The threshold above which a foreign subsidy is considered to distort the internal market needs to be further investigated, said some MEPs on the European Parliament’s Committee on International Trade on Monday 25 October, as the European Commission presented its proposal (see EUROPE 12713/1) to combat this kind of foreign subsidies.
The rapporteur of the legislative text, Christophe Hansen (EPP, Luxembourg), said he was generally satisfied with the Commission’s proposal, which he said “strikes a good balance [...], there is a balance between strategic autonomy, enforcement of rules on single market, and openness”.
For several of his colleagues on the left of the political spectrum, however, the instrument proposed by the Commission could be stricter. Reinhard Bütikofer (Greens/EFA, Germany) said that the €5 million threshold for considering a subsidy distortive was too high. Inma Rodríguez-Piñero (S&D, Spain) asked the Commission to justify this choice.
The €5 million threshold is reasonable, according to Ánna-Michelle Assimakopoúlou (EPP, Greece), who wants to focus on the biggest grants.
Mr Hansen remains open to a discussion on thresholds. “I’m willing to discuss, as many stakeholders are saying the thresholds are too high. We know if we would decrease the threshold, it would increase exponentially the resources we would need to invest, but I think we can discuss this further”, said the rapporteur. He also said he would ask the Commission for “figures” on the consequences of lowering the thresholds.
The Renew Europe group questioned the threshold for public procurement. The Commission requires companies to notify aid received only in the case of public procurement above €250 million.
“It seems high compared to the international procurement instrument [threshold fixed at €5 million for goods and 15 million for works and concessions, editor’s note]. “Is there a way to bring these thresholds closer together?”, asked Dutch Liberal Liesje Schreinemacher.
Several groups stressed the risk of an administrative burden for companies, which could potentially be induced by a lowering of the thresholds. This is the case for the ECR group, but also for the EPP.
In addition, MEPs from all sides of the House have called for the definitions of distorting foreign subsidies to be clarified to ensure proper implementation of the regulation.
Subsidies discussed at G7
The G7 trade ministers, meeting in London on 22 October, also addressed the issue of competition-distorting subsidies. According to them, action must be taken against these “opaque” practices.
In their communiqué, they note that some members of the World Trade Organization (WTO) are still failing to notify their subsidies. They encourage all WTO members to support the proposal on transparency and notifications to the WTO General Council. Presented in 2019 by a handful of members, including the EU, it proposes new procedures for all members to meet their reporting obligations, including the least developed countries.
See the Commission’s proposal: https://bit.ly/3vGS4Hc (Original version in French by Léa Marchal)