Eu State Aid Rules And Wto Subsidies Agreement

December 8, 2020

This technical proposal applies to aid schemes subject to standard procedures. With regard to aid schemes for which notification and annual reports are governed by other Community provisions (fishing and coal), aid under the framework of aid to steel (ECSC), shipbuilding and automobiles, aid submitted to the Commission`s aid for treuhaund aid and to all co-financing schemes for which the Commission has agreed not to have any other annual report than the one on community funding. , Member States are only required to present to the Commission the section of the WTO report format (Annex I, Section B). Unlike the EU aid framework, there is no procedure for notification of subsidies or other forms of state aid and WTO authorisation. The EU and its Member States also use state aid as a political instrument. Derogations from EU state aid rules allow for some useful interventions. For example, state aid may be necessary and justified to remedy a market failure. B, for example, when small and medium-sized enterprises (SMEs) find it difficult to find investment capital. It may also be necessary to achieve policy objectives such as regional economic development or environmental protection. Governments can, for example, use state aid to encourage companies to invest in less developed areas or to develop advanced green technologies. In many respects, these WTO rules generally comply with current EU state aid requirements.

However, there are important differences that will have a significant impact on future state aid to the UK: given the narrow scope of WTO state aid rules and subject to the final negotiating agreement between the UK and the EU, it is likely that the UK would adopt its own national regulations. The scope of this regime will depend on the extent to which the EU insists on complying with state aid rules as a precondition for comprehensive trade agreements. It should be noted that, with the exception of Switzerland, all other information on state aid in negotiations between the UK and the EU see Commons Library Briefing CBP 8852, The UK-EU future relationship negotiations: Level playing field. While an EU member state, successive British governments have supported strict controls on state aid and avoided subsidising certain sectors or businesses. In addition to EU state aid rules, the UK is a party to the WTO agreement on subsidies and countervailing measures. The Government has announced that its WTO commitments will play an important role in the UK`s future subsidy regime. State aid is subject only to strict EU rules aimed at promoting competition in the internal market. Most of these provisions are contained in the Treaty on the Functioning of the European Union (TFUE) and in the General Category Exemption Regulation 2014 (RGEC) and are not transposed into national law. Therefore, the impact of Brexit on state aid to the UK will depend entirely on the final negotiating agreement between the UK and the EU.

In response to the coronavirus outbreak, the EU has temporarily relaxed the usual restrictions on state aid to give Member States more flexibility to support their economies. The European Commission (EC) has powerful powers to assess cases of state aid, approve them and apply strict “recovery mechanisms” when state aid is deemed illegal.