11 REVIEW OF INDUSTRIAL POLICY
(28781)
11686/07
COM(07) 374
+ ADD 1
| Commission Communication: Mid-term review of industrial policy — A
contribution to the EU's growth and jobs strategy
Commission staff working paper: Developments since the 2005
Commission Communication on industrial policy
|
| Legal base | —
|
| Document originated | 4 July 2007
|
| Deposited in Parliament |
12 July 2007 |
| Department | Business, Enterprise and Regulatory Reform
|
| Basis of consideration |
EM of 30 July 2007 |
| Previous Committee Report |
None |
| To be discussed in Council
| September 2007 |
| Committee's assessment | Politically important
|
| Committee's decision | Cleared
|
The document
11.1 In 2005, the Commission issued a Communication (the 2005
Communication) making proposals for action to strengthen the manufacturing
industry in the EU.[60]
The proposals were endorsed by the Council and the European Parliament.
The Commission was asked for a progress report in 2007. This document
is the Commission's response. It:
- describes the current state of EC manufacturing
industry;
- reports on the implementation of the 2005 Communication;
and
- outlines action the Commission will take between
2007-09.
THE CURRENT STATE OF MANUFACTURING INDUSTRY
11.2 The Commission says that, in general, manufacturing
industry in the EC is healthy and making a substantial contribution
to economic growth and employment. For example, manufacturing
accounts for about a fifth of the EC's total output and 73% of
EC exports. Productivity in manufacturing industry grew by 2.9%,
on average, between 2001 and 2006, compared with 1.1% for the
EC economy as a whole. The EC has maintained a 15% share of world
trade in manufactured goods, while the USA's share has declined.
11.3 On the other hand, manufacturing productivity
growth was higher in the USA. High-tech goods represent 27% of
the USA's exports but only 18 % of the EC's. Some products made
in the EC are subject to heavy regulation, hindering their competitiveness.
For some purposes, R&D in the EC is at a disadvantage compared
with the USA because of the fragmentation of businesses between
Member States, the diffusion of research facilities and research
workers and the lower proportion of private sector investment
in research.
11.4 According to the Commission staff working document
:
"Globally the EU manufacturing sector is
performing well and is taking full advantage of the favourable
business cycle. Nonetheless, the challenges of globalisation,
technological change and Europe's environmental goals are likely
to intensify in the coming years."[61]
PROGRESS REPORT ON THE IMPLEMENTATION OF THE 2005
COMMUNICATION
11.5 The 2005 Communication proposed seven policy
initiatives which would be relevant to manufacturing industry
generally. They included, for example, initiatives on intellectual
property rights and legislative simplification. The Commission
also proposed a number of sector specific initiatives, bringing
together experts from the businesses and public authorities on,
for example, pharmaceuticals, mechanical engineering and space.
The Commission says that some of the initiatives have already
had an appreciable impact on policy development. For example,
the CARS21 initiative led to legislative proposals to extend the
European whole-vehicle type-approval system. (ADD 1 provides a
detailed commentary on progress so far.) Other initiatives are
still in progress or are soon to begin.
ACTION BETWEEN 2007-09
11.6 In the Commission's view, there is no need for
a fundamental change to the industrial policy set out in the 2005
Communication. But some of the challenges facing manufacturing
industry in the EC have grown in importance. So the document outlines
further work the Commission will be doing to strengthen and support
EU businesses. It includes:
- simplifying and improving EC
regulation;
- promoting innovation and competitiveness through
the way European standards organisations set standards;
- fostering cross-border networks of businesses
and research bodies ("clusters") to support innovation
and competitiveness;
- promoting sustainable production and consumption
(for example, by encouraging the development of low-carbon energy-efficient
products and services and international markets for them);
- safeguarding and improving access by EC manufacturers
to natural resources and raw materials;
- encouraging structural changes by manufacturing
industry to adapt to globalisation and technological change and
to help the workers involved to re-train and find employment;
and
- promoting innovation and competitiveness in specific
industries through studies, private-public partnerships and other
initiatives.
The Government's view
11.7 The Minister for Competitiveness at the Department
for Business, Enterprise and Regulatory Reform (Mr Stephen Timms)
tells us that the Government regards the Commission's progress
report as a positive and constructive piece of work. The Government
supports the Commission's approach to improving the business environment.
It also agrees with the Commission's analysis of the main challenges
facing EU businesses and about the areas which may be appropriate
for action by the Community.
11.8 The Minister says that he expects the Competitiveness
Council to discuss the document, and perhaps agree Conclusions
on it, either on 27-28 September or 22-23 November.
Conclusion
11.9 We share the Government's view that the Communication
is useful. It is both a progress report and an outline of the
further work the Commission will be doing over the next few years
to promote the competitiveness of EU manufacturing industry. It
does not seek approval of new EC legislation or additional expenditure
by the Community. We are content to clear the document with this
short report to the House.
60 (26913) 13143/05 + ADDs 1-3: see HC 34-ix (2005-06),
para 9 (9 November 2005) and HC 34-xvii (2005-06), para 9 (1 February
2006). Back
61
ADD 1 page 8, paragraph 2.2.4. Back
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