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TERMS OF REFERENCE FOR THE AD HOC WORKING GROUP ON ECONOMIC THEMES, FOCUSING ON INVESTMENT AND COMPETITIVENESS, BETWEEN THE EUROPEAN UNION AND THE FEDERATIVE REPUBLIC OF BRAZIL

JOINT STATEMENT ON THE INAUGURATION MEETING OF THE EUROPEAN UNION-BRAZIL AD HOC WORKING GROUP ON ECONOMIC THEMES, FOCUSING ON INVESTMENT AND COMPETITIVENESS


TERMS OF REFERENCE FOR THE AD HOC WORKING GROUP ON ECONOMIC THEMES, FOCUSING ON INVESTMENT AND COMPETITIVENESS, BETWEEN THE EUROPEAN UNION AND THE FEDERATIVE REPUBLIC OF BRAZIL

The Minister for External Relations (MRE), Ambassador Luiz Alberto Figueiredo Machado;
The Minister for Development, Industry and Foreign Trade (MDIC), Mauro Borges; and
The Minister for Science, Technology and Innovation (MCTI), Marco Antonio Raupp;
And
The Vice-President of the European Commission, responsible for Industry and Entrepreneurship, Antonio Tajani, in liaison with:
The European Commissioner for Trade, Karel De Gucht;
The European Commissioner for Research, Innovation and Science, Máíre Geoghegan-Quinn;
The High Representative and Vice-President of the European Commission, Catherine Ashton;
Building on the proposal submitted by the President of the European Commission, José Manuel Durão Barroso, to the President of the Federative Republic of Brazil, Dilma Rousseff, during the sixth Brazil-European Union Summit (Brasilia, 24 January 2013);
Considering the importance of promoting a fluid and predictable environment for international trade and investment in both goods and services;
Reiterating the intention expressed by both Presidents to further strengthen contacts between the two business communities, with a view to facilitating trade and bilateral investment, as well as exchanges in the areas of research, development and innovation;
Recognising the mutual interest of European and Brazilian companies in establishing or expanding their presence in Brazil and in the European Union, respectively;
Considering the importance of European investments in Brazil and the growing competitiveness of Brazilian companies in the European market;
Reaffirming the commitment to promoting bilateral dialogue in science, technology and innovation;
Emphasising the crucial role of micro, small and medium-sized enterprises for economic growth and jobs in Brazil and in the European Union;
Express their intention to establish an Ad Hoc Working Group on Economic Themes, focusing on investment and competitiveness (hereinafter: «Ad Hoc WG») as follows:

I. Objectives

1. The objective of the Ad Hoc WG is to develop economic cooperation between the Parties, focusing on investment and competitiveness, and to provide a temporary forum for economic/trade dialogue between Brazil and the European Union.
2. The economic forum should address economic and trade issues of common interest, with emphasis on the following:
a) promoting exchanges of information on trade in goods and services, − exploring opportunities for development of trade – as well as on investments;
b) identifying opportunities to boost the competitiveness of undertakings, in particular for micro, small and medium-sized enterprises;
c) promoting science, technology, innovation, research and development;
d) taking into account private sector perspectives;
e) identifying opportunities to obtain private sector support for capacity-building and education projects.

II. Meetings

1. The Ad Hoc WG will endeavour to organise a high-level meeting, attended, on the Brazilian side, by the Minister of State for External Relations (MRE), the Minister of State for Development, Industry and External Trade (MDIC) and the Minister of State for Science, Technology and Innovation (MCTI) and, on the European side, by the Vice-President of the European Commission, responsible for Industry and Entrepreneurship, in liaison with the Vice-President of the European Commission and High Representative of the Union for Foreign Affairs and Security Policy, the Commissioner for Trade and the Commissioner for Research, Innovation and Science.
2. The high-level Ad Hoc WG meeting should be held once a year – preferably as part of the Brazil-European Union summit, or whenever considered appropriate by the Parties − alternately in the European Union and in Brazil.
3. A Steering Committee on Investments and Competitiveness should meet alternately in Brasilia and in Brussels in between Summits to monitor the implementation of the Plan of Action and to discuss, at the technical level, the adoption of new programs and initiatives by the Ad Hoc WG. The Steering Committee should regularly report to the Ad Hoc WG.

III. Partnerships

The activities of the Ad Hoc WG should be carried out in coordination with other bilateral arrangements in place and in liaison with the relevant governmental and private bodies, agencies, institutions and associations of the Parties.
Any disagreement regarding the interpretation or application of these Terms of Reference should be settled between both sides through diplomatic channels.
These Terms of Reference may be amended at any time by mutual consent through diplomatic channels.
These Terms of Reference have no financial implications on EU budget over and beyond the appropriations already foreseen in the official financial programming of the Commission.
These Terms of Reference do no not intend to create rights or obligations under international law.
Done in Brussels, on 24 February 2014, in two original copies.


JOINT STATEMENT ON THE INAUGURATION MEETING OF THE EUROPEAN UNION-BRAZIL AD HOC WORKING GROUP ON ECONOMIC THEMES, FOCUSING ON INVESTMENT AND COMPETITIVENESS

The Minister for External Relations, Ambassador Luiz Alberto Figueiredo Machado;

The Minister for Development, Industry and Foreign Trade, Mauro Borges;
The Minister for Science, Technology and Innovation, Marco Antonio Raupp;
The President for the National Confederation of Industry (CNI), Robson Braga de Andrade;
On the side of Brazil
and
The Vice-President of the European Commission, responsible for Industry and Entrepreneurship, Antonio Tajani;
The European Commissioner for Trade, Karel De Gucht;
The European Commissioner for Research, Innovation and Science, Máíre Geoghegan-Quinn;
The Vice-President of the European Commission, responsible for Digital Agenda, Neelie Kroes
The High Representative and Vice-President of the European Commission, Catherine Ashton;
The President of EUROCHAMBRES, Richard Weber;
The President of BUSINESSEUROPE, Emma Marcegaglia;
On the side of the European Union
have met in Brussels, on February 24th, 2014, within the Brazil-European Union Summit, for the inauguration meeting of the Ad Hoc Working Group on Economic Themes, focusing on Investment and Competitiveness.
They acknowledge the common history and fundamental values that support the relationship between Brazil and the European Union and reiterate the relevance and vigor of the Strategic Partnership, launched in 2007, under which both parties have held an increasingly fruitful dialogue, dynamic cooperation and intense and frequent exchange of visits, at all levels.
They recall the ongoing negotiations of the association agreement between MERCOSUR and the European Union as well as their shared commitment to reach an ambitious, comprehensive and balanced result.
They reaffirm the strategic decision by President Dilma Rousseff and President José Manuel Durão Barroso to create the Ad Hoc Working Group on Economic Themes, as a new mechanism envisaged to foster a positive and cooperative agenda in the areas of investment and competitiveness, bringing together the respective Government agencies and business entities of both sides.
They recognise that European companies are by far the most traditional and largest investors in Brazil and the desire to foster the presence of Brazilian businesses in the European market, where Brazilian companies, taken as a group, already occupy the fifth position among the main investors.
They recall the importance for research and innovation to strengthen competitiveness and job creation and the opportunities arising from Horizon 2020 – the new Framework Programme for Research and Innovation – open to participation to public and private entities from Brazil, also in line with the new strategic approach for international cooperation in research and innovation.
They register the importance of building upon the existing complementarities, taking advantage of the strengths and areas of excellence of both economies as well as the need for further promoting the integration of productive chains.
In light of the above, THEY EXPRESS THE INTENTION to establish a Plan of Action on Investment and Competitiveness, as follows in the Annex to this Joint Statement.

Annex

PLAN OF ACTION ON INVESTMENT AND COMPETITIVENESS
European Union-Brazil

1) Increasing Two-Way Investments

The sectors of Infrastructure and Logistics, Oil & Gas and Offshore Industry, Renewable Energy, Agribusiness and Innovation are of high priority, as they offer huge opportunities for intensifying two-way investment and technology flows, stimulating business cooperation, promoting the integration of productive chains, strengthening the presence of European companies in Brazil and fostering the internationalization of Brazilian companies in EU Member States.
In this regard, Brazil and the European Union express their interest to jointly promote and disseminate business opportunities and to discuss investment policies at large on both sides. Work will start with the organization of a Workshop on Opportunities in Brazil for European Investors and vice versa, focused on these five priority areas, in 2014, with the support of the European Investment Bank, APEX-Brasil, CNI, EUROCHAMBRES and BUSINESSEUROPE.

2) Regulatory Cooperation / Standardization

The European Union and Brazil aim to strengthen their dialogues on regulatory cooperation, particularly in the fields of standards, certification and conformity assessments.
In this context, the European Union has the intention to place a standardization expert in Brazil, to help companies, especially SMEs, to operate efficiently in the Brazilian market and provide information to Brazilian companies on EU standards.
Additionally, both sides on the basis of a joint mapping exercise will seek closer cooperation among regulators, with a view to achieving mutual recognition agreements on technical requirements, conformity assessments, and standards where this proves feasible.

3) Cooperation for Competitiveness

INFRASTRUCTURE AND LOGISTICS

Brazil and the European Union share views on the importance of the development of infrastructure and logistics. Their expansion and improvement should have a positive effect on the competitiveness of their economies and contribute to the wellbeing and mobility of citizens.
Both sides are interested in a specific dialogue focused on the different aspects of this topic, including road and highway networks, railway systems and urban mobility.
In particular, Brazil and the European Union have declared their intention to draft a Memorandum of Understanding with a view to promoting preliminary information-sharing and cooperation on rail signaling and communication, safety and interoperability standards and rules before the 2015 Brazil-EU Summit and to launch a regulatory dialogue on rail issues in the course of 2014 to which the industry would be closely associated.
Signaling and communication systems will be on top of the cooperation agenda, and in particular the European Rail Traffic Management System (ERTMS) that has become a standard of reference for some countries worldwide for safety and rail capacity optimization.
Furthermore, safety and interoperability will also be core topics of the cooperation in the current context of expanding the Brazilian rail network. The European model of vertical separation between infrastructure management and rail operations has enabled the market opening to competition. Information-sharing and capacity-building on European systems and standards are valuable for Brazil as the country is developing its own railway system, including high-speed, and implementing the interoperability of the national rail network.
In this respect, the European Commission has invited the Brazilian authorities to visit key railway premises located within the EU territory in 2014. The Enterprise for Logistics and Planning (EPL) and the Terrestrial Transportation National Agency (ANTT) are especially invited to join the Brazilian delegation. The aim of these meetings will be to find a common ground for cooperation in the field of rail infrastructure development and management systems.
These visits will be organized in cooperation with the Association of the European Rail Industry (UNIFE).
Furthermore, a workshop on signaling and safety rules and standards could be organized in Brazil to promote EU standards with representatives of the Association of the European Rail Industry (UNIFE), and in cooperation with the European Railway Agency (ERA).

OIL & GAS AND OFFSHORE INDUSTRY

Brazil and the European Union confirm their common interest in furthering dialogue on oil & gas and offshore industry and to jointly promote and disseminate business opportunities for companies of both sides. Work will start with the organization of a Workshop jointly held in Brazil in 2014 with the aim of fostering the competitiveness of this strategic sector and promoting matchmaking and the interchange of best practices on cluster and sectoral development of the oil & gas industry. Brazil`s National Organization of the Oil Industry (ONIP) and other industrial associations should be invited to participate in this initiative.

RENEWABLE ENERGY

Brazil and the European Union recognise the strategic importance of access to adequate supplies of renewable, clean and sustainable sources of energy, including biofuels for transport and other biomass-based fuels (for industrial/commercial heating & cooling and power generation), solar power generation and wind power, and, in this regard, highlight the common interest in promoting a mutually beneficial partnership aimed at promoting investments and boosting the competitiveness of Brazilian and European companies in this sector.
Brazil and the European Union also endeavour to advance technical consultations between Government and private sector experts with a view to elaborating a pilot project on wind energy. This pilot project will focus on strengthening the stages of the productive chain of wind energy both in Brazil and the EU.
Brazil`s National Confederation of Industry, through the network of SENAI research centers, will be part of this initiative.

EXCHANGE OF ENTREPRENEURS

Brazil and the European Union will jointly develop a mobility programme for exchanging young entrepreneurs, in the areas of technology and innovation, the Entrepreneurs without Borders, which will provide the possibility to acquire knowledge and practical experience and broaden their markets by working with entrepreneurs in another country.

TOURISM

Brazil and the European Union intend to launch a tourism dialogue on senior exchanges. This dialogue should lead to increase travel flows for senior citizens during low and medium seasons and would add value to the competitiveness of both economies, providing benefits to the industry and private stakeholders. Such dialogue may include an exchange of good practices in the fields of eco-tourism and agro-tourism.

CORPORATE SOCIAL RESPONSIBILITY

Brazil and the European Union intend to raise awareness in Corporate Social Responsibility (CSR) and sustainability issues in Latin America. It involves large companies facing new competition but also SMEs connected to their supply chains.

4) Cooperation on Industrial Innovation and Research
Brazil and the European Union confirmed their commitment made during the last Brazil-EU Summit in January 2013 in its 6th Steering Committee meeting by stepping up cooperation in a number of strategic key areas, namely in marine research, bio-economy, sustainable agriculture and energy.

The scientific and technical cooperation developed in the framework of the Cooperation Arrangement which was signed in January 2013 between the Joint Research Centre of the European Commission (JRC) and Brazil's Ministry of Science, Technology and Innovation (MCTI) as well as JRC collaboration with other partners in Brazil will further support scientific cooperation between the two sides/EU and Brazil in such areas as disaster management, sustainable management of natural resources in particular forests and water, energy with a focus on smart grids, sustainable agriculture, bio-economy, information and communication technologies (ICT), including geo-information and space applications as well as nanotechnologies.

BIOECONOMY AND SUSTAINABLE AGRICULTURE

A dedicated working group should be set up to capitalize on what already exists, taking into account international agreements on sustainable development, in particular the outcome of the Rio+20 Conference, identify joint actions and report on implementation.
Moreover, Brazil and the European Union reiterate the importance of promoting mutual knowledge sharing in bioeconomy, a domain to which both sides attach strategic relevance. Both sides intend to intensify bilateral dialogue on the theme, through a workshop on bioeconomy to be held in Brazil, in 2014, with the support of the National Confederation of Industry (CNI) and based on its bioeconomy agenda for 2014. The event should serve the purpose of facilitating matchmaking and the exchange of information between Government and private sector experts in the field as well as of discussing interactions with Brazil in the context of the European Bioeconomy Observatory.

MARINE RESEARCH

The 6th Joint Steering Committee meeting agreed to set up a joint working group to step up cooperation on a sustainable Atlantic Ocean ecosystem approach (ocean observation and forecasting), sustainable marine food production (including aquaculture), innovative use and conservation of the Atlantic biodiversity (biotechnology) and critical raw material (blue mining).

BUILDING THE CAPACITY OF COMPANIES AND STANDARDIZATION LABORATORIES

The European Union welcomes Brazil`s interest in strengthening the capacity of companies, especially of SMEs, as well as laboratories in the area of standardization and technical rules. Both sides consider possible bilateral initiatives in this area, including videoconferences, information-sharing events, exchange of experts in technical regulations and standardization, so as to enable Brazilian products and services, in particular from SMEs, to access the European market and to enable European products and services, in particular from SMEs, to access the Brazilian market.
Dedicated working groups should take the different actions further including those stemming from this action plan so as to fully explore the possibilities provided for in H2020, which is open to participation of Brazilian public and private entities.

INNOVATION − NETWORKING COMPANIES AND RESEARCH CENTERS

With a view to networking companies and research centers of both sides, Brazil and the European Union plan to take the following initiatives: (i) further the participation of CNI in the platform Enterprise Europe Network (EEN); (ii) to invite, namely through the EEN platform, European startups to participate in the calls of “Startup Brazil”; (iii) to stimulate cooperation between “Startup Brazil” and “Startup Europe”; (iv) to stimulate the elaboration and presentation of joint innovation projects under Brazil`s Plano Inova Empresa; (v) to build upon the success of current Coordinated Calls (e.g. on ICT) to further ensure targeted, effective and strategic cooperation.
Furthermore, particular attention will be paid to promoting H2020 − which is open to participations from anywhere in the world − in Brazil as the new single programme coupling research to all forms of innovation and covering the entire value creation chain.

INFORMATION AND COMMUNICATION TECHNOLOGIES

Brazil and the European Union are committed to reinforce the strategic value, efficiency and impact of the cooperation in the domain of ICT.
The cooperation on cloud computing, addressing standards, certification mechanisms, safe and fair contracts as well as legislative frameworks will be reinforced through the establishment of an EU-Brazil Cloud Computing Working Group (in the context of the EU-Brazil Dialogue on Information Society), aiming at facilitating the emergence of mutually recognised trusted cloud solutions.
Two Coordinated Research and Innovation Calls on ICT have been successfully implemented with the support of the National Council for Scientific and Technological Development (CNPq), proving to be an efficient mechanism of cooperation between Brazil and the European Union, leading to results with high social and industrial impact. A third Coordinated Call has been agreed to be launched in 2015 focused on the development of an Advanced Cyber Infrastructure, including the topics of Advanced and High Performance Computing, Future Internet experimentation and Cloud Computing. This will be the first enhanced and focused international cooperation in Horizon 2020. Furthermore Brazilian scientists can participate in EU projects in certain areas through the Science without Borders programme thus offering new opportunities in industrial research and innovation.

The importance of ICT entrepreneurship for growth and jobs is reflected in a reinforced cooperation between "Startup Europe" and "Startup Brazil", exploring the mutual benefits of “apps” development by young web-entrepreneurs and SMEs, on top of open and common Future Internet platforms.

Brazil and the European Union, with the collaboration of the private industry of both sides of the Atlantic, recognise the strategic importance and encourage all relevant stakeholders to work on the setting-up of a direct transatlantic high-capacity fiber-optic cable, linking South America to Europe. This new cable will widen and strengthen communications between the two continents, facilitating commercial transactions and investment operations. Specifically, it will be a vehicle for the integration of national and regional research and education networks, which will allow the allocation of high capacity for scientific experiments, collaborative research, education and inter-regional innovation and support the ambitious agenda of competitiveness. This direct link will stimulate broadband deployment in South America leading to lower prices for end-users but also contribute to enhance cyber-security and consumers` trust and privacy on the flows of information through the Internet and the Cloud.
This project will build upon a long standing cooperation on regulatory matters between the European Union and Latin American countries.

SPACE

Based on the mandate received in 2011 from the Council of the European Union to enter into negotiation with Brazil to set up a formal international Agreement on Global Navigation Satellite Systems (GNSS) Cooperation, Brazil and the European Union endeavor to develop their space dialogue including the field of satellite navigation but also satellite observation and space science and exploration.

LINKING STUDENTS TO EMPLOYERS

EUROCHAMBRES, BUSINESS EUROPE and CNI commit to stimulate European companies and Brazilian subsidiaries in Europe to offer internship opportunities for Science without Borders students, as a way of complementing their studies, bringing them closer to practice in their academic area.
Furthermore, the European Commission's Joint Research Centre has offered the possibility of hosting Brazilian researchers to acquire experience in various Science without Borders priority areas.
Brazil and the European Union aim to develop initiatives in order to link the EURAXESS portal and the digital platforms of Science without Borders and LATTES CNPQ, with a view to stimulating curricula-sharing and the announcement of job opportunities in both markets.
Brazil invited European researchers to participate in the Science without Borders programme in the modalities Young Talents and Special Visiting Researchers.

5) Small, Micro and Medium-Sized Enterprises (SMEs)

Brazil and the European Union express their joint intention to support small, micro and medium-sized enterprises, which play a strategic role as wealth and job creators in both economies. Both sides stress the strategic importance of fostering the internationalization of these enterprises, mainstreaming a culture of innovation in SMEs and promoting their integration into global value chains.
In order to achieve these goals, both sides intend to reinforce their bilateral cooperation on SMEs, using the available programmes supporting the competitiveness of enterprises and SMEs, notably the European COSME Programme for the Competitiveness of Enterprises and SMEs and Partnership Instrument.

The European Union endeavours to fully integrate the Enterprise Europe Network Brazil with their European partners and other relevant networks.
Recognizing the importance of the bilateral dialogue on SMEs policies and the network of SME Envoys, both sides will aim to reinforce contacts between their respective SMEs envoys and will do their outmost to share best practices.
Transparency, predictability and simplification of the administrative environment is also a shared priority and an issue of concern for many SMEs in Brazil and in the European Union. Both sides should therefore cut red tape and reduce the administrative burden in strategic areas in order to increase the effectiveness and promotion of SME policy dialogue. Therefore, the European Union and Brazil endeavour to launch a consultation on the top ten burdensome administrative procedures between the two sides. Brazil and the European Union express their joint intention to develop an on-line problem-solving mechanism to help with handling complaints from businesses which, when exporting in the European Union or in Brazil, face disproportionate requirements or delays in the context of administrative procedures.

INTELLECTUAL PROPERTY

Brazil and the European Union intend to assist SMEs in better using and protecting their Intellectual Property Rights on the market. In that perspective, the EU IPR helpdesk should explore synergies with the work already developed by CNI in this field. This should help sharing good Intellectual Property Rights business practices that encourage creativity and innovation.

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