FTAs with Japan and the US A perspective from the European rail industry. Philippe Citroën, UNIFE Director General 9 July 2013
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1 FTAs with Japan and the US A perspective from the European rail industry Philippe Citroën, UNIFE Director General 9 July 2013
2 What is UNIFE? UNIFE represents the European Rail (Supply) Industry Based in Brussels since permanent employees A trusted partner of the European institutions in all matters related to rail and transport Full members: Over 80 of the largest and medium-sized companies in the rail supply sector Associated members: 15 National Associations, representing almost 1,000 suppliers of railway equipment + EFRTC and UNISIG UNIFE members have an 80% market share in Europe and supply more than 50% of the worldwide production of rail equipment and services.
3 Global rail market A level playing field? DOMESTIC MARKET GLOBAL MARKET EU Transparent as per EU procurement rules and open to competition Punctual governmental support as per OECD rules JAPAN Almost entirely closed to foreign competitors (Operational safety Clause); Complex/untransparent tender procedures Significant governmental support (e.g. soft loans), JICA, etc. US Market relatively opened despite «Buy American» requirements Additional constraints e.g. Recovery and Reinvestment Act Punctual governmental support as per OECD rules
4 Market size - EU 45,00 EU - Average annual accessible market (Bn ) 40,00 35,00 30,00 10,99 12,56 13,97 25,00 Rolling Stock 20,00 4,65 4,56 5,24 Rail Control Infrastructure Services 15,00 9,30 8,88 9,33 10,00 5,00 8,26 8,83 9, / / /2017 UNIFE World Rail Market Study,
5 Market size - Japan 6,00 Japan - Average annual accessible market (Bn ) 5,00 4,00 3,00 2,40 0,65 0,86 0,01 0,68 1,10 0,01 0,74 Rolling Stock Rail Control Infrastructure Services 2,00 1,00 2,29 2,36 2, / / /2017 UNIFE World Rail Market Study,
6 Market size - US 25,00 US - Average annual accessible market (Bn ) 20,00 5,34 15,00 10,00 3,77 0,96 6,26 4,63 0,92 6,36 1,09 6,67 Rolling Stock Rail Control Infrastructure Services 5,00 5,84 6,39 7, / / /2017 UNIFE World Rail Market Study,
7 UNIFE actions Support to Free Trade Agreements as a tool to create a level playing field in market access (mainly public procurement) and create growth Highlight issues of interest to the rail industry in the draft Regulation on public procurement being currently discussed by the European Parliament (Caspary report, INTA Committee) and get the support of the Council Bilateral initiatives undertaken with the European Railway Agency (ERA) for further cooperation and promotion of European standards (such as ERTMS) in third countries
8 Japan Barriers to trade and stakes of the FTA negotiations
9 Reminder: the general context Javelin trains (370mn ), Intercity Express Program (4.5 Bn ), UNIFE POSITION: A LEVEL PLAYING FIELD MUST BE ENSURED Only 2% of rail market open according to international procurement rules The Commission estimates that non-japanese bidders only won about 0.25% of the Japanese rolling stock market.
10 Barriers to entering the Japanese rail market The Operational Safety Clause allows the Japanese to exclude non-japanese suppliers from any competition for the supply of rolling stock and other railway equipment. Complex and restrictive tendering procedures in the supply of railway equipment, promoting de facto Japanese suppliers FTA negotiations with Japan must address these issues. The European Commission should suspend negotiations after one year if Japan does not live up to its commitments.
11 The US Barriers to trade and stakes of the Transatlantic Trade & Investment Partnership (TTIP) negotiations
12 FTA negotiations Relevant chapters 3 relevant chapters for the rail industry to be addressed during the negotiations: Public procurement: Focus on Buy American provisions which oblige US cities and States to buy trains with US content, as the EU has not been successful at lifting those restrictions in the WTO GPA negotiations concluded in December Technical barriers to trade: EU-US cooperation is already well advanced as DG-MOVE has both started notifying its TSIs and is commenting on the US notifications. Standardisation: Broad technical standards mandate, which should cover technical standards. This could therefore open the possibility for more TSI conformity.
13 UNIFE policy recommendations
14 UNIFE policy recommendations A worldwide level playing field should be ensured for all actors in the rail market. The EU should further encourage a comparable and effective opening of Japan and US rail markets, also through technical assistance of the European Railway Agency. UNIFE is willing to support the European Commission and to be actively involved in discussions with Japan and the US.
15 UNIFE Promote rail market growth for sustainable mobility
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