Committee on International Trade Ordinary meeting
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INTA European Parliament
Follow its sittingsEva Krauza
and we have removed seasonality and introduced TRQs on cucumbers, grapes, pears, apricots, cherries, peaches, plums, and strawberries. I would like to also say that the existing entry price system will be maintained for all relevant fruits and vegetables. As a reminder, some of the important Armenian exports, such as brandy, molybdenum, and copper, already benefited from a 0% duty, as the MFN rate on these products is already 0%,
so the proposed ATMs will not change anything for these products. And finally, the proposal also includes a safeguard mechanism that can be activated in case of serious disturbances on the EU market caused by Armenian imports under the proposed autonomous trade measures. Thank you.
Bernd Lange
Thanks a lot for the explanation. I now give our standing rapporteur the floor, Bogdan.
Bogdan Andrzej Zdrojewski
Thank you very much. I will speak Polish, but very short.
Ta sprawa nie jest kontrowersyjna, ale jest pilna. Chciałem bardzo Komisji podziękować za przygotowanie określonej propozycji, która wynika z agresywnej polityki Rosji i z uzależnienia gospodarczego Armenii od Rosji w czasie przeszłym. Wynik wyborów spowodował, że mamy reakcję Rosji i zablokowanie, krótko mówiąc, rynku rosyjskiego dla większości produktów, zwłaszcza pochodzenia rolniczego, dla Armenii. Komisja przygotowała określoną propozycję. Nie będę jej przywoływać, bo pani dyrektor zrobiła to doskonale.
Chcę natomiast powiedzieć, że czas jest ważny. To są produkty rolne, a więc o krótkiej trwałości. Straty dla Armenii w jej produkcji mogą być dotkliwe, poważne, a wiemy, że wynikają z aspiracji narodu armeńskiego przynależności do Unii Europejskiej. Wyciągamy w związku z tym pomocną dłoń dla Armenii na okres zamknięty, postulując także określone mechanizmy kontrolne, jeżeli chodzi o bezpieczeństwo i jakość tych produktów, które pojawią się na rynku europejskim. Od razu zaapeluję jako stały sprawozdawca o niewnoszenie do tej propozycji poprawek.
Dzięki temu ten czas procedowania będzie maksymalnie krótki, a interwencja będzie, krótko mówiąc, dużo korzystniejsza niż odwleczona w czasie. Bardzo dziękuję raz jeszcze Komisji, bo dopowiem, że jestem też po rozmowie z panem ambasadorem, ambasadorem Armenii. Mamy przygotowane też elementy drobniejsze. Będzie to bardzo ważna, szybka interwencja Parlamentu Europejskiego i Komisji Europejskiej w odniesieniu do kraju aspirującego do Unii Europejskiej. Dziękuję bardzo.
Bernd Lange
Thanks a lot. And now the shadow rapporteurs for two, three minutes. Stefan is the first for the S&D.
Ştefan Muşoiu
Thank you, Mr. Chair. Dear colleagues, good afternoon. The swift adoption of this regulation through the simplified procedure provides yet another opportunity for the European Union to demonstrate solidarity by delivering timely and appropriate support to partners facing difficult circumstances.
The implementation of the proposal on temporary trade liberalization measures for Armenian products reaffirms that the European Union is a reliable partner for countries that choose the path of reform, democracy, and the rule of law, as Armenia has done. Unfortunately, Armenia continues to face challenging economic conditions exacerbated by the trade restrictions imposed by Russia. By granting Armenia improved access to the European market, we are helping to diversify its exports, strengthen its economic resilience, and create new opportunities for its economy. At the same time, European solidarity also entails responsibility, respect for the rules, and the protection of the interests of European citizens and producers. As shadow rapporteur, I would like to reassure European consumers that this trade opening does not imply any lowering of the European Union's standards.
Armenian products entering the single market will be required to comply with the same European standards on food safety, sanitary and phytosanitary measures, quality, and consumer protection as any other products marketed within the Union. In other words, we are liberalizing market access, not lowering our standards.
Furthermore, the regulation includes safeguard mechanisms to protect European producers in the event of market disturbances. Given the limited scope of the trade covered by these measures, it is also highly unlikely that they will cause significant disruption to the single market or adversely affect the competitiveness of European producers. Although I am confident that Armenia will honor its commitments to democracy, the rule of law and fundamental rights, the regulation contains important safeguards and may be suspended if those commitments are not respected. I say this because both the European Union and Armenia have a strong shared interest in strengthening the Eastern Partnership. A stronger Armenia more closely integrated with the European economy means greater stability in the European Union's neighborhood.
Thank you.
Thank you very much. I would like to say a couple of words and have two questions as AFET standing rapporteur on Armenia.
Miriam Lexmann
I find it extremely positive that we are reacting on this coercion from Russia on Armenia, particularly this coercion started in order to influence the elections, which wasn't successful, but unfortunately continues in order to intensify the pressure on the Armenian government, which is trying to cooperate with the European Union more vividly and strongly. This will, I mean, the diversification of the trade routes will of course also strengthen the relation between Armenia and EU, which is the goal of us and also the Armenian government. But I have two questions. How the Commission is going to deal with the logistical problems, because we know that the one neighbor is Turkey, where practically the borders after the since the since the genocide is closed, although there is little, I mean, the situation is improving, but it's not open yet. And the second possible route is through Georgia, but we also know that Russia has a strong influence on the Georgian government.
So my question is how logistically we are going to handle this? And the second question is because we do know due to the strong, I mean, trade partnership between Armenia and Russia for long-standing, that there is lots of Russian companies which are practically the Armenian companies are subsidiaries of the Russian companies.
So how are we going to make sure that Russia is not using our offer to Armenia to help as a route to circumvent the sanctions? Thank you.
Eva Krauza
Yes, thank you so much. On logistical problems, just to mention that this ATMs are only a part of a bigger package that the Commission is working on to support Armenia. We have a task force in place that is led by DG ENER and all the Commission services are currently working very closely with Armenia to help with also logistical challenges. In particular, they are Commission services such as DG AGRI, SANTE, but also MOVE, DG GROW, DG TAXUD, that work together to make sure that all the possible trade facilitation measures are put together. There is also budgetary support, so the overall package is there with the objective to strengthen the export capacity and to tackle the logistics as well, but also improve quality infrastructure to facilitate the access to the EU market.
So all various aspects are being worked on and we hope that they will be put together as soon as possible to facilitate trade. On the circumvention possibility, I would like to underline that in order for Armenia to benefit from the preferences, Armenia has to comply with the rules of origin that are set in this regulation. So in this sense, we also have included a provision that explicitly reinforces Armenia's obligation to collaborate with the EU in the verification of the origin of goods to prevent any risk of fraud or circumvention. And that's one of the conditions that are in the regulation in case of no respect would be possible to trigger the suspension. Thank you.
Bernd Lange
Thanks a lot. So this concludes the debate and as I mentioned at the beginning, I would propose to have a simplified procedure. This means there will be no report, but starting with amendments or not amendments, so have it really in a quite swift mode. Any objections to have it in a simplified procedure? No.
So we would need five members to oppose. So the simplified procedure is approved. And this means that we will have deadline for amendments until Thursday, the 13th of July, high noon, 12 o'clock. And then we will vote in our next session about the amendments, that's then in September. And then I guess we can have a really swift and quick approval of the whole exercise.
Thanks a lot. Then we switch to the monitoring groups. We have had one on Japan, and Miriam will tell us what happened with Japan.
Miriam Lexmann
Thank you very much. I'll be very brief because I have to run to vote. But we had the meeting on the 23rd of June, and it was a second monitoring group on Japan in this mandate.
And maybe, I mean, the agenda was focused as predominantly on the latest updates on the regarding on the trade and investment relations, including a presentation of evaluation of the current effects of the Economic Partnership Agreement, which was shown to those who were around. We were also discussing the way how Japan can be a model to diversify our critical raw materials and help our competitiveness. Maybe a short point, because I was the only member in the room and I am hearing that this is happening also in other monitoring groups. So maybe the idea is that if we cannot merge the monitoring groups, maybe on Japan, South Korea, because otherwise, I mean, and kind of look at the region rather than every country particularly, maybe that could increase the members present in the room. But otherwise, everything runs smoothly.
Thank you very much.
Bernd Lange
Yes, thanks a lot, Miriam. This is a problem for several monitoring groups. We discussed it just yesterday in the coordinator, so how we strengthen the program and also make clear that there's more efficiency coming from the Commission. So we are tackling this problem. Last week there was also a delegation from Japan here.
I guess you met them as well, so it was quite constructive. Okay, then we have Vietnam, Iuliu.
Iuliu Winkler
Yes, thank you, thank you very much, Chair. We had a monitoring group on Vietnam on the 24th of June and we discussed mainly two issues, which are the consequence by one part of establishing a special EU-Vietnam task force to improve implementation of the EVFTA, which was the group was established last September by our Trade Commissioner Šefčovič and his counterparts in Hanoi, and of course the upgrading of the political relations with Vietnam and the consequences of such an upgrading. On political level, on the upgrading of our relations, we heard the report about some power concentration happening in Hanoi through the double position of President and the Party Secretary General Tô Lâm.
We heard the upgrading motivation which is built on four areas: first of all, green transition, resilient supply chains, digital governance, and support for the international rules-based international trading order. We could hear also the continuation of the human rights dialogue which is especially important regarding Vietnam and some of the tangible outcomes, which does not mean that things are perfectly okay, but which means that we can use as the European Union the instruments that we are being provided. And of course we discussed on the trade front with Mr. Aitor Montesa, who is in DG TRADE responsible for the EVFTA implementation, about the priority issues that are of concern to European companies, namely the phytosanitary SPS issues. There are around 40 Member State market access applications which are expected to be finalized but which are under procedure, and we also could hear the situation in the automotive sector. And finally we discussed a little bit about our Global Gateway project with the DG INTPA representative, lots of wishful thinking, but who knows, maybe those projects can become more concrete.
It is about mobilizing finance for the green transition, for the industrial development and for the connectivity. And especially interesting since there are some trends in Vietnam about adopting EU standards in the railway sector, which could open a new interesting perspective for European Union investment under Global Gateway or private investments in Vietnam. And of course, not linked to the monitoring group, but you know we had this inter-parliamentary meeting just a few days ago in Strasbourg. And I saw that trade and you chair know because you had your separate meeting with the delegation, but trade had an important part in the overall discussion.
the overall discussion, so I think that it's a valuable relationship and we will continue also monitoring group activity, but also on political level, even if it is about a partner with a different system than our democratic systems here in the European Union. Thank you.
Bernd Lange
Yeah, thanks a lot, Julius, and of course a different political system, but nevertheless a reliable partner and we are working quite close together to push them also to stay to their commitment. And thanks a lot for this good, really cooperation, Julius. It's really a pleasure to work together with you. Then we have Mashreq. Celine is not here, so there was a monitoring group on the 25th of June, specifically regarding the relation to Syria.
Oh, please, oh, excuse me. I didn't... Yeah, so you have to send me the latest version of the agenda, then I'll be better prepared. Dion.
Jörgen Warborn
Thank you, Chair. So, yes, the monitoring group had a meeting on the 25th of June and it was focusing on Syria. Here the Commission explained the reason that led it to restore the EU-Syria cooperation agreement, and the Commission and the External Action Service reiterated that this restoration of relations with Syria remains progressive and conditional on progress regarding freedom of expression and the protection of minorities, in particular the Kurds. Today, trade flow between Syria and the European Union remains low, but they hold strong potential as the country seeks to reconnect to trade routes.
It was also noted that Syria represents an opportunity for our businesses in terms of reconstruction, a market estimated at around 300 billion dollars. Finally, on the question of potential future macro-financial assistance package, the Commission indicated that while the IMF study is ongoing, there is no near-term prospect for the European Union. Thank you.
Iuliu Winkler
Thank you very much, Chair. We had the monitoring group on the 25th of June on Indonesia. Of course, in the meantime, you know that the EU-Indonesia Free Trade Agreement has been finalized and submitted for institutional scrutiny, not yet to us, but to the Council. In any way, the monitoring group was quite complex because we had several points on the agenda and we had a series of stakeholders invited so that we can hear diverse voices also from civil society and various activist groups.
And first we discussed energy and raw materials provisions in the EU-Indonesia CEPA. And and we discussed also about mining standards, about what is that to be done in the mining sectors in a sort of competition with China and giving through our CEPA, our free trade agreement, a chance to Indonesia to diversify away from China maybe in certain sectors. Then we discussed securing supply chains for critical minerals but also the sustainability, traceability, supporting local value creation and responsible business conduct aspects of of that that sector. Then on our second point we discussed very important point on provisions on small and medium-sized enterprises which is of course very important for our committee and for our group of the European People's Party. We discussed tariff liberalization, the extra market opportunities and the possibility to ensure diversification in the supply chain and as reasons to welcome the EU-Indonesia agreement by by small and medium enterprise.
There is a self-standing chapter on SMEs and it should also translate in separate contact points for SMEs during the implementation of agreement. And also we discussed about the fact that the new trade agreement is a driver for sustainability regarding the SMEs. And then thirdly, we discussed trade and sustainable development chapter and we touched upon opinions of stakeholders. We discussed precarious work conditions in the nickel smelting sector. We discussed labor law implementation and also we discussed the need for civil society organizations to be able to monitor or to take part in the monitoring of the implementation of the agreement once it enters into force.
And just to inform you, formal referral to the Council was made by the European Union Commission and so referral towards the European Parliament could take place in early autumn. And then so we can officially start the consent procedure, but still we are in a sort of time problem because as everybody knows, the colleagues, on the 1st of January we will have not any more GSP between EU and Indonesia.
There is a timeline worked out with the Commission Secretariat and thank you very much for the help and for the work of the Secretariat. We have the proposal that we draw up an interim report on the rule 107 paragraph 5 and for this of course we need an authorization from the COP, but the chair of this committee I have no doubt can obtain such an authorization so that we can start the work and of course in parallel we will continue also monitoring group meetings. In September we will have an important question which was risen by some of our colleagues regarding the fisheries sector. So we continue the work of the monitoring group also. Thank you.
Bernd Lange
Thanks a lot Giulio and indeed yesterday the coordinators supported the interim report and we will work quite hard so that we can keep the timeline for finishing the ratification in this year. Thanks a lot. South Asia, Saskia is there, please.
Saskia Bricmont
Thank you chair. Yes, indeed.
Pakistan has kept us busy lately. Last month the plenary adopted the technical report on the TRQ with Pakistan and last week we adopted an urgency resolution on the case of the abduction, forced conversion and forced marriage of a young girl, Maria Shahbaz. Beyond that specific case, the resolution contained broader messages to the Pakistani authorities and it was the opportunity to remind the eligibility criteria for the GSP+ in terms of compliance with international obligations pursuant to international conventions. During our monitoring group that gathered on the 2nd of July, we invited representatives from the diaspora who gave us a wide and gruesome overview of the human rights violations in the country. And it was timely, a timely testimony since the Commission and Pakistan will engage after the summer break on the conditions for the reapplication of the GSP+ status.
We will follow closely what will come out of these exchanges. Another country that was discussed during the monitoring group is Bangladesh.
We also had an exchange with the ambassador of Bangladesh to discuss the bilateral prospects considering that Bangladesh is keen on negotiating an FTA and an IPA. The Commission is currently evaluating what arrangement would be beneficial to both partners considering that despite the adoption of recent bills that go in the right direction, Bangladesh continues to face many challenges. The graduation of the country in 2029 will have implications in this context. Therefore, a mission to the country would probably be opportune next year or in 2028. Thank you.
Bernd Lange
Thanks a lot. With Bangladesh, we had some discussion about the textile and integration of the textile export in our legislation. Was this also an item in the discussion?
Saskia Bricmont
Not this time, but the previous monitoring group indeed focused on textiles because it's indeed an issue also with Bangladesh. And we had the opportunity to listen to the author of the study on import and export flows. I think our monitoring groups could make it a common goal also to work together on import-export flows with the ad hoc monitoring groups and countries of export and import. Is it maybe a suggestion that the colleagues could endorse?
Because I think the textile sector presents indeed a specific challenge.
Gabriel Mato
Gracias, presidente. Permítanme hacer un breve resumen de la reunión que tuvimos el día 2 de julio pasado, la reunión número 11 de esta legislatura, y la convocamos para que la Comisión nos hiciera una primera actualización sobre la aplicación provisional del acuerdo que, tras la firma el 17 de enero, como ustedes saben, los socios de Mercosur han completado muy rápidamente sus procedimientos de ratificación. En marzo del 2026 ya estaban todos finalizada la ratificación y, de acuerdo con la decisión del Consejo, pues el acuerdo entró en vigor en aplicación provisional el 1 de mayo y ya lleva, por tanto, dos meses en vigor.
DG Trade informó que en un plazo muy breve las Direcciones Generales de AGRI y TAXUD llevan a cabo una importante labor técnica y ya han incorporado el contenido del acuerdo a la legislación de ejecución, incluyendo las normas específicas para los productos agrícolas y el nuevo régimen de contingentes arancelarios. Y en este momento es verdad que los contingentes no están asignados a cada uno de los países del Mercosur y el reparto dependerá de la decisión que adopten los propios socios de Mercosur, que todavía no han comunicado a la Comisión cómo desean proceder en este asunto. Y asimismo, un grupo de trabajo que se reúne cada dos semanas con expertos de Mercosur está supervisando los avances. La base de datos TARIC ya ha sido actualizada y la Comisión está ultimando el reglamento de salvaguardas para los productos no agrícolas, que en principio va a ser remitido a este Parlamento y al Consejo para el examen. Y en relación con el capítulo sobre comercio y desarrollo sostenible, han lanzado una convocatoria de manifestaciones de interés dirigida a organizaciones de la sociedad civil para participar en lo que se llama los grupos consultivos internos.
La respuesta ha sido muy buena, ha sido elevada y hay 39 organizaciones que ya han presentado su candidatura para formar parte de estos grupos consultivos.
En cuanto al calendario institucional, está previsto celebrar el primer Consejo de Comercio durante la cumbre de Mercosur de finales de año, previsiblemente a principios de diciembre bajo la presidencia rotatoria de Uruguay. Y antes de esta reunión se convocará un Comité de Comercio seguido de varios subcomités técnicos y de diálogo con la sociedad civil al margen de lo que son estas reuniones. Bueno, no hace falta decir que ya sabemos que estamos pendientes del dictamen del Tribunal de Justicia de la Unión Europea sobre la compatibilidad del acuerdo con los tratados. Nosotros aprobamos la resolución el 14 de enero, el servicio jurídico formalmente presentó la solicitud en marzo y el propio servicio jurídico nos ha informado que las demás instituciones tenían de plazo hasta el 10 de julio, 10 de julio para presentar sus observaciones. Y ahora evidentemente corresponde al tribunal decidir si considera necesario o no la vista oral.
Y lógicamente pues una vez que conozcamos el dictamen del tribunal junto con el coponente de AFET, Paco Millán, pues ya empezaremos a determinar los siguientes pasos del procedimiento de aprobación y del informe provisional.
Eso es todo, muchas gracias.
Bernd Lange
Muchas gracias. So on this irritation between EU and Brazil on the standards, so you think that will be solved until September, yeah?
Gabriel Mato
Sí, se puso de manifiesto sobre todo la situación que había con Brasil en relación con la suspensión de las importaciones de carne fundamentalmente, pero un tema que en principio es absolutamente al margen del acuerdo con Mercosur, si han cumplido con los requisitos o no han ido cumpliendo para estar incluidos en la lista o no. Es verdad que Brasil, y esto no es motivo del Monitoring Group, pero ya lo digo porque creo que es el sitio, Brasil sí estaban molestos con esa situación, pero añadían una especial preocupación con el tema del acero. Eso les preocupa mucho a Brasil y de hecho hablaban bueno de poder entablar algún tipo de actuación, incluso medidas de retorsión que iban a estudiar porque estaban muy insatisfechos con lo que se estaba haciendo en relación con el acero.
Bernd Lange
Yeah, thanks a lot. Until this is not undermining the Mercosur agreement, then of course we can discuss everything, yeah, for sure. Thanks a lot.
And then we have the monitoring group on Ukraine chaired by Karin Karlsbro. And there we discussed last time on the 2nd of July the trade relation with Ukraine and specifically also the negotiations on Ukraine's future market access on steel and we discussed it today as well. And therefore there is still ongoing process regarding the new TRQ system. That's it on Ukraine. This was the last monitoring group.
And the next item will be the presentation by the Irish Minister for Foreign Affairs, Trade and for Defence representing the Irish Presidency. I would propose now that we perhaps make a break until 20 past 3. Okay? Thanks a lot. So we will ask the Presidency perhaps coming a little bit earlier so that we can start.
So, as agreed, dear colleagues, we started a little bit earlier.
So, as agreed, dear colleagues, we started a little bit earlier, and this gives more room for the exchange with Helen McEntee, the Minister for Foreign Affairs, Trade, and Minister for Defense of Ireland, representing the President-in-Office of the Council, the Irish Presidency. I'm happy that you are here and that we can discuss a little bit the issues which are relevant for the trade policy at the moment. Before starting with the whole exercise, I have to announce that for this item of our agenda, item 15, we have interpretation, of course, from Irish into other languages, or to our Irish colleagues, no, nobody there, but they can, of course, listen if the Minister will speak in Irish, their original language. So, this is also well organized. Thanks a lot for that.
And minister, yes, we have of course a lot of items on the agenda which were really relevant for trade policy. We discussed just a few minutes ago the situation with United States. And I guess this will be also a key element in your presidency. The actual trade legal basis act 122 is expiring on the 24th of July and nobody knows exactly what will happen afterwards. And we have also seen that there's some additional investigations coming up.
And beside the discussion with United States, of course there is now this trade and investment council with China. So that we will have also some additional development with China in the next months, perhaps until the end of October.
Beside that, of course, we are hopeful that we can really conclude and ratified, and I hope that we can cooperate on that as well, the agreement with Indonesia, so that we have a wonderful Christmas gift to everybody and could really close it. And we are in negotiation with the Philippines and Thailand, and I hope also the negotiation could be concluded and therefore also the cooperation is quite important. And regarding the existing trade agreements, Minister, we have CETA still there, which is ratified by 17 out of 27 member states. So if you can really motivate your colleagues to take some steps, this would be also quite important. And then in the international field, of course, the question of the future of the WTO and the reform process in WTO is also an important part for our economic development.
So, some elements, but I guess you have on your list some additional one, and I give now the floor to you, want about 15 minutes, please.
Helen MCENTEE
Thank you, Bernard, and to your committee and your team as well, thank you for all your work. A dhaoine uaisle, is mór an onóir dom a bheith anseo inniu ag labhairt libh mar Aire Gnóthaí Eachtracha agus Trádála na hÉireann. Is geal liom go bhfuil deis agam inniu athbhreithniú a dhéanamh ar an gcéad mhí de Uachtaránacht na hÉireann ar Chomhairle an Aontais Eorpaigh. As Irish Minister for Foreign Affairs and Trade, I'll speak in English now if that's okay, I welcome the opportunity to address you today during the first month of Ireland's eighth presidency of the Council of the European Union, and indeed we take on the role at what is a crucial time for Europe. The European Union is navigating its most turbulent geopolitical era in decades, defined by Russian aggression in Ukraine, escalating conflicts in the Middle East, and of course volatile global trade tensions.
We are facing an environment where economic interdependence is frequently weaponized, challenging our traditional reliance on a strictly rules-based international trade and investment order. During our presidency, Ireland will work with the member states and alongside the European Parliament, and I look forward to working with all of you in the months ahead, in seeking to build consensus on how we best respond to these challenges facing Europe, how we deliver practical progress on behalf of all European citizens, and how we are ambitious in achieving more together. Ireland brings to this role a strong track record as a committed and constructive member state of the European Union. Our experience, our values, and our diplomatic tradition equip us well to navigate the complexities of the presidency.
For me this is not just an institutional obligation, it is a profound personal responsibility. The Irish presidency will be guided by our old Irish proverb, Ní neart go cur le chéile, no strength without unity, and our guiding star will be strength with unity. As the presidency we will lead a collective effort. We know we can depend on the support and the cooperation of members of this committee as we work together in the interests of citizens, communities and of course businesses across Europe. We will build on the excellent work of the Cyprus presidency and to thank our colleagues for their work which has guided the agenda of the Council so effectively through the first half of 2026 and achieved significant progress in many areas.
And in turn we will seek to lay strong foundations for further progress in important areas of policy during the presidency terms of our trio partners of Lithuania and Greece. In terms of our priorities we will focus our efforts on enhancing the competitiveness of our economy, safeguarding the values of our union at home and abroad and providing for the security of our citizens. These core themes, competitiveness, values and security are of course closely interlinked and mutually reinforcing. They will guide our work across all dimensions of our presidency role. We will also strive for progress in a number of important areas which link to all three of these thematic pillars.
As you will be aware, the specific objectives that we will pursue as the presidency are set out in detail in the program that we published last month. On competitiveness, in order to deliver a secure economic future which meets the needs and expectations of its people, Europe must act urgently to enhance our own competitiveness and productivity. The Irish presidency aims to make decisive progress in strengthening Europe's competitiveness, focusing on the blueprint for action agreed by the European Parliament, the Council, and the Commission in the One Europe, One Market roadmap. This will be a core priority for our presidency. Given the urgency of the task, the targets are firmly ambitious and indeed challenging, with 20 proposed to be concluded by the end of this year.
Success will require each institution and all member states to work purposely together in that spirit of cooperation and compromise, but in the interests of every citizen, community, and again, business right across the Union. In terms of our trade policy priorities, trade policy cuts across all of our core themes, but is perhaps most relevant in advancing the EU's critically important competitiveness goals. Our presidency will pursue an ambitious, open, rules-based, value-based trade policy agenda with a reformed WTO at its core that supports European competitiveness, resilience, economic security, and one that strengthens our trade relationship with reliable global partners.
I personally will take responsibility for driving this in my role as chair of the Council of the EU trade ministers. On the diversification agenda, trade policy is one of the most important elements of the EU's toolkit to strengthen global, regional and bilateral relations. The current overall geopolitical and geo-economic context, marked by heightened instability, underscores the need for diversified, resilient supply chains and greater engagement with our trading partners. Preferential trade agreements have the potential to open new markets, to diversify supply sources, to improve supply chains resilience and contribute to the EU's competitiveness, economic growth, the creation of high value-added jobs and the dissemination of our values. With this in mind, we will work to strengthen our trade relations and diversify our markets, advancing trade negotiations with important partners, and you've mentioned some, Chair, with Malaysia, the Philippines, Thailand, the United Arab Emirates, as called for in the One Europe One Market roadmap.
Our presidency considers the effective implementation of trade agreements as essential. While we have just received the proposal from the Commission, we look forward to progressing Council decisions on the recently concluded FTA with Indonesia and sending this agreement to the Parliament for its consent. We also hope to follow the same track with India once the Commission has finalized the texts.
I also want to work with this committee to ensure early agreement on the Commission proposal for autonomous trade measures to Armenia, including in the sectors affected by recent Russian trade restrictions, and I hope very soon...
Speaker 17
A little bit too quick for the interpretation, so if you could speak a little bit more slowly.
Helen MCENTEE
I speak too fast, apologies. Including in the sectors affected by recent Russian trade restrictions, and I hope very soon that we will make progress specifically on this measure. On the EU-US trade and investment relations, as you said, an extremely important relationship in a context where our trading landscape is shifting towards greater fragmentation, the EU's priority must be to preserve a stable, predictable transatlantic trading environment. The Irish presidency's position remains that cooperation, engagement, and dialogue is the best way forward to address the challenges facing both the EU and the US, and is committed to seeking the implementation of the EU-US joint statement by both sides.
We believe that by fully delivering on our part of the tariff commitments in the joint statement, which was achieved with the excellent cooperation with this committee, and to thank you for that, we are in a much better position to engage further with the US on various elements important to all of our stakeholders, such as US Section 232 tariffs on steel and aluminium, and in particular the related derivative products, and the expansion of the list of EU subjects only to US most-favored-nation tariffs. As regards the non-tariff element covered in the joint statement, we are committed to engaging in constructive discussions, including in relation to supply chains and critical sectors and technologies. I also want to welcome the recent progress made on establishing channels for this dialogue on digital issues. This should importantly contribute to fulfilling our overall goal of effectively stabilizing EU-US trade relations. Having said this, we remain very clear about the challenges still lying ahead and the need for proactive and positive cooperation with our US interlocutors, and again I look forward to working with the committee and the commission in that regard.
But we cannot limit ourselves to thinking that cooperation alone is enough to make Europe resilient to future shocks. Nor should we convince ourselves that dialogue should only be between governments and between our EU institutions. We must also engage in dialogue with the people that will turn our ambition, our ambitious competitiveness agenda into reality on the ground. These people will place Europe at the cutting edge, they will create the high-quality jobs, they will generate the tax revenues that a more competitive economy promises. Let us remember that many companies in Europe are exemplars of dynamism.
In perhaps no other sector is this more obvious than in life sciences. This sector accounts for almost 10% of the EU's GDP and will continue to grow in the coming years. But it is also the sector most at risk from the threat of tariffs. Its strategic significance cannot be overstated. If our life science sector is to thrive, the measure we will implement under the One Europe One Market roadmap cannot be just diktats.
They must be designed through dialogue with those at the coalface, not just over the six months, but on a continuous basis. That is why I believe that a formal dialogue between the European Commission, the life science sector and member states most at risk from the impact of tariffs on the sector should be considered carefully. If we want European industry to flourish in the face of external threats, then European industry cannot just be heard, it must be an active participant as we design our single market. On the EU-China trade and investment relations, the Irish presidency also looks forward to constructively managing the trade and investment relationship between the EU and China, which requires both sides to come together to deliver real solutions to current trade imbalances.
The discussion at the European Council in June underlined that China's economic model is presenting significant challenges for Europe. There was a shared recognition that China is a crucial economic counterpart, but there are also imbalances in the relationship that have become unsustainable, with a consistently widening trade deficit in goods over the last decade. More worryingly, China is increasingly weaponizing those dependencies, for instance via export restrictions on rare earth or semiconductors. The EU's overarching approach remains de-risking, not de-coupling. The EU strategy towards China based on three-pronged approach remains valid.
First, engagement with China through dialogue, and I welcome the efforts of Commissioner Šefčovič to establish the EU-China trade and investment consultation mechanism. Second is the use of EU autonomous trade tools when warranted, but we should also review our toolkit, and therefore the European leaders tasked the Commission with undertaking work to assess if the EU trade defense toolkit needs to be updated to address new challenges. The Irish presidency will work with the Commission to support this work in Council. And thirdly, diversification through increased free trade agreements with other partners to help build resilient supply chains. Our aim should continue to be a strong, innovative European economy which is competitive and attracts investment.
Alongside any measures we take, we should keep channels of communication open and work to make them more effective. On WTO reform, the strong, innovative European economy we are calling for requires a predictable international trade and investment landscape. With this goal in mind, the EU should remain committed to the WTO, which remains highly relevant in achieving such predictability. Despite all our efforts, as you know, the MC14 ended without reaching an agreement on some of the EU's key priorities, such as WTO reform and the extension of the moratorium on customs duties on e-commerce. The EU showed its commitment to working in particular with the members of the Comprehensive and Progressive Trans-Pacific Partnership and other like-minded countries to advance meaningful and ambitious ideas for WTO reform.
Any measures should be specific, carefully targeted and proportionate.
We are looking at the General Council this week in Geneva to see if the genuine appetite for reform is there. During our presidency, Ireland will work to support this reform agenda and to promote broad cooperation to uphold the multilateral trading system. On economic security and finally, the Commission's joint communication on strengthening economic security from last December provides greater clarity and coherence for the EU's work in this area. The Irish presidency will continue to support efforts to strengthen the EU's economic resilience, to bolster supply chain resilience, and implement the economic security package in its three axes: promote, protect, and partner.
I'm pleased that work on the review of the foreign direct investment screening regulation was finalized and that the regulation will enter into force soon. The presidency will also closely follow the review of the current EU export control framework that the Commission has launched in order to examine whether it remains fit for purpose, considering new geopolitical dynamics and the increased use of unilateral export controls. We will continue to work on other key initiatives linked to economic security and I would like to mention in this respect the ongoing discussion on the Industrial Accelerator Act, a profile, a priority file that the Irish presidency will strive to reach an agreement with the co-legislators by the end of this year. The Irish presidency will also drive discussions on a proposal for targeted trade measures on aluminum scrap once it is presented by the Commission after the summer. Ensuring availability of aluminum scrap on the EU market is absolutely vital for EU's decarbonization goals by securing low-carbon raw materials needed internally for the green transition and for de-risking EU supply chains.
The Irish presidency will guide negotiations on these and other relevant economic security files in the Council to ensure that all measures are compatible with free, open and rules-based international trade and WTO rules and we can address proven cases of unfair trade practices.
Ireland has delivered effectively on our responsibilities as presidency of the Council on seven previous occasions, from our first in 1975 to the last in 2013. Speaking in advance of that most recent EU presidency, our then Taoiseach Enda Kenny stressed that the European Union is not some exclusive distant pavilion. Our Union is a family, at times boisterous, anxious, fretful, joyful, but always compassionate, always faithful. Just as in 2013, our presidency will be focused on advancing the common goals of our European families. I am confident that with the support of our fellow member states, with the European Parliament, we can make a decisive contribution at European level once again in 2026, advancing our shared policy agenda and ensuring that the EU continues to deliver effectively for citizens, communities, the companies and jobs reliant on trade right across Europe.
I look forward to working very closely with this committee, with you, Chair, with our European partners, and with all stakeholders to ensure that our presidency is a success for Europe and indeed for our shared future.
Bernd Lange
And indeed, I hope this will be also a joyful cooperation in the next months. So, I will give first the floor to the coordinators of the political groups for round about three minutes. And Jörgen Warborn from the EPP is the first.
Jörgen Warborn
Thank you chair and thank you minister for your overview and welcome to this committee and congratulations on assuming the presidency and I wish you all the best of luck for the coming months. You are of course taking over at a very particular and important moment in the EU trade policy. We have several major free trade deals making in the good progress, among them India, Indonesia, Australia and the Philippines and we hope that they as soon as possible can be ratified by the parliament. At the same time, EU is introducing a number of unilateral trade instrument intended to protect European industries and jobs and I'm referring in particular to the new steel trade measures and the proposed industrial accelerating act that you mentioned yourself. And here I have two questions basically.
And first of all, on the Industrial Accelerating Act. We have received numerous concern from trading partners, from business organization, from businesses themselves, from academics, from think tanks who argue that elements of the proposal may not be compatible with either WTO rules or our existing free trade agreements. And I very much share these concerns, which is why I think we in the committee and the Parliament, we need to have a proper legal assessment of this to be able to go ahead with these proposals. How do you in the presidency intend to address these legal uncertainties? What step will the presidency take to ensure that the final legislation is fully consistent with the EU's international obligations?
And do you agree that the best approach would be to include a clear list of trusted partner countries combined with an opt-out mechanism?
This would of course demonstrate loyalty to our trade partners while also avoiding unnecessary disruptions for our business when it comes to how they have organized their supply chains. My second question is regarding the WTO and I'm happy that you mentioned it and I share your concerns because of course we failed to reach meaningful outcome at MC14. So what are the presidency priorities for advancing the WTO reform? In particular, how do you intend to build support for extending the e-commerce moratorium and advancing the WTO work program on reform? And is the presidency actively and regularly engaging with other WTO members to build coalitions and identify areas where progress can be achieved?
And finally, today actually the General Council of the WTO convenes. What are your expectations for this meeting? Thank you.
Brando Benifei
Ministra McEntee, benvenuta nella nostra commissione. Grazie per essere qui oggi.
A nome del gruppo dei Socialisti e Democratici, desidero ringraziarla per la presentazione delle priorità della presidenza. Apprezziamo l'approccio ambizioso che avete delineato su diversi dossier. Ad esempio, il rafforzamento del sistema commerciale multilaterale. Il collega ha appena parlato dell'importante discussione in atto a livello dell'Organizzazione Mondiale del Commercio. Ma poi anche il sostegno alla competitività europea, l'avanzamento dei negoziati con i partner strategici e l'agenda sulla sicurezza economica.
Vorrei però concentrarmi su un punto in particolare che oggi rappresenta una questione di credibilità per l'Unione Europea: il commercio con gli insediamenti israeliani nei territori palestinesi illegalmente occupati. E i prossimi sei mesi, quelli della presidenza irlandese, su questo tema saranno determinanti. Lo status quo non è più sostenibile. Dopo il parere della Corte Internazionale di Giustizia, continuare a consentire l'ingresso nel mercato europeo di beni provenienti dagli insediamenti significa tollerare una situazione che l'Unione stessa considera contraria al diritto internazionale. È positivo che una maggioranza di Stati membri sostenga finalmente un divieto alle importazioni dagli insediamenti, ma non basta.
Non possiamo continuare a parlare di opzioni. Bisogna agire subito. E accolgo con favore le sue dichiarazioni secondo cui l'azione europea dovrebbe andare oltre questo primo passo. Purtroppo ci sono governi che continuano a opporsi.
Solo ieri il Ministro degli Esteri italiano Antonio Tajani ha sostenuto che una decisione di questo tipo richiederebbe l'unanimità. È un'affermazione che non regge, se perfino il servizio giuridico del Consiglio ha indicato che trattandosi di una misura di politica commerciale, la base giuridica è quella della maggioranza qualificata. Le rivolgo quindi un appello molto chiaro: utilizzi il ruolo della presidenza per mantenere questo dossier nell'ambito della politica commerciale e non lasciarlo scivolare nella politica estera dove l'unanimità rischia di diventare l'ennesimo alibi per non decidere. E mi permetta un'ultima considerazione. Non possiamo continuare a dire ai cittadini che siamo bloccati a discutere su cavilli.
È surreale. Non possiamo bloccarci di fronte a situazioni dove si consumano violazioni gravissime del diritto internazionale. Io penso che dobbiamo fare di più e la presidenza irlandese ha oggi l'opportunità di imprimere questo cambio di passo. Grazie.
Bernd Lange
Grazie. And then we have the Patriots for Europe and Enikő is the speaker.
Enikő Győri
Thank you. Thank you, Chair, and Minister, welcome, sorry for coming late from another meeting.
Well, my question would be on the cumulative impact of the FTAs, the free trade agreements. Because, well, this Commission, as if we had a completely brand new leadership on the top, has changed mind concerning FTAs, so they are very active and more and more free trade agreements were born in the last one year, let's say. But I have very little knowledge because the Commission hasn't updated its report of 2024 on the cumulative impact on the agriculture, European agriculture of these FTAs. And from the previous ones it was not even mentioned the Ukrainian FTA. So I am asking whether the Irish presidency would be interested in getting an impact study from the Commission.
Are you interested in asking for it, if the Irish presidency is interested in knowing the true impact of all these FTAs? Because I think and I hope you would agree with me that it's important to have a transparency and a clear picture on that issue. Thank you so much.
Catarina Vieira
Thank you very much Chair and thank you Minister, welcome and congratulations on the presidency. All the best in the coming months. I have two questions for you or two sets of questions.
The first one would be on the subject that was already raised by my colleague. I want to thank the Irish government who's been very active in the Council in addressing the genocide that is being taken place by Israel against the Palestinian people, also looking at the actions happening in the occupied Palestinian territories. And as this is really on the agenda right now, I think it's a very pertinent moment to ask you about the meeting yesterday and about where we stand there. At the end of it, Ms. Kaja Kallas stated that taking action against trade with settlements was the option that got most support from the member states, but of course this can mean different things because there were different types of action. So can you tell us a little bit about if we're talking about a specific ban on trade against illegal settlements and if this is a total ban or a partial ban or if we're still looking at the tariffs rather than a ban, which is a very different option?
Can we talk a little bit about what the countries, where the countries stand right now? And can you verify that the Council sees that the trade ban can be carried out on the trade policy legal basis rather than on the common foreign and security policy, therefore a qualified majority would be sufficient and not unanimity? And then my second set of questions would have to do with the UAE.
The Irish presidency program mentions that one of the priorities is advancing the free trade agreement negotiations with the UAE. How will you seek the support of the FTA negotiations with this country, knowing our fundamental differences when it comes to human rights, labor standards, and the environment? And how do you see, how do you see that we can build an enforceable trade and sustainability chapter, keeping the Paris Agreement an essential element to ensure that UAE could possibly adhere to EU standards? I know this is one of the trickiest trade agreements, but I think it's worth also discussing. And thank you so much for being here.
Bernd Lange
Thanks a lot. And for the Left, it's Lynn, no, it's Woody. Bah, forgot.
Rudi Kennes
Thank you, Chair. I will speak in Dutch. Ja, dank u, voorzitter. Geachte minister, ik ga het jammer genoeg waarschijnlijk ook over hetzelfde onderwerp hebben. Ik heb daarover vier vragen.
Ten eerste merk ik op dat een gedeeltelijk handelsverbod met illegale nederzettingen zich in de laatste fase van behandeling in het Ierse parlement bevindt.
En toen deze wetgeving ruim een jaar geleden ter toetsing kwam bij uw commissie Buitenlandse Zaken, erkenden ambtenaren van uw eigen ministerie dat er naar onze mening een verplichting bestaat om de handel van goederen en diensten te voorkomen. Mijn vraag: kunt u op basis van deze verklaring van uw eigen ambtenaren deze commissie mededelen of u van mening bent dat de Europese Unie het internationaal recht schendt door handel met illegale nederzettingen toe te staan? Twee: uw wetgevende maatregelen hebben alleen betrekking op de handel in goederen en uw regering heeft herhaaldelijk gezegd dat zij een verbod op EU-niveau willen zien. Voor de goede orde: beide had u evengoed in nationale wetgeving kunnen regelen. Maar nu u voorzitter bent van de Raad, wil ik u vragen: welke concrete maatregelen gaat u nemen om de strijd voor een algemeen EU-breed verbod op de handel met illegale nederzettingen te doen?
Ten derde wil ik u vragen: erkent het Ierse voorzitterschap dat het een kwestie van handelsbeleid is die valt onder gemeenschappelijk handelsbeleid uit artikel 207 van het Verdrag over de werking van de EU? Want de argumenten van de voorzitter van de Europese Commissie over unanimiteit zijn duidelijk een politieke hocus pocus om eigenlijk niks te moeten doen. En ten vierde en tot slot: in verband hiermee is er nu een Europees burgerinitiatief met meer dan één miljoen handtekeningen waarin wordt opgeroepen tot beëindiging van de associatieovereenkomst tussen de EU en Israël. Burgers in heel Europa eisen echte maatregelen en geen holle woorden meer.
Mijn vraag: wat gaat u doen om het handelsbeleid te verschuiven van medeplichtigheid aan een genocide naar de handhaving van internationaal recht? Dank u wel.
Nina Carberry
Go raibh maith agat, Minister McEntee, thank you for joining us this afternoon. I appreciate your time, particularly as this is your third hearing of today. It's welcome that cutting red tape and supporting SMEs are central priorities for the Irish presidency. And so as this committee's standing rapporteur for the UK trade relations with the UK, I believe that the Irish presidency stands at a crucial juncture. The INTA committee has been clear about the benefits of reaching an agri-food agreement, particularly given the scale of trade between the EU and the UK in this sector, which is worth around 66 billion annually.
So on that, could you set out more details on how the presidency will work with the Commission and the UK government to speed up process on the SPS agreement in the coming six months, and what other steps can be taken to further strengthen relations with the UK? And separately, it's great to see competitiveness as a key pillar also, and I want to welcome yesterday's 5 billion announcement from Intel to expand manufacturing and create quality jobs in Europe through the Leixlip site. And I hope the Irish presidency can build on momentum and use the presidency agenda to further attract investment into Europe. Thank you very much.
Gabriel Mato
Gracias, presidente. Ministra, bienvenida a esta comisión y felicidades además por un programa que sitúa al comercio en el centro de las prioridades de la presidencia irlandesa. Es evidente que estamos en un momento de gran incertidumbre y lo vemos en las recientes declaraciones del propio presidente Trump sobre España, por ejemplo, que demuestran que cuando un país tercero señala a un Estado miembro, en realidad está poniendo a prueba la unidad de toda la Unión Europea. Por eso, hoy más que nunca, Europa necesita una política comercial fuerte, nuevos socios y mercados más diversificados. Y también comparto, por tanto, la apuesta de la presidencia por avanzar en nuestra agenda comercial.
Pero no podemos olvidar que esa propuesta y esa apertura debe ser equilibrada. ¿Por qué?
Pienso, por ejemplo, en negociaciones con Indonesia y con Filipinas, donde va a ser esencial proteger sectores sensibles, como el atunero, por ejemplo, o la modernización del acuerdo con Corea del Sur, que debe seguir garantizando unas condiciones de competencia justa. Ministra, el programa es ambicioso. Sin embargo, me ha llamado la atención que, pese a la importancia que concede a América Latina, no haya una referencia expresa al acuerdo Unión Europea-Mercosur. Es verdad que estamos esperando la emisión del dictamen del Tribunal de Justicia de la Unión Europea, pero cuando esté ese dictamen volverá al Parlamento y no sé si en ese caso todavía estará bajo presidencia irlandesa o no. En todo caso, muchos hitos son los que esperan alcanzar al término de la presidencia en materia de política comercial.
Y a mí me gustaría el que me pudiera decir cómo van a hacer hincapié fundamentalmente en garantizar que la apertura de nuevos mercados vaya acompañada de una protección efectiva para nuestros productos y nuestros sectores más sensibles. Termino. Le deseo mucho éxito durante estos seis meses y estoy convencido que vamos a poder trabajar de forma conjunta y de forma muy constructiva. Gracias.
Hana Jalloul Muro
Gracias. Aparte de mi pregunta, me sumo también a esta última que me parece que es interesante y muy importante.
And I switch into English. Thank you again, Mr. Marchetis, to be here with us today. We were together also in AFET committee in the morning. Here I want to raise an issue that I think that is worrying for all of us because there have been several questions related to the ban on trade with goods from illegal Israeli settlements. Last week the Commission shared a paper with three possibility pathways and yesterday at the Foreign Affairs Council a majority of member states backed a full ban.
So I think that the moment is there. Spain and Ireland has shown real leadership on this area and international law and it is essential that your presidency can be helpful in this way in which we need the required qualified majority for taking some decisions related to that. So I ask you if what is your stand on to take from yesterday's discussion and what are the priorities to ensure no product from illegal settlement reaches the single market? Will the Irish presidency be supportive of calling an extraordinary Foreign Affairs Council before October to finally tackle this issue?
And finally related to the ICC court, what is your opinion related to that? For us in this Parliament, it's not being easy to, you know, to show that for us international law, international humanitarian law is the basis of everything and it doesn't have to go with any kind of punishment to the Israeli society, which we fully support. It's something related to the impunity of the Israeli government, but not of the society. So it's very difficult to, you know, to be brandished, but we keep explaining that all and all over again. Thank you.
Lynn Boylan
Go raibh maith agat, a Chathaoirligh, agus fáilte ar ais an t-Aire. I think to start I want to ask about the presidency's approach to democratic scrutiny of trade agreements, because we're aware that the Commission will send the text of the trade agreements to Council for approval before the agreement has been translated into official languages, so in effect beginning scrutiny before it's available in the languages that MEPs and officials speak. The government has said that it wishes to prioritize the use of Irish at an EU level, so I wonder how you view how this practice would run counter to that commitment.
Secondly, I'd like to address the digital trade agreements. The Irish presidency has committed to championing a digital sovereignty agenda aimed at reducing Europe's dependence on non-European technology providers, including through the development of a tech sovereignty package. But at the same time, several digital trade agreements are expected to come forward for ratification, including with South Korea, Indonesia, and as well as at the WTO. These agreements contain provisions that restrict algorithmic transparency and limit government's ability to require that data generated in Europe be stored and processed in Europe. So how will the Irish presidency reconcile these commitments with its digital sovereignty agenda, and will it support a change of approach and seek to remove these highly problematic provisions from current and future digital trade agreements?
And then finally, because others have raised the illegal settlements and Israel, so I won't go over that territory again, but I will echo the comments of my Green colleague on the UAE and the concern I have with the EU negotiating a trade agreement with a country where the establishment of a meaningful and independent domestic advisory group is effectively impossible. Organized civil society cannot operate freely under the UAE's regressive legal framework, and the UAE has also explicitly indicated that it does not intend to ratify at least one fundamental ILO convention.
So I would like to hear what the Irish presidency's view is on this issue, on whether it sees the UAE as a potential trading partner at all.
Bernd Lange
Thanks a lot, Minister, for my side, two areas where I'm thinking about. And one is you mentioned the economic security and the industrial policy, how you will manage to have a coherent approach on that. Economic security and industrial policy. So we have the foreign direct investment and the foreign subsidies regulation, and then in the AIA we have some limitation of investment. So then we have the exclusion of some countries in the public procurement.
On the other hand, we have trade agreements with public procurement. We have the car package, which is also linked to the industrial policy and has implications for trade policy. So, for example, South Africa, a trade partner where we just concluded the clean energy partnership agreement, is producing cars. About one third of their production is coming to Europe. And of course, now they are a little under danger with this whole package, if they are able to deliver these cars in the future as well.
And 50,000 people in South Africa have now fears about their jobs. So how you will bring these different elements, and I could mention even more, together so that we have a really coherent approach in trade and industrial policy, which is of course in line with WTO rules? And Minister, the second is related to the relation with the United States. You mentioned that we adopted our legislation on the reduction of US tariffs, and therefore we have now a basis for dialogue, and you were quite polite on that.
But even after we adopted this legislation, they started a new investigation based on 301 against pharmaceutical prices in Germany. They want not to lower the price, they want to increase the price of pharmaceuticals in Germany. So this is a clear coercive measure. They want to influence legislation inside the European Union. So there will be an investigation and in September there will be a hearing so and then perhaps in October, November there will be a conclusion, so everything under your presidency.
So how you think the European Union, the Council will be ready to react on these coercive measures? And my fear is that regarding some other legislation also there are some interests on the side of the United States in changing or influence the legislation inside the European Union. Minister, some small questions.
Helen MCENTEE
Please let me know if I miss anything, but I think I have most things here.
So thank you to everybody for their specific questions. Jürgen, initially you've made a number of points just in terms of the moment that we're at now. Obviously there's a huge amount of work on a number of different relationships and new free trade agreements, but also looking to see how we can protect ourselves from maybe some of the challenges as well that have emerged. The Industrial Accelerator Act is one of the mechanisms that's been advanced to do just that, to strengthen our supply chains, to protect us from some of the more challenging environments that we find ourselves in. And I suppose no matter what we do, we have to make sure that the Industrial Accelerator Act, that any legislation, any policies that we progress, that they are compatible with World Trade Organization requirements.
There are discussions including aspects relating to union origin, European preference ongoing at the moment. The origin mechanisms that are proposed are quite complex, I suppose, and they're varying in terms of the content requirements, the timelines, the union origin specific procurement rules and more than that as well. I suppose the approach from the Irish presidency will be to ensure that whatever we introduce is balanced.
And obviously, similar to yourself, I speak to business, I speak to enterprise, I speak to other countries, and there's a concern that the balance will be favoured from a protectionist approach. And I think we need to make sure that we are addressing the challenges at the same time remaining open and competitive, because that is the only way that we will be able to remain competitive, that we are open, but also recognise that we are and our chains are interlinked. Of course, in terms of any compatibility, the Council have to ensure that any relevant questions around that compatibility are addressed, and we will work with them. We don't have legal... we don't have legal Council report on it yet, but that work is underway and we will work with them obviously as that is examined and then hope to steer the negotiations towards something that is legally robust but that gets that balance right, which I think is really important here. In terms of WTO reform, you know, I think that there was obviously a sense of ambition going into the MC14.
We met with Secretary General at our informal in Cyprus actually just that week, and there was an anticipation that more progress would be made. Unfortunately, it wasn't, but I do think that there was an ambition there and I think we need to build on that, and that's what we hope to do in engaging with countries, with member states.
The Commission's concept paper's obviously that's been discussed around decision making, level playing field in the industrial sector, the foundational issues are all issues being discussed at the moment. And then obviously the General Council chair has launched the new roadmap on WTO reform that has quite an ambitious schedule of meetings and facilitator-led work. So I think now is the time because there is that ambition to try and move things along. On the e-commerce moratorium, the moratorium on customs duties lapsed obviously and in response the US has launched the political initiative to extend the moratorium on a plurilateral basis while working on this. So there's still it seems a broad consensus among member states to support this statement and what we're trying to do is to facilitate within the Council this and we'll be working closely with member states in that regard.
Brando, in terms of the occupied Palestinian territory and where we are, I think he's gone now, where we're gone. And I might perhaps maybe group this because we had a number of contributions, Ms. Viera as well as Rudy as well as Lynn and Hanna and apologies if I've left anyone else out, but there's a number obviously that have asked specifically about the occupied Palestinian territory. Maybe just firstly to outline what happened at yesterday's meeting.
We have Ireland with a number of member states for some time been advocating for the Commission to bring forward proposals that would essentially address the ICJ ruling from 2014. I think we are all in agreement in the Council that the ruling is clear, that the EU should take every measure possible to prevent trade in the occupied Palestinian territory, and so we have asked for proposals that would do that. The Commission paper set out three options. One was essentially to strengthen the current customs mechanisms that are in place. The second was increased tariffs, which would perhaps make it more difficult, and the third was banning goods in the occupied territories.
While I'm speaking as presidency, the view from many member states I think is that the first two options would in fact legitimize trade in the occupied territories because it would allow for it to continue. So the preference among those who supported change, so it's not that there was an overall majority, but those who supported any action was for the third option that we would ban goods in the occupied territories. This was a discussion paper, so there was no tabled options, but what is happening now is the ambassadors will meet to see if there is a consensus to put that forward to a vote.
I think we do have an obligation to ensure that we are compliant with the ICJ ruling. And obviously the ruling doesn't say how we comply or how member states, how the EU, how anybody is compliant. But I think we need to make sure that we take every measure possible to be compliant in that respect. And that is the approach that the Irish presidency will take in working with the Commission and working with member states. In terms of the association agreement, this is already on the table.
Commission put it forward last year when they also proposed sanctions against violent settlers. This itself has been voted on and agreed. But the unanimity that is needed to progress any suspension of the association agreement or the trade elements of the association agreement is quite simply not in the room. The unanimity is not there, and that is why it has not been put to a vote. In terms of Ireland's legislation, by Thursday this week we will have enacted legislation to ban goods from the occupied territories.
We have been working closely with colleagues on a cross-party basis to progress this. And the reason that this is specific to goods is for a number of reasons. The legal advice that we have is that there is a public policy ground based on the 2014 ruling that allows for, or that creates a legal environment for goods. However, that same legal environment is not there when it comes to services.
Trade is an EU competency, that is very clear, but there is a public policy ground based following the 2024 ICJ ruling, which does not exist for services. And in terms of implementation, there are challenges there. So we have advocated to move on goods, while from an Irish perspective advocating that we would make progress at an EU level. But it is important to stress that in bringing this forward, we have to take on board all Member States' views and have to work with the legal advice that we have in the Council. The legal advice is very clear that this is a position that can be taken through the common commercial policy.
That would obviously require QMV, and the legal advice in our Council has been very clear, and that is the approach that we have been working with, or the legal advice that we have been working with in terms of that issue itself. Then we will continue to engage with colleagues on this matter, and will, I believe, before the next formal Council, have a discussion following the ambassadors' meeting, which will take place soon. In terms of the cumulative impacts, Nico, of the FTA, this is something that I think as Presidency, but working with the Commission and with the Parliament and with the Council, if these are being produced previously, then it's important that we understand the impacts of our FTAs.
I think for the most part we can see that FTAs are positive. FTAs are important for our own economic growth, for competitiveness, for supply chains, for economic security. So I think it's important for us to understand the overall impact positively, but also if there are negative implications or if there are issues that emerge. And you'll know even from the recent Mercosur agreement that there are mechanisms that were put in place should certain industries or sectors be negatively impacted, that there would be a review and ability to look at specific areas within the trade agreement. So I think certainly this is something that we could and should be open to in looking at the overall cumulative impacts and effects.
In terms of the UAE and the free trade agreement, I was in the UAE last week and met with two of my colleagues, Minister Reem and Minister Thani. And while we discussed in particular the ongoing situation in Iran and the conflict in the wider region, the overall FTA agreement was something we discussed also.
As you'll be aware, negotiations have been inactive for about 15 years, so this has been a particularly difficult FTA for the reasons that you've outlined to progress the negotiations within the region and its individual members. I think we have a shared interest and ambitions to resume this, but we do need to be very clear, and this is part of the discussion that we had last week, that where there are red lines, that we are clear about ours, and I would say that the UAE will be clear about where their red lines are too. So we need to engage, and I think that is the only way that we can find a way forward in addressing some of the concerns that we have, but also the ambitions that we share as well. More broadly then, you have the Gulf conference that's taking place in October, and while we have not been able to make progress on the wider Gulf trading relationship, this is something that I know there is an ambition for. And yesterday we hosted the Gulf countries for lunch during our FAC, where this ambition was discussed and where there was an ambition to go beyond the trading relationship, but also from a security perspective, how we could work more closely together.
In terms of the relationship with the UK, so I can say more broadly, I believe that the current UK government have utterly transformed the relationship between the EU and the UK, which had for 10 years since Brexit been quite fractious.
We've seen it ourselves in Ireland, but more broadly, the relationship has become one more of, I suppose, where we've worked closely together and there's been a real ambition to do more together. The summit that was due to take place next week, the 22nd, has obviously been postponed because of the change in leadership, but there were three key items on the agenda that we hoped to make progress on and that Commissioner Šefčovič in particular had been working closely on. That is the SPS agreement, which is important when we talk about our agri-food sector and when we talk about addressing some of the overhanging issues from Brexit, which are still impacting businesses and communities in Northern Ireland in particular. But also the ETS, Emissions Trading System, there was good progress in agreement in that area. And thirdly, then, on youth mobility, this was the third package that we hoped to agree.
So I would hope that with a new Prime Minister next week, the summit will be reinstated and that we'll have an opportunity to address these issues and to move even further. And certainly the soundings that we are getting from the potential incoming Prime Minister is that he wants that close relationship to continue and he wants it to be even more ambitious. So we would certainly support that through our presidency, working on that relationship and facilitating that in so far as possible. On the Mercosur agreement, Gabriel, in terms of where we're at now, so I mean, we've obviously gone through a very lengthy process.
When we talk about the UAE and the timelines, obviously Mercosur has been a very lengthy timeline. It has been challenging, I would say, and again I don't want to speak too much. I think Ireland's position was very well known as others were and I think it was important that mechanisms were put in place to protect specific markets and industries where concerns had been raised. But we are now and we will through our presidency work as the I suppose the different steps play out now over the next while. The Parliament has, as it's rightly entitled to, taken legal action in terms of the implementation of it and it's important that we wait for that to to progress.
And at the same time they have taken the position that is open to them, the Commission, to to start implementing in the interim. So there are a number of stages that are happening at the moment. But I think for any new FTA we need to make sure that where there are specific industries or sectors where there are concerns that we work with the Parliament closely. And I want to acknowledge there are many people here in the Parliament who worked very closely with the Commission and the Council to put in place mitigating mechanisms should concerns arise, particularly around the the beef industry in the Mercosur agreement. And that shows how working together obviously we can we can address some of these concerns or challenges.
In terms of our overall... Now, apologies. In terms of the implementation of FTAs, apologies, Lynn, your question around things progressing. So that is a proposal that's on the table from the Commission, but it has not been agreed to. And I appreciate that, you know, there are certain member states and we need to make sure that if we are making any changes to how they are transposed, how they are translated and at what stage, that we do that with the full support of all member states.
So that's something that's obviously being proposed. It hasn't been agreed to, but I do think, and I think I... sorry, I know I fully understand the reason for the Commission putting forward this proposal. It's to make sure that we can, after many years of negotiating free trade agreements, implement them as quickly as possible. And that is the objective here. It's not to circumvent anything, but I think we need to look and see how we can find quicker ways to try and implement trade agreements when they are negotiated, when it takes so long, while at the same time respecting, obviously, the official languages within our Parliament, within the EU, and doing so by working together and reaching an agreement.
And look, that's something that we will work with the Commission on in the time ahead.
In terms of then the the balance your your question around the the economic security or economic policy industrial policy I I think there's a number of things here that we need to look at. I mean I've attended the defense committee today as well where we've talked about the European security strategy and obviously so much of that is focused on the new and emerging threats and the risks but I think it's really important that as part of our European security strategy that we have a focus on economic security that we look at the challenges that we are facing within our supply chains we look at resilience we look at the overall competitiveness agenda and how that in itself will support us in that overall objective. We had a very good discussion at one of our trade councils recently with Maroš on how we can combat some of our security risks and some of it is what we do ourselves within the EU.
within the EU, it's strengthening our capacity, our capabilities and the single market more generally and that is why competitiveness is really an important objective for us. How can we strengthen the single market? How can we complete the single market? How can we progress really important files that have been on the table for some time now, whether it's the savings and investments union, the 28th regime, looking at simplification, how we can make it easier for business to do business, to grow certain industries and economies and sectors? And that is why we have set out in particular, and you've mentioned the 301 investigation, which I know is a separate question, but when we look at the life science sector, is there more that we can do to be strategic, not just from a US perspective, but as an industry, in the same way that we would have done with the automotive or certain types of older or more traditional industries?
Can we look at this in a more strategic way so that we are responding to some of the the challenges that we're seeing now, but in particular where certain industries or certain countries are weaponizing certain industries as well? And then I suppose when we're looking at WTO reform, how do we make sure that that is that is fully aligned? So I think that there is there are a number of things that we need to do, but it crosses over to to bring it together and that is where an economic security working group I think would be important and and that is something that we would like to see progress as well. On the US and and the relationship, I think it's fair to say it's been very challenging over the last year and a half.
At the same time, we all would agree that the US is our most important trading partner and it's important that irrespective of what is happening, that we keep that dialogue open, that we remain focused on achieving our overall objectives, at the same time being very clear about what it is that we stand for. And we've had a number of moments, I think, in the last year where Europe has been very clear that we stand together, be it in specific member states being singled out by the US, be it in non-EU member states but connected being singled out, that the EU has remained strong in our response. And I believe that it is because of our strength and because of the unity of the EU 27, be it on economic measures, be it on security measures, and because we have remained unified, I believe that's had an impact on how the US has responded also. Of course, the 24th next week will be an important moment to make sure that the turn-key can be fully implemented and that the legal mechanisms that have been taken, or the approach that has been taken by the US to bring us back to where we were prior to the Supreme Court ruling, that that will transpire and that that commitment that we've received from the US, that that will follow through. But we also, as you've said, need to deal with other investigations that have now taken place.
And again, this can only be resolved through dialogue.
And I would acknowledge your role, that of Commissioner Šefčovič, and we will support fully the engagement that needs to happen on behalf of Member States in that regard. But specifically the 301 on the pharma, again, I think is important to highlight why we need a more strategic long-term approach and objective to pharma, to the life science sector, to medical devices, to medtech. And that is what we are hoping to achieve through the development of a new task force, bringing together the industry, bringing together Member States, bringing together the Commission and the institutions to be able to bring that forward, working with Commissioner Šefčovič, but also Commissioner Várhelyi as well. And we've been working on that and hope to make progress on that soon.
Helen MCENTEE
Briefly in terms of the, apologies I missed them, in terms of the digital trade agreement with Canada. This is something that the Council supports and the negotiations and will be working with our colleagues to help this come to a conclusion in the coming months. The digital trade agenda more generally, I think it's there to further deepen and modernize agreements with our FTA partners. The agreement won't change the EU approach to the digital enforcement of rules, but it's an important element of it. Apologies.
Bernd Lange
Indeed. So we are really supporting the trade, the digital agreement with Korea and Japan and Singapore.
And of course, perhaps it would be possible with the digital agreement with Canada to ratify the CETA agreement in one approach.
Helen MCENTEE
Just on that, so we have moved to implement it, to ratify it in Ireland and will be working to highlight the benefits of the CETA agreement ten years on during our presidency as well.
Bernd Lange
Perfect. So, thanks a lot, Minister. This was a comprehensive overview and you answered all the questions. That's really great. And so I wish all the best, really great success to your presidency.
I guess it's really a challenging time and therefore all the best and stay in contact for the next six months.
Yes, thank you.
Bernd Lange
So, dear colleagues. Now we switch to I guess the last item on our agenda of today. And this is the evaluation report on the foreign subsidies regulation.
I guess today we mentioned the Foreign Subsidies Regulation several times. And this was a new instrument which was introduced and also really mentioned and wanted by the European Parliament three years ago. And in this negotiation with the Council, of course, we also mentioned that it is important to have an implementation report how this is working and what we can we could achieve and what are the necessities for the future implementation. And this report was published today, so quite fresh. And I'm happy that the Commission is now here with Henri Piffaut and Alessia Di Gregorio.
And they will now present this implementation report. And I guess Henri is starting.
Henri Piffaut
Good afternoon.
Yes, indeed, I'm here for those who are looking for the origin of the voice. Yes, it is indeed fresh from the oven. And we hope it's going to be, you know, crusty enough for this end of afternoon. So what I suggest is that I'm from DG Competition, I'm going to present the scope, timeline, and findings of the report plus maybe the next steps for the competition side. And then I will hand over to my colleague Alessia, who will then present the same thing for the public procurement side.
So you know that the FSR regulation when it was adopted had an Article 52, paragraph 2, which required that the Commission would review its practice after three years of implementation. It was so it entered into force in July 2023, which leads us to today, Bastille Day, I'm French, 14th of July 2026.
This Article 52 asked the Commission to review notably the provisions, the implementation of the provisions of Articles 4, 5, 6 and 9 of the FSR, which deal with foreign subsidies, distortions, balancing test and the ex officio cases. At the same time, it also asked to review the notification thresholds set out in Article 20 and 28 for respectively concentration cases and public procurement procedures, and to report as well on developments in international relations regarding third country subsidy control systems. So we launched the first review, our first review in August last year, and we are here today to present the outcome. The report was published this morning, together with a staff working document and a study. So what were the sources of evidence on which we relied to produce that report?
We asked an external contractor to conduct a review study with the advantage of him or them being external and having a critical eye on our practice and being able to address also the stakeholders from a neutral perspective. We asked for feedback from stakeholders through a call for evidence and a public consultation, as well as targeted consultations with Member States and selected stakeholders. And also we conducted internally some review of our practice and experience gained during these three years of implementation.
The findings of the review we found that the stakeholders actually welcomed the actions of the commission to provide more guidance. So there were the guidelines which were published in January this year as well as a number of question and answers and and further clarifications provided through staff working documents and other documents or decisions. However stakeholders also demanded higher legal certainty concerning certain substantive FSR notions and the application of the analytical framework. The early FSR enforcement shows that the instrument is fit for purpose.
As far as the ex-officio investigations are concerned the the mechanism was found to function as intended. The FSR provides an effective framework to pursue the regulation's objectives and ensuring a level playing field.
And the Commission has exercised its ex officio powers in two cases where it opened proceedings, but the cases are of course still currently ongoing. As far as the second chapter is concerned, concentrations, the volume of notified concentrations was far in excess of what we had initially anticipated, with 100 notifications per year, with the very vast majority of cases not raising concerns. So far, we have opened three in-depth investigations. Two of them have been closed with decisions with remedies, and another one is still ongoing this summer. The stakeholders considered that the turnover threshold is an appropriate notification proxy and value the pre-notification engagement that we have with them before they notify their transactions.
However, there were or there are concerns about data collection, which is triggered by the reporting of the so-called foreign financial contributions. And they also underlined the uncertainties surrounding the possible exercise of the call-in powers, whereby the Commission can ask parties to notify a transaction that would not meet the thresholds set out in Article 20.
I will skip the findings for public procurement and let that to Alessia and I will jump immediately to the proposed adjustments that were also aired this morning together with the publication of the report. Given the findings I just outlined, we found that there was no need to reopen the FSR itself because it's fit for purpose. It's a helpful instrument to ensure the continuity of the level playing field in the internal market. However, given the stakeholders' feedback, we found that for the notification of concentrations, some adjustments should be added to the FSR setup. And therefore, the Commission is considering to increase the turnover notification thresholds from 500 million euros to 600 million euros through a delegated act that's provided for in Article 49 of the FSR.
And some targeted changes to the implementing regulation, which would help to lighten the burden for businesses by introducing a new short-form FSCO for simplified cases, a slight increase in reporting thresholds, so therefore less information to report for businesses, and additional exemptions from reporting requirements for the simple foreign subsidies and not those who are the most likely to lead to distortions of competition.
And obviously the Commission will continue to provide guidance and increase transparency. With that, I let the floor to Alessia.
Alessia Di Gregorio
Honorable members, good afternoon. DG GROW is happy to be here today and to keep open the important and constructive dialogue with the European Parliament and with this committee in particular. So now I will focus on the ex-ante notification procedure for public procurement, which is another important pillar of the FSR framework. The figures presented today in the report speak for themselves. Since the regulation started to apply and until end of May 2024, we received more than 5,000 submissions covering around 800 public procurement procedures and representing a combined total value of around 712 billion of euro.
These figures show that the FSR framework has been well integrated into national procurement practices by both contracting authorities, but also by economic operators. Our case practice assessment has also identified crucial and key industrial sectors where we saw recurring submissions coming across these sectors that I can mention for example transport, ICT, energy, health, just to give you an example. And this is particularly interesting for us because underpins our strategic handling of cases based on economic intelligence and priority actions. At the same time, we have also made active use of the Commission investigative powers and to date we have launched four in-depth investigations with a conditional decision with commitment in the context of a metro line case in Portugal adopted this April.
We also adopted two incompleteness decisions and we used the call-in Commission powers to request the prior notification in a procurement procedure in Croatia in the context of the transport and construction sector. But beyond these formal investigations, it is also important to recall that the FSR is also producing an important deterrent effect with economic operators in some cases reluctant to disclose the information requested by the Commission and so preferring to withdraw from the procedure in question. So implementation of the FSR in the context of the public procurement pillar has also generated valuable practical experience. And despite the complex framework, the Commission has consistently respected the tight deadlines and completed the preliminary reviews within the 20 working days as required by the regulation, so contributing to more legal certainty. At the same time, our guidance and regular engagement with contracting authorities, businesses and practitioners have contributed to more consistent and predictable application of the regulation.
And what is very important today to affirm is that stakeholders have well received all this work. But that said, there are some challenges.
In particular, we see gaps in awareness among contracting authorities and instances where the economic operator fail to comply with the notification obligations. Actually, practical experience has also shown that there is a scope to reduce unnecessary administrative burden on businesses. And in light of of this and as announced in today report for the public procurement module, the Commission would like to propose some practical simplifications. I can mention, for example, the simplification and clarification of notification procedures, facilitating the use of waivers, clarifying and limiting the reporting obligation for contributions falling outside the categories considered most likely to be distortive and clarifying the rights and the obligation for contracting authorities and economic operators on processing confidentiality in the context of the access to file.
As I said, these are targeted and experience-based adjustments and per se do not alter the objectives and the architecture of the regulation. Rather, they reflect the feedback received from stakeholders and aim to simplify the reporting of the foreign financial contributions, especially in the context of the preparation of the FS-PP form, which for the time being appear to impose disproportionate burden on European businesses. So, to conclude, we believe that this adjustment will also support improved legal certainty, compliance and efficiency. In parallel, we will continue our effort to improve awareness and increase transparency regarding our enforcement practices. I stop here and I remain available for any further clarifications.
Brando Benifei
Thank you, Chair, and thank you to the Commission for presenting the evaluation report. We can only offer some initial remarks today as the report has only just been published. Given the importance of the foreign subsidies regulation, Parliament will need time to examine its findings in detail.
At first sight, we welcome the report's overall conclusion that the FSR is fit for purpose. At a time when foreign subsidies increasingly distort competition and undermine European industry, this confirms that the regulation remains an essential instrument to safeguard a level playing field in the single market. We understand the need to reduce unnecessary administrative burdens where they genuinely exist. However, we want to be very clear: simplification cannot become a backdoor for deregulation. We are hearing increasingly strong calls from some stakeholders to weaken the FSR in the name of competitiveness.
That would be the wrong lesson to draw. The priority should be better implementation and greater legal certainty, not lowering our level of ambition or creating loopholes that undermine enforcement. On public procurement, we therefore welcome the Commission's decision not to revise the notification thresholds. The S&D Group fought hard during the negotiations to secure thresholds that are both proportionate and effective, and we remain convinced that increasing them would risk excluding precisely those cases where foreign subsidies can have the greatest distortive impact. I would also like to ask about the ex officio tool.
It is one of the regulation's most valuable instruments, as shown by the ongoing investigations.
At the same time, many stakeholders argued during the consultation that it needs to be enforced more effectively. Has the Commission explored ways to shorten investigation timelines? Thank you very much.
Dirk Gotink
Thank you, Chair, and apologies for being late and thank you for being flexible. I think the FSR instrument is of course a very key element of our defensive toolbox, but clearly we need to make changes along the way. Now, the Commission is not really leaning forward when it comes to saying that, well, we need to change, but mostly change when it comes to sort of targeting better. I think it's a fair point to say that if you have a lot of reporting and very few hits or very few investigations, it makes sense to look at the calibration of the mechanism. I think a political issue that we dealt with also here in the past was the question of non-cooperation.
We are somehow data-dependent.
Now the Commissioner here last time told us we can make assumptions about certain levels of subsidies. I don't know how those can hold up in court, assumptions. But if all my assumptions would hold up in court, I wouldn't be in this building to be honest. But I think that makes the instrument very tricky to deal with and also very important to make it legally sound, for example when it comes to the call-in powers. So when you're under the threshold, but when the Commission still thinks it's important to have a look at it.
It stays a bit vague. And I think for everyone involved, for our side but also the other side, it's important for these conditions to be clear. And I think it's something, another point is what also Brando mentioned I believe, is sort of the length and the complexity of the investigation remains quite challenging for it to be of any use in a very dynamic trade environment. And we basically have a choice to make it a technocratic investigation tool or a real political tool, and there's pros and cons to both of them.
But I think we all agree that we also need to become more political in our engagement with our partners even if we want to level the playing field a bit. So those would be some of my considerations and questions. And thank you for for the report and the evaluation and I'm looking forward to the for the future process.
Catarina Vieira
Thank you Chair and thank you to our speakers today. Also from my side it will be brief because we have recently gotten the report but would like to go further into detail in the future. And thank you very much for the overview and the evaluation report. It's really encouraging to see that the Foreign Subsidies Regulation has become a usable tool and that it will help level the playing field for European companies that cannot compete with foreign subsidies. I guess I have a couple of questions and concerns that that arise from the report.
The first one is the choice for delegated act and not a full revision. Can you elaborate a bit on on why that recommendation? And based on the report I would worry that this proposed changes could not only mean simplification but also to a certain extent deregulation. We do understand that there are many limitations within DG Trade staff resources that affect how many cases can be handled. However increasing thresholds for investigation also means that fewer cases will be flagged under the regulation.
And we really do need this instrument to be able to tackle trade distortions, for example, those caused by China, but also other countries that rely heavily on foreign subsidies and therefore distort competition. To my understanding, at this stage, only few cases have led to further investigations and you have opened only two in-depth investigations using ex officio powers. Has this been enough to combat the issue of how foreign subsidies have distorted competition in the EU? And in what ways do the proposed changes help investigation processes in tackling the root causes of distorted competition? And then finally, I'd like to ask how do you see the FSR interact with the Industrial Accelerator Act and the upcoming revision of the Public Procurement Act?
I understand that you also propose changes to the procurement chapter, but have you also fed to the revision of the two pieces of legislation that I just mentioned? Thank you.
Rudi Kennes
Thank you, chair, I will speak in Dutch. Ja, dank u, ik heb vier vragen. De eerste die gaat fundamenteel over deze verordening. De FSR is in feite ons eigen staatssteunverbod opgelegd aan de rest van de wereld, hè. Het idee dat overheidsingrijpen een verstoring is van de markt, dat leggen we eigenlijk op aan derde landen.
Daarnaast beschermt deze verordening enkel Europees kapitaal, niet Europese werknemers. Het is goed dat we kunnen controleren wie ons publiek geld krijgt en wie onze bedrijven opkoopt, daar ben ik voor. Maar de verordening kijkt alleen maar naar de nationaliteit van het kapitaal, niet naar het gedrag ervan. Als een Chinees staatsbedrijf bijvoorbeeld een fabriek koopt: onderzoek. Als een Europees private equity fonds diezelfde fabriek koopt, leegmelkt en sluit: geen enkel probleem, geen enkel onderzoek, dan hebben we geen marktverstoring, dan hebben we enkel duizenden werknemers op straat.
Mijn vraag is: waarom toetsen we wel enkel het speelveld tussen aandeelhouders en niet de gevolgen voor werknemers of de maatschappij? Twee: de selecte toepassing ervan. We weten inmiddels hoe handelsinstrumenten in deze Unie worden ingezet: wel tegen geopolitieke vijanden, niet tegen geopolitieke vrienden. Wel tegen China dus, niet tegen de VS. En ik lees ook in de evaluatie dat niet één keer is er een onderzoek geopend naar een Amerikaans bedrijf, ondanks dat er ongetwijfeld bedrijven tussen zaten die steun hebben gekregen via de Inflation Reduction of de Chips Act.
Mijn vraag is dus: hoe verklaart de Commissie dit verschil, gezien de VS toch ook één van de grootste subsidieverstrekkers is ter wereld? Drie: over de impact op het mondiale zuiden. Deze verordening treft niet alleen grote landen, ze treft ook landen in het mondiale zuiden die doen wat wij ook deden: hun industrie opbouwen met staatssteun, staatsbanken en publieke bedrijven. Dit maken we nu een stuk moeilijker voor hen. Dus mijn vraag: de evaluatie zegt niks over de gevolgen van FSR voor ontwikkelingslanden.
Is dat effectief onderzocht en verwacht u dat er een effect is? En ten laatste: waar gaat deze evaluatie toe leiden? We kennen inmiddels een beetje het patroon in dit huis: een evaluatie wordt aangekondigd, het bedrijfsleven begint te klagen over administratieve lasten en rechtsonzekerheid en het eindresultaat heet dan steeds opnieuw vereenvoudiging. Dit is ook direct wat de Commissie zegt te willen doen in deze evaluatie. Mijn vraag: heeft de Commissie ook een analyse gemaakt van de impact van de voorgestelde vereenvoudigingen op de effectiviteit van deze verordening?
Dank u wel.
Bernd Lange
Thanks, and from my side also some questions.
First, there are only two ex officio investigations in three years. So there is my question: are there problems, let's say, undetected, or are the expectations too high regarding unfair investment in Europe? Two in three years is quite low. Secondly, in the report, the number of notifications is mentioned that the number of notifications is really exceeded the expectation. So is the Commission still able to have a proper assessment of these notifications?
And then the question, and this was raised also by Katerina, of the, let's say, modernization of this regulation.
In the, I was a little bit involved in this process of making this legislation ready. In article 52 of the regulation, it is clearly said that there should be an implementation report accompanied with some, if necessary, relevant legislative proposal. And we discussed this quite intensively, that if there should be a change of the legislation, this should be in the normal legislative process. And we had in 2023 an experience where there was an implementing act published, which were a little bit at the border to the change of the legislation. And at that time, the INTA chair and the INTA rapporteur mentioned it quite clearly to the Commission, that this is not a proper behavior regarding the regulation.
And now you want to make some targeted adjustment. I have no clue what this means exactly and how you will introduce this. Also with an implementing act? I have no clue how you can implement targeted adjustment.
And this of course in my understanding need also a deep involvement of the Parliament. How you will involve the Parliament in this adjustment? And then you wanted to change the threshold. And of course this has to be done by a delegated act, that's for sure. But also here the threshold, if I'm remembering right, was the most controversial discussion during the trilogue.
Also the core of the legislation. And now you want to present a change in the core of the legislation with a delegated act where the Parliament can only say yes or no. So how you want to bring the interests of the Parliament into this process?
Okay. Ah, now he's there. Christian, please.
Christian Doleschal
Ja, vielen Dank zunächst für die Vorstellung der Evaluierung und verzeihen Sie, dass ich etwas zu spät gekommen bin bzw. nicht früher hab kommen können. Aus Perspektive des IMCO darf ich folgendes anführen: Mit der Foreign Subsidies Regulation haben wir vor einigen Jahren eine wichtige Lücke im europäischen Ordnungsrahmen geschlossen. Während staatliche Beihilfen innerhalb der Europäischen Union seit langem einer strengen Kontrolle unterliegen, fehlte bislang ein vergleichbares Instrument gegen Wettbewerbsverzerrung durch Subventionen aus Drittstaaten. Als IMCO-Berichterstatter für den binnenmarktrelevanten Teil der Verordnung war es für mich besonders wichtig, den fairen Wettbewerb zu schützen, ohne Unternehmen und öffentliche Auftraggeber mit unverhältnismäßig hohem Verwaltungsaufwand zu belasten. Und ich glaube, genau diese Balance stand bereits im Gesetzgebungsverfahren im Mittelpunkt.
Nach drei Jahren Anwendung ist eine erste Evaluierung der richtige Zeitpunkt, um die praktische Umsetzung zu bewerten und gegebenenfalls auch nachzusteuern. Entscheidend wird nun sein, die angekündigten Anpassungen sorgfältig zu prüfen. Maßstab sollte aus meiner Sicht derselbe bleiben: ein wirksamer Schutz des Binnenmarkts, größtmögliche Rechtssicherheit und ein möglichst schlankes und risikoorientiertes Verfahren. Ich freue mich auf die weitere Diskussion und danke auch für die Evaluierung dieser wichtigen Regulatorik. Herzlichen Dank.
Jörgen Warborn
One quick question regarding the notification and the threshold.
The Commission mentioned that the suggestion will be to increase it from 500 to 600. On what basis did you land at 600, and why not 700 or 550? What's the reasoning behind this?
Henri Piffaut
Yeah, thank you very much for all these interesting questions. I think I will start with the question on ex officio. So the fact that we have publicized the opening of procedures in two ex officio cases doesn't mean that the Commission services are not investigating all the time possible leads of distortive foreign subsidies into the European markets. And they might be, but it's not yet, you know, ripe for public information, there might be cases still already ongoing.
Also, as we have abundantly made clear today, it's still a very new instrument and everybody is learning how to use it, including us. And this is also responding to the question on the effectiveness, how to ensure the effectiveness of the ex officio tool. We are learning by doing, and we are trying to focus as much as possible our resources to ex officio investigations because these are those which may have the most impact into the internal market. So we, that's also part of the global, let's say, economy, to use a French term, of the proposed adjustments to simplify the investigation of concentrations that are very unlikely to lead to any issue and therefore free resources which can be reallocated and focused on ex officio cases. So that's for ex officio.
There was a question on the impact on outside the jurisdiction of the EU linked to the foreign subsidy regulation. The foreign subsidy regulation looks only at foreign subsidies which may have an impact in the internal market. It has no say whatsoever, it's not interested into the way that foreign subsidies are designed in third countries and in third jurisdictions.
So there's no impact in a way, unless these foreign subsidies are imported into the functioning of our own internal market. Next question was about the adjustments that we are planning to propose. First I should have said that our idea is to publish in the last quarter of this year proposed adjustments for consultation and at a later stage to actually obviously inform the Parliament and also the Council through the advisory committee on these proposed adjustments. And the idea is really to get the information that we need to do our investigations and not to get information that is not relevant.
So when that information is relevant, we ask for it, when it is not relevant, we shouldn't ask for it and and create undue burden on on us and also on businesses. To so these are really adjustments at the margin and they're not changing in any way the way the implementing regulation exists exists today. Now turning to the to a proposal to to look at and to change the the turnover threshold for concentration notifications, I would remind you that the there's the possibility for the Commission to exercise its call-in powers. So if there were concentrations that would fall below these new thresholds, the Commission has still the power to to exercise its call-in power. And actually, I would like to remind that the we have tried to provide more clarity as to what criteria would be used to determine when we would be using our call-in power and this is explained into the guidelines that were published in January this year.
There's a whole chapter on on on the criteria that would be applied by the Commission to exercise its call-in powers for both concentrations and public procurement procedures. Why go up to 600 million? We we looked at the the concentrations that had been notified and and the number of concentrations that have actually raised issues. The it's basically 1% of concentrations that went into second phase. There are a few others that also triggered some kind of a, you know, assessment in first phase, but they were found that there were insufficient indication to open a second phase.
And all of these concentrations were above that threshold of 600 million. So we thought that it would not at all undermine the effectiveness of the foreign subsidy regulation in terms of concentration notifications and control of concentrations to propose an increase into that turnover threshold. But obviously we are open to any comments that may be made at the time of the public consultation that we will conduct on the draft implementing acts. I'm reviewing my notes to see if there is another question that I haven't addressed yet. There was a question on public procurement and also the industrial accelerator act, but that I will leave to my DG GROW colleagues.
Alessia Di Gregorio
Thank you, and thank you very much for your constructive questions and interventions. So regarding the question raised by Ms. Vieira on the link between the FSR and the accelerator industrial act and the public procurement review. Well, for the first point, we don't necessarily link the two acts.
For us, these are two different things. For the public procurement review, there is actually an important link and we are looking at the work that the Commission is preparing in view of the review of the public procurement and which will be presented to the co-legislators in the coming time. But unfortunately, I cannot comment on that so far. And in addition, I wanted also to come back to other members' interventions, in particular regarding Mr. Benefei raising the threshold on public procurement. We are happy to hear that you may support this choice.
In particular, what I want to provide now is the context which brought the Commission to this conclusion. We based very much, as I said before, on the feedback stakeholders, on the stakeholders' feedback. And precisely, we noted that half of stakeholders wanted to raise or decrease the threshold regarding the public procurement module, but the other half was very happy with that.
So we essentially concluded that we don't have sufficient basis to revise the public procurement threshold for the time being, but of course we will keep monitoring the situation during the application of the regulation. Then I wanted also to address in particular the question from Mr. Lange regarding the expectations that we had about notifications and the actual number of notifications that we have received. So, two points here. First of all, as DG GROW, we are trying to cope with this huge number of submissions, as I said before, more than 5,000, but today there is a dedicated unit to do so and to ensure a proper and effective preliminary review on any submissions that we receive. And second point, and here it is an announcement already said in the report, but I will be even more open and clear today regarding the submissions that we receive.
We are operating a solution in order to improve transparency and we intend to make public through a kind of register the notifications that have been submitted to the Commission under the public procurement module.
So this will come likely in the coming months. Thank you very much.
Bernd Lange
Thanks a lot. So the involvement of the Parliament was not really satisfied for me, but we will discuss this continuously, I'm sure. And yeah, so I see no further request for the floor. So thanks a lot for being here. And this leads to the next item, any other business.
Karin is not here, so I have nothing on that. And the last item is first to thank the interpreters here for this wonderful work, even today with Irish translation. Thanks a lot to everybody. And the next meeting will be on the second and third of September. And I wish you a wonderful holiday with a lot of sun.
And please reload your batteries and restart on the second of September with full of energy. Thanks a lot.
And we wish you the same.
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