EU trade legislation
The EU has in place a number of measures to ensure a fair and equitable trade with third countries.
A fair and equitable trade
Over recent years, the EU has been running a fundamental reform of key trade-related rules. The main areas covered are:
- anti-coercion
- foreign direct investments
- bilateral safeguards
- trade defence instruments, including anti-dumping
The EU's legislative initiatives aim to protect Europe's producers and businesses from the potential damage which certain trade practices by foreign entities can cause.
Screening of foreign direct investments
The EU has rules in place on the screening of foreign direct investment (FDI) into the EU, to enable member states to check and control foreign investments in the EU and address any risks to security or public order. They do so in cooperation with other member states and the European Commission.
On 11 December 2025, the Council and the Parliament reached a provisional deal to revise a regulation on FDI screening from 2019.
The provisional agreement will be endorsed by the Council and the Parliament before it is formally adopted. The rules will start to apply 18 months after the revised regulation enters into force.
The revised FDI screening arrangements are part of the EU's strategy to strengthen its economic security and to protect strategic industry sectors from risky investments by foreign investors.
Foreign direct investment screening explained
Anti-coercion measures
On 23 October 2023, the Council adopted the anti-coercion instrument. This tool aims to deter third countries from targeting the EU and its member states with economic coercion through measures affecting trade or investment.
Among the measures that could be applied to the third country as a response to economic coercion are the imposition of trade restrictions, for example, in the form of:
- increased customs duties
- import or export licences
- restrictions in the field of services, access to FDI or public procurement
The anti-coercion instrument is designed to de-escalate and induce discontinuation of coercive measures through dialogue. Any countermeasures taken by the EU are applied only as a last resort.
Trade defence instruments
On 8 June 2018, the new regulation modernising the EU's TDIs entered into force.
The regulation aims to protect EU producers from damage caused by unfair competition, ensuring free and fair trade. It makes trade defence instruments more predictable, transparent and accessible, in particular for small and medium-sized enterprises (SMEs).
The EU's objective is for anti-dumping and anti-subsidy instruments to be more efficient and better suited to protecting EU producers from unfair practices by foreign firms and from any risk of retaliation.
At the same time, importers should enjoy greater predictability in terms of changing duty rates, making their business planning easer. The entire system should be more transparent and user-friendly.
Anti-dumping
On 4 December 2017, the Council adopted new EU rules to help protect the European Union against unfair trade practices. They entered into force on 20 December 2017.
The updated EU anti-dumping rules apply to cases where prices of imported products are artificially lowered due to state intervention.
The legal framework removes the former distinction between market and non-market economies for calculating dumping.
Moreover, the European Commission need to prove the existence of significant market distortions between a product's sale price and its production cost.
Horizontal bilateral safeguards
On 28 January 2019, the Council adopted a regulation which enables the application of safeguard measures for trade agreements.
The regulation covers the EU-Japan, EU-Singapore and EU-Viet Nam free trade agreements. EU agreements with Chile, Kenya and New Zealand are also covered by bilateral safeguards. Further trade agreements might be added to the scope.
Bilateral safeguard measures allow the temporary withdrawal of tariff preferences.
Prior to this initiative, this mechanism was proposed separately in each trade agreement.
See also
Last review: 2 March 2026