A week in Brussels, Anti-coercion instrument, Chile, Energy Charter Treaty, India, Latest news

Week in Brussels: MC12, India, Energy Charter Treaty, Chile, anti-coercion

The fact that the international trade policy community’s attention was all on MC12 in Geneva throughout the week does not mean there weren’t other meaningful news on trade and investment policy in Brussels. More below from Rob Francis and Iana Dreyer.

Geneva to India

European Commission executive vice-president Valdis Dombrovskis tends to run trade policy as a side-gig in his gigantic portfolio covering finance, the economy and the eurozone. This week he had to stay focused days in a row in Geneva. Dombrovskis has been much seen roaming the corridors of the William Rappard to help clinch a deal at MC12. There are just some decisions one can’t delegate.

Here again a summary of the key outcomes of this night’s MC12 meeting in Geneva– brought to you by Chris Horseman.

India was at the centre of attention in Geneva as its maximalist demands almost scuppered the whole ministerial conference.

And India – represented by its charismatic trade minister Piyush Goyal – is now in Brussels to kick-start negotiations towards a free trade agreement, an investment agreement and a geographical indications agreement with the EU.

India was also the centre of attention at the international trade committee this week, with a report by rapporteur Geert Bourgeois adopted by a large majority on Thursday (16 June). That should offer some guiding principles for EU negotiators.

More on the EU India FTA talks from us very shortly.

EU Chile FTA update – Chilean politics and splitting discussions in EU

There were further noises this week from policymakers that the updated EU-Chile association agreement could be signed by the end of the year.

Summarising the visit of a European Parliament delegation last month to Santiago, Bernd Lange told fellow MEPs in committee that he was “quite optimistic” that the signature could take place this year after the summer break, with the Chilean ministry reportedly aiming for November.

Were this to happen, it would pave the way towards ratification in the EU during 2023.

Lange’s comments echoed those  last month from the EU’s High Representative for Foreign Affairs and Security Policy Josep Borrell who had also struck an optimistic tone and signalled similar timing for the signature.

A deal with Santiago had been reached towards the end of last year. But a new Chilean government, which came into power shortly afterwards, wanted additional time to analyse it.

Chile itself has been undergoing some political reconstruction of late. In addition to the recent election, the country’s new constitution will be published for consultation on 4 July before a final vote will take place on 4 September.

Overall the mood music over the deal seems to be positive.

In what could be another upbeat development, the Latin American country’s chief negotiator this week met with the Director-General of the European Commission’s trade department Sabine Weyand on the sidelines of the WTO ministerial conference.

Association Agreement splitting issues

During this week’s exchange in parliament Romanian centre-right MEP Iuliu Winkler, who was part of the delegation, noted that the Chileans want the document to be ratified as one.

The EU however is insisting that it needs it to be split up into the association agreement, the trade element, and the investment agreement, to fall in line with the 2017 Singapore ruling from the European Court of Justice.

More generally, the EU may slowly be turning the corner when it comes to getting trade agreements over the line following a long period of introspection and the tabling of several unilateral instruments.

“2023 has to be the year of trade agreements in the European Parliament” said Winkler, referencing the agreements with Chile, Mexico, New Zealand, and Australia which should in his view be ratified by MEPs next year.

This “window of opportunity” does not include 2024, explained the Romanian lawmaker, given the EU elections which will take place in the spring.

ECJ says ruling on modernised Energy Charter Treaty clause would be “premature”

That fell flat.

A Belgian request to the European Court of Justice to issue an opinion on the compatibility of the future investor-state-dispute settlement article 26  of the Energy Charter Treaty was ruled inadmissible by the judges in Luxembourg on Thursday.

The court believes the Belgian request is “premature” given that there is no text available and no precise information on the content of the treaty whose ‘modernisation’ is currently under negotiation. The opinion comes only days before the ECT upgrade talks are expected to be concluded. The court case is part of this wider pressure campaign.

The commission is under strong pressure from a range of member states, powerful political groups in the European Parliament – including INTA Chair Bernd Lange and environment committee chair Pascal Canfin – and NGOs to pull out of an energy trade and investment treaty that dates back to the 1990s.

The EU has sought to include climate and environmental obligations, to carve out fossil fuel investment protection and to reduce investor protection rights. Negotiations formally started in 2020 but had been under preparations for many years.

Brussels will also need to find a solution to the fact that the ECT has allowed a recent proliferation of intra-EU investor-to-state dispute settlement cases, as the large majority of member states and the EU as EU are parties to the treaty.

The European Court of Justice has ruled those cases illegal as it considers them a threat the integrity of the EU legal order.

Anti-coercion instrument discussed at international trade committee

The international trade committee discussed the amendments –  analysis here – tabled by its MEPs to chair Bernd Lange’s report on the critical anti-coercion instrument under preparation in the EU on Thursday too.

The European Commission, represented by DG Trade’s Colin Brown, reacted to a range of amendments in statements that followed on the MEP discussion.

The EU executive is mainly concerned about the proposal tabled by the centrist Renew group and the Greens to create a ‘resilience office’, about being tied to any obligation to follow specific deadlines and timeliness, and about one amendment by the far left that would oblige the commission to first seek to settle the economic coercion matter at the WTO’s dispute settlement system.

INTA’s vote on the report is expected in September. An opinion by the foreign affairs committee AFET is under preparation and is due to be adopted in August.

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