The European Parliament declared the need to protect European companies from the extraterritorial effect of US laws. RT got acquainted with the text of the appeal of the deputy from Belgium Philippe de Man to the European Commission, in which he noted that, despite the EU legislative measures, business suffers from the consequences of “a trade war waged by its main partner against the European Union.” According to experts, the Europeans are unlikely to be able to completely eliminate their dependence on the United States, but it is very important for them to at least reduce it – in particular, by abandoning the dollar.
He clarified that the EU legal norms that give companies the opportunity not to follow the US laws, which have extraterritorial jurisdiction, are valid only in theory. In practice, however, such preferences do not really matter for business representatives from the European Union, who are afraid of losing their share in the American market.
Taking this into account, the parliamentarian turned to the European Commission with a number of questions.
“Given that the European Commission is now talking about a system of common values for the United States and the EU, can it say whether it is planned to include the issue of US extraterritorial jurisdiction in the agenda of the next meeting with a representative of the American government?” De Man asked.
He also asked what the European Commission plans to do to protect European companies from the consequences of the “trade war, which is being waged against the EU by its main partner in” this common system of values. “
Among other things, in his address, the MEP mentioned the measures already taken by the European Union in order to help European entrepreneurs feel more free in the market. Thus, de Man noted that in 2019 the European Commission put into effect the blocking mechanism INSTEX (Instrument in Support of Trade Exchanges), developed by France, Great Britain and Germany, which is a “Tool to Support Trade Exchanges” aimed at “complete isolation” of financial transactions of the parties using it. from ties with the United States. However, according to him, this mechanism has not yet been practically used.
Member of the European Parliament from Belgium Philippe de Man
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© Nicolas Maeterlinck / ZUMAPRESS.com
“Providing Competitive Advantages”
To defend their own interests, Americans often use the opportunities available to them to restrict foreign business through extraterritorial US laws. They apply them against foreign individuals and legal entities in various fields – for example, the fight against corruption, the proliferation of nuclear weapons, or human rights violations.
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At the same time, the United States and European companies have repeatedly suffered losses due to such actions. Thus, due to the US sanctions imposed on Iran due to the alleged non-compliance by the Islamic Republic of the terms of the Joint Comprehensive Action Plan on the nuclear program, the French Total, one of the largest oil and gas companies in the world, was forced to withdraw from the joint with Iran in 2018. a gas field development project worth about $ 4.8 billion.
Her example was forced to follow, among others, the German oil and gas company Wintershall, the sports brand Adidas, as well as Danish company Maersk, specializing in sea freight.
First of all, the INSTEX mechanism, mentioned by Philip de Man, was put into effect by the EU for carrying out trade operations with Iran, bypassing US sanctions. The first transaction within its framework was carried out by Iran and the European Union in 2020. However, this was a deal for the supply of medical supplies from Europe to Iran, which is not subject to American restrictions.
European businessmen also suffered heavy financial losses due to the ongoing opposition from the United States to the construction of the Russian Nord Stream 2 gas pipeline. So, earlier it was reported that in February about 20 companies refused to participate in the project due to the threat of imposing sanctions from Washington, provided for by the American law “On the protection of energy security of Europe” (Protecting Europe’s Energy Security Act, PEESA).
The list of those who left the project included, for example, the German and French insurance companies Munich Re Syndicate and Axa Group.
Construction of the Nord Stream 2 gas pipeline
© Maxim Shemetov
In addition, Europeans were affected by the law Foreign Corrupt Practices Act (FCPA). At various times, many EU firms fell under its influence. Here it was about the payment of fines by companies in the framework of investigations of bribery cases carried out by Washington.
So, in 2015, the French engineering concern Alstom had to pay a fine of $ 772 million.The same law did not bypass the British engine manufacturer Rolls-Royce (more than $ 800 million in 2017) and the largest German financial conglomerate Deutsche Bank (more than $ 120 million in 2021 year).
Note that the European Union has repeatedly expressed concern about the application of American laws against European companies – for example, the head of EU diplomacy, Josep Borrell, criticized the imposition of sanctions by Washington.
“The European Union, in principle, opposes the application of sanctions by third countries against European companies carrying out legitimate business,” he said, stressing that the extraterritorial application of restrictions is contrary to international law.
“European policy should be determined here in Europe, and not by third countries,” the diplomat stated.
In turn, the European Commissioner for Trade Valdis Dombrovskis said that the European Union should strengthen its trade policy “in order to balance the balance of power and protect itself if partners do not play by the rules.”
In general, the imposition of sanctions is the prerogative of the UN, Vladimir Olenchenko, senior researcher at the Center for European Studies at the IMEMO RAS, recalled in a conversation with RT. Despite this, the United States unilaterally and without approval from the world organization is introducing “unilateral restrictive or repressive measures” against its allies, including to ensure the competitive advantage of American companies, the expert explained.
“They proceed from the premise that their legislation should be applied throughout the world. The USA “punishes” its allies for the fact that they conduct their affairs independently, without coordinating with the Americans. And in the American understanding, “coordinating actions” means acting in their interests. Therefore, there is a certain impasse here, from which it is difficult for the American allies to get out: either they must firmly say that they will act independently, or try, as most of them do, to maneuver, “Olenchenko specified.
Yuri Kvashnin, director of the Center for European Studies at IMEMO RAS, noted that the United States is ready to defend its interests to the detriment of partners and in violation of generally accepted norms.
“The United States has its own interests, which are associated with their confrontation with a number of states, in particular with Russia, China and Iran. For this, they are ready to act, despite the WTO norms, ideas about justice, the interests of even American business in a number of cases. Political situations are clearly taking over now, “he told RT.
The road to economic independence
At the same time, the US and the EU are closely interacting in the economic sphere. According to Eurostat, the United States was the EU’s largest trading partner in 2019. The United States accounted for just over 15% (about € 617 billion) of the total EU trade. The second largest trading partner of Europe at that time was China with a share of about 13.8% (€ 561.2 billion).
However, in 2020 (according to experts, this is largely due to the consequences of the coronavirus pandemic), the situation changed – Beijing bypassed Washington and for the first time in history became the main trading partner of the European Union. Thus, China’s share in trade with the EU increased to 16%, and the mutual trade volume increased to € 586 billion.
In turn, the share of the United States remained at around 15%, but the volume of trade between the United States and the European Union fell to € 555 billion.
Nevertheless, taking into account the ambiguous US policy towards European partners, the EU began to think about developing mechanisms to protect against the extraterritorial effect of American laws.
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In particular, we are talking about increasing the role of the euro in international settlements, creating independent payment mechanisms, developing an instrument of compensation for companies affected by extraterritorial sanctions, providing systemic legal assistance to European businesses, as well as introducing counter-restrictive measures if necessary.
However, Anastasia Likhacheva, director of the HSE Center for Comprehensive European and International Studies (CCEMI), questioned the EU’s ability to resist American restrictions in the short or even medium term.
“We can state that European business does not believe in the political capabilities of European leaders to protect it from sanctions and is already actively and systematically curtailing its activities in sanctions with Iran. We can expect the desire of European business to comply with the US sanctions regime in the future in other areas, ”she said in a conversation with RT.
At the same time, the expert added thatin this case It will be easier for European companies to cut off the “problem markets” due to US restrictions than to jeopardize all their other activities.
In turn, Maxim Bratersky, a professor at the Higher School of Economics, recalled that firms from Europe, as well as from many other countries, depend on the dollar, which reduces the degree of their economic independence.
“While the payments are being made through dollars, the Americans have power over these calculations, technical, but very strong,” the expert explained in an interview with RT.
Europeans should move away from the dollar and work in euros and other currencies, the specialist added.
“It will not be possible to completely eliminate dependence on the States, but to reduce it in some way, at least at the technical level, for example, when making payments in another currency, the Europeans can,” said Bratersky.
Moreover, most European companies are forced to follow Washington’s requirements also due to the fact that they earn much more on the American market than on deals with other partners, and “you can’t do much about that,” the expert said.
“As long as the American market remains so attractive and all companies in the world will strive there, the Americans will retain this leverage,” he concluded.
Source site russian.rt.com