Investment | Brussels, 14 March 2013
EU reports on progress in fight against protectionism
The Commission is today able to report about some success in its strategy to fight global trade barriers. The efforts of the European Commission to fight protectionism over the last year bear fruit and could create better trade and investment conditions for EU companies. Yet the struggle against protectionism continues. The resistance of Europe’s strategic partners to the plea for open markets comes into the limelight in the European Commission’s third annual Trade and Investment Barriers Report published today. In particular, China, India, Mercosur and Russia do not escape criticism.
According to the report, the European Commission in 2012 achieved progress towards eliminating some of the most trade distortive barriers hindering global activities of EU companies:
• The EU victory in the WTO case against China on access to raw materials brings to an end a fundamental disadvantage affecting the competitiveness of the European industries;
• Many years of difficult negotiations over the Russian accession to the WTO resulted last year in the significant lowering of import duties;
• EU trade diplomacy made progress toward the opening of the Indian market to EU telecommunication equipment, tyres and steel products. The bilateral discussions conducted with Japan are making it easier for EU producers of liquor, beef meat and processed foods to respond to the Japanese appetite.
Yet not all of the 25 key trade and investment barriers identified by the European Commission last year could be satisfactorily addressed. Several long-standing obstacles, together with a number of new trade-distortive measures taken by our partners in 2012, still stand in the way of European companies looking for markets outside the EU.
• Chinese investment barriers persist. Disappointingly, China introduced further restrictions in some industrial sectors and raised the uncertainty levels to discourage potential investors;
• India refuses to withdraw the unjustified regulatory measures that maintain its agri-food market closed to imports. Also, trade in electronic products and renewable energy technology suffers from a protectionist attitude of the Indian authorities.
• Protectionism in Argentina and Brazil is on the rise. There has been no improvement regarding measures affecting import and export, public procurement procedures, reinsurance services or maritime transport in these countries. The new tax regime in Brazil increasingly favours domestic producers against the interest of European companies. Furthermore, the looming perspective to increase 100 tariffs in Brazil up to the permitted WTO limit jeopardises the future of commercial relations.
• In addition to longstanding market access issues, Russia adopted a series of protectionist measures, the majority of which are not in compliance with its WTO obligations. Those include discriminatory recycling fees for imported vehicles and various technical and sanitary barriers to trade.
Against the evidence of rising protectionism around the world, the European Commission will continue to ensure that the EU's trading partners stick to their commitments and keep their markets open. Firstly, it will use the trade diplomacy instrument, leveraging on EU's global network of Delegations and working closely with the EU Member States. Secondly, it will use the WTO's Dispute Settlement Mechanism and the EU's presence in WTO Committees to enforce international trade rules. Finally, the European Commission will use negotiations for bilateral trade agreements and WTO accessions to address certain specific trade disruptive measures in third countries.
The Trade and Investment Barriers Report will be presented to the European Council on 14-15 March 2013.
The Trade and Investment Barriers Report is part of a broader EU trade enforcement strategy outlined in the 2010 Commission Communication "Trade, Growth and World Affairs". The updated document has been presented to the Spring European Council every year since 2011. Its purpose is to assess the progress towards elimination of trade and investment barriers faced by European companies and raise awareness of the action taken by the European Commission to secure access to global markets for European firms.
The report focuses on a selection of key trading partners (China, India, Japan, Russia, the US and Mercosur) that account together for more than 40% of the EU exports of goods, commercial services and outward flows of the EU foreign direct investment.