The European Commission lost patience with this stalemate last year and said that it would update and strengthen the EU’s Enforcement Regulation (EU 654/2014) so that action can be taken when a trade dispute is blocked.
It noted that the existing Regulation requires that a dispute goes all the way through the WTO procedures, including the appeal stage, before the Union can react.
This has meant that WTO Members with whom the EU is in dispute have been able to escape a binding ruling by simply appealing a report on the issue, knowing that the appeal system is dysfunctional.
The revised legislation, Regulation (EU) 2021/167, enables the EU to react, even if the WTO has not delivered a final ruling, in situations where the other WTO member refuses to agree to an alternative arbitration under the WTO Dispute Settlement Agreement.
The Trade Commissioner, Valdis Dombrovskis, said: “The EU must be able to defend itself against unfair trading practices. These new rules will help protect us from those trying to take advantage of our openness. We continue to work towards our first preference, which is a reformed and well-functioning multilateral rulebook with an effective Dispute Settlement System at its core. But we cannot afford to stand defenceless in the meantime.”
The new Regulation came into force on 13 February 2021.
