Brussels:France and Germany have urged the European Union to develop new trade tools to safeguard European industry, asserting that the current measures are inadequate to meet the challenges facing the EU's trade system.

According to Anadolu Agency, French President Emmanuel Macron and German Chancellor Friedrich Merz addressed a joint letter to European Commission President Ursula von der Leyen, expressing concerns over the EU facing 'unprecedented challenges.' The leaders highlighted the impact of trade 'weaponization,' market-distorting practices, and global macroeconomic imbalances on the rules-based trade system.

The letter warned that these factors compromise the competitive environment for European companies and threaten the EU's status as a key industrial player. Macron and Merz stressed the urgency of action to mitigate these threats, diversify, and reduce risks.

While acknowledging ongoing efforts to enhance the EU's resilience and competitiveness, the leaders emphasized that existing trade defense measures are insufficient. They proposed a 'comprehensive framework' to introduce new legal instruments that are efficient and minimally bureaucratic.

The first proposed instrument aims to decrease European dependencies and address supply-chain concentration risks. A second tool would target instances where third countries intentionally disrupt fair market conditions, potentially causing significant market distortions within the EU.

The proposed mechanism would empower the European Commission to enact 'decisive' responses, including potentially cutting off access to the internal market. Macron and Merz emphasized that this instrument should be impartial to any specific country.

Additionally, the letter pointed out substantial non-tariff barriers for EU exporters and the influx of non-compliant products in the EU market. It also mentioned exchange rate misalignments contributing to competitive disadvantages for European companies.

Macron and Merz called for strengthening the European industrial base through industrial policy, simplification, and investment. Their proposals are a continuation of discussions from the June European Council and the July Franco-German Council of Ministers, with further discussions anticipated at the upcoming European Council meeting in October.