UNIFE insists on parity between European and Chinese rail industries

Posted: 2 September 2019 | | No comments yet

How can the rail industry ensure that there is a fairness in trade between Europe and China? UNIFE calls for the legality of this position to be investigated.

UNIFE insists on parity between European and Chinese rail industries

Following the news that Vossloh has signed a contract on divestiture of its locomotives business, UNIFE has reiterated that it is essential for the industry to present fair conditions between the European and the Chinese rail supply industry.

While access to the Chinese market has become increasingly restricted, and to some extent non-existent for European rail manufacturers (the accessibility rate fell from 63 per cent to 18 per cent in less than eight years) Chinese State-owned rail suppliers have become major competitors in all product segments and on all continents, including Europe.

In this respect, it is worth noting that ‘advanced railway transportation equipment’ is among the 10 priority sectors identified by the Chinese Government in its ‘Made in China 2025’ strategy, which aims to strengthen the country’s position as a ‘manufacturing superpower’.

Rail is also an essential component of China’s geopolitical strategy known as the Belt and Road Initiative. UNIFE commented: “For the sake of the 400,000 people employed by the European rail supply industry, it is crucial for the European Union to rise to this challenge and immediately ensure the conditions for open but fair trade relations between the EU and China in the rail sector.”

In March 2019, joint communications between the EU and China resulted in outcomes proposed by the European Commission (EC) which are an important step in the correct direction. Most notably for UNIFE, the adoption of the EC’s guidance on the participation of third country bidders and goods in the EU procurement market in which it reiterates that Chinese economic operators do not have secured access to procurement procedures in the EU and may be excluded from tenders (since China has not signed up to any binding international agreements that would ensure reciprocal opening of the procurement markets on both sides). It is of utmost importance for the EC and the Member States to make sure that contracting authorities are aware of and apply these rules.

Furthermore, in the wake of the joint communication, UNIFE has called upon the EC to publish, before the end of 2019, a report identifying how to fill existing gaps in EU law to fully address the distortive effects of foreign State ownership and State financing in the internal market.

In regard to the EU-China Investment Agreement, UNIFE has highlighted the need for the EC to obtain, before the end 2019, a revised market access offer from China which will address the barriers to market access faced by the European rail supply industry, in view of an agreement by 2020.

Above all, UNIFE has called once more on the Council and the European Parliament to pursue and finalise the discussions on the International Procurement Instrument (IPI) as this mechanism would be instrumental to create a level-playing field and open new market opportunities for European suppliers in China and worldwide. This instrument should also include specific rules for the exclusion of non-European State-owned enterprises from EU procurement.