European Union legislation targeting foreign state-backed buyers of European companies was prompted by fears of a Chinese buying spree. This may be impossible to comply with the American Chamber of Commerce. And also peer groups for Indian and Japanese businesses said on Wednesday.
The concerns voiced by the groups come as European Union governments and EU lawmakers will meet this month to discuss. And possibly adopt the European Commission’s proposal announced last year which takes aim at subsidies that harm competition.
The proposal also covers bids in public tenders in order to prevent the use of foreign subsidies to grow market share or underbid European rivals. This is to gain access to strategically important markets or critical infrastructure.
Other signatories to the letter are Europe India Chamber of Commerce, European Australian Business Council, Japan Business Council in Europe, Korea Business Association Europe and Swiss-American Chamber of Commerce.
They urged a narrower scope for foreign subsidies. For example, the provision or purchase of goods or services in a competitive, non-discriminatory and unconditional tender should exclude from the calculation. The legislation should set a minimum threshold of financial contribution so that subsidies used to pay public authorities for water, electricity or employee health insurance.
To avoid breaching World Trade Organization rules, the EU should also consider whether the foreign subsidy pursues a goal in the foreign country. Such as job growth, innovation, climate change, sustainable development, and a resilient supply chain, they said.
