In this Briefing Paper, we look at the European Commission’s recently proposed unilateral measures for European Union trade security. Taken together, the Foreign Subsidies Regulation and the Anti-Coercion Instrument are aimed at enabling the Commission to counteract the distortive impact of ‘third country’ subsidies on EU business competitiveness; as well as to investigate and retaliate against the perceived use of economic coercion by foreign governments against the EU, its Member States and firms. While such policies may be primarily targeted at China, they would de facto apply to all third countries including Russia, the US, and the UK. While both measures would give the Commission wide discretion in their application, the Anti-Coercion Instrument would specifically allow it to bypass the World Trade Organization dispute settlement process and possible wider international law commitments. We conclude that with continuing geopolitical uncertainty for the rules-based global trade environment – compounded by the Covid-19 pandemic and the Russian invasion of Ukraine – the EU treads a careful line between the development of a specialist trade policy and a piecemeal approach in respect of the overarching restraints of Member States, international law commitments and other stakeholders’ fundamental rights.

Read Briefing Paper 70: Trade and Security: The EU’s Unilateral Approach to Economic Statecraft