Austria blocked

EU supply chain law: vote postponed

(Bild: Andrey Kuzmin - stock.adobe.com)

The EU member states were unable to reach an agreement on the EU supply chain law on Friday and postponed the associated vote. This was announced by a spokesperson for the Belgian Council Presidency on Platform X. Austria and Germany, among others, had declared in advance that they would abstain, which was tantamount to a blockade. According to reports from EU circles, the vote planned for today has been postponed to February 14.

The EU Supply Chain Act is intended to hold large companies - with more than 500 employees or in high-risk sectors with more than 250 employees - to account if they profit from child or forced labor outside the EU, for example.

Companies have a duty
Larger companies must also draw up a plan to ensure that their business model and strategy are compatible with compliance with the Paris climate targets to limit global warming.

In order for the text to be adopted, a qualified majority (55% of member states or 15 out of 27 or member states representing 65% of the population) would be required in the Committee of Permanent Representatives of the EU member states.

Dispute over Kocher's abstention
The announced abstention of Austria's Economics Minister Martin Kocher (ÖVP) had certainly caused displeasure among the coalition partners, with Justice Minister Alma Zadic (Greens) appealing to Kocher not to abstain.

Austria could tip the scales here, as it is reported that several smaller EU states are likely to vote against. If Kocher does abstain, it is possible that the legislative text will not find a majority.

Kocher expects discussion at WTO conference
Kocher himself said on Friday that he expected the issue to be discussed at the World Trade Organization (WTO) conference. Measures such as the CO2 border adjustment, the Critical Raw Materials Act (CRMA) or now possibly the Supply Chain Directive could lead to a dispute as to "whether Europe is possibly applying some of these legal acts in a protectionist manner and thus placing suppliers and companies from third countries in a worse position, causing costs or creating additional hurdles for imports and thus favoring the European market," explained Kocher.

"We are entering a phase of global trade where we simply have more disputes about such legal acts - it's not just the Europeans who are doing this." Care must be taken to ensure that this does not lead to protectionist tendencies, because Europe, as an export-oriented continent, would suffer more than other parts of the world. As the country with the eighth highest export quota in the world, Austria would be even more affected if other countries were to close the market to Austrian products. There are more and more such legal acts in other parts of the world, which could lead to a possible fragmentation of global trade and would be disadvantageous for Austria.