Call for EU ’embassies’ to support business

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Europe's new External Action Service (EEAS) could serve as a first port-of-call for small businesses looking to gain a foothold in foreign markets, according to Europe's main business lobby group.

SMEs face particular challenges in emerging markets like China, where protectionism and intellectual property rights pose major problems, says Adrian van den Hoven, director of international relations at BusinessEurope.

BusinessEurope has highlighted growing trade tensions between Europe and China in a series of letters to the EU executive, but van den Hoven believes the Lisbon Treaty provides scope for Brussels to provide advice and direct protection for companies operating overseas.

In an interview with EURACTIV, he said the business community is asking whether the EEAS could have a trade and enterprise unit to help companies – especially smaller firms with limited resources – to clear day-to-day hurdles that have typically made life difficult for internationally-minded start-ups.

National governments across Europe are watching with interest as the EU's new diplomatic service takes shape, but most would resist any encroachment onto turf traditionally reserved for national embassies and trade missions.

Senior officials have indicated the new EEAS will focus on diplomatic affairs rather than business issues, but van den Hoven is hoping the role of the service could be broadened.

"I think if the new [EU] embassies acted within the EU's competencies on things like market access it could work. If it's trade promotion, that would not be acceptable to member states," he said.

The kinds of problem the service could address would include advice on legal issues, patent protection, and accessing public procurement contracts, according to BusinessEurope.

Van den Hoven said business groups are hoping the EEAS will include business expertise rather than relying solely on politically-minded diplomats.

"The problem with these new embassies is that the Commission doesn't think of them in that way. They are busy discussing what kind of officials to send, most of whom will be foreign policy experts," he said.

"We take a more functional view. If we could convince the Commission that this kind of functional service would help the EU's own trade and enterprise policy, maybe they would go for that. Of course, you would need to send people from Brussels with knowledge of trade and business," Van den Hoven added.

He said an alternative to this approach would be for the EU to support chambers of commerce with offices in key cities such as Beijing and Moscow. These chambers sometimes lean towards supporting bigger business but could also provide a one-stop-shop for advising SMEs if they were given European funding, according to Van den Hoven.

In a wide-ranging interview on the challenges facing European businesses active in China, he also accused Beijing of allowing state-owned firms to stockpile raw materials using cash from China's massive stimulus package.

Van den Hoven warned that a "race for raw materials" would not be in the interests of China or the EU, and he was critical of the Chinese authorities for limiting the exports of rare metals, which are essential for green industries such as catalytic converters, windmills and electric car engines.

To read the interview in full, please click here.

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