Brussels, 21/11/2014 (Agence Europe) - EU trade ministers were deeply divided at their meeting in Brussels on Friday 21 November on two draft laws that have been semi-shelved at the Council. The first is on the review of the EU's trade defence instruments against unfair competition from non-EU countries and the second is on a mechanism to ensure reciprocity in access for European companies to public procurement markets outside the EU.
On Friday, the Italian Presidency threw in the towel on both issues, where traditionally free trade member states clash with southern European countries. Italian trade minister Carlo Calenda said it was clear that no agreement was possible between the member states on either item of legislation because sensibilities differ and there is a split between those that believe that the trade defence instruments are protectionist measures and countries that favour trade defence instruments and public procurement meausres. He said they had decided to be upfront with the European Parliament and have told the chair of the EP's international trade committee, Bernd Lange, that there is no room for manoeuvre to reach agreement on the two issues. Calenda added that it would be more efficient for the Italian Presidency to focus on TTIP rather than on an agreement that is so out of reach. The two draft regulations require qualified majority voting at the Council, in agreement with the European Parliament.
First is a draft regulation tabled by the Commission in April 2013 to improve the way EU trade defence instruments work. On this file, the member states are stumbling on the issue of instituting, on raw materials markets, higher duties on imports coming from countries that use unfair subsidies and create structural distortions. In such cases, the EU would suspend its lesser duty rule, which states that duties must not exceed the level necessary to prevent harm being caused to an EU industry.
On Friday, the ministers' meeting confirmed a split into two distinct camps - with half the member states against the Italian Presidency's compromise and supporting the preservation of the lesser duty rule (Austria, Belgium, Cyprus, the Czech Republic, Denmark, Estonia, Finland, Ireland, Latvia, Malta, the Netherlands, Slovenia, Sweden and the UK). “We agree on tackling the distortions in raw materials by keeping the lesser duty rule in tact but by going through free trade agreements or through WTO panels. We must not give in to protectionism. Abolition of the lesser duty rule could be dangerous”, said UK Under-Secretary of State Lucy Neville-Rolfe. Germany said it supported the Presidency's compromise proposal, but by asking for clear definitions on structural distortions.
The other text is a draft regulation proposed in March 2012 to improve the conditions in which European companies participate in public procurement in third countries. This text aims to strengthen the EU's position in the negotiations concerning the modalities of access to third countries' public procurement, while clarifying the legal situation of foreign tenderers in the EU.
On Friday, the Italian Presidency called “to find an alternative way” on this issue. “Between us there is consensus when it comes to asking the Commission to ensure greater openness of third countries' public procurement, but when it comes to thinking of a mechanism to force the opening of third countries' public procurement, we hide behind trans-sectoral national interests”, said Calenda. The only three member states that spoke showed how great the difference of opinion is at the Council on this issue. Greece said it fully supported this mechanism. Spain believed the text was “completely wrong” because it gives a protectionist signal, and Spain therefore called for it to be abandoned so as to have, instead, the opening of public procurement in bilateral agreements. Germany considered it was useful to continue discussions on this proposal. “Half the member states have doubts about the usefulness of such an instrument”, a diplomatic source told EUROPE, ahead of the Council. (EH)