EU foreign subsidies instrument to address market distortions

Instrument should level the playing field, be comprehensive and effective

Today, the European Commission will release its White Paper on levelling the playing field as regards foreign subsidies. BusinessEurope welcomes the objective to ensure fair market conditions for all economic operators and to address all distortive impacts.

Markus J. Beyrer, Director General of BusinessEurope, said: "The European business community would like to see this instrument to be comprehensive, filling existing legal gaps and effectively addressing market distortions generated by foreign subsidies. We need to level the playing field for companies while ensuring that Europe remains open to trade and investment as this is critical for our recovery".

In January this year, BusinessEurope released a comprehensive position paper "The EU and China addressing the systemic challenge". The paper identified a number of market distortions in the areas of trade, investment, procurement and competition that have foreign subsidies as one of their main root causes. It calls for a whole-of-government approach towards tackling these distortions that involves complementarity across different policy areas.

Beyrer added: "In some cases, trading partners are not respecting their international commitments within the World Trade Organisation, for instance by not notifying state subsidies. In other cases, legislative loopholes are being explored to gain market advantage and prevent fair and open competition, like in the case of trade in services. We hope this new instrument will be effective in addressing market distortions while providing legal certainty to economic operators".

BusinessEurope is ready to engage actively in this process and provide the business views during the incoming public consultation.