Proposal for a COUNCIL REGULATION (EC) on the implementation by the Commission of activities to promote market access for Community industry to third countries - MULTILATERAL TRADE AND MARKET ACCESS
Date: 1996-09-06
Institutions: European Commission
Subjects: EU action, advisory committee (EU), market access, third country, trade policy

COMMISSION OF THE EUROPEAN  COMMUNITIES 

Brussels,  06.09.19% 
COM(%) 432 final 

96/0219 (ACC) 

Proposal  for a 

COUNCIL  REGULATION  (EC) 

on the implementation by the Commission  of activities to promote market access for 
Community  industry to third countries 

MULTILATERAL TRADE AND MARKET ACCESS 

(presented  by  the  Commission) 

EXPLANATORY  MEMORANDUM 

1. 

IMPROVING MARKET ACCESS IN THE CONTEXT OF COMMERCIAL POLICY 

Community  firms  are  exposed  to  a  much  greater  degree  of  competition  than  before.  In  this 
context open markets worldwide are one of the keys to securing  faster  growth  and  more rapid 
job  creation  in Europe. Community firms encounter  a multitude  of  obstacles  abroad  resulting 
from  violations of international agreements, from insufficient  enforcement  of national laws, or 
unregulated practices. The Community must strive to achieve improved market access in third 
countries  in parallel to the continued  progressive opening of its own market, both by ensuring 
the  full  implementation  by  its  partners  of  their  intentional  obligations,  and  through  other 
market  access  actions.  The  Commission  has  given  a  comprehensive  picture  of  the  strategy 
which  should  be  implemented  by the  Community  in  its  Communication  to  the  Council  "The 
global challenge of international trade: A market access strategy for the European Union". The 
Commission  should  dispose  of the  necessary financial resources  in  order  to  carry  out  certain 
actions which are part of this strategy. 

In  the  case  of  trade  promotion  actions  aiming  in  particular  at  raising  the  profile  of  the 
Community  industry,  the activities carried out by the Commission  shall be complementary  to 
Member  States' programmes. Community  funded  activity  should reflect  the division  of labour 
which has grown up between Community, national and industry based trade promotion and co 
operation  programmes  and  concentrate  on  cases  where  it  brings  a  clear  value  added. 
Community activities will focus on target markets in creditworthy countries, offering  a growth 
potential, where entry costs are high and benefits can therefore be expected from  a critical mass 
afforded  by a pan European approach. 

2. 

A COUNCIL REGULATION  IS NOW NEEDED TO PROVIDE THE 'MARKET 
ACCESS PROGRAMME'  WITH A  LEGAL BASIS. 

This  point  is  a  direct  consequence  of  the  Commission  Communication  to  the  Budgetary 
Authorities  "on  legal  basis  and  maximum  amounts"1  as  all  budget  lines  exceeding  5 MECU 
now need a specific  legal basis. In  1996 this threshold has been reached  in the case of  the B7-
852 budget line, "market access in third countries". 

3. 

THIS PROPOSAL INCLUDES THE FOLLOWING POINTS: 

Articles  1  and  2  of  the  draft  Regulation  indicate  the  type  of  measures  the  Commission  is 
authorised  to undertake  in relation to market  access actions and by using the opportunities  of 
the multilateral trade agreements. The Commission is also requested to ensure that such actions 
will be compatible with other Community policies. 

Articles 4 and  5 lays down rules for  a consultative committee to assist  the Commission  in the 
performance  of its duties under the Regulation. 

Article  6  indicates  that  Community  actions  may  be  accompanied  by  separate  activities  by 
Member  States in the field of export promotion. The Regulation  is not intended to modify  the 

SEC(94)  1106  final 

I 

existing  division  of  labour between  Community,  national  and industry  programs  concerning 
these specific activities. 

The  form  of  the  proposed  legal  act  is  a  Regulation.  The  choice  corresponds  to  the  one 
mentioned  under point  IV,  paragraph  3,  letter c)  of  the  "Declaration  commune  du  Parlement 
européen, du Conseil  et de la Commission de  1982" (J.O. C  194, 28.7.1982, p.l), according to 
which: 

"The implementation of appropriations entered for significant new Community 
action shall  require a basic regulation.  If such appropriations are entered, the 
Commission is invited, where no draft regulation exists, to present one by the 
end of January at the latest". 

Finally, the legal basis of the Regulation is Article  113 of the EC Treaty, since  its object and 
purpose act is to gain market access in third markets and the activities mentioned under article 
2 fall within the ambit of the Common Commercial Policy. 

3 

Proposal for a 

COUNCIL REGULA HON  (EC) 

of 

on the implementation by the Commission of activities to improve 
market access for Community industry to third countries 

THE COUNCIL OF THE EUROPEAN UNION 

Having regard to the Treaty establishing the European Community and in particular Article 113 
thereof, 

Having regard to the proposal of the Commission1, 

Having regard to the opinion of the European Parliament, 

Whereas the common  commercial  policy  would  be incomplete,  if it were not accompanied  on 
the Community  level by specific  activities designed to remove trade barriers and facilitate  and 
market penetration for Community industry to third countries, 

Whereas  therefore  new  world-wide  commercial  opportunities  for  Community  industry  should 
be supported by a market access policy of the European Community, 

Whereas  the  policy  needs  to  be  backed  up by  specific  activities  to  identify  and  find  ways to 
eliminate trade barriers, to indicate market opportunities, and to raise the profile of Community 
industry, 

Whereas  to  this  end  it  is  necessary  to  adopt  rules  laying  down  the  basic  objectives  to  be 
achieved by the Commission as well as the means to achieve these goals, 

HAS ADOPTED THIS REGULATION 

Article 1 

The  Commission  shall  design  and carry  out  a market  access programme  aimed  at  improving 
the access of Community products and cross-border services in third countries. 

Article 2 

1.  The Commission of the European Communities shall, in particular, undertake, directly or 

indirectly, the following activities : 

• 
• 

analysis of the conditions of market access in third countries, 
establishment  and  development  of  databases  as  well  as  coordination  and 
dissemination  of  information  concerning  trade  barriers,  international  or  national 
trade regulations. 

OJ.C. 

1 

• 

• 
• 

• 

Studies  concerning  in  particular  implementation  by  third  countries  of  their 
obligations  under  international  trade  agreements,  or  in  connection  with  the 
preparation of negotiations, 
organisation of,  or participation in, trade fairs in third countries, 
organisation  of  seminars  and business  fora,  production  and distribution  of  studies, 
information  packs,  publications,  leaflets  concerning  any  legal  or  economic  aspect 
relating to access to third countries markets or international, trade conditions, 
any other activity  destined to raise the profile  of the  Community  industry,  promote 
the image of Community products or services and support market openings. 

2. 

In implementing the activities referred tô in paragraph 1, the Commission shaîl ensure the 
consistency  of  the  specific  activities  developed  thereunder  with  the  various  aspects  of 
other Community policies. 

Article 3 

In  order  to  enable  the  Commission 
to  carry  out  the  market  access  activities,  promote  the 
European  opportunities  resulting  from  international  trade  agreements  and  other  activities 
mentioned  in  this  Regulation,  the  Commission  shall  dispose  of  the  necessary  financial 
resources.  For that reason, the Commission of the European  Communities  will  include  annual 
proposals  for  its  financial  requirements,  for  the  activities  specified  in  article  2,  under  the 
normal budgetary procedures. 

Article 4 

The market access programme referred to under article  1 shall  be  adopted  in  accordance  with 
the procedure laid down in Article 5, 

Article 5 

The Commission shall be assisted by an advisory committee for access to third country markets 
hereinafter  referred  to  as  "the  Committee",  composed  of  the  representatives  of  the  Member 
States and chaired by the representative of the Commission. 

The representative of the Commission shall submit to the committee  a draft  of the  measures to 
be  taken.  The  committee  shall  deliver  its  opinion  on the  draft  within  a time  limit  which  the 
chairman may lay down according to the urgency of the matter, if necessary by taking a vote. 

The  opinion  shall  be  recorded  in the  minutes; in  addition,  each  Member  State  shall  have  the 
right to ask to have his position recorded in the minutes. 

The  Commission  shall  take the  utmost  account of the  opinion  delivered  by the  committee.  It 
shall inform the committee of the manner in which its opinion has been taken into account. 

Article fl 

Without  prejudice  to  other  Community  provisions,  the  actions  developed  by  the  Community 
under the present Regulation may be accompanied by  separate activities by Member  States  in 
the field of export promotion. 

s 

Article 7 

This regulation shall enter into force on 

This regulation shall be binding in its entirety and directly applicable in all  Member States. 

Done in Brussels, 

For the Council, 

G 

Financial  Statement 

Access to the markets of non-Community  countries 

1. TITLE 

Access to the markets of non-Community  countries 

2. BUDGETARY HEADING: 

B7-852 

3. LEGAL BASIS 

•  Article  113 of the Treaty of Rome 
•  Proposal for a Council regulation N° .... on the implementation by the European 

Commision of activities to promote market access for Community industry to third 
countries (O.J.C 

) 

4. DESCRIPTION OF OPERATION  : 

4.1 General objective: 

European  firms  are  exposed  to  a much  greater  degree  of  competition  than  before.  In 
this context open markets worldwide are one of the keys to securing faster  growth and 
more rapid job creation  in  Europe. European  firms  encounter  a multitude  of  obstacles 
insufficient 
abroad  resulting  from  violations  of  international  agreements,  from 
enforcement  of national  laws, or unregulated  practices. The Community  must strive to 
achieve  improved  market  access  in  third  countries  in  parallel  to  the  continued 
progressive opening of its own market, both by ensuring the full  implementation by its 
partners of their international obligations, and through other market access actions. 

The  Commission  has  given  a comprehensive  picture  of the  strategy  which  should  be 
implemented  by  the  Community  in  its  Communication  to  the  Council  "The  global 
challenge  of  international  trade:  A  market  access  strategy  for  the  European  Union". 
The Commission  should  dispose of the necessary  financial  resources  in order to  carry 
out certain actions which are part of this strategy. 

The  activities  to  be  carried  out  by  the  Commission  are  expanded  upon  in  this 
Communication and shall be complementary to Member States' programmes. 

The major actions which will be pursued under this line will be the  following: 

•  Market  opening  actions  -  identifying  trade  restrictions  in  third  countries,  where 
appropriate  take  action  to  remove  obstacles  and  assisting  European  industry  by 
taking  appropriate  measures  (through  business  cooperation  or  through  legal 
instruments such as the Trade Barriers Regulation). 

• 

Identification  of  market  opportunities  and  development  of  appropriate  market 
opening strategies. 

•  Raising  the  profile  of  European  industry  and  promoting  the  image  of  European 

products. 

4.2 Duration of the action; means foreseen for its renewal: 

The general action undertaken will be of an indefinite duration. Athough some actions 
dealing with a specific market access problem (e.g. the existence of a specific barrier to 
trade) may be temporary and continue until the problem has been resolved.  In the case 
of promotional activities action will normally be supported for a maximum of three 
years (after which it will be assumed that the event should have become self-
supporting). 

=7 

5. CLASSIFICATION  OF  FAPKNDITIIRR/RKVKNIIK 

5.1 Non-compulsory  expenditure  ("DNO") 

5.2 Differentiated  appropriation  ("CD") 

5.3 Type  of revenue  involved: 
None 

6. TYPE  OF  EXPENDITURE/REVENUE 

-  J00%  subsidy 

Not  normally  but  will  be considered  in exceptional  cases (e.g. the establishment  and 
operation  of a market access data base) 

-  subsidy for  co-financing  with  other  sources  in the public  or private  sector? 

Yes, this may be envisaged  as a method  of funding.  Subsidies not normally  exceeding 
50% will be provided  to professional  associations and other responsible  organisations 
for  market  access  activities elaborated  in  9.1. 

When  dealing  directly  with EU enterprises, subsidies (in the form  of  financial 
incentives) will be given directly  to companies to assist them  in market  promotion 
activities.  Subsidies will be given for  50% of certain cost items normally  resulting  in a 
total  subsidy  not exceeding  1/3  of the total cost of a specific  action. 

-  Interest  subsidy:  No 

-  Others 

Financing  of market  access events, acquisition  of studies, trade promotion  activities 
(e.g. fora,  missions  and Community  pavilions), publications  and conferences.lt  is 
envisaged  that, following  the appropriate provisions of the Commission's  financial 
regulations, consultants will be directly  contracted by the Commission  services. 

-  Should  the action prove  an economic  success,  is there provision  for  all,  or  part 

of  the  Community  contribution  to be  reimbursed? 

-  Will the proposed  operation  cause  any  changes  in the level  of  revenue? 

No 

"8 

7. FINANCIAL  IMPACT  ON APPROPRIATIONS  FOR  OPERATIONS 

7.1  Method  of calculating  the total  cost of the  operation: 

A wide range of different  actions are  foreseen  to meet the objectives  of the  budget-line 
and  costs will  vary  considerably  depending  on the nature of action  undertaken.  Even 
for  similar  types of action  (e.g. studies) costs will  vary  considerably  depending  on  the 
scope of the action  and  the degree of specialisation  needed. 

The costs of specific  actions will  be determined  either: 

• 
• 

following  invitations to tender issued by the  Commission 
following  requests for  subsidies.  In such cases, projects  are selected  according  to 
how well they  meet the criteria which have been established  for  selection. 
Subsidies  are based  on a percentage of total costs and usually the  Community 
funding  is limited  to a maximum  of 50%. 

A.  Analysis  of market opportunities  and trade  barriers 

Activities  to be achieved  through the use of studies.  Past experience  demonstrates 
that the total  costs of studies and advise may range between  20.000 to 200.000  ECU. 

B.  Establishment  and  development  of  data-bases 

Costs to be established  following  calls for tender.  Total  estimated  average cost  of 
100.000  ECU per  sector. 

C.  Production  and  dissemination  of  information 

Costs will  vary  greatly  according  to the type of action  undertaken.  A  large  scale 
business  seminar could cost up to  100.000 ECU, production  and distribution  of an 
information  leaflet  10.000 ECU. 

D.  Market  access  actions 

The cost of a business  forum  or trade mission will depend on the number  of 
participants  and the country  in which the event is being held. Typically the total  costs 
of events will be in the range of  100.000 to 300.000  ECU 

The cost of a European  Union participation  in trade fairs  can vary  for  the  same 
reasons as for business fora.  We estimate that the cost of participation,  including  the 
financial  incentives to companies, range from  200.000 to 800.000  ECU  or more. 

3 

7.2 

Breakdown by elements of the  operation 

InMECU 

Breakdown 

Year 
1996 

1997 

1998 

1999 

2000 

Total 

2001 
and 
follow 
ing 
years 

A. Analysis of 
market  opportunities 
and trade barriers 

1,4 

1,4 

B.  Establishment and 
development of data 
bases 

0,6 

0,6 

C. Production and 
dissemination of 
information 

D. Market access 
actions 

0,7 

0,7 

3,8 

3,8 

Total 

6,5 

6,5 

7.3 

Indication of the timetable for commitment and payment appropriations 

Year 
1996 

1997 

1998 

1999 

2000 

In MECU 
2001 
and 
follow 
ing 
years 

Total 

6,5 

6,5 

6,0 

2,5 
3,5 

Commitment 
appropriations 
Payment 
appropriations 

Year 1996 
1997 
1998 
1999 
2000 
2001 

I Total 

6,0 

6,0 

|o 

8.  WHAT  ANTI-FRAUD  MEASURES  ARE PLANNED  IN THE PROPOSAL  FOR 

THE OPERATION  ? 

Methods  of control  (submission  of reports, etc.) will  be  included  in all  agreements  or 
contracts  between  the Commission  and  beneficiaries.  A close cooperation  with  the 
delegations  of the Commission  and  the participation  of a representative  of  the 
Commission  at events  in third  countries  will  check  on  the spot  the work  to  ensure 
that  it corresponds  with  the terms of reference,  contract provisions  and  required 
professionalism. 

The checks take place before  the final payment.  The same rule applies to the  financial 
incentives paid to participating  companies. Where appropriate, agreements  also 
require  organisations  to submit  financial  accounts certified  by their  auditors. 

In those cases involving  cooperation  with EU industrial  federations  the accounts  are 
further  checked  at the Annual  General  Meeting  of the federations  concerned. 

9.  ELEMENTS  OD COST-EFFECTIVENESS  ANALYSIS 

9.1.  Specific  objectives  of the proposed  operation, population  targeted 

-  Specific  objectives  : links  with  the general  objective 

• 

• 

• 

• 

• 

information  concerning 

in  the  context  of  international 

analysis  of  the  conditions  of  market  access  in  third  countries  - to  be  achieved 
through  studies. 
establishment  and  development  of  databases  as  well  as  coordination  and 
dissemination  of 
international  or 
national  trade  regulations, 
studies 
particular 
connection  with the preparation  of negotiations, 
organisation  of,  or participation  in, trade fairs, trade missions and business  fora 
in non-Community  countries, 
production  and  distribution  of  studies,  organisation  of  seminars,  information 
packs,  publications,  leaflets  concerning  any  legal  or  economic  aspect  relating 
to access to third  countries markets or international  trade  conditions, 

in 
implementation  by  third  countries  of  their  obligations,  or  in 

trade  agreements  concerning 

trade  barriers, 

-  Target  population 

The target population  are the exporting  companies, business associations,  chambers 
of commerce  and  public  institutions  of the  European  Union  which  will benefit,  or 
have an  interest  in, market  access  in third  country  markets. 

9.2.  Reasons  for  the  operation 

-  Need for  intervention  from  the Community  budget 

Under Article  113 of the Treaty of Rome the Community  has exclusive  competence 
for  commercial  policy  and  subsidiarity  does therefore  not apply. Nevertheless  the 
Member  States are authorized to accompany  the actions developed  by  the 
Community,  under the proposal  for  a Council  regulation N° 
destined  to raise the profile  of their industry. The Commission  will  also be  assisted 
by  a committee  of an advisory  nature composed  of the representatives  of the  Member 
States and chaired by the Commission  to discuss the Community  market  access 
actvities. 

, by  separate  activities 

For the reasons elaborated  under 4.1  it is appropriate  for  the Commission  to  develop 
a  strategy  to achieve  improved  market  access in third  countries  for  European 

A-) 

industry: both by ensuring the full implementation by its partners of their 
international obligations, and through other market access actions. Community 
funded  activity will concentrate on cases where it brings a clear value added. 
Community activities will focus on target markets, where entry costs are high and 
benefits can therefore be expected from a critical mass afforded  by a pan European 
approach. 

- 

( 'hoice 0/ methods of intervention 

* advantages over alternative measures (comparative advantages) 

* analysis of similar operations at Community or national level 

* results and expected multipliers 

Advantages that result from  Community market access actions instead of isolated 
actions: 

•  Coordination of market opening measures at the EU level where negotiations and 
market opening initiatives such as use of the Trade Barriers Regulation will occur. 

•  Economies of scale in many cases. 
•  Avoiding duplication of activities by Member States (e.g. in the case of market 

studies) 

larger scale. 

•  Better impact and higher credibility as Community actions are often carried out on a 

•  The European Commission  is in a position coordinate all market access  information 

.  available in the Member States and establish data-bases which will provide the 

European industry with a competitive advantage. 

-  Main factors  of uncertainty which could affect the specific results of the 

operation. 

9.3 Monitoring and evaluation of the operation 

-  Performance indicators selected 

* Output indicators 

* indicators of impact, following the objectives chosen 

-  Evaluation of results 

In the case of market opening measures, success can be quantified  by the removal of 
barriers to trade in third markets.  Progress in this regard will be regularly monitored 
by the officials  concerned. Progress can for example also be measured in terms of the 
TRPM reports for a qualitative evaluation and with COMEXT for a statistical 
evaluation. 

Market opening can also be measures by increased EU exports and this factor will be 
taken into consideration although export performance  is subject to such a wide range 
of variables (e.g. changes in exchange rates) that this can never be the sole factor  for 
evaluation. 

In the case of actions realised through studies evaluation will be largely based upon an 
analysis of how successfully  the results meet the original terms of reference. 

In all cases a final analysis will be made jointly by all concerned Commission services. 
Relevant sectors of industry, Commission trade experts, industrial policy experts, 
delegations and country desks are requested to contribute to the analysis of projects. 

>12 

In actions involving direct participation of enterprises success is subject to systematic 
performance  indicators: 

•  Follow-up studies (3-6 months after the event) of the participants in business fora 
and missions to measure quantitatively and qualitatively the established  contacts 
with their potential clients. 

•  Evaluation surveys are distributed to all participants at trade fairs to indicate the 
number of firms which found the event useful  and which will be interested in 
participating again. The degree of active interest in the products or services on 
display by those attending and the volume of contracts for sales concluded are 
examined as performance indicators. 

Details and frequency of the planned evaluation 

To be decided according to the nature of the event and following the methods 
described above. 

10.  ADMINISTRATIVE EXPENDITURE  (PART OF SECTION III OF THE 

GENERAL BUDGET ) 

u 

-tne^djfriinrstrative resources needed Wrlli)èlrflôbili2«d thrOiip th^^mtrn^ion%annual decision 
oa the allocation of resources, in light of the extra staff and funding allowed by the budgetary authority. 

0. Î 

Impact on the number of jobs: "Operation to be financed  by redirecting some of DG's 
existing administrative resources" 

Types of jobs 

Staff assigned to operation 

bunding for these staff  from: 

Period of service 

permanent 

temporary 

existing 
budget of the 
relevant DG 
or dept. 

additional 
resources (to 
be released in 
1997) 

indefinite 

Permanent 
or temporary 

Other resources 

A 

B 
C 

6 

1 
2,5 

6* 

1 
2,5* 
2 nat. exp. 
(second 
ment) 

-

2 nat. exp. 
(second 
ment) 

Total 

9,5 

2 

11,5 

-

-

Ihe operation would be compromised without extra funding either through a general redeployment 
of resources or new staff. 

10.2 

Overall financial impact of extra staff:"Operation to be financed by redirecting some of DG's 
existing administrative resources" (See point 10.1) 

Amount 

Method of calculation 

(ECU) 

Permanent  staff 
Temporary staff 
Other resources (state budget 
heading) 

Total 

I 

__ 

10.3 

Increase in other operating expenditure as a result of the operation: "Operation to be financed by 
redirecting some of DG's existing administrative resources" 

(ECU) 

Budget heading 
(number and title) 
A.2510 

A. 1300 

I  Amount 

Method of calculation 

19 000 

5 730 
19 240 
13 350 
57 320 

| 

Total  I 

Document DG IX "Missions -coûts indicatifs  selon 
durée (en ecu)": 
Additional missions: 
1  missions to Korea (4 days) 
2 mission to Japan (3 days) 
5 missions to the United States (3 days) 

* A number of officials  are working pari of their time on market acecss issues. 

ISSN 0254-1475 

COM(96) 432 final 

DOCUMENTS 

EN 

02  11  10 

Catalogue number  : CB-CO-96-434-EN-C 

ISBN 92-78-08548-0 

Office  for Official  Publications of the European Communities 

L-2985  Luxembourg 

is