EIC Memo on Correcting the unlevel Playing-Field
At the 5th Meeting of the Thematic Group on International Competitiveness in March 2018 in Brussels, which operates in the context of the "Construction 2020" Action Plan, EIC called upon European policy-makers to recalibrate the competitive framework for European international contractors.
Asymmetric obligations under international law
EIC called upon European policy-makers to realise that China, more than other trade partners, takes advantage of the existing imbalance in the international trade law and that the resulting asymmetric obligations for European and Chinese international contractors, and notably the European and Chinese development and export finance institutions, is distorting the international level playing. The leading Chinese international contractors are large state-owned conglomerates which are nurtured by Chinese state development banks providing tied aid and loans disbursed directly to Chinese construction enterprises.
EIC presents Memo on Correcting the Unlevel Playing-Field
EIC have urged EU policy-makers to improve the international competitiveness of the European construction industry through the following measures:
Establish a level playing field in the area of Export and Development Finance
Establish a level playing field in the area of Market Access
Establish a level playing field in the area of Procurement
In May 2018, EIC submitted its Memo in a letter to MEP Bernd Lange, chairman of the European Parliament's International Trade Committee (INTA). EIC is pleased to share the Memo on our website below.
China's Official Finance Practices
A study published by the European Parliament concluded already in 2011 that Chinese exporters have gained unfair advantages internationally due to the fact that China it is not bound by OECD agreements and Chinese policy banks may disregard these international rules that limit tied aid, impose maximum repayment terms, prescribe country risk classification and minimum interest rates, require the exchange of information on export finance, and impose social, environmental and governance standards.
In order to better understand and analyse the distortion of competition between European and Chinese construction companies resulting from China's Official Finance Practices over the past decade, with a particular focus on Africa, EIC commissioned a study on the matter. The study illustrates that, unlike OECD countries, China does not make a clear distinction between the various forms of official development finance, on the one hand, and officially supported export credits, on the other hand, and that the unregulated Chinese official finance practices outside of the rules-based multilateral system - developed by IMF, WTO, Multilateral Development Banks, OECD, EU and its signatories - creates an unfair competitive advantage for Chinese financiers and successively for Chinese contractors, most of which are state-owned entities.
EIC is pleased to share this study on our website below.