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Competitiveness Council

Volume 405: debated on Thursday 22 May 2003

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To ask the Secretary of State for Trade and Industry what the outcome was of the Competitiveness Council held on 12 to 13 May; what the Government's stance was on the issues discussed, including its voting record; and if she will make a statement. [113979]

My hon. Friend the Minister for Employment Relations, Industry and the Regions, represented the UK at the Competitiveness Council on 13 May 2003.The council adopted conclusions on Industry Policy in an Enlarged Europe, which were discussed at the Competitiveness Council on 3 March 2003.The commission introduced its new Communication on Innovation Policy. Among other things it highlights the EU's continued underperformance in turning ideas into commercially successful products and services. The commission emphasised that new models and marketing methods were as important as exploiting technological research. Key characteristics of EU policy should be an emphasis on diffusion, and seeing the world from a business perspective. Other important elements were innovation in the public sector, regional diversity and the challenges of diversity.The UK welcomed the communication, while expressing some disappointment that the commission had not done more to integrate research and innovation policy. The communication could also have gone further in promoting the role of competition. A light touch was needed in applying the open method of co-ordination.Many similar points were made in discussion on the commission's Action Plan for increasing spending on Research and Development to 3 per cent. of GDP. Member states particularly stressed the need for fiscal and other incentives, and more flexibility over state aid. This area was of equal importance to accession states; Slovenia was interested in the question of policy co-ordination and how to make markets work better.Commissioner Liikanen presented the commission's 7th Report on the situation of world shipbuilding. The report highlighted that the difficulties in world shipbuilding are growing, as evidenced by a further decrease in orders for new vessels in the major shipbuilding regions in 2002. The commission stressed that the most important market segments for EU yards developed negatively. For EU producers, order intake in 2002 was down by 50 per cent. compared to 2001. Investigations into Korean yards show that there were large-scale subsidies, and the commission was working closely with industry representatives on the challenges the sector currently faces, and would report by the end of the year. The French and Spanish delegations, supported by Germany and Portugal urged the commission to extend the temporary defence mechanism and include liquid gas carriers. France also pressed for the commission to open a WTO dispute procedure against Korea.In introducing the Communication on European Defence—Industrial and Market Issues the commission argued that the industrial aspects of defence equipment supply were important for EU competitiveness. The fragmented state for the EU market needed to be overcome, and consolidation should be encouraged by an appropriate regulatory framework which would promote cost-effectiveness. Commissioner Busquin supported this with a plea for more civil/military synergy in R&D. A number of member states were cautious. The UK gave a broad welcome but said detailed examination would be needed, including inter-governmental work on key issues.The council considered a draft resolution which broadly supported the commission's Green Paper on European Space Policy and better co-operation between the commission and the European Space Agency. After a comprehensive discussion, and concerns raised by the Italian and German delegations, details on the form and scope of such an agreement were deleted. The resolution was then agreed.Wide-ranging proposals for regulation of chemicals were presented by the commission. Commissioner Liikanen recognised the need to strike a balance between public health and environmental objectives on the one side, and competitiveness on the other and stressed the commission's effort to ease the burden on SMEs and respond to industry concerns. A number of member states, including the UK, intervened to warn of major concerns over the effect on competitiveness and the danger of moving chemical production outside the EU, and emphasised the need for impact assessment and for the Competitiveness Council to keep the issue under review. The Italian delegation said that the legal base included Article 95, which meant that the Competitiveness Council should lead on the dossier, and indicated that this would feature highly on the agenda during their presidency.The commission also presented their latest report on the Life Sciences and Biotechnology Strategy, stressing three key priorities: more effective use of intellectual property rights; the need to implement EU legislation on GMOs; and improved access to finance.Ministers discussed the arrangements for selecting the site for the new International Thermonuclear Experimental Reactor (ITER). All member states apart from Spain agreed with the draft council conclusions supporting the commission's approach that a single EU candidate site should be selected to compete subsequently with the non-EU sites. Spain argued that the EU would stand a better chance if both EU sites (French and Spanish) were put forward together. The presidency was forced to abandon formal conclusions, and summed up that all Spain could accept the suggested process, which would be based on an objective criteria and expert input.