The European machine tool sector and related manufacturing technologies
advocate for an open and fair trade, driven by bi- and multilateral trade and investment agreements that create a level playing field for the signatories, respect intellectual property rights and data protection, and facilitate regulatory cooperation between the parties.
International market access
Our manufacturers need a high degree of trade certainty. CECIMO supports free and fair trade through cooperative measures over unilateral protectionist measures. For that purpose, a strong and modernized WTO should be able to guarantee not only a fairer playfield and market access rights to its members but would also create more efficient safeguard mechanisms through highly operational dispute settlement resolutions and stronger enforcement of WTO rules (IPR, mutual access etc.).
In the context of improving market access and benefitting from an efficient trade defence system, we need a clear tariff and non-tariff framework that will also reduce the administrative burden for our exporters. That is why we should focus on cooperative actions, rather than retaliatory measures that further deteriorate existing trade relationships.
Free Trade and Agreements
CECIMO closely follows EU negotiations for Free Trade and Investment Agreements with EU’s main third country trade partners.
As of February 1st 2019, the EU-Japan Economic Partnership Agreement entered to force, which unlocked new opportunities for open and rule-based trade for trade two biggest world economies. CECIMO supports the deal, stressing that more needs to be accomplished in terms of reciprocity through a sound industrial policy. Removing barriers without promoting the machine tools made in Europe is not sufficient to support European manufacturers competitiveness in the global market.
CECIMO endorsed the EU-US talks on a limited trade agreement focusing on industrial goods. The regulatory cooperation and the removal of non-tariff barriers in the planned trade deal between the EU and US is relevant, but it should be focused on industrial goods, to advance trade talks. Moreover, the removal of non-tariff barriers in the EU-US trade of AM solutions and the alignment of technical requirements between US and EU standards and regulations in conformity assessment procedures will benefit both sides.
CECIMO provides for its members market and political intelligence on a regular basis. An important part of this mission is supporting our companies in their navigation through sanction regimes.
Based on the Joint Comprehensive Plan of Action (JCPOA) between Iran, the P5+1 and the EU, most of the sanctions on Iran were lifted by 2016. But due to US withdrawal from JCPOA in May 2018, US sanctions on Iran were reimposed, with the implication of cutting out business with any US allies that trade with Iran. To circumvent these consequences for EU businesses, CECIMO continuously proposed several solutions based on our experience from the sector. We are pleased that Germany, France and UK established a special purpose vehicle with a sovereign shield – the Instrument in Support for Trade Exchanges (INSTEX) – to safeguard the deal and protect EU exporters by facilitating legitimate financial transactions of EU businesses with Iran in compliance with JCPOA provisions.
Both US and EU have imposed sanctions on Russia, a very important trade partner for European machine tool builders. CECIMO has underlined the negative impacts on our strategic industrial assets and voiced that a solution is needed to prevent further damage on European advanced manufacturing.
Tariffs on AM
The Harmonized System (HS) is an international nomenclature for the classification of products. The system is used by more than 200 countries and economies as a basis for their Customs tariffs and for the collection of international trade statistics.
Over 98 % of the merchandise in international trade is classified in terms of the HS. The lack of a standalone, specific tariff code for AM machines makes tracking their trade across boundaries more difficult, thereby hindering the ability to understand truly the growth of this technology world-wide.
CECIMO cooperated with the European Commission on the definition of the code, and in 2019 international WCO partners should decide whether to accept the Commission-proposed classification. If the proposal is accepted, the classification for Additive Manufacturing machines will be part of the tariff harmonised system from 2022.
Foreign Direct Investment
FDI can be defined as an investment made by an entity in one economy to obtain lasting interest in an enterprise located in another economy. FDI can be a key driver of competitiveness and economic development and a great source of employment and growth in an open economy. In return, it also established effective control of foreign business assets, and a certain degree of influence on the decision-making of the foreign business. However, the openness to foreign investments should be mutual. EU companies should have equal opportunities to acquire ownership in third country companies, just as their third country competitors.
CECIMO welcomes the current proposal of an EU framework for screening foreign direct investments (FDIs) as a voluntary cooperation framework. We strongly believe that security and public order are sovereign competences and should remain as such.
An additional EU FDI screening level, as initially foreseen in the EC proposal, would have posed the risk of a disproportionate administrative burden for our companies, leaking commercially sensitive information and discouraging FDI into the EU in the longer run.
Dual-use export control
The current regulation on dual-use export controls reflects the international commitments of EU in multilateral accords on export controls. The European Commission is currently reviewing the regulation. CECIMO welcomes the proposal in the sense that it aims to further harmonise regulatory framework across the Single Market. However, we strongly disagree with the introduction of additional controls going beyond the control lists, such as catch-all clauses, and the requirement for businesses to act in “due diligence” when verifying the end-user, therefore enlarging the scope of the applicable controls These measures create grey areas and entail more legal uncertainty for businesses. Shifting the responsibility of protecting human rights and preventing terrorism to the private sector puts risk avert exporters at a competitive disadvantage in respect with other business operators that might comply with laxer export controls.
Given the increased risk of a no-deal Brexit, the new status of the UK, as a very important trade partner for the EU27, will need to be decided in the most suitable way for businesses on both sides of the canal. Therefore, CECIMO endorses the European Commission’s proposal to include the UK in the list of lower risk countries, as it already complies with all international accords for dual-use goods.