Europe is not alone in understanding the importance of KETs and many non-EU countries have adopted policies designed to attract foreign investment in KETs that distort the market for KETs-related industries. The European Commission works ensure a level playing field for KETs by examining trade policy and negotiating trade agreements, and modernising state aid rules.
Non-EU countries, such as the United States and Asian countries, have adopted policies designed to attract foreign investment in KETs. In the US for example, the National Nanotechnology Initiative has helped fuel nearly EUR 14 billion in cumulative investment since 2001. In China, biotechnology, advanced materials, and advanced manufacturing technology are all areas of emphasis in China’s 12th Five-Year Plan, which helps establish the strategic direction of Chinese policy.
According to a Commission study, there is evidence that some measures taken by US and Asian countries to create incentives to make them attractive to investors in KETs-related industries have resulted in the distortion of the international market. There have been cases where EU-based KET companies have invested in third countries, not for market reasons, but because the incentives were too attractive to turn down, the investment less risky.
By recognising the importance of KETs and addressing the market distortions taking place around the globe, the EU is in a position to make Europe a hotbed for KETs.
The EU already has a set of common rules that covers both state aid and international trade. These rules help prevent the distortion of competition between EU countries and give the EU greater weight in the international arena. By fine-tuning and adapting these regulatory tools, the EU can combat international market distortion.
Already, state aid rules have been modernised to increase Europe's global competitiveness. The EU is also negotiating trade agreements, at bilateral and multilateral levels to ensure a favourable trade environment and a level playing field for KETs in compliance with World Trade Organisation (WTO) rules.
The Commission is also exploring how trade policy can better support the KETs policy, notably regarding the reciprocity needed to ensure an international level playing field with respect to technology transfer.