Debate: Exercise of the Union's rights for the application and enforcement of international trade rules
Date: MONDAY, 18 JANUARY 2021
Speaker: Virginijus Sinkevičius
Language: EN

The Commission regards this amendment as both important and necessary. Given today’s realities, there are two reasons for this. First, since December 2019 we no longer have an impartial and binding two—step adjudication mechanism within the WTO. This is of major concern for the European Union’s economic interests. To recall, this happened because of the Appellate Body of the WTO; the second tier of adjudication is unable to function due to the blockage of appointments by certain WTO Members. As you know, the Commission is sparing no effort in resolving the crisis. We have improved the situation in Geneva through the multi-party interim appeal arrangement, or MPIA for short, but it will not apply in all cases. The MPIA does not engage the entirety of the WTO Membership, far from it, and it is voluntary. In other words, WTO Members need to agree to its use in their cases with the EU. Therefore, as you have recognised, it is wrong to think that the danger arising from the breakdown of the WTO dispute settlement has passed. This underlines the importance of the legislative file you are voting on tomorrow. Next to our ongoing efforts to resolve the crisis, the amended Enforcement Regulation would enable the Union to protect its interests in the face of blocked dispute settlement systems. The Union would be able to take measures where it prevails in an offensive dispute against another country at the panel stage, but it’s unable to obtain a binding award because the other country blocks the process. Thus, the revised Enforcement Regulation will act as a line of defence, while at the same time it would act as a deterrent and an incentive for others to cooperate. Similarly, under the EU’s free trade agreements, there is no guarantee that a contracting partner will, in all cases, allow the proper functioning of dispute settlement. In the bilateral context, dispute settlement requires a certain degree of cooperation. The amendment would play a particularly important deterrence role for parties that might otherwise contemplate obstructing the proper functioning of dispute settlement. By concluding this file, we send a powerful signal to our trade partners. The Union is able to equip itself quickly and is ready to protect its rights, if a need arises. This is very important for the credibility of the Union’s enforcement action and for its timeliness, which is ultimately what our stakeholders will judge us on. Second, the importance of the amendment also lays in the broadening of possible remedies to cover trade in services and some trade—related aspects of intellectual property rights. The extension will allow the Union to make use of these additional possibilities whenever it is necessary for the effectiveness of the enforcement action or because the rules require it. The extension of scope results from a proposal advanced by Parliament. The Commission welcomes this improvement.  The extension unquestionably renders the Union’s enforcement action more effective and in line with today’s realities. It corresponds to the needs of modern and knowledge—based economies. It matches the prominence of services and intellectual property rights in international trade agreements. It makes the Union credible when it seeks to negotiate protection for the right holders abroad. It means the Union is serious about its agreements and obligation and will expect that partner countries stick to their commitments. And finally, broadening the scope increases the deterrence effect. Even though the extension is only partial in the field of trade—related aspects of intellectual property rights, we should not lose sight of the immense benefits of the extension in its current form. The Union is clearly better equipped than ever. I look forward to hearing your views.