The European Union wants to allow governments to exclude foreign bidders and "buy European" in a move reminiscent of Donald Trump's "America First" policy, which could violate international agreements with trade partners.
The European Commission "will propose the introduction of European preferences in public procurement for critical sectors and technologies," according to a draft plan obtained by the Financial Times.
Officials say the aim is to give governments a way to shield important EU sectors from cheaper competitors from China and other countries. The proposal, which seeks to implement reforms advocated by former Italian Prime Minister Mario Draghi, is still under discussion and could be modified before its expected release on Wednesday, they said.
"Buy European" provisions, which could affect the United Kingdom and Switzerland, have long been debated in Brussels but have struggled to gain support from economically liberal member states. This latest initiative comes at a time when the US president has prioritised domestic procurement for his administration.
"The loss of European manufacturing capacity and expertise in critical sectors could make the EU dependent on imports in key areas of the economy," the proposal states.
"In a context where other major players are imposing restrictions on access to their markets and seeking to increase production capacity in critical technologies, Europe must protect its own capacities."
A Remarkable Shift
Thierry Breton, the French EU Commissioner for Industrial Strategy, said that measures such as the revision of public procurement rules and state aid policies are part of Brussels' efforts to "turn European doctrine into action."
The Commission aims to revise the Public Procurement Directive next year, which currently requires that all contracts "must treat all applicants equally and without discrimination."
The EU is also a signatory to the World Trade Organization’s Government Procurement Agreement, which states that measures "should not be prepared, adopted, or applied in a manner that protects domestic suppliers, goods, or services, or discriminates against foreign suppliers, goods, or services."
If approved by member states, the "Europe First" policy would mark a significant shift. This month, the EU threatened legal action against China for unfair discrimination against EU companies in the medical device market.
The Union also launched a legal case against the United Kingdom at the WTO in 2022 after consulting on granting preferential access to domestically produced wind turbines in subsidy schemes.
"This violates the fundamental WTO principle that imports must compete on an equal footing with domestic products," the Commission stated at the time.
(EUpravo zato/SeeBiz)
