Brussels has unveiled plans to potentially ban non-EU firms from government contracts. The proposed powers aim to strengthen the bloc’s arsenal against trade discrimination, most notably China.
Currently Europe’s public procurement market is the world’s most open, at some 350 billion euros. The US is about half that, while Japan lags way behind at just under 30 billion. The opportunities for firms to win state contracts in China are so tiny, the figure is not known.
The plan aims to push Beijing, in particular, to knock down its trade barriers. EU officials say the proposals will empower the Commission to shut the door on foreign firms bidding for state purchases, if countries outside the bloc repeatedly discriminate against European contractors.
The EU’s Internal Market chief Michel Barnier said:’‘If a public body or country believes there isn’t a level playing field, in which a European business is being prevented from working in a country, in that case, the decision makers could turn round and say: we want to block a company from that country from working in Europe. But it would have to be approved by the Commission. So, this will be on a case-by-case basis, and will only apply to contracts above five million euros.’‘
Inside the EU, government contracts amount to a important slice of the bloc’s GDP, around 20 percent.
The latest proposals have reportedly sparked much debate inside the European Commission, between trade liberals, who fear the plan could put Europe on a collision course with China, and those who want a more robust policy towards non-EU firms.