The European Commission has presented a legislative proposal to enforce the EU’s rights under international trade agreements where the World Trade Organization (WTO) is no longer able to deliver binding dispute settlement decisions. 

The proposal consists of an amendment to the enforcement regulation (EU 654/2014), that permits the European Commission to act on the Union's behalf on trade matters. The main focus of the proposed amendment is to cater for situations where the EU has succeeded in obtaining a favourable ruling from a WTO dispute settlement panel, but another WTO member blocks the dispute procedure by appealing into the void, or when a third country does not cooperate, as necessary, for dispute settlement to function. Both situations have the same negative consequences for the EU’s economic interests

This proposal can be used as a basis for the EU to impose countermeasures after it has won a dispute settlement proceeding in the WTO or under a bilateral EU trade agreement. Under current rules related to disputes under multilateral trade law, the EU can adopt countermeasures only at the end of a dispute settlement procedure, having received an authorisation from the WTO. Furthermore, the current regulation does not provide powers for situations in which the dispute settlement procedures do not function and therefore cannot be completed, such as the situations of blockage of dispute settlement mechanisms. The legislative proposal for an amendment of the enforcement regulation remedies this gap through an extension of the triggers for action under the Enforcement Regulation to such situations

The European Union is at the forefront of the WTO reform, making efforts to ensure that WTO members can rely again on a well-functioning Appellate Body in the future. The proposal will be subject to a normal legislative procedure, involving a decision by the European Parliament and the Council. Giving urgency for the EU to be able to use appropriate trade enforcement tools, this process can be concluded by mid-2020.

In B2EU consulting we are following closely the next steps of the WTO reform in order to inform our clients about the impact of this legislative initiative on their business interests. For more information on how we can assist you and your organisation, please contact us at: info@b2eu-consulting.com.