asked the Minister for Foreign Affairs the extent to which national aids for industries in the European Free Trade Association countries are incompatible with the free trade agreements between EEC and EFTA countries; and the steps that are being or will be taken to encourage an end to such distorting aids.
Written Answers. - National Aids for Industry.
240.
It is provided in each agreement between the European Economic Community on the one hand, and individual EFTA countries on the other, that "any public aid which distorts or threatens to distort competition by favouring certain undertakings or the production of certain goods" is "incompatible with the proper functioning of the Agreement" in so far as such aid may affect trade between the Community and the individual EFTA country. Each agreement provides formal machinery, in the form of a Joint Committee, to deal with complaints by either of the contracting parties. If one of the contracting parties considers that certain practices are incompatible with the terms of the agreement, it may refer the matter to the joint committee, who examine the problem, make recommendations, and take decisions.
Up to December 1977 no complaints had been lodged with any of the joint committees of the EEC/EFTA country agreements in regard to national aids to industries in the EFTA states. However in December 1977 at the most recent meeting of the EEC/Sweden Joint Committee, the Community did have occasion to raise the question of alleged subsidies introduced by Sweden in an effort to combat difficulties arising in the reconstituted wood industry because of the recent recession. The joint committee are examining the complaint and the problem will be further discussed bilaterally by the authorities of the partner states.