The idea is that this will deter other countries from trying to force the EU or EU countries with economic pressures that affect trade or investment, according to a press release.
In the negotiations, the EU countries were represented by the Swedish presidency.
If the mechanism gains legal force and is then activated, it could open the door to punitive tariffs, embargoes against exports or imports, or restrictions on public procurement.
The settlement is based on a proposal from the European Commission from December 2021, which was drawn up on behalf of the EU countries and the EU Parliament.
The fully negotiated proposal must be formally approved by the parliament and member states before it can enter into force.