Download Print Version - ERA Additional Services

STATE AID CONTROL IN THE CONTEXT OF
GLOBALISATION
Blanca RODRIGUEZ GALINDO *
Head of International Relations Unit
EUROPEAN COMMISSION
DG COMPETITION
Trier, 12th November2015
* This presentation does not reflect the official opinion of the European Commission. Responsibility for the information and views expressed therein lies entirely with the Speaker
Summary
 Context
 Short description of WTO rules
 State Aid Control in the context of the EU TRADE strategy
 EU-KOREA Free Trade Agreement (FTA)
 Transatlantic Trade and Investment Partnership Agreement (TTIP)
 Agreements with Candidate Countries and EU Neighbourhood Countries
 Conclusions and way forward
Context
 Trade and investment liberalisation shouldn't be circumvented through
anticompetitive behaviour by companies and governments
 Subsidies can nullify benefit of decrease in customs tariffs resulting from
Trade liberalisation
 EU State Control system: General scope applicable to all sectors of the
economy. General prohibition with exemptions
 Outside the EU, lack of a comprehensive and uniform system of control
of State Aid/Subsidies
WTO Rules
 WTO Agreement on Subsidies and Countervailing Measures (ASCM). Applies only to goods and not
to services
 Prohibited subsidies: Export subsidies, Import substitution subsidies. Defined on the basis of their
nature
 Actionable Subsidies that cause adverse effects on WTO members. Defined on the basis of their
effects
 Non actionable subsidies, some examples: assistance to research activities, assistance to
disadvantaged regions, assistance for adaptation to new environmental requirements
 Reporting obligations but non ex ante control
 GATS for services, provides only for consultation when a member country considers that is
adversely affected by a subsidy of another member
State Aid Control in the context of the EU Trade strategy
 A holistic Trade strategy tackling beyond the barriers obstacles like public
procurement and competition including subsidies
 Systematic inclusion of State Aid Provisions in Free Trade Agreements (FTA)
negotiated since 2006 (around 36 FTAs)
 Going beyond WTO provisions (WTO +):
 Broaden the scope to include services
 Increased transparency obligations
 Prohibition of most distortive forms of aid
 Illustration through concrete examples: EU-Korea FTA, TTIP and EU-Ukraine
Association Agreement
EU – Korea Free Trade Agreement
 Entered into force in 2011. Chapter 11 on competition and subsidies
 Best endeavours clause to remedy or remove distortions of competition caused by
subsidies
 Scope, only goods but best endeavours to develop rules applicable to subsidies to
services
 Transparency, reporting should contain information concerning the objective,
form, the amount or budget and where possible the recipient of the subsidy
 Prohibition of unlimited guarantees and subsidies to companies in difficulties
without a credible restructuring plan
Transatlantic Trade and Investment Partnership Agreement (TTIP)
 Negotiations ongoing. 11th round took place in October 2015
 Scope, both goods and services
 Transparency obligations more granular including legal basis, form,
amount and where possible recipient of subsidies
 Structured consultation mechanism on subsidies potentially affecting
one of the parties interest focused on objective, incentive effect,
proportionality (EU common principles)
 Discussion on potential disciplines for most distortive types of
subsidies
Agreements with Candidate Countries and EU Neighbourhood Countries
 Deep and Comprehensive Free Trade Agreement (DCFTA) with Ukraine.
Enter into force January 2016. Chapter 10 on competition and
subsidies
 Scope both goods and services
 General prohibition of state aid which may affect trade between the
two parties and exemptions clearly inspired in article 107 of the TFEU
 Obligation for Ukraine to establish a domestic State Aid control
system and operational independent authority to manage it
 Alignment with the EU acquis
Conclusions and way forward
 Pursuing holistic trade strategy with state aid as an essential element of the
negotiations in FTA
 Negotiations with other important trade partners recently concluded or
ongoing like Canada, Singapore, Vietnam and Japan
 Negotiations to be started with other important trade partners like Mexico or
Australia-New Zeeland
 Monitoring implementation of the subsidies provision in FTA
Thank you for your attention
http://ec.europa.eu/competition/international/bilateral/korean_fta.pdf
http://trade.ec.europa.eu/doclib/docs/2015/january/tradoc_153019.6%20Competition%20SoE%20S
ubsidies%20merged.pdf
http://trade.ec.europa.eu/doclib/docs/2015/january/tradoc_153031.pdf
http://eeas.europa.eu/ukraine/docs/association_agreement_ukraine_2014_en.pdf
(only from pages 110 to 115)
http://trade.ec.europa.eu/doclib/docs/2015/october/tradoc_153846.pdf