ECCO Symposium Discusses Offset Benefits
Defense expenditure in Europe, measured as a percentage of GDP, has
decreased in the past twenty years. The defense industry has to
restructure to ensure that companies become capable partners in the
European defense market.
defense and sensitive security procurement
and Article 346 of the Treaty on the
Functioning of the European Union (TFEU) form two pillars of this
restructuring and were the main topics at the latest ECCO (European
Club for Countertrade and Offset) symposium in Brussels, Belgium.
The 90 attendees represented 17 countries.
debated issues related to the
Equipment Market (EDEM) and defense
procurement in EU. The European Commission stated that
European Union (EU) industries are significantly dependent on EU
member states� spending and that an industrial restructuring at the
European level is needed as a first step to create an EDEM.
To reach this goal, however, an adequate legislative framework has
to be created.
the implementation of the Directive were discussed in presentations
made by the European Commission, as well as in the roundtable
discussions where attendees could raise questions and debate
Directive was implemented to counter:
Fragmentation of the defense market
competitiveness on a worldwide market
aim of the Directive is to establish a competitive EDEM and an
efficient European Defense Technological and Industrial Base (EDTIB).
Czech Republic, Denmark, Greece, France, Lithuania, Malta, Portugal,
Spain, Sweden and the United Kingdom have officially transposed the
Member states that have not yet written the Directive into national
law have until the first quarter of 2012 to announce their
TFEU mentions that the internal market is built on fundamental
freedoms and principles prioritizing equal treatment. According to
EU Primary Law there needs to be free movement of goods, persons,
services and capital, while non-discrimination and transparency need
to be assured. Offset is seen as contracting the basic Treaty
principles, because it discriminates on the basis of nationality and
impedes free movement of goods and services.
only possible justification for Offset can therefore be found in Art
346 TFEU, and the Offset requirement itself needs to fulfill the
conditions for its use.
However, the �catch-all� approach can no longer be tolerated as it
is incompatible with EU law. The new approach is to move away from
compensation logic to focus on capability and security requirements.
The new Directive offers possibilities to achieve security of
supply, operational sovereignty and market access for local
industries. Article 346 is included if it is necessary to address
national security measures.
Representatives from two EU countries explained how they are
applying the Directive and interpreting Art 346.
Further debates included the question whether the Directive will
really open in Europe, and discussions of how national security
vastly differ from one member state to the next.
the second day, a collection of presenters shared fundamental
reasons for implementing Offset policies. Speakers� presentations
detailed how Malaysia, Israel, India and Czech Republic, benefited
from Offset. The impact of direct and indirect Offset, respectively,
on a company�s strategy and activities were investigated and shared
by two different speakers.
next ECCO Symposium will coincide with the Eurosatory 2012 trade
show in Paris, France. The forum presentations will focus on Offset
in Brazil, while the workshop with look at the role of SMEs in
ECCO is an association for European companies, individuals and
institutions involved in Offset and countertrade. The association
organizes symposiums where members and guests can unravel matters
related to trade, international law and government procurement.
Offset research and training are also aims of ECCO.