- 2025-09-24 “They are unabated. Ongoing trade tensions with the US, with Chinese overcapacities might continue to to funnel problematic imports to to Europe. So requires us to increase vigilance in terms of trade defence. As you know, we are also vigilant in terms of any potential surge in imports and have introduced an economy wide surveillance of imports, which we publish on a regular basis and on which I've had the opportunity to, to to discuss with you once before the summer break. That effort continues, and it will enable domestic industries to also be able, if the facts justify it, to benefit not just from trade, structural trade, defence protection, but also, if necessary, from trade contingency, uh, type measures. There's a lot of so there's a lot of volume of work. Um, we have secured some additional resources for the trade. Defence services for the director G. Of, of of of DG trade. Uh, and that, uh, should go a long way to help us maintain, uh, the standard that we want to have in serving the interests of EU industry, which the instrument is there to, to serve. So I guess I will leave it there and of course, happy to, to to reply to any, any question that you may have on this, on this, this policy area.”
Trade relations with China · EU-US trade relations
- 2025-09-24 “Uh, we have investigations and measures on the imports of things like candle. Uh, plywood is also a sector where there are many SMEs, uh, EU producers, uh Bob flats, sweetcorn, uh, and of course the ceramics sector which has is typically an SME, uh dominated sector where we have been able to provide significant protection against distortions over the last few years. And finally, in terms of the robustness of the instrument, um, which of course is subject to, to legal scrutiny and very often challenged by, uh, by parties to, uh, the cases. The courts have delivered some very important judgments in 2024, which are important for the stability and the effectiveness of policy. The the Court of Justice, uh, confirmed the findings of General Court on the issue of cross-border subsidies and the way we address this through the instruments, the so-called transnational subsidies or the subsidies that we have seen granted by China under the Belt and Road Initiative. And the court has confirmed that it is possible to attribute the financial support of a third country to the government of the country of origin or export. And that is important because it means that there is applicability of our of our defense tools against these distortions. Um, also the EU's approach in constructing normal value when there's a finding of significant distortions was confirmed in an important court ruling. So these judgments overall, in our view, um, reaffirm our approach or support, uh, confirm that we are right in the approach that we have taken in tackling some of the particularly damaging, unfair trade practices that we have seen over the last two years.”
Trade relations with China · EU policy on custom fee on non-EU imports
- 2025-09-24 “These are clearly retaliatory in nature, and they are aimed at deterring our efforts to counter the negative impact of Chinese subsidies and overcapacities in our Anti-subsidy case, in on battery electric vehicles. And so we have pushed back against these measures. We continue to do so Uh, using available channels, notably the WTO, where we have challenged the initiation of the dairy case, uh, and the provisional measures in the Brandy case. Uh, now, definitive measures have been adopted. And as you probably know, provisional measures have been adopted by the Chinese authorities, the investigative authority on the exports of pork. Now, uh, we support the industries when faced with these illegitimate measures, when the measures we consider are illegitimate, um, and in many cases believe that this helps, uh, providing relief for the concerned industries on their exports. If you take a number of us, uh, investigations against EU origin goods in 2024, we've seen the US, for example, uh, terminate, um, an important anti-dumping investigation into tinplate from Netherlands and from Germany. And that's important. I mean, we're talking here about some €1 billion of EU exports to the United States market. Uh, the US also terminated their anti-dumping investigation on aluminium extrusions from Italy, uh, and imposed a much more reasonable duties on paper bags from Portugal than what was initially proposed by the petitioners.”
Trade relations with China · EU-US trade relations
- 2025-09-24 “Just a couple of comments in French because the question was asked in French. Firstly, there was a question of surveillance and what we do with imports. I did note down what you were saying about having wanting to start a new discussion to take stock of, of what we've been witnessing. The approach that we've adopted up to now has been based on transparency. It's been a question of using these measures as efficiently as possible. We have customs databases, and this makes it possible to track imports with very short deadlines in place to ensure that these transactions are being monitored. And we're talking about a deadline of about three weeks, which is quite a swift reaction time from our point of view. Purely based on external databases. We then publish a precise list of customs codes that we use on the basis of a certain number of filters, and we see where there are abnormal trade flows occurring or abnormalities in prices. Both of them have a role to play. The logic behind it, and this ties in with other questions that were asked about this. The logic underpinning this system is to provide industry the means necessary to provide us with market related data, to see whether there's been any, any impact of these imports. That's what counts. We can take trade defence measures. And if we see that there's a sudden spike in in imports. Then there needs to be a significant there needs to be an impact. And these this information that we have, we can only compile this information on the basis of what comes to us from European industry. This is why it's so crucial to ensure that we have a mechanism in place that is based on cooperation with industry, and is not simply that we bear the responsibility for solely as European authorities.”
Carbon Border Adjustment Mechanism (CBAM) · EU policy on custom fee on non-EU imports
- 2025-09-24 “We can do our part on the import side, but industry, the industry in question needs to do their share as well. If there are any, any impacts. But of course we could explore this in much greater detail. We could look at trends. We could look at what we're witnessing. Based on the lists of customs codes that are published on a regular basis through this surveillance exercise. I think our questions now was about overcapacity. Trade. Defence is an imperfect response to the problems that we have with over capacity. Firstly, because tdis come in quite late in the distortion cycle. And because they're at the borders. The real problem is it has to do with the origin, the source of overcapacity, which stems from the very nature of our of the state capitalist system in China, and externalities as well created by these these systems, which unfortunately are not recognized as such by Chinese authorities. And the problem is that the real solution to overcapacity would be to seek, seek out the source of the problem and find a better balance, and that will require a certain amount of rebalancing in the Chinese model. Without that, overcapacity will remain a problem and this will require protection measures. And often they will be protection measures which are there, um, over the long term. And in the case of steel, we have to keep these horizontal protection measures in place for the sector. The fact that we do that is the inevitable result of the very nature of the problem that we're dealing with.”
EU-China relations · Trade relations with China · EU policy on custom fee on non-EU imports
- 2025-09-24 “So the case, in our view, on injury is more than debatable in any case. Um, and this is why we reserve the possibility to continue to push back against, uh, against these, these measures. The, the the more fundamental level, the practice of using trade defence for retaliation purposes is something that is not entirely new. We have been confronted with this in the past, and we will continue to challenge this at a fundamental level of principle. Um, on the um, on the question of, of of Mr. Benifei on, on on SMEs, I completely agree with you. I mean, we we understand clearly the difficulties of, for SME dominated sectors to organise and to be able to, uh, effectively and, you know, with acceptable costs, uh, represent themselves and, and, and be in a position to, uh, lodge complaints with the commission. So we think it's important to, uh, make an effort to accompany this so that we do not have Of distortions in terms of who has actually access to the to the instruments. I think it's a question of information. It's a question of support with indeed the SME help desk that we have established some time ago that we continue to try to to improve in terms of responsiveness, uh, of colleagues, uh, vis a vis, uh, the, the domestic producers, uh, concerned. Um, kelkoo.”
Intellectual property rights (IPR) · EU Competition policy
- 2025-09-24 “It depends very much on sectors. And this was a question on green tech and the situation there. And obviously one area of green tech where we believe that the conditions for taking trade remedy action was there, uh, on the imports of battery electric vehicles, subsidized battery electric vehicles, imports from from China. Um, because we saw from the facts, uh, massive overcapacity in China and the potential for these production to outflow rapidly. Very rapid acquisition of market share. A market in the EU, which was the market that was open while other markets were being closed. And therefore, uh, we, uh, we, we were able in good time to deploy a trade defence instrument vis a vis, uh, this green tech area where indeed there is overcapacity, other sectors in other sectors where the situation is different, the level of competitiveness or relative competitiveness of EU industries is different. There's a huge difference between the solar panel industry, for example, and the wind sector or the wind sector. We have, uh, I would say EU based industries face probably still, I think more problems in third country markets yet than on the domestic market, even though we have seen cases of potential distortion there too. So it's very difficult to think about a sort of trade remedy response to overcapacity without looking at the specificities of each of each sector. You also had a, I think, a question and the point on the question of how we look at injury, notably in the context of the of the the regulation when it comes to taking into account, uh, social or environmental issues.”
Carbon Border Adjustment Mechanism (CBAM) · Trade relations with China · State Aid
- 2025-09-24 “I think we have actually, uh, provided to Parliament a specific report actually, on the implementation of this part of the basic regulation. I can't quite remember when that was, maybe a year ago or last year. Yeah. Um, and, uh, and, and will continue to, to, to basically apply the, the framework that the co-legislators have decided upon with respect to those issues. Uh, when the last legislative change was made, uh, in 2017 and 2018. So some of these elements, social environmental issues are considered in selecting the representative country. And indeed the costs of social environmental compliance can be taken into account when calculating the injury margin when it comes, if I remember correctly, to the target profit. And that means that in some cases this does play a role. It's a limited number of cases where this plays a role. But this is the, I would say, the the strict automatic application of the provision as currently constructed on this in the, in the current, uh, in the current uh, regulation. Um, I think with this, I hopefully I know there is one final point on, uh, well, you asked a very concrete question on, on workload and delays, so I think I have to address that also very directly. So it is correct that, uh, currently, uh, the this increase in workload is leading to more delays, in particular in the ability of the Complaints office to deal as quickly as we would ideally want with the incoming complaints.”
Due diligence in supply chains (environmental and human rights)
- 2025-09-24 “Yes on this question, which is a feature of the of our legal framework. Uh, I mean, it's a bit like what I was saying on the, um, taking into account social environmental issues. I mean, we, you know, we currently operate the, the framework as, um, as was stabilized and set, uh, uh, in in 2018 after the, the modernization. So that has already had an impact, as you recall, because the lesser duty rule is no longer applied in anti-subsidy investigation in some cases in anti-dumping investigations. Um, and, you know, if we want to have a different if we want to change in practice, then of course this would require legislative change of the basic regulation. So currently there is nothing in front of, of the co-legislators uh, for, for that. What we, what we have seen, though I would say empirically, is that, um, Overall, we believe that the measures that were based on the injury margins to have achieved the objective of of eliminating the injury caused by the dumped imports, because we've seen in most cases, as I indicated at the very beginning, a sharp reduction in import volumes in those cases, in many cases, the levels, the duties are imposed at the level of the dumping margin.”
EU policy on custom fee on non-EU imports
- 2025-09-24 “So there is some delay that is, uh, being created by the fact that we do hit at some point, uh, especially we really have a suddenly a surge in complaints, so to speak, uh, the ability to actually process them. Of course, it's not just a question of complaint. We also have capacity constraints for having investigative teams further down the road to deal with the with the cases at the at the current moment, it is correct that, uh, there is uh, some, uh, some delay in the treatment of complaints that we do not believe we would want to have in some cases. The reason why complaints are not being, uh, taken on board and initiation also take place is because the complaints are not, uh, or are deficient. And that happens to happens often. And there the, the the complaints office is committed to working expeditiously with the potential complainants to remedy those deficiencies. And does that in those cases, of course, the delays are completely normal and legitimate because we can only initiate on the basis of properly substantiated complaints. But there is more than that at play. There is also an effect of the volume of complaints at the at the moment.”
Due diligence in supply chains (environmental and human rights) · EU restrictions on unfair commercial practices
- 2025-09-24 “And this cannot change given the cap imposed by the by the WTO, by the WTO rules. So there are some aspects which in any case would not be affected by a potential removal of the lesser duty rule. But you know that under the leadership of Commissioner Sefcovic, the trade department of the Commission has continued to look very actively over the last few months at the effectiveness of the instruments, because, again, more activity, more import pressures, more and more sophisticated and complicated distortions that the instrument has to face. So there is a there is a review ongoing of, uh, the effectiveness, the functioning, the features of uh, anti-dumping and anti-subsidy measures on the basis of the current regulations. And I cannot exclude that at some point the instruments will have to, to be to be modernized again, uh, not least because there is a sort of natural cycle in any in any legal framework, in any regulatory framework, where after a number of years we see. Changes in the in what needs to be addressed and what is being regulated, necessitating a review. But I do not have right now any particular, uh, announcements to make about any, any, any plans in this area.”
Intellectual property rights (IPR) · EU Competition policy
- 2025-09-24 “Uh, and, uh, we'll have to ensure that that measures provide a highly effective protection to the sector. Uh, the safeguard itself has been adjusted over time within against the within again the the constraints of the safeguard instrument. The last revision actually leads, in our view, to a reduction in the tariff free volumes that come in and enables the measure to track in part also, uh, the, the drop in in demand and domestic production. Uh, but it is clear that continued protection must, must be ensured for the sector. I cannot really anticipate on the the actual legal proposal because that is not yet uh. Arbitrated inside the College of of commissioners. But I think that we certainly, uh, get in the civil service from the College of Commissioners the very clear sense of urgency of putting forward a proposal, a proposal for for that for that measure very soon on the um on some of the retaliatory, uh, trade defence measures taken by third country jurisdictions and notably, uh, the cases that I mentioned, uh, from China, um, it is clear that the, uh, the, the, the provisional duties on pork are very significant, uh, economically, uh, our exports of pork to China in 2023 was something like €2.7 billion worth of, of export or of the pork exports, basically all product categories, meat by products are targeted by these this investigations, the duties that have been the provisional duties that have been imposed on the 10th of September, which range from 15% to more than 60%, are very significant. And in our view, from what we have seen of the of the disclosure of the measures by the Chinese authorities, this measure suffers from major shortcomings, notably the fact that we see a significant decrease already in EU imports by more than 50%, and the EU imports representing less than 2% of the Chinese market.”
Trade relations with China
- 2025-09-24 “Thank you very much, chair. Very kind of you. Thank you for your kind introductory words. Um, I'll jump right in. I mean, of course, the the report that we publish on a yearly basis on trade, defence and that we put to you so as to, to to help the scrutiny of this plank of EU trade policy is a very factual document. It's a backward looking document. But I'm of course happy to try to, to distill, uh, in, in the first in these introductory comments and then further on answering any question. Or you may have some of the more policy relevant dimensions that come through the report. And I suppose the first thing to say is that, um, the environment that determines our recourse to trade defence instruments is, of course, one which is fairly adverse. We see that there is a continued sustained trend towards, uh, overcapacities, uh, state subsidization in many different jurisdictions, which create the conditions for, uh, growing, uh, quantum of unfair trade practices, which are impacting, uh, the European uh, manufacturing base and as such, threatens potentially some of our objectives, including industrial but also climate and economic security objectives, as they are all linked. So in 2024, in this context, uh, we have seen. An increase in those, uh, import pressures coming from unfair trade and as a result, also an increase in the demand for protection from these distortions by the European. Producer industries. In 2024, the Commission opened 33 new investigations, which is the highest number in the last 20 years.”
State Aid · EU Competition policy
- 2025-09-24 “Thank you very much. I try to take all these points. And of course, if I, if I, if I miss some, uh, please do not hesitate to, uh, uh, to call on me again and to remind me to properly respond. Uh, sometimes I miss I'm not used to doing these kinds of debates too often, so bear with me. Um, there were several questions. Uh, indeed. On on on steel, perhaps start with that. I mean, it is clear that the The distortions in global steel trade are enormous. And we're seeing the problem over capacity is really infecting the totality of, uh, of of production and trade in the sector in a major way. Um, we're seeing that overcapacity is now flowing not from necessarily only the origins where most of the excess capacity is generated, but also through push out effects on other, uh, jurisdictions where you have steel production being reoriented towards the EU market. Uh, this is why we have had to initiate, uh, a number of important anti-dumping cases on important product categories in steel, which are multi origin. There's a reason for that. Um, as a result it's clear that there needs to be continued protection for the domestic producers in Europe. Um, across uh, majority of the, the, of the sector categories. And that requires an ad hoc measure given the fact that, uh, the safeguard measure will by law have to expire by the end of June 2026. So the commission will have, will come forward with and it has announced that in the action plan will come forward with a, uh, an ad hoc measure, uh, 207 measure.”
Trade relations with China · EU policy on custom fee on non-EU imports
- 2025-09-24 “And it is, uh, an increase, a significant increase from the sort of average, uh, new defense investigations that we had in previous years where we we used to open, you know, around 12 cases per year. So we're a significant higher level of activity, uh, measured in number of, of cases. Um, the um, imports from China were, uh, the target for about two thirds of these initiations of new cases. If you look at things from a sectoral standpoint, there was a very marked rise in the number of cases, uh, relating to the chemical sector defined broadly, uh, chemical the chemical sector accounting for about a third of the 33 initiations and since 2023. So over the last two years, we're now in a situation where in terms of number of new initiations, the chemical sector is actually becoming more important in the in the mix and in the amount of work that the Commission is undertaking in trade, defence. Then the steel sector on steel with respect to steel and metals, we have also reviewed last year the steel safeguard, extending it to the end of June 2026, which is the maximum time available for the extension of that particular measure. And as you know from what the College of Commissioners announced, notably in the Steel and Metals Action Plan earlier this this year, the commission is working on a proposal for a trade measure which will kick in, uh, and replace uh, to a certain extent that safeguard, uh, existing safeguard measures.”
Trade relations with China
- 2025-09-24 “It is visible within a relatively short period. So we see a direct impact or impact on the on the distorted imports concerns and in some cases very significantly. Uh, for example, the most recent figures there show that, uh, the average drop in imports in, well, the two sectors that I mentioned, which are very prominent in terms of number of investigations, chemicals on the one hand and steel on the other hand, we see, uh, respectively, an average drop in the imports when measures are imposed of 85% in relation to the chemical cases and 52% in the case of the steel cases. So of course, the impact will vary across the product depending on the level of protection that is being imposed. But the overall impact, we believe is is solid as it as we would expect it to be. Um, we monitor closely import levels to make sure that, uh, if there are unexplained changes, we are able to identify them quickly, and we work continuously with the domestic industry to understand market developments. And then in several cases, we take concrete actions to address instances of circumvention of duties. Now, in 2024, uh, the commission completed three Anti-circumvention investigations, which extended anti-dumping measures on birch plywood from Russia to other origins to Turkey and to Kazakhstan, extended anti-dumping and anti-subsidy measures on stainless steel cold rolled steel from Indonesia to Taiwan, Turkey and Vietnam, where we identified through investigation as circumvention was taking place.”
EU Competition policy · EU policy on custom fee on non-EU imports
- 2025-09-24 “So at the end of 20, uh, at the end of of 2024, we had a total of 199 trade, defence, anti-dumping, anti-subsidy measures in place in law that we estimate protects something like 625,000 jobs in Europe, uh, and jobs which are associated with, uh, supply chains around more than 100 of product categories. Um, now, um. This, uh, let's say quantitative overview, um, is also the backdrop for, uh, a number of policy, uh, considerations, uh, that we saw emerging in 2024, in which I can briefly highlight. First, we introduced a significant change in practice, which was the automatic registration of imports in all new investigations. That doesn't create any burden on industry. It strengthens the trade defence process because it sends a signal to the market and potentially can allow the collection of duties retroactively. In cases where the conditions to do so are met. And this has happened already. In two cases where imports were registered in 2024 on Eritrea and on wood flooring from China. Second, more policy related issue. We continue. And this is a constant in practice. We continue to pay close attention to making sure that when once the EU adopts a trade defence measures, the measures are effective. They actually stick. Because this would this is what ultimately determines the potency of the instrument. Now we continue to see that the the impact of measures when adopted and implemented is real.”
Trade relations with China · EU policy on custom fee on non-EU imports
- 2025-09-24 “And in 2024, we initiated two new anti-circumvention investigations. Uh, I think we are very aware, uh, given the current international trade climate, the degree of fragmentation, uh, the degree of diversion of flows that, uh, there is always a potential for, uh, continued attempts to undermine the effectiveness of measures. So ensuring the effectiveness of measures, not just the adoption of measures, remains a policy priority. Uh, from from our point of view in this part of the Common commercial Policy, as in others, by the way, enforcement is a priority across the board. Um, third sort of policy element. Um, we also continue to do one thing, which is to support our exporters, EU exporters, when they are faced, uh, in third country markets by unjustified trade defence measures of other jurisdictions, uh, because not all jurisdictions are as disciplined as we believe in the EU. We are. And we've seen a rise in the number of cases that are opened against EU exports in third countries. There were 34 such cases, uh, that we interact with industry on, compared to 20 in the previous year. We also see an increase in the use of safeguards globally. Illustrate contingency measure. And more alarming still, in our view, is the unjustified use of trade defence when it is a means of retaliation against legitimate use of trade defence by the European Union. And here I am explicitly referring to three trade defence cases initiated by China two anti-dumping investigations on brandy and pork exports from the EU, and an anti-subsidy investigation on dairy exports from the EU.”
Trade relations with China · EU-US trade relations
- 2025-09-24 “Final point, uh, of course, in discussing 2024, I can also highlight the, uh, important in size anti-subsidy investigation into the battery electric vehicles from China, which was concluded in in October. Obviously unprecedented in terms of relative importance, uh, in terms of some of the challenges faced in in taking forward a measure of this, uh, of this kind, um, since the measures were imposed, the production of battery electric vehicles in the EU has now increased by 19%, while the sales of battery electric vehicles produced in the EU have increased by 28%. So the market share of the BEVs produced in China has decreased from 25%, which was the level reached during the investigation period to 17% in the second quarter of 2025 of this year. So imports of Chinese BEVs continue to enter the EU market in substantial quantities. But the measures, in our view, is effective and at the same time keeps our market open. So this measure is not a market closing measure. It is therefore playing the role that we would expected to play in a proportionate manner based on an investigation, compared to the nature of distortions that it is there to to Correct. So now that we are actually quite late into 2025, and the report essentially talks about the 2024 number, I think I can say that the factors that we saw at play, which were driving the this continuous increase in the number of cases in 2024, these factors persist, are still there.”
Road transport environmental policy · Trade relations with China · State Aid
- “In other words, that economic security does not have to translate into beggar thy neighbor policies in an unwanted manner. Um, third, uh, what the the Commission has sought to do with this text is to propose new areas, broad areas, high risk areas where we see risks and that we believe the risk assessment framework should be applied. Uh, this therefore develops, builds on the June 2023 strategy from which already a number of workstreams had emerged, notably risk assessments conducted between the Commission and Member States national authorities on four critical technology areas. The paper now identifies six broad risk areas on which to do more risk assessment exercises of the same nature, but to do them faster, to do them in a more efficient way, and to do them in a way which enables, uh, the institutions to pivot from risk assessment to risk mitigation more quickly. The six areas are, first of all, continuation of the strengthening of supply chain resilience in key industrial sectors. Second, attracting value added inbound investment in the EU. Third, supporting the defence and space industrial base and a number of other high risk sectors. Fourth, uh, and that's more of a technology logic than a supply chain logic. Uh, work to develop leadership or indispensability across a number of critical technologies, including emerging digital technologies. That is an accentuation and continuation of the work that I was referring to. Fifth, preventing access to sensitive information and data inside the EU.”
EU digital & tech sovereignty · EU policy on screening foreign investment in strategic sectors and critical infrastructure
- “To the extent that this success would undermine either the EU's hard security or economic security. And finally preventing disruptions to EU critical infrastructure, whether physical or cyber. So within these six areas, the continuation of the application of a framework of risk assessments and then the text, the communication, this policy proposal moves to the issue of instruments and capabilities. First, by setting out a number of orientations with respect to the improvement of governance and capabilities in the area of economic security. And the three, I would say under three headings. First, enhancing the coordination between the EU institutions, between the Commission and Member States, and also bringing in the European Parliament in that work. And there are a number of concrete, in this case, very concrete proposals that the Commission is making, notably vis a vis member states, such as the recommendation to nominate national economic security advisers in member states, ideas about how to use existing networks in a different way, and proposals to develop new tools to secure to enable the secure exchange of classified information, which, uh, is an issue in this in this area. The second uh block relating to governance is about, uh, better ways to generate and exploit information and data that is relevant in the economic security zone. And there the Commission proposes to pool available economic security information that exists today across different institutions, different parts of the Commission, into an economic Security Information Hub, which will support in a more efficient way the the work streams such as, for example, monitoring markets or for example, consolidating consolidating information at central level, for example, in high risk entities, which the the communication wants to protect from in different in different areas.”
EU policy on screening foreign investment in strategic sectors and critical infrastructure
- “Given the strategic importance thereof. Uh, I should also say that I think on our side, we believe that we need to seek inspiration also from models of policy and governance that actually are proving relatively successful in jurisdictions that face similar constraints or challenges. Japan has been an inspiration in this area, notably with uh, uh, the several issues were raised. I think one financing, uh, now, as I indicated, the issue here is really to ensure financing of a number of strategic projects that will, through scale up in the Commission's assessment, actually reduce the, the, the level of dependency within a reasonable period of time. The interesting factor in this sector, in this area, which is different, for example, from, you know, the the ramp up of production, say, of legacy chips, is that in the area of critical raw materials, the, the, the level, the amount of financing involved is not actually gigantic. It is a manageable in terms of what actually represents financially that additional effort.”
Sourcing of critical raw materials · State Aid
- “Uh, second, uh, we fully agree with what was said on the need to focus on recycling. And that brings in indeed questions that then bring us back to trade policy. For example, the question of possibly instituting, uh, restrictions on the export of scrap waste. Uh, the, the the questions also sometimes can relate to protection. I would just flag that, uh, the co-legislators are considering right now in the context of the review of the FDI screening regulation, the question of, uh, bringing under the scope of the regulation, the harmonized scope of the harmony of the of the regulation for mandatory screening. The the the this particular area of of critical raw materials. That of course is in the hands of the co-legislators, but it is very much on the, on the table. And then the question of partnerships, because there as I said, this is about projects which are not only EU based projects, but also based in third country jurisdictions and where there is a lot of effort, uh, in terms of, uh, looking collectively and in and across different governments. And what are the policy tools to make those projects in third countries viable to ensure diversification? And that includes notably ensuring the conditions for offtake on the two other sectors on, on, on, on the battery side and the farmer side.”
Sourcing of critical raw materials · EU policy on screening foreign investment in strategic sectors and critical infrastructure
- “Thank you very much, chair. We're happy to report, as we do on a yearly basis, on this zone of the Common Commercial Policy, which are this the issues relating to either strategic trade control or strategic investment controls, where there is a EU, as you say, EU legislation and overall framework legislation. These are, of course, uh, policies that are implemented, uh, in a very decentralized manner at the level of member states. But nevertheless, I think we we do these reports annually and in particular, this, uh, annual report on the FDI screening regulation. Uh, first of all, because it's mandated, of course, by the by the legislator, but also because we hope that this is something that enables you to exercise democratic scrutiny over those this particular part of the of the CCP, Which is the zone where we put trade and investment instruments at the service of a hard security consideration. Um, so it is a factual report, and I will basically highlight the main numbers and visualize them in a set of slides. So if you can move to the next slide, um, I will cover both what is done and what comes out of the report in terms of what is happening at the level of member states, and then what is happening specifically at the level of the coordination mechanism, which takes place at uh, at EU level? Uh, if we move to the next slide. So, uh, and the next one, uh, now, uh, it's about coverage, uh, the number of EU member states that are adopting or have adopted national legislation in order to establish an FDI screening mechanism has been expanding over time.”
EU policy on screening foreign investment in strategic sectors and critical infrastructure · EU policy on social & environmental impact of foreign investments
- “As you see, there were 13 member states when the regulation started to operate, rather, when it was tabled to 24 at the end of last year. The report covers 2024 in data. If we move to the next slide, you see the visualization of that on the map. But I want to stress, of course, that in 2025 this year so far, there have been important legislative updates at the national level as well in this area. In November, Cyprus adopted its first foreign direct investment screening law. Croatia adopted its first investment screening law in October, when the parliament there passed the Foreign Investment Screening Act, and in Greece in May of this year, the Greek Parliament enacted a law for screening foreign direct investment as per the implementation of of the regulation. Um, and in November, very recently, they have adopted secondary legislation for the implementation of screening uh, in Greece. If we move to the next slide. So this is the totality of, uh, the notifications that take place under the framework of the regulation and uh, from the national level. So since 2021, this is the first year for which we have a complete data, as the the mechanism took a number of years to, uh, to start entering into full force. Uh, the number of notifications to the cooperation mechanism at EU level has increased from 414 in 20 21 1 to 477.”
EU policy on screening foreign investment in strategic sectors and critical infrastructure · EU policy on social & environmental impact of foreign investments
- “And it is from there that we will be able to establish whether there is a need for policy development as such, uh, perhaps above and beyond monitoring or whether the question of monitoring should become a standard. But I cannot prejudge, of course, on what the Commission will decide to do at that point in time. Um. To Mrs. Gregorova, I think I mentioned the question of, uh, the mandatory coverage of sectors. This is definitely something which must form part of an improvement of the system. We do not envisage to impose particular obligations when it comes to the level of transparency that member states exercise. There are differences there. Member states interact with their environment, their stakeholder environment in different ways. It is true. And this is the point that you were making, that I think to my knowledge, very few. For example, uh, engage, uh, in an open manner on these particular tools with civil society actors. Uh, this tends to be very much anchored in an environment of security, uh, where where the questions of outreach, transparency are more limited than in other segments of, uh, commercial or investment, uh, policies. Um, um. Point.”
Transparency requirements of EU institutions · Transparency requirements for interest groups
- “So the revision doesn't actually impact the current balance because the basic construction, i.e. that the decision should be taken at the member state level, means that there is not really an institutional changes in terms of what has been put on the table by the co-legislators of sectors.”
EU Single Market harmonisation
- “We see a lot of tariff and non-tariff barriers. Local content requirement type measures are prevalent in many, many jurisdictions. Other types of import substitution measures, but also measures not just on import but also on exports. And the question of export restrictions, including on raw materials on minerals, remains also a distortion of trade, which in some cases violates international trade rules and which in any case constitute obstacles for many European based stakeholders in 2024. We estimate that we continue to again solve or help solve or contribute to provide relief on those market access difficulties that emerge with 44 barriers that we assess have been either partially or fully removed in the course of 2020. For a lot of them actually in the agricultural and fisheries sector, where we put a lot of effort and resource on the, uh, market access dimension in support of the agro food and the fisheries sector. But not only, of course, I could give you examples of that, but they are in the in the report. So in total, if we take that zone of operation of of our efforts as public authorities in support of companies, EU companies over the last five years, since 2020, we estimate that something like 180, 180, 190 barriers, individual barriers in individual countries that have been lifted or removed in some cases. And in most cases, we do this through engagement, uh, under the structures of the trade agreements in particular, which serve served that purpose.”
Free trade agreements (FTAs) · Export of EU agri-food products
- “The on the aspect of global or comprehensive trade agreements. Now we have this panoply of new generation comprehensive trade agreements. And we must harness them to ensure that stakeholders receive as many benefits as possible. I agree with what you said. We must be able to move above and beyond the traditional Comprehensive Trade Agreement as a simple trade agreement, and we think that there is space for more sectoral agreements, more targeted ones. And that is true. Since the beginning of the new commission and how we negotiate in house, we are moving towards new tools such as digital trade agreements and also investment facilitation agreements. And this is true for countries in sub-Saharan Africa, and we think that these types of agreements, which do not have the same legal or scope, um, aspects, could be really useful.”
Free trade agreements (FTAs) · Asia-Pacific · EU policy on African region
- “Thanks very much. Let me start maybe with, um, uh, both with Mrs. and Mr. Zoido were, were talking about in terms of making sure we have the right facts and metrics to try to assess the validity of the policy as it is being implemented. That is precisely what this report is trying to, um, uh, to do. Now, you know, the choice of metrics is complicated because you have different ways of looking at the benefits and potential costs of putting in place a particular framework. We try to do this through various types of impact assessments, both ex-ante and exposed, as you know, and we have, I think, a system of systematic impact assessment, uh, basically three ex-ante impact assessments, uh, an evaluation of the negotiated outcome of the actual agreements when we conclude them, and then the ex-post evaluations, which can only come after a number of years because they have to reflect the actual phased implementation. But, uh, we probably need to bring out more. We're happy to engage in particular on the basis of these ex-post impact assessments, which are, very detailed and which to answer one of the one of the questions. Uh, look, for example, at the question of SMEs in more detail, although there. Um, the, the actual numbers when it comes to the SME take up of trade agreements at national level, we do not have, uh, detailed breakdown numbers on this, but that's something, I guess, which we should look into in terms of, again, the ability to have a proper read through of who benefits from what in in the trade, in the trade agreement.”
Due diligence in supply chains (environmental and human rights) · Transparency requirements of EU institutions
- “At this distributional effects, um, I mean, two different issues. I think there's a question of market disturbances in some member states, and there's a question of allocation of gains between member states. That's a reflection, of course, of certain clusterization of sectoral, uh, capacity in Europe to some extent. But I think, as I said, um, the report itself does not have, I have to admit, the ambition to look at the distributional aspects. If not, it would be a something of a completely different, uh, magnitude. But I think this question of distributional aspects, we should we should probably also use other instruments that we have that, on which we report to to the committee to perhaps get more into if there is certainly an interest in the committee of, uh, drilling down, uh, and exercising more scrutiny on those data and those metrics that are not included in the in the annual implementation report. Thanks.”
Cohesion and rural funding · European Globalisation Adjustment Fund
- “And a lot of changes are taking place in different national settings and how they want to reflect that in the council structures, which of course is not something which the commission has in its hands. Um, but I think that generally speaking here there is a there is a need to learn to work differently. There is a co-construction here between EU public authorities, member states, national governments and industry themselves who are actually themselves executing the strategy through their de-risking, either because they are implementing Amending regulation. If there is something that regulates the issue, or responding to a certain number of incentives for themselves to take forward a de-risking. Of course, the European Parliament will play its role in this, of course, as co-legislator, but also by making sure that you can exercise through the work of this committee, the democratic scrutiny over the different areas of policy, some of them being, again, development of new legislative instruments, some of them being the implementation of existing existing instruments. So when we come and report to the Parliament on what happens in terms of strategic trade and investment controls at EU level, what happens when it comes to trade defence instruments in the broad sense of the word that that is also where these these issues will be tested and looked at. So I hope that covers most of the points. I hope I haven't forgotten anything, But in any case, this is certainly, for us, a useful first exchange. Thank you.”
EU policy on screening foreign investment in strategic sectors and critical infrastructure · EU policy on social & environmental impact of foreign investments
- “So that is, of course, an important metric. And several of you mentioned, of course, the issue of the import side of the equation. I mean, we don't look at this from a mercantilist export point of view. We look at this from the point of view of both exports and imports, not least because you need to source certain materials that are not necessarily plentiful in the EU, and you need to import in order to export. So all this, of course, means that the the free trade agreements in particular, are playing, again, a role when it comes to cushioning the risks relating to supply imports of goods. I'm thinking, for example, about, for example, the role that Kazakhstan plays increasingly in our supply of LNG, or the imports of materials and minerals and and metals such as copper, for example, from a country like Chile, which is of course, big reserves. And where we have modernized the agreement in order to ensure, through a number of provisions on trade in goods and critical raw materials, stability and predictability of the framework under which this trade operates. Um, surely relative to.”
Natural gas · Free trade agreements (FTAs) · Sourcing of critical raw materials
- “These have been already starting to take place and will be reinforced going forward. And I think the the need to minimize external, uh, negative externalities on our partners is also something that is well taken, uh, into, uh, into account. The question is what is the locus for doing this and whether there is space in the WTO for WTO members of WTO members to engage on these issues for the time being. We believe that there's a lot to be done with key partners on a bilateral basis, but also in some other plurilateral settings. These issues of economic security and resilience are being discussed actively by us representing the EU in the G-7 context. When it comes to the question of economic coercion, I would point out to the existence of a G-7 economic coercion platform, which I believe is important precisely to try to find some sort of a collective normative approach to these issues. Uh, on this, uh, I think the ideas that, uh, Doctor Paulson has put forward are indeed interesting. We continue to believe that there is space for having normative discussions about, uh, these different new policy Settings going forward. Where we do it and how we can do it is, of course, a matter of or reflection of the political possibilities, uh, for, uh, for doing this. Um, we think that there are certainly elements of, uh, the international rule book that need to apply. We believe, for example, uh, and this is more in relation to what George said, that, uh, the Chinese export controls and the use of the Chinese export control law in order to impose restrictions and licensing requirements on a very broad range of basic materials and in specific case, rare earth elements, uh, indeed, without evidence based parameters, is something that we consider as an element of concern from the point of view Of Chinese international commitments, including commitments in the WTO.”
Trade relations with China · EU policy on screening foreign investment in strategic sectors and critical infrastructure
- “You're very right that the one of the big issues, strategic issues, is that there is inevitably going to be more nontraditional approaches to the use and recourse to export controls when it comes to emerging technologies that are not inherently or have been traditionally understood as classically dual use in the sense of the regimes, and in particular driven by the logic of non-proliferation of weapons of mass destruction, it's evident that there is a much broader scope, uh, where unilateral or lateral controls have already started to emerge outside of the regimes and on which the EU needs to be able to position itself. And this is precisely why we need to continue to implement, uh, the, the workstreams of the White Paper of 2024, but also come to the legislature. No doubt at some point with an update of our framework, which has to continue to evolve with the reality around us. And there is it is not a thinkable that we can have a framework legislation in place in these areas which are so fast changing and that these are not going to require, I would say, relatively frequent amendments. The same applies to to investment controls. Finally, on the question of, um, how to diversify, who to partner with. There were a lot of questions there. I would just say two things.”
EU policy on screening foreign investment in strategic sectors and critical infrastructure · Disarmament and non-proliferation of weapons
- “Thank you very much, chair. Um, and indeed the document policy document, the form of communication that the College of Commissioners adopted last week is a further step in the development of a policy as a communication. I should perhaps start by saying that it is is fundamentally a sort of directional statement of policy. It's also a framework for more detailed policy measures that need to apply in this area of economic security and resilience. Some of them are already identified and proposed by the Commission. In that text, some of them will be taken forward in subsequent steps. This is evidently a policy that is there for the long haul. So perhaps I should unpack the main elements as we see them from this, uh, this text, and seek your your views, reactions in order for us to take forward. Uh, subsequently, as I said, some of the policy measures. Um, so the communication, because it is of the kind of document that it is, does certain things. First, it renews the diagnostic about the context in which commission, from its part, believes that the internal market is interacting with the rest of our economic relationships. And in particular, it highlights that we see and we've seen since 2023, since the first economic security communication that the previous college put forward, we see a more aggressive use of economic statecraft by other players, more weaponization of dependencies, and as a result, more pressing vulnerabilities. And this is why the economic security communication was accompanied by the EU Action plan, specifically focused on the issues relating vulnerabilities with respect to critical raw materials.”
Sourcing of critical raw materials · EU policy on screening foreign investment in strategic sectors and critical infrastructure
- “We remain convinced that there are ways to obtain changes on the ground in these areas through engagement and cooperation under the agreement and the agreements under dogs, and the role that the dogs play under the agreements are enabling us to see a positive result, for example, in terms of ratification and implementation of core ILO conventions or of multilateral environmental agreements, which is what our trade agreements support in these in these provisions, the report actually contains. But I want to to go into detail, but contain examples of where we have seen some of these changes over time. We have had recourse once to the dispute settlement provisions under the one agreement, which is the Korea agreement, on the basis of the TSD provisions when it comes to, uh, to labor. But that is not a necessary and unique tool. It can be judged to be an appropriate step in order to resolve a dispute about the compliance with the provision. But we also think that and we have seen this on the basis of the complaints that we have had received recently, for example, are engaged with Colombia, that we are able, through engagement with the countries, to obtain a number of policy changes and measures, which are the result of the implementation of the agreement itself. Um. The.”
Due diligence in supply chains (environmental and human rights) · Free trade agreements (FTAs) · EU policy on labour exploitation in global supply chains
- “And that's why we also discussed this in the context of our civil society dialogues on the on the, the DAGs. Um, I would just say there that, um, the facility is, uh, I mean, it's not a political tool. It's that in order to support the framework framework as established under the agreements, if there are issues about the functioning of the DAGs, not on the EU side, but on the side of our partners, these are things that we discuss and we discuss with the partner state to state, notably under the TSD committee subcommittee of these, uh, of these agreements. Of course, the the treaties do not prescribe how our trading partners are organizing their interactions with civil society. There is a limit to how much that can be prescribed in the context of bilateral trade agreements. In the same way that I don't think we would like third countries to actually tell us how to organise our internal processes of interactions with stakeholders. So there is a limit to how much this, uh, this setup can serve as leverage. But we are looking very carefully at whether any of our partners would be in breach of the provisions in the TSD chapter, and that includes the commitments that they have taken vis a vis the the interaction with civil society and the establishment of the of the DAGs when it comes to the issue of, of on on sustainability provisions of recourse to dispute settlement.”
Due diligence in supply chains (environmental and human rights) · EU engagement with civil society
- “Um, the focus of the work is to set out how this expanded toolbox of unilateral instruments that have been put on the books over recent years can be used in a more strategic way to support economic security resilience type considerations. It will include certain principles for the use of tools, rules of engagement for the cooperation between the EU member states and the private sector. Because all these, of course, are tools that are in some cases regulatory, in some cases more providing a set of incentives for market forces to to react to. So transparency predictability about how we use these unilateral instruments in the Protect toolbox is going to be very much the center of the focus on the on the doctrine, even though of course, we want to make sure that we do not fall into the trap of looking exclusively or excessively at the protect side of the policy and not actually giving enough focus to the promote side of the policies. Whereas in many areas, the de-risking will come from efforts on the promote side rather than the protect uh, side. Uh, as I said, the concept of economic security standards, on the other hand, refers to, uh, supply chains.”
Due diligence in supply chains (environmental and human rights) · EU digital & tech sovereignty · EU policy on screening foreign investment in strategic sectors and critical infrastructure
- “Uh, and, uh, you know, relates to how to reverse an excessive market dependency over time, how to reinforce trust among like minded partners, uh, and how to prevent, where necessary, or limit access for untrusted entities from third countries to certain European markets, in some cases for reasons linked to security and public order, in some uh, for some other, uh, in some other respects when it comes to the risk of weaponizing dependency. So internally, of course, there are a number of measures related to economic security standards and diversification that are being developed as part of various policy initiatives in the industrial policy space, let's say, and externally, in parallel, discussions are taking place on these issues in various fora, including notably the Critical Minerals Action Plan that was endorsed last month by G7 leaders to support diversification and de-risking. To underpin all this, we are and I'll finish with this. We have been establishing bilateral strategic dialogues on economic security with a number of key partners Japan, South Korea, Canada, Australia, Taiwan, the UK in order to see how, uh, more deeply we can go on these issues of cooperation and the convergence of policies, because it is, of course, easier to do that on a bilateral setting than in rural setting, such as, uh, the G7, where the work will will continue. So I hope that gives you an overview of the of the ongoing work and shed some lights, which can be useful for the discussion today. Thank you.”
Sourcing of critical raw materials · EU policy on screening foreign investment in strategic sectors and critical infrastructure
- “Thank you. Thank you very much, chair. Um, I don't think I will deliver a doctrine to you today, but but I'm happy to to give you as, um, as an entry point into the this hearing and the discussion you will have with a number of experts. Uh, an update on on the different, uh, work streams that are being taken forward under the economic security umbrella inside the inside the commission. Um, because we, like many other jurisdictions, are experiencing this shift in policy. Where are our economic? International economic policies in particular, are moving from being essentially driven by considerations of economic efficiency and purely that and introducing within the mix an element of consideration to economic resilience or economic security. Um, the two, uh, terms being, uh, probably to a large extent, but perhaps not completely overlapping. Um, now we continue to do this inside the commission, within the services, and under the authority of the college. Uh, we continue to do this through the lens of the three pillars of the strategy that the previous commission adopted, as you referred to it in June 2023. Um, by promoting, uh, competitiveness and some of the sectors that are particularly relevant in terms of technological leadership and indispensability. Protecting against risks through a number of protect tools or instruments, but also, and importantly, not doing this in isolation inside the EU. But partnering on these questions with others to reflect the fact that everybody is undertaking shifts in their policy stance in this respect.”
EU policy on screening foreign investment in strategic sectors and critical infrastructure
- “And that is the balance that we need to find in terms of the efficiency of these measures. And at the same time, maintaining the right degree of economic integration that we want to maintain when it comes to selecting technology and taking action and focusing on where to de-risk. As I said, the important thing is to focus and have a framework in place which is being developed inside the Commission to focus more quickly on the highest risks so as to bring mitigation measures faster. And in some cases, it is correct. The reality is biting already. It's not a putative risk, it's a real risk. This the disruptions created by the new, the implementation of the new export restrictions by China on critical raw materials, rare earth elements and permanent magnets is having today a real world industrial supply chain impact. It is not indeed a one off question. And so to address what was said there, I can only say that in the face of these kinds of policies, we we cannot accept, of course, any kind of of form of, of coercion. It will take time to reduce dependency. So it may well be that we will need to use more active economic statecraft than the use of leverage in order to balance and find solutions to these, to these issues going forward. Going into that bilateral summit next week and beyond. Thank you chair.”
Trade relations with China · Sourcing of critical raw materials · EU policy on screening foreign investment in strategic sectors and critical infrastructure
- “In the last six months under the new college, the implementation of this strategy has actually accelerated with a new internal governance structure inside the Commission. With the creation of the Commissioners Project Group on Economic Security, which is indeed chaired by Commissioner Cisco and with DG trade, now renamed DG Trade and Economic Security, and we are reflecting those changes also in our internal internal organisations, uh, Providing coordination with a very wide range of commission services involved. The project group usually brings together at least nine members of the of the college and serves as a sort of, um, I guess, the equivalent of a of a cabinet committee in a, in a, in cabinet government, uh, structure. Um, uh, for uh, the for, for, for, for framing the discussions here, I think maybe I can go through the, the, the latest state of play of, of the most relevant initiatives. And you mentioned some of them first. Uh, the project group of commissioners is increasingly setting its sights on not just taking receipt of, uh, risk assessments that are being put forward by, uh, the services to them for examination, but are increasingly looking at the question of how to mitigate risks in a number of identified high risk areas which are put on the agenda of the project group. The first phase of the risk assessments on the resilience of supply chains on one hand, and on the weaponization, the possible weaponization of economic dependencies on the other hand. So therefore, the the risks of coercion as we see them, these exercises, these assessments have been completed in 2024.”
Sourcing of critical raw materials · EU policy on screening foreign investment in strategic sectors and critical infrastructure
- “That goes to the question of finding the right balance between the promote and the protect approach, and having a holistic approach to these, to these questions. Uh, uh, trade restrictive or control measures can be disruptive and they can be used for good reasons. They are not necessarily transformative to be transformative. It is likely that it is an promote zone that we will find this. So that links to the links to several things. One is this call that has been expressed here, and I think we have heard that we need to, uh, have the ability to map and support, uh, are key technology holders and their ecosystems and understand that they are European strategic assets. And I think it is relatively clear that there is a representative of that here with ASML and its ecosystem. Uh, the second is to recognize the economic security might cost money and hence the link that you have expressed, Mr.. Rembrandt. To the to the MFF. It's evident that this is on the promote side, a very important aspect, whether there is financial capacity at EU level to take forward certain promote type uh, policies, and at the same time that there can be trade offs, which is a point that you have made. And in order to reflect the reality that economic security policies can involve trade off in costs.”
EU digital & tech sovereignty · EU policy on screening foreign investment in strategic sectors and critical infrastructure
- “And I'll come back to the content of that, um, is high compared to the overall average of transactions. So the phase two, the more complicated transactions tend to be very much, uh, centered in that very broad manufacturing plus ICT, uh, zone or a set of sectors. And it's a set of sectors because manufacturing covers a lot. Uh, on the other hand, in the non-sensitive cases, you see a lot of transactions in the area of retail or wholesale. And it's not it's not surprising in a way that there is somewhat less sensitivity from a pure security or public order standpoint on this. If we move to the, uh, the next slide. So, um. For the phase two cases where the manufacturing sectors are dominant, uh, this is this, this these pie charts give a further breakdown of the cases by the factors that trigger an in depth assessment. So what is it that leads to on the left hand side to a phase two assessment of the cases that are screened under the regulation and under the mechanism. Um, the factor that tends to trigger uh, the phase two review, typically, uh, the factors are either because the investment is in critical technology sector, it's about half of the total or in critical infrastructure or relate or raise issues relating to the supply of critical inputs. So these are basically the three main triggering factors for in-depth screening at the level of the EU, much less, for example, some of the other risk factors that are identified in the regulation.”
Sourcing of critical raw materials · EU policy on screening foreign investment in strategic sectors and critical infrastructure
- “Of loopholes. Well, that is precisely what we hope the co-legislators will, uh, bridge by, uh, coming to an agreement on the revision of the regulation. The the the the review as proposed by the Commission is very much focused to closing loopholes and introducing efficiency, Both. When it comes to loopholes, it's very evident that there were two very important fundamental problems in construct with the regulation as it stands. One is the absence of mandatory screening for all member states, and the second one, but that is being progressively, in a sense, transformed by the facts and by changes at national level. The other one being the screening of Intra-eu investment, where the ultimate owner is outside of the EU. And that is not, uh, from our point of view, uh, a competence grab or a mission creep of the instrument. It is precisely the necessity to close a significant, uh, significant loophole, because that was a loophole for the rest, the improvement in the regulation, uh, can come from a number of things. Uh, we very much agree on the commission side with what, uh, Daniel Caspary was saying about the need for the scope to be properly defined in, in, in, in an instrument of this kind, uh, but also in terms of improving the functioning of the cooperation mechanisms, where, again, we reinforce security, but not by increasing bureaucracy, on the contrary, by reducing bureaucracy or the obligations that end up, uh, weighing on either the ultimate investors or the member states national authorities, which are also concerned about their capacity and resources in this area, as in as in many as in many others. Um donc.”
EU policy on screening foreign investment in strategic sectors and critical infrastructure
- “Um, we see that of course, the landscape of trade, restrictive measures, notably in the US side is not, uh, stable. There are, uh, postponements, countermeasures, uh, adjustments. Um, and that means that the picture is going to inevitably continue to, to evolve before any kind of trend, uh, sets in and trade diversions inevitably will take several weeks to materialise if it is to materialise. Taking also into consideration the time that is needed for shipping, for establishing contractual engagement, etc. so there is a lag which is not fully captured in the data to the end of April. In in our view, it's also fairly normal for imports to fluctuate significantly from one month to to the next. Um, we've seen percentages increase increases that are particularly high, you know, thousands of percents of increase. But in most cases so far in the 55 codes, that is generated by a baseline effect, basically, and in some cases, for example, when it comes to China and Chinese imports, there is clearly between 22, 23, 24 and 25. There are baseline effects that that explains some of the very significant, uh, uh, shifts in, uh, in the data.”
Trade relations with China · EU-US trade relations
- “Thank you very much indeed. This step that we have taken inside the Commission and that we're reporting to you on today was was announced by the president, by the president, von der Leyen, at the beginning of April. And it fits, as you rightly say, within the different pillars of of the overall strategy for for responding to the recent US tariffs and the upending of the potential, uh, global tariff architecture that this creates and leads to, um, together with the our efforts towards diversification, uh, of our of our partnerships, um, the work internally that needs to happen from the point of view of the internal market, picking up some of that potential slack on the export side, and indeed strengthening vigilance on global import flows in case there would be both significant and also potentially injurious trade diversion towards the towards the EU. So, um, the purpose of the task force, which brings together ourselves in the EU trade, colleagues from DG food, I think my colleague Lucia Grenell is here as well as well as the DRC. Did you grow? Did you agree? Because we are looking at this also structurally and through different entry points. Uh, the purpose of the task force is to detect, uh, the trade, divert potential trade diversion, and then to see whether that needs to inform, uh, potential action to protect the internal market from the effects of the trade diversion that could come from the US tariffs and restrictive measures, uh, and, and measures taken by others in response.”
EU Single Market harmonisation · EU-US trade relations
- “Uh, now, in addition to the results lists, the actual list of codes, you will have seen that we have published a heatmap in addition to that which which flags the the potential surges by industry sectors and by origins, rather by groups or group of origins, where the potentially harmful increases of imports would tend to be most frequent based on the observations. So we published the first results online of this on the 5th of June. Um, comparing the import data in the period between the beginning of this year, the 1st of January 2025, and the end of April 2025, compared with the same period in 2024. And the that has actually, uh, produced or identified or showed up a list of 55 product codes at each digit level, where these notable and potentially abnormal increases in imports, in our view, have have occurred. Uh, main product groups, including energy intensive industries, Textiles, agro food. But there are a lot of caveats and for, in our view, for interpreting these results. And I think this is what we also wanted to, uh, to share in for your for your examination and review today. Um, first of all, in terms of what we have published so far, these initial results covering that period are not really capturing, in our view, potentially potential trade diversion following US measures because those were ramped up basically from March onwards.”
Carbon Border Adjustment Mechanism (CBAM) · Carbon leakage support · EU policy on custom fee on non-EU imports
- “Um, we believe this first principle that underpins this work and why we are trying to build an evidence basis for taking this strand of work forward, is that if there is to be any action to address, uh, trade diversion effect, it should of course, be be proportionate, uh, targeted. Uh, and as I said, uh, evidence based. So we need to, to, to act on the basis of actual trade flows and observations and not on the basis of, uh, concerns. Um, so what the initiative does is to monitor the import trends from all origins. So this is not just from China or from the US because we are. See? We are concerned about the global trade effect of this potential upending of US tariffs and to detect, as I said, possible harmful import surges for certain product codes. And the idea is to give ourselves the basis for actually engaging with European industry, European economic stakeholders, which can then help us to complement the information that is available to us through the observation of of trade data with additional sources of, of information. What the task force and the initiative is not there to do is to provide a sort of ready made list of products on which we would somehow automatically, uh, impose trade contingency type, uh, measures or directly form the basis for initiating investigations? Certainly not.”
Trade relations with China · EU-US trade relations
- “So it's a collective endeavor. This, this this exercise, um, it links potentially to a number of um instruments under the CCP, um, and trade defense instruments. Of course, this issue lends itself a priori much more to a sort of trade contingency type instrument which which we have in our toolbox, uh, as EU, uh, which originates from the WTO agreement, which is the safeguard instrument. We have a safeguard measure in place today on steel. I'll come back to this. Uh, it is a little bit different from the structural trade defence instruments, which are based on a a structural distortion that is corrected through the instrument. In the case of a safeguard. The issue is whether there is an injurious. Sudden surge in import, which is precisely the issue that we are trying to look at. To look at here. Now, it is true that it is not something that suddenly appeared. And in many sectors we are already seeing a significant amount of import pressure on the internal market, um, basically across a whole range of industrial sectors where we have seen and we are, uh, cognizant of global over capacities in many cases generated primarily out of China, and the distortion that the Chinese state capitalist system actually creates on internal markets. That is true certainly for a range of sectors such as steel and metals. But it is also increasingly true across a range of other sectors, notably in the, green industrial supply chains.”
Carbon Border Adjustment Mechanism (CBAM) · Trade relations with China
- “But that is basically how we're trying to, uh, to approach this. And again with two steps. One, is there something sudden and abnormal in the flows? And then two, very importantly, is that injurious. And we need to look at these two components. So there also has to have a proportionate uh reaction If there is a need to have a reaction to to those changes in circumstances when we when the, the, the, the, the monitoring system throws up, uh, customs codes. Um, what it enables and what is going on with respect to the first 55 codes, uh, that have been identified, is that, first of all, it enables us to focus our continued surveillance of the flows, but it also gives and it's very important. I want to emphasize this, an opportunity for EU based market players in these product areas to actually tell us, with much more granularity than what trade data or customs data in this case can tell you about what is actually happening on the market. That is the natural next steps, and that is what we we are seeking from, uh, European stakeholders in order to be able to provide a, reaction from a public policy standpoint if necessary, which is both a proportion, as I said, but also timely and fast enough so that we are not behind the curve.”
EU policy on custom fee on non-EU imports
- “On steel, of course, we have a safeguard measure in place, and I will just recall here, but I assume that the EVP may have addressed this as well to today, that in addition, the Commission in the Steel and Metals Action Plans will take in the commitment to ensure a highly effective level of protection beyond the duration of the steel safeguard after the 30th of June of of next year. So, in a way, on steel, we are in a much already in a in a much more managed trade situation than we are in many other sectors of our international or our international trade when it comes to safeguard. You were mentioning that indeed, this is normally initiated on the basis of a request by one or more member states. Uh, the the Commission has the possibility to initiate a safeguard investigations on an ex-officio basis. There is no particular reason to to do that. This is where, of course, there's a difference between, uh, structural trade, defence and safeguard. Is that here? Indeed, it's a member. States are the commission are initiating. And this is not to be done on the basis of an industry complaint. But notwithstanding that, we will need, as I said, to get the input from, from from industry. It's not so much um, I'll be I'll do it all in English, even though some of the questions were in French.”
State Aid · EU Competition policy
- “You know, how we how we react, how we continue to work. I would just like to say that we are open to, uh, coming back, of course. And, uh, present as you see fit, the result of this, of this work, uh, to give you any additional information beyond, of course, what we are making public to stakeholders. Uh, and we are also engaging with member States here in the context of the institutional structures that we have, both the Trade Policy Committee, but also the Trade Defence Committee, because obviously there is a link here with the trade protection, the trade protection, uh, instruments. And then there was a question about whether we will be led to amend our, uh, trade defence, uh, policy. Well, there are two different things. We do have instruments which enable us to, uh, make to address sudden increases in imports. So we have these safeguard measures. They exist, and we make use of them now as to whether we need to modernize those trade defense mechanisms in a more overarching way. To enable us to face up to these complex distortions is quite a different question to what we're looking at here today. But together with the Commissioner Sefcovic, we are looking at how the trade, defence mechanisms, anti-dumping, anti-subsidy etc. function in general because we are facing more and more complex situations, transnational situations linked to China but not directly linked to China, distortions, uh, linked to Chinese imports. And another phenomenon that we are seeing more and more often is a push out effect for from third countries that they themselves are suffering distortion on their markets from, uh, dumped or subsidized Chinese goods. So it's a complex situation, but that's how we address our trade defence measures at the moment.”
Trade relations with China · EU policy on custom fee on non-EU imports
- “Uh, Mr. Grotius, you were mentioning cybersecurity. Uh, um, and also, uh, some of the key emerging digital tech areas, which you also mentioned, uh, notably advanced AI, advanced semiconductors, quantum, some references made also to, uh, cloud services, certainly on the emerging tech zones. The Commission considers that we would be well advised to have harmonization of scope, uh, under the legislation as part of the compromise that we hope the co-legislators will find on the, on the, on the text. Uh, because these are things which connect, of course, to our ability to assess risk more broadly when it comes to technological, uh, sovereignty of the EU in these important areas. On the question of outbound investment screening, um, 21 member states have shared with with us with the Commission services, uh, progress reports on the implementation of the recommendation of January 2020 for the member States review our outward investments in these the three critical technology emerging digital technologies that I've just mentioned. That is the focus of what they are. They are, uh, doing indeed. Uh, it is country neutral. Uh, the review therefore, on this basis of these interim reports is advancing, and by the end of June of next year, June 2026, the member States will submit a comprehensive, comprehensive reports which will be the outcome of the review.”
EU digital & tech sovereignty · EU policy on screening foreign investment in strategic sectors and critical infrastructure
- “So at the end of 20, uh, at the end of of 2024, we had a total of 199 trade, defence, anti-dumping, anti-subsidy measures in place in law that we estimate protects something like 625,000 jobs in Europe, uh, and jobs which are associated with, uh, supply chains around more than 100 of product categories. Um, now, um. This, uh, let's say quantitative overview, um, is also the backdrop for, uh, a number of policy, uh, considerations, uh, that we saw emerging in 2024, in which I can briefly highlight. First, we introduced a significant change in practice, which was the automatic registration of imports in all new investigations. That doesn't create any burden on industry. It strengthens the trade defence process because it sends a signal to the market and potentially can allow the collection of duties retroactively. In cases where the conditions to do so are met. And this has happened already. In two cases where imports were registered in 2024 on Eritrea and on wood flooring from China. Second, more policy related issue. We continue. And this is a constant in practice. We continue to pay close attention to making sure that when once the EU adopts a trade defence measures, the measures are effective. They actually stick. Because this would this is what ultimately determines the potency of the instrument. Now we continue to see that the the impact of measures when adopted and implemented is real.”
Trade relations with China · EU policy on custom fee on non-EU imports
- “Uh, we have investigations and measures on the imports of things like candle. Uh, plywood is also a sector where there are many SMEs, uh, EU producers, uh Bob flats, sweetcorn, uh, and of course the ceramics sector which has is typically an SME, uh dominated sector where we have been able to provide significant protection against distortions over the last few years. And finally, in terms of the robustness of the instrument, um, which of course is subject to, to legal scrutiny and very often challenged by, uh, by parties to, uh, the cases. The courts have delivered some very important judgments in 2024, which are important for the stability and the effectiveness of policy. The the Court of Justice, uh, confirmed the findings of General Court on the issue of cross-border subsidies and the way we address this through the instruments, the so-called transnational subsidies or the subsidies that we have seen granted by China under the Belt and Road Initiative. And the court has confirmed that it is possible to attribute the financial support of a third country to the government of the country of origin or export. And that is important because it means that there is applicability of our of our defense tools against these distortions. Um, also the EU's approach in constructing normal value when there's a finding of significant distortions was confirmed in an important court ruling. So these judgments overall, in our view, um, reaffirm our approach or support, uh, confirm that we are right in the approach that we have taken in tackling some of the particularly damaging, unfair trade practices that we have seen over the last two years.”
Trade relations with China · EU policy on custom fee on non-EU imports
- “Final point, uh, of course, in discussing 2024, I can also highlight the, uh, important in size anti-subsidy investigation into the battery electric vehicles from China, which was concluded in in October. Obviously unprecedented in terms of relative importance, uh, in terms of some of the challenges faced in in taking forward a measure of this, uh, of this kind, um, since the measures were imposed, the production of battery electric vehicles in the EU has now increased by 19%, while the sales of battery electric vehicles produced in the EU have increased by 28%. So the market share of the BEVs produced in China has decreased from 25%, which was the level reached during the investigation period to 17% in the second quarter of 2025 of this year. So imports of Chinese BEVs continue to enter the EU market in substantial quantities. But the measures, in our view, is effective and at the same time keeps our market open. So this measure is not a market closing measure. It is therefore playing the role that we would expected to play in a proportionate manner based on an investigation, compared to the nature of distortions that it is there to to Correct. So now that we are actually quite late into 2025, and the report essentially talks about the 2024 number, I think I can say that the factors that we saw at play, which were driving the this continuous increase in the number of cases in 2024, these factors persist, are still there.”
Trade relations with China · State Aid
- “I think we have actually, uh, provided to Parliament a specific report actually, on the implementation of this part of the basic regulation. I can't quite remember when that was, maybe a year ago or last year. Yeah. Um, and, uh, and, and will continue to, to, to basically apply the, the framework that the co-legislators have decided upon with respect to those issues. Uh, when the last legislative change was made, uh, in 2017 and 2018. So some of these elements, social environmental issues are considered in selecting the representative country. And indeed the costs of social environmental compliance can be taken into account when calculating the injury margin when it comes, if I remember correctly, to the target profit. And that means that in some cases this does play a role. It's a limited number of cases where this plays a role. But this is the, I would say, the the strict automatic application of the provision as currently constructed on this in the, in the current, uh, in the current uh, regulation. Um, I think with this, I hopefully I know there is one final point on, uh, well, you asked a very concrete question on, on workload and delays, so I think I have to address that also very directly. So it is correct that, uh, currently, uh, the this increase in workload is leading to more delays, in particular in the ability of the Complaints office to deal as quickly as we would ideally want with the incoming complaints.”
Due diligence in supply chains (environmental and human rights)
- “Just a couple of comments in French because the question was asked in French. Firstly, there was a question of surveillance and what we do with imports. I did note down what you were saying about having wanting to start a new discussion to take stock of, of what we've been witnessing. The approach that we've adopted up to now has been based on transparency. It's been a question of using these measures as efficiently as possible. We have customs databases, and this makes it possible to track imports with very short deadlines in place to ensure that these transactions are being monitored. And we're talking about a deadline of about three weeks, which is quite a swift reaction time from our point of view. Purely based on external databases. We then publish a precise list of customs codes that we use on the basis of a certain number of filters, and we see where there are abnormal trade flows occurring or abnormalities in prices. Both of them have a role to play. The logic behind it, and this ties in with other questions that were asked about this. The logic underpinning this system is to provide industry the means necessary to provide us with market related data, to see whether there's been any, any impact of these imports. That's what counts. We can take trade defence measures. And if we see that there's a sudden spike in in imports. Then there needs to be a significant there needs to be an impact. And these this information that we have, we can only compile this information on the basis of what comes to us from European industry. This is why it's so crucial to ensure that we have a mechanism in place that is based on cooperation with industry, and is not simply that we bear the responsibility for solely as European authorities.”
Carbon Border Adjustment Mechanism (CBAM) · EU policy on custom fee on non-EU imports
- “Yes on this question, which is a feature of the of our legal framework. Uh, I mean, it's a bit like what I was saying on the, um, taking into account social environmental issues. I mean, we, you know, we currently operate the, the framework as, um, as was stabilized and set, uh, uh, in in 2018 after the, the modernization. So that has already had an impact, as you recall, because the lesser duty rule is no longer applied in anti-subsidy investigation in some cases in anti-dumping investigations. Um, and, you know, if we want to have a different if we want to change in practice, then of course this would require legislative change of the basic regulation. So currently there is nothing in front of, of the co-legislators uh, for, for that. What we, what we have seen, though I would say empirically, is that, um, Overall, we believe that the measures that were based on the injury margins to have achieved the objective of of eliminating the injury caused by the dumped imports, because we've seen in most cases, as I indicated at the very beginning, a sharp reduction in import volumes in those cases, in many cases, the levels, the duties are imposed at the level of the dumping margin.”
EU policy on custom fee on non-EU imports
- “As you recalled, the commission decided to give a greater focus through deep dives type analysis on four critical technologies AI, quantum semiconductor and biotech. And some of them are the subject of your of your discussions, um, today where there are considerations of resilience. But there are also considerations of technology, leadership and technology. Uh, indispensability, uh, as a concept which, which we are applying to these to the examination of in these areas. Now these four, For deep dives in these four areas have also been taken forward, and we are looking to cover the remaining six technology items that were identified into it in 23 as well. It is very likely that the scoping for that will be finalised by the project group of commissioners, probably in September. So again, in some specific areas, this is allowed to move from risk mitigation to sorry, from risk assessment to risk mitigations on a number of specific issues, some of them having been very topical, of course, recently, for example, the risk relating to access to critical raw materials and rare earth elements, which are the subject of intense discussions right now and notably bilaterally between us and the Chinese authorities, but also looking at the risks of weaponization of certain services by non-state actors. Risk of disruption of access to semiconductors under certain scenarios with respect to third countries like Taiwan. Uh, in parallel.”
Sourcing of critical raw materials · EU policy on screening foreign investment in strategic sectors and critical infrastructure
- “Okay, just a few points then. Picking up on the question in the comments. Um, I think that, uh, to your point, chair, um, it is clear that there are both trade investment policies that relate to and interact with, uh, issues which fall into the area of essential security. And this is where some of our protect tools fall, and that is distinct from considerations of, uh, economic resilience across all of our industrial supply chains. And these questions with technological leadership or indispensability, where issues such as technology leakage are a problem, but a problem of economic security and nature. And it is true that under the economic security umbrella, we are dealing with different objectives, with different instruments. And one of the objectives that we have is to try to provide. Transparency and clarity about what which instrument is used for which problem. Because that is probably a good basis for sound policy in these areas. There are three, maybe three points I'd like to make beyond that. First. Um, one thing that has come out very clearly for me in these these contributions and comments by members is that, um, we should not underestimate the risks, the vulnerabilities, but we should also, by the same token, not underestimate the strength, uh, the ubiquity that we have, because we do have ubiquity, to use a term that was used by in the previous panel, uh, and are indispensability in some areas.”
EU policy on screening foreign investment in strategic sectors and critical infrastructure
- “Traditional trade integrative frameworks, such as free trade agreements do play a role there. Whether it's with Chile, whether it is with hopefully very soon Indonesia. Given the fact that they they happen to be a jurisdictions where there are a number of materials that we need for our supply chains. The basic proposition that the EU is trying to make, not just in free trade agreements, but also through new instruments such as the clean Trade and Investment Partnerships is to look with those countries as whether there is a fair deal in how to share between us the value added that comes from the industrial, the green and and digital industrial transition and transformation at all. Jurisdictions in the world are seeking to experiment and promote, and that is why we need these integrative tools to be able to find that that balance. But it also means that was the point of Mr. Rogers that demand policies, including in the EU, do matter. Its correct. Why? Because there are market failures. That's why we need economic security strategies. And there are also policies and practices elsewhere in other jurisdictions that actually distort the functioning of markets. So it is necessary in some cases for the state to intervene and shape demand policies, the creation of lead markets necessary to provide offset arrangements. And within that and this underpins these efforts. The definition of economic security or trustworthiness standards. But we will continue on the EU side to be mindful to develop those, but not in a way that beggar thy neighbors, our allies.”
Free trade agreements (FTAs) · Sourcing of critical raw materials · EU policy on screening foreign investment in strategic sectors and critical infrastructure
- “Um, I will say much less because a lot of points that have been raised relate more to, uh, policy instruments that will be taken forward or are likely to be taken forward in the proposals for the Industrial Acceleration Act, which will come later, and which which is, first of all, not in the within the remit primarily of DG Trade and Commissioner Sefcovic, but under the authority of EVP Séjourné. So I will not anticipate on that. And I will just say on the pharmaceutical side that, uh, we have well noted, of course, the the strong outward orientation of the sector, in particular the innovative, uh, side of the sector that requires an active trade policy, uh, in the ways that you have described on the question of resilience and dependencies. Uh, whilst it is correct, of course, as you said, that, uh, we do not have import dependencies on APIs for innovative medicines, the situation is different in terms of the import concentration for, uh, APIs for generics. And that is an issue therefore, which is being looked at from the point of view of economic security as well. That has worked, that has been going on now for several years inside the commission, actually, ever since the Covid crisis, where these zones have been identified as areas where import dependencies are still prevalent. Thank you very much.”
EU policy on screening foreign investment in strategic sectors and critical infrastructure
- “Um, to come back now to the what we're going to do with the results and the purpose of the exercise. Uh, the objective is to identify potential trade diversion, which would be harmful to EU industries. So for the time being, it's not yet possible to conclude. Number one, as I said, whether trade diversion or even any abnormal increase in imports overall is really yet taking place. So we have to discuss this discount. The the still the relatively short term fluctuations that are being observed in the data. But then even more importantly, we cannot conclude whether EU industry is is particularly suffering as a result of those, uh, import trends because we do not. And the commission side, of course, have detailed knowledge of, uh, the market realities for each individual product and again the product even within the codes. And that's exactly why we are making, uh, those, uh, verified data publicly available so that the industry stakeholders have an opportunity to review them, to make their concerns known. To share with us on the basis of template documents that we have also put online, uh, their assessment of the market, of the market realities. We have outreached the product to, uh, stakeholders, and we are going to continue to do that. We had a meeting on the 10th of June with the European associations and federations to try to receive the first feedback from the first um, public information provided.”
EU policy on custom fee on non-EU imports
- “We will use existing structures, for example, the uh, the Advisory Committee for Market Access, which can be put to use to interact on the on on these on these issues. And with this feedback, we can keep a close eye on the products, which might be considered at risk of diversion. We can analyze further weather conditions for protective action on a given product. Whether it is a contingency measure like a safeguard measure, or perhaps the use of more structural trade, defence instruments, if the conditions are met, would be actually met. And then we also want to refine as we go along in partnership with industry. The methodology that I have described to you, in particular, the filters that we apply to see if they if there are, if they strike the right balance, as I said, between between catching and not being drowning in data. I also finally want to say, I'll finish with this, and I'm sorry to have overrun that. The next set of results, which we will continue to put that out, is being prepared right now because the data has been generated from the customs database and we will most probably make those data a second increment available on the dedicated web page as of next week. Thank you very much.”
Carbon Border Adjustment Mechanism (CBAM) · EU policy on custom fee on non-EU imports
- “All right. Thank you very much for these reactions. Very useful for us to, to continue to to develop the work on the commission side. Let me try to address as much as I can these different questions and considerations. So first, in terms of, um, how does that relate with our willingness to continue? Of course, to be open, including under the preferential free trade agreements that we have in place, I think there, um, we can distinguish the, the, the frameworks that we have in place with the FTAs who do not produce very sudden changes. The phasing of liberalisation is usually progressive. Um, there is no reason that that the existence of those preferential trade agreements create, uh, noise, uh, against what we are really trying to look at here, which is whether there is a, there are sudden surges in imports that would really be linked to what is happening in terms of trade restrictive measures, or rather, a change in the tariff architecture starting from the United States. That's why we apply criteria to try to identify the sudden nature of the search. Now we had to place the, uh, the bar somewhere, uh, try to again to see what is potentially abnormal versus what is not. You see already in the data that it's not a, it's not a, a straightforward exercise because again, with baseline effect, you can seem to have in percentage terms a huge increase, but it actually doesn't necessarily mean much in terms of what is happening on the market.”
Free trade agreements (FTAs) · EU-US trade relations · EU policy on custom fee on non-EU imports
- “Um, so we have we have been monitoring and dealing with these issues of global overcapacity by deploying a whole host of different type of protection instruments so far. We had already, by the way, where necessary in the recent past, started to introduce a surveillance type instruments. I mean, this was of course much less visible because much more targeted as opposed to this very important horizontal step that we're taking. But we have introduced several months ago, prior surveillance. On the same basis that we are now using much more horizontally with respect to a number of, um, um, tariff codes in the chemical sector for petrochemical products, because we have been seeing, uh, an import pressure on the EU market, notably in the chemical sector over the last year, a year and a half, which is very noticeable and very clear compared to previous years. This is why we have also, as a result, initiated a very large number of trade defence investigations in that sector where there had been no trade defence investigation basically for about for about ten years. So that's the sign that there's something happening there in terms of trade distortions that was not there before. We have also initiated another safeguard investigation recently on the imports of ferro alloys, and where the Commission will take a decision as to what to do in terms of potential measures in response to that investigation.”
EU policy on custom fee on non-EU imports
- “And the actual investments where there is reported prohibition of the investment is a very small percentage of the totality of what is screened. If you move to the next slide, the next one here, I move to the what is happening within the corporation mechanism and how we operate, uh, at EU level with member states. Uh, the regulation, uh, now, of the 477 cases that were notified last year, uh, the big bulk vast majority, 92% are closed within the corporation mechanism very quickly. So in so-called phase one, within 15 calendar days and only 8% of the totality requires a more detailed security risk assessment. Inside the cooperation mechanisms, so-called phase two transactions, that is not in itself indicative that there is a problem, there is over notification. Although of course, tangentially, we would like to continue to see the system evolve, including via the revision of the Colegislators will bring in order to make sure that more and more focus is put increasingly on the more sensitive cases and not the contrary. It's a question of efficiency of the of the of the system. So there is a steady trend regarding the share of these cases that are non-critical. Uh, and we are we are basically have a stability in terms of these, these percentages, uh, over time. And uh, as you can see, the commission issues a formal opinion or has issued.”
EU policy on screening foreign investment in strategic sectors and critical infrastructure
- “Sorry. Last year, a formal opinion in less than 2% of all cases, which again reflects a targeted approach to screening and this is about formal opinions under the regulation. There are cases where the Commission brings to the attention of the notifying member States certain things outside the framework of a formal opinion. If we move to the next slide, um, so this is now moving to the question of the value of FDI transactions that are screened under the cooperation mechanism. So we see that basically 30% with very large transactions above €500 million and a non-negligible percentage of transactions are, on the contrary, much smaller to 17% of what has been screened under the regulation are a transactions of a value of less than €10 million. But this doesn't mean that that these transactions are not potentially or necessarily unimportant, because in some sectors, including emerging tech sectors, you can also have other investments where the equity valuation is not yet significant. Uh, as uh, the, the market deployment of the companies concerned or the entities concerned remains remains limited. If we move to the next slide, um, now that looks at the sectoral, uh, coverage of what comes under the coordination mechanism and the screening. Um, so, uh, there is a difference between the average of the, uh, handle cases and those investments that are subject to a detailed security risk assessment. So the phase two Cases. So the share of target companies that are active in the manufacturing sector writ large.”
Sourcing of critical raw materials · EU policy on screening foreign investment in strategic sectors and critical infrastructure
- “And therefore, this is why, uh, when it comes to Emira, the idea is very clearly to test whether this existing statute can actually be used for the purposes that have been identified so far. And I continue to be identified for the risk assessment work or whether it will fall short. And if that's why the decision is to actually undertake a very rapid evaluation of this in this new context. But the Commission decided not to prejudge too early the need for additional legal authorities in this area without first fully testing the existing the existing ones. Um, on the um, on the questions of, uh, how not to be a paper tiger, uh, and about who is executing the strategy because the two I guess the two things are linked. Um, so I think that there, um. We have to separate what is in the air in the realm of general policy orientations and what are the actual concrete policy measures to come, whether they're policy measures that are identified here, or whether the policy measures that will be reinforcing? There are a number of measures envisaged in the in the industrial policy and tech policy areas. And I mentioned some of them on the sectoral side, which are going to be contributing when it comes to executing. So things have changed and are constantly changing in the setups. It's very clear that in this area, the commission needs to work in a very close and probably different manner with member states, because here economic security outcome is the sum of policies that are done at both at EU level and national level.”
EU policy on screening foreign investment in strategic sectors and critical infrastructure
- “For example, the question of access to sensitive information. And on the right hand side of the chart, you have a breakdown of the phase two cases, specifically when it comes to critical technologies, or where it is that factor that has triggered, uh, the, uh, the, the, the substantive, the substantive, uh, screening. And there you see basically that it's a combination of, uh, defense, uh, semiconductors and other emerging tech, which you find in the other critical technologies gray box there, which you have where you have, for example, artificial intelligence, quantum, etc.. So taken all together, this is what, uh, materially, uh, the, the cases are, are about. And finally. I'm sorry. I've been a bit long on the next slide in terms of where the investment comes from. There we see a continuity over time. More than 50% of the transactions are from American or British investors. Other investors from Japan are in fourth place, and investors from China and Hong Kong combined represent about represented in 2020 for about 9% of total investments. That's actually an increase compared to last year, where the share of Chinese investment had had really dropped significantly compared to previous previous years. So we see a take up of those investments in 2020 for us. Next slide, which I will not go through because it just summarizes what I've just said. In 13 minutes. Three. Three too many.”
Trade relations with China · EU policy on screening foreign investment in strategic sectors and critical infrastructure
- “Of sectoral scope and the low number of transactions Trends relating to energy. Uh, what? That is actually, precisely. I think part of the reason why that percentage is low, it's also because we're talking about actual numbers of transactions, and I suspect that it may well be that you have a smaller number, but probably higher value transactions in the energy sector where there is a huge, uh, CapEx or a significant assets of companies. So there's probably less, uh, back and forth in terms of, of, uh, change in capital and ownership, uh, in these, uh, in these sectors. Uh, this is also there's also a question of classification. This is energy defined on the basis of the chapter, but there may well be actually sectors which relate to energy, which do not fall within that. If you want that heading in the data that we put across. So it may well be that we are giving perhaps a slightly biased, uh, rendition of what exactly is the sectoral breakdown of the of the transaction? Maybe this is something we should try to look into for the purposes of this, uh, of this annual report. Um, finally, chair on the on the on your questions, I think that, um, you are quite right that, uh, we're seeing these instruments as part of an overall approach to economic security. And the commission is likely on Wednesday to put forward a new set of ideas, proposals in the form of a communication on economic security and enhancing the coordination, in particular, of economic security tools, of which FDI screening is a part of, and the question of how this instrument works in sync with other economic security related instruments, for example, how strategic investment controls can also be, in some cases a mirror of strategic trade controls.”
EU policy on screening foreign investment in strategic sectors and critical infrastructure · EU approach to energy security (home-made vs import sources)
- “That will include developing guidance. Early next year on certain aspects of the financial regulation. Again, with the idea of preventing that high risk entities benefit from EU funds. That is one of the work streams associated with this, this particular question. Second, block the security related trade and enforce trade and investment instruments. So strategic trade controls, strategic investment controls. We came to indeed to you with respect to the investment control framework last week. And we will see each other soon for the trilogue. There the communication announces that in addition, to continue to implement the framework, the Commission will look into developing guidelines to support the implementation of the regulation. And with respect to strategic trade controls, we will use the evaluation of the dual use Export Control regulation. It is planned next year in order to gear it towards seeing how it can support more actively economic security and resilience considerations. Finally, when it comes to trade and competition instruments there, the communication says basically that these tools will not be modified and will continue to operate under their existing mandates, but that proper consideration will be given to economic security and resilience dimensions in the deployment and the use of these instruments. That means for trade, defence instruments, anti-dumping and anti-subsidy, that from now on the Commission services, when deploying anti-dumping and anti-subsidy instruments, will consider the economic security applications both in the investigations and when necessary, also in the design of measures.”
EU policy on screening foreign investment in strategic sectors and critical infrastructure
- “Second thing that the communication does is give a number of policy signals general orientation principles to guide further actions. I think there are three main ones. One, that the Commission wants to move to a more proactive approach in the area of economic security, as simply as opposed to simply playing defense and being reactive, and also seek to leverage strengths where we do have strengths, including the strengths that come from a highly integrated internal market. Second guiding principle that you find in that statement of policy is the decision to use in a more strategic way, in a more coherent and joined up way. A number of tools in the sense of legal instruments, legal authorities, many of which have been determined by the legislative branch. And this is in that sense that the document is equivalent to a doctrine, but not a doctrine. In general terms, doctrine about the use of instruments which which are listed listed. I will not go into the details there. And guiding principle number three, that this strand of policy or policies, I should say, will be taken forward in cooperation with trusted partners through economic security dialogue, through the development of economic security standards with partners and trusted partners, and by designing risk mitigation measures across different range of policies in a way that tries to minimize negative externalities on trusted partners.”
EU policy on screening foreign investment in strategic sectors and critical infrastructure
- “So there is a premium, uh, that comes from the having in place a preferential trade agreement. It's true in most of the sector categories concerned. And these are Comprehensive Trade Agreement, which covers substantially all trade. Of course, when we look at one area which is agri food exports, we see that this preferential premium is even higher than that. Agri food exports in 2024 hit a new record of €235 billion to, uh, to the world, including a large part of that to our FTA partners. The same also applies to trade in services. Of course, there the figures are coming with a lag that we see that trade in services with preferential partners increases again, more than three times as much as trade with FTA partners. Now, that is true across all of the new generation trade agreements that have entered into force basically over the last 15 years. Now Korea. Canada. Japan. Vietnam. Number of others that also have come into force more recently. There's a new agreement with New Zealand, new agreement with Kenya, the EPA. There were there have been modernisation of existing agreements. Now there, if you take these new generation agreements and you mentioned Canada, well, Canada is a good example when you take overall EU goods exports, since the entry into Force of Canada agreement, they have increased by 51%, which is significant compared to an overall a 20% increase of overall exports over the same period to the rest of the world.”
Trade relations with Japan · Free trade agreements (FTAs) · Export of EU agri-food products
- “There will be cases of application of this that are in the pipeline Line. And when it comes to competition tools, the Commission states that it will fully utilize the foreign subsidies regulations in areas where foreign subsidies create not just distortions, but also economic resilience or economic security risks. And finally, when it comes to new measures, the communication points into certain directions without necessarily specifying yet at this stage, concrete measures. I think there are two zones which are worth highlighting. First, commission indicates that we will explore the modalities for encouraging companies, in particular those that operate in specific, high risk, high risk sectors, to source from at least two different suppliers. And again, modalities for ensuring this will be taken forward in the follow up or the implementation of the communication. In the same way that the Commission will explore the possibility of providing financial support for companies that are subject to foreign direct investment screening. In situations where the financial viability may be at risk absent the investment, and that these are situations, notably in certain start up related sectors where we see a risk to our continued technological leadership in certain key areas. I think I have had the opportunity to mention quantum at your last, at your last meeting. Finally, and I'm sorry, I will finish with this. There are more specific proposals that are made or announcements of measures to come that are made in this communication.”
EU digital & tech sovereignty · Sourcing of critical raw materials · EU policy on screening foreign investment in strategic sectors and critical infrastructure
- “Yes, thank you very much. And thank you for for allowing me to do the two points, one and one, one after the other. And this report, of course, is of a broader scope because it looks at the whole well, it looks at different aspects Or all of the aspects of the CCP which are not the negotiation of new agreements, basically. So it is therefore covering a wide range. It's the fifth annual implementation report since we decided to merge a number of tools and data into one. So again, here to enable the Parliament in particular to exercise the scrutiny over all of the downstream, let's say, of policy, the downstream of policy is important and is challenging. At the same time, we see and we continue to see that the the global environment for trade and the environment in which our economic operators avail themselves of the agreements and arrangements that we have negotiated and put in place remains difficult with, uh, continued trends towards protectionism, import substitution that we observe in many, in many jurisdictions. And that is not improving. If anything, we are seeing a more fragmented and fractious international trade system. But that is why we are advancing the trade agenda in terms of negotiations, and because we are putting more agreements on the books. It's extremely important to make sure, in particular, with the preferential trade agreements, the 44 trade and trade agreements that we have in place, that we ensure that they are they genuinely contribute to greater economic integration, and for that, they need to be properly implemented in spirit and in law.”
Free trade agreements (FTAs) · Asia-Pacific · EU policy on custom fee on non-EU imports
- “They are unabated. Ongoing trade tensions with the US, with Chinese overcapacities might continue to to funnel problematic imports to to Europe. So requires us to increase vigilance in terms of trade defence. As you know, we are also vigilant in terms of any potential surge in imports and have introduced an economy wide surveillance of imports, which we publish on a regular basis and on which I've had the opportunity to, to to discuss with you once before the summer break. That effort continues, and it will enable domestic industries to also be able, if the facts justify it, to benefit not just from trade, structural trade, defence protection, but also, if necessary, from trade contingency, uh, type measures. There's a lot of so there's a lot of volume of work. Um, we have secured some additional resources for the trade. Defence services for the director G. Of, of of of DG trade. Uh, and that, uh, should go a long way to help us maintain, uh, the standard that we want to have in serving the interests of EU industry, which the instrument is there to, to serve. So I guess I will leave it there and of course, happy to, to to reply to any, any question that you may have on this, on this, this policy area.”
Trade relations with China · EU-US trade relations