MEPs call for a ‘level playing field’ across rail industry

MEPs and stakeholders gathered on 11 January 2012 at the European Parliament in Brussels to discuss the topic European rail industry: latest trends in international rail markets and the way forward.

The state of play of market access in third countries and potential solutions for improvement were presented by the European rail industry and the European Commission.

MEPs expressed their ‘dissatisfaction about the current unbalanced market access between the European Union and some third countries in the field of railway material and called for the establishment of a level playing field’.

Philippe Citroën, Director-General of UNIFE, explained that rail is one of the industrial sectors where Europe still has global leadership, both commercially with a 50% world market share and in terms of innovation.

The rail industry also plays an important social role with a workforce of 400,000 employees in Europe.

He underlined however that ‘competition has seriously increased recently, with traditional players from Japan and South Korea and catching up Chinese companies being more present on foreign markets’.

He highlighted the ‘unbalanced situation of market access between the EU that has a very open market with transparent rules and other markets that are often very difficult to access, such as Japan (where foreign bidders are not able to bid) and China (where for instance no contract is signed without technology transfers)’.

Competitors also ‘benefit from a strong support from their national government and financial institutions’.

Philippe Citroën called upon the EU to “assess possible solutions to level the playing field” and mentioned means such as the WTO Agreement on Government Procurement (GPA), reciprocity instruments or ‘buy European’ instruments as potential solutions.

Alain Berger, Vice-President European Affairs of Alstom, further underlined that competition with suppliers outside the EU is not an issue, as long as European suppliers are granted a similar access to these foreign markets.

He stated that; “There is a need to compete on equal footing, in order to keep growth and jobs in Europe”.

Anders Jessen, Head of the Unit in charge of Public procurement at DG Trade, European Commission, presented the work undertaken by the European Commission services to deliver a level playing field.

He underlined that ‘although Europe has opened its public procurement markets, most third countries did not’.

In addition, protectionist policies have recently been built up outside the EU.

To address these issues, the Commission is preparing a proposal for an EU initiative on the access to public procurement markets that should go out in the first quarter of 2012.

He stated that; “The Commission may develop new tools to create leverage to open market and to permit the adoption of targeted restrictive measures for non-covered procurement”.

He also promoted the EU’s actions for the opening of railway markets in the context of the GPA, and bilateral negotiations with South Korea.

As regards Japan, he explained that given the impossibility to obtain the lifting of the “Operational Safety Clause” (OPC) in the GPA context, the EU had ‘excluded Japan from commitments on intercity railways and the urban railways sector, but would push strongly for opening the Japanese rail market in the bilateral context’.

Brian Simpson, Chairman of the EP’s Transport Committee and Rail Forum Europe President, commented on the situation in Japan:

“The EU has lacked courage in the past and needs to be very firm with Japan. It is time to say: either you lift restrictions or you can no longer bid in the EU.”

Gesine Meissner, Member of the EP’s Transport Committee and Rail Forum Europe Vice-President, concurred that she is not sure the measures presented by the European Commission will be sufficient to keep the EU rail industry’s leadership.

Malcolm Harbour, Chairman of the EP’s Internal Market Committee and Member of Rail Forum Europe Managing Board, insisted on the importance of agreeing on and promoting European standards on the global market, but pointed out that Europe’s position in arguing for global standards would be greatly strengthened if EU rail authorities effectively applied common standards.

Marcel Verslype, Director of the European Railway Agency, concurred that promoting European standards in emerging markets such as Brazil, the Gulf Region or the US will help the European industry keep its leadership.

Malcolm Harbour concluded by emphasising the importance for the rail industry of the ongoing public procurement review and called for improved market access, not only in Japan, but also in emerging markets that will hold the greatest potential for the European rail sector.