Knowledge about market-distorting state aid helps in ensuring an equal playing field for Finnish companies

Ministry for Foreign AffairsMinistry of Economic Affairs and Employment 15.4.2019 15.32
Press release
Knowledge about market-distorting state aid helps in ensuring an equal playing field for Finnish companies

Harmful government support for businesses granted by non-EU countries, such as China, have a direct impact on Finnish companies operating both in the EU and on global markets. In order to ensure an equal playing field for companies, the European Commission, Finnish ministries and the Confederation of Finnish Industries (EK) hope that companies would inform about any harmful subsidies that they have perceived.

State aid policy has rapidly become a focus of discussion in international forums. In China's internationalisation efforts, particular concern is caused by the operation of its state-owned companies and government support for businesses.

Eddy de Smijter, Head of the Unit in charge of international relations at DG COMP of the European Commission, said that companies are not in an equal position in the global playing field, and the World Trade Organization's (WTO) current system of rules does not provide sufficient guidance on state aid.  Changing rules is a slow process and their amendment would require greater transparency in information about support programmes – which does not exist to date.

The EU seeks to address cases of harmful state aid multilaterally (WTO, G20 and G7), bilaterally (free trade agreement negotiated by the EU) and independently.

“However, the right way to react is not to copy non-EU countries' harmful practices. EU rules on state aid ensure that companies do not gain an advantage over competitors in the internal market and there is no reason to relax these rules.  In the end, all those concerned benefit from a tight control over state aid,” de Smijter stressed.

Knowledge helps address distortions caused by state aid

Harmful state aid has a direct impact on Finnish companies operating on global markets or considering expanding on international markets. The seminar, organised by EK, the Ministry for Foreign Affairs and the Ministry of Economic Affairs and Employment, encouraged Finnish companies to reply to a survey launched to gather information about situations where they have had to deal with state aid granted by non-EU countries.

All information, even if fragmented, is valuable. The survey will be conducted in all EU Member States and all data will be sent to the European Commission for processing. Information will be kept confidential. The Commission will use the information in its countervailing duty investigations and in WTO dispute settlement contexts, for instance. Gathering the information will also help the Commission in imposing pressure on non-EU countries and in including orders applying to state aid in its bilateral trade agreements.

“Information obtained from companies will help us influence the direction the EU takes in state aid matters, which trading partners' state aid programmes are addressed, and to see in which sectors problems are perceived the most,” said Commercial Counsellor Mary-Anne Nojonen from the Ministry for Foreign Affairs.

“Awareness of Finnish companies' sore points is valuable for Finnish authorities representing the national perspective on EU forums,” said Nojonen and Olli Hyvärinen from the Ministry of Economic Affairs and Employment.

“We want to hear about the countries of destination and sectors of exports and, as far as possible, get more detailed information about state aid programmes, including the forms, duration and targeting of state aid programmes,” said Senior Ministerial Adviser Hyvärinen.

The threshold for supplying information is low. The survey will be run in all EU Member States and directed to all lines of business. Be it about state aid or regional, direct or indirect aid – even tiny pieces of information will help us build a more complete picture of the situation. A thorough understanding of unfair competition in the playing field helps in dismantling barriers.

The online survey will be open until 31 May 2019. To access the survey, first register your email in the online tool. The Eduuni password will be valid for 12 months.

Inquiries:

Mary-Anne Nojonen, Commercial Counsellor, Ministry for Foreign Affairs, tel. +358 295 351 494, [email protected]
Olli Hyvärinen, Senior Ministerial Adviser, Ministry of Economic Affairs and Employment, tel. +358 295 047 026, [email protected]