EU faces test to get members to cede power on export controls

FILE PHOTO: News conference on the day of a meeting of EU trade ministers in Stockholm

By Philip Blenkinsop

BRUSSELS (Reuters) - The European Union faces a challenge to convince its members to relinquish authority over export controls as it aims to bring in an EU-wide system that would also monitor outbound investment, European Trade Commissioner Valdis Dombrovskis said on Friday.

The European Commission intends to present its "Economic Security Strategy" next month, which is expected to contain measures to avoid China and other rivals gaining access to the most sensitive technologies.

"It's about certain high technologies, emerging technologies, dual use technologies that they do not end up in the wrong hands," Dombrovskis told Reuters in an interview. Dual-use technologies can have both civilian and military applications.

Dombrovskis said the current EU system involved EU members deciding individually when to invoke their own national security interests to control exports.

In the most prominent recent case, the Dutch government said in March it planned new restrictions on exports of chip-making equipment to protect national security, joining a U.S. effort to curb semiconductor technology exports to China.

"Member states are guarding their prerogatives and there is some reservation towards bringing this kind of decision-making to the EU level," Dombrovskis said.

"So that requires some discussion on how to ensure an effective system while preserving member states competence on national security matters."

The EU and the U.S. are expected during a Trade and Technology Council (TTC) meeting of top officials in Sweden next week to commit to cooperate on export controls and investment screening.

"Clearly, in the current more conflictual, geopolitical context, these economic security questions feature more prominently," Dombrovskis said, adding this would be a topic for discussion in Sweden.

He said the two sides were already coordinating on export controls following Russia's invasion of Ukraine.

"Russia has been a very practical test case for this cooperation and actually it has worked quite well," he said.

(Reporting by Philip Blenkinsop; Editing by Mark Potter)