Competitiveness proofing Directors and Experts of Better Regulation Meeting Vilnius, 5-7 th June 2013 Konstantin Pashev DG ENTR Unit A5 'Economic Analysis and Impact Assessment' DG Enterprise and Industry

2 Outline 1.The Commission's approach to assessing competitiveness impacts 2.Overview of the 12-step operational guidance 3.Streamlining competitiveness proofing in the practice of Impact Assessment DG Enterprise and Industry

The commitment Industrial Policy Flagship October 2010 "…a reinforced analysis of the impacts on industrial competitiveness for all important new policy proposals with significant effects on industry as part of the impact assessment process…" "…assessing and reporting the overall impacts of a proposal on competitiveness, including the investment, cost, price and innovative implications for industry and individual sectors, as well as consumer satisfaction, and taking particular account of the potential interactions between a policy proposal and other existing or planned legislation and regulation." DG Enterprise and Industry

Impacts on competitiveness Cost competitivenessCapacity to innovate International competitiveness The capacity of the business to produce more and/or higher quality products and services that meet better customers' preferences Impacts on the affected sectors' international sales performance The cost of doing business, which includes cost of intermediate inputs (incl. energy) and of factors of production (labour and capital) DG Enterprise and Industry Three - pillar approach

I. Getting Started II. Qualitative screening III. Quantifying expected impacts Step 1: Does your IA require comp. proofing? Step 2: How deep should we go? Step 3: Which are the affected sectors? Step 4: What is the effect on SME competitiveness? Step 5: Effect on cost and price competitiveness Step 6: Effect on capacity to innovate? Step 7: International competitiveness? Step 8: Data on structure and performance of directly affected sectors Step 9: Data evidence on indirectly affected sector(s) Step 11: Quantify expected impacts on the capacity to innovate Step 12: Quantify expected impacts on international competitiveness Step 10: Quantify expected extra compliance and other operational costs DG Enterprise and Industry The 12 steps at a glance

6 Cost competitiveness Step 5: What is the likely effect on cost and price competitiveness of the affected industry? Compliance costs Other economic costs (from price changes of intermediate goods, including energy and raw materials, capital and labour costs) effect on consumer choice and prices the need and cost of restructuring DG Enterprise and Industry

7 Step 6: Capacity to innovate Questions about the capacity of the sector to produce R&D, product and process innovation, which largely depends on supply of skills, incentives to invest in R&D (e.g. IPR protection), access to risk capital Step 7: Likely impact on the affected enterprises' international sales performance (market shares, comparative advantages,) and access to markets DG Enterprise and Industry Non-cost and international competitiveness

8 Results of Part II: Qualitative screening matrix DG Enterprise and Industry Competitive impacts Affected sectorsSizing (timing) of impacts Duration of impacts Risks and uncertainty DirectlyIndirectly Cost and price competitiveness Capacity to innovate International competitiveness

Descriptive statistics Input-output analysis Quantification of impacts on competitiveness may require Applied general equilibrium modelling Other econometric exercise Quantifying the impacts No prescription on the instruments

10 Mainstreaming CP in the IA practice DG Enterprise and Industry The IAB 2012 Report recommended that "services make better use of the related new operational guidance documents to provide a robust assessment of the impacts of proposals on industrial competitiveness, SMEs and on micro enterprises".

11 First good CP practices Published Consumer Product Safety Regulation Directive concerning the posting of workers Regulation on reduction of CO2 emissions from new light commercial vehicles Revision of the Council Directive 90/314/EEC on Package Travel and Holiday Tours Revision of the European Atomic Energy Community (Euratom) nuclear safety legislative framework

12 First good CP practices Finalized (publication upcoming) Unique identifier for medicinal products Fertilizers Regulation Legislative amendment of the Directive 89/686/EEC on personal protective equipment Revision of the Directive on products burning gaseous fuels European Tourism Label for Quality Systems Strategy for reducing Heavy Duty Vehicles' CO2 emissions and fuel consumption

13 Thank you The guidance and good practices are available online at: assessment/competitiveness-proofing/index_en.htm