Friday, September 03, 2004

The ultimate irony

Will he, won't he? That is the question of the moment in Brussels, as to whether Frits Bolkestein, the current EU internal market commissioner, will bite the bullet and end a ten-year-old dispute over car spares, or leave it for his successor to sort out.

The outcome will affect virtually every car owner in the EU, determining whether manufacturers will be given a monopoly over spare parts, in a market worth nearly £10 bn a year, or whether consumers will be able to buy their parts from cheaper sources.

The issue actually stems from negotiations which went into the Design Directive (98/71/EC) of 1998 which created EU-wide intellectual property rights for manufacturers of goods but, in so doing, was set to prohibit independent suppliers producing spares for cars. Consumer would thus no longer benefit from cheaper parts.

The answer was to add an amendment to the directive, the so-called "repairs clause", which safeguarded car-makers intellectual rights on new cars but also permitted third parties to use their designs where replacements parts were necessary for repair.

After considerable lobbying from the European car industry – which makes 39 percent of its gross profit from spare parts, as against only 18 percent from manufacturing - the amendment was blocked, despite being approved by the European parliament.

As a result, an interim solution was instead adopted (known as "stand still plus") which allowed member states to continue using their own national legislation, with many countries already having their own "repairs clause".

But now the issue has come to a head as the principle opponent of the "repairs clause" - German EU commissioner Günter Verheugen – is on 1 November to take over industry and enterprtise, assuming responsibility for the amendment from Frits Bolkestein, who has been trying to get it adopted as EU law.

Verheugen is supported by French commissioners Pascal Lamy and Jacques Barrot, and several others from carmaking countries including the Slovakian Jan Figel. They are arguing that the final decision should wait for the arrival of Jose Manuel Barroso's new administration on 1 November.

Prodi, on the other hand, seems to be backing an immediate decision, scheduled for 8 September after he had allowed it to be postponed, first from May and then June. The scene is now set for a final battle of the titans, with Bolkestein knowing that if the clause does not succeed now, it will probably go on the back-burner again.

But the ultimate irony is that, for all the years that this dispute has dragged on, member states have been quite happily regulating their own spare parts markets without the intervention of the EU.

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