External impact of EU trade and investment policy on public-private initiatives in countries outside the EU

The Committee on International Trade adopted an own-initiative report by Jan ZAHRADIL (ECR, CZ) on the external impact of EU trade and investment policy on public-private initiatives in countries outside the EU.

Members recalled that public-private partnerships (PPPs) are a long-term tool used in government policies at international, national, regional and local level and are important as a vehicle for economic growth, innovation, competitiveness and job creation.

They believe that PPPs could a potential source of growth for EU companies and, at the same time, be useful for our partner third countries, as these PPPs could provide infrastructures, goods and services of general interest.

Recalling that PPPs should bring high added value to citizens and consumers, Members urged the Commission to promote a definition of PPPs that can gain international recognition as a long-term relationship between public entities and private investors geared to the provision of high-quality, accessible public services and infrastructures on the basis of terms and conditions clearly laid down in contracts.

Challenges: Member considered it regrettable that, so far, the EU has kept its government procurement markets largely open to international competition, while EU companies still face substantial barriers abroad. They called for appropriate levels of both flexibility and procedural safeguards to ensure transparency, non-discrimination and equal treatment.

Involving the private sector in development: Members stressed that EU trade, investment and development policies are interlinked. They stressed the increasing potential of PPPs to foster innovative solutions and mobilise long-term private finance and domestic resources for development objectives. They believe that PPPs can also generate innovation in technologies and business models, and build mechanisms for holding the private sector accountable. They stressed, however, to instances in which the participation of the private sector in PPPs in some developing countries has not delivered the expected results. They noted that, in consequence, a contribution of technical assistance is needed to reinforce the legal and institutional frameworks in which PPPs are developed.

Members noted that PPPs are high on the development agenda and are increasingly being promoted as a means of closing the infrastructure financing gap in developed and developing countries alike. They called on EU bodies to encourage EU companies participating in PPPs in third countries, in particular in less-developed countries, to work in accordance with the principle of policy coherence, by promoting projects focused on environmental protection, poverty reduction, education, waste management or the use of renewable energies, for instance.

They recognised the fact that private investment and finance are likely to be the key engine for sustainable growth, which is projected to be approximately 5% in developing countries in the coming years; recognises that such private funding can help support local economies and companies and provide decent jobs. They emphasised that future PPPs within the post-2015 development agenda should pursue poverty reduction and other sustainable development goals, and should be aligned with partner countries’ national development plans.

Potential tools to enable EU companies to engage in PPPs outside the EU: Members called on the Commission to work towards gaining substantial market access commitments internationally in the World Trade Organisation (WTO), and in ongoing bilateral negotiations with third countries, in a positive and reciprocal approach that allows for international competition.

They called on the Commission to:

• work to eliminate administrative, procedural and technical barriers that prevent EU companies from taking part in foreign PPPs; 
• undertake a study on the effects of the Union’s FTAs and their implementation on access to foreign PPPs by EU companies;
• promote the use of clear and comprehensive accounting rules at international level in order to reduce the uncertainties associated with PPPs, while, at the same time, promoting sound budgetary policies and project sustainability; 
• ensure that EU-backed bodies such as the European Agency for Small and Medium-sized Enterprises (EASME) and the Enterprise Europe Network (EEN) can also access and share information with SMEs on how to enter PPPs in states outside the EU. 

PPPs outside the EU: new jobs and growth opportunities for EU companies: Members are convinced that increased participation by EU companies in large-scale international PPPs could lead to substantial benefits in terms of the creation of decent jobs, productivity, competitiveness, technological capabilities and innovation development in the EU.

They stressed that the work in this area must take into account, in particular, the challenges for EU-based SMEs in competing on international markets as parts of PPPs, and the need to ensure that SMEs gain concrete and fair access.