European Commission Takes Action to Open Up

European Commission - Press release
European Commission Takes Action to Open Up International Procurement
Markets
Brussels, 29 January 2016
New tool aims at discouraging discrimination of EU companies in procurement markets of
third countries.
The European Commission has today presented a revised proposal for an International Procurement
Instrument - a tool to promote open access to public procurement markets around the world. While the
EU is an open economy, many of the EU's major trading partners apply restrictive practices which
discriminate against EU businesses. Closed procurement markets undermine competition and
transparency, increase the costs of public goods and services for taxpayers and also increase the risk
of corruption. Opening up non-EU markets for European companies would lead to public savings,
creating a win-win situation for jobs and growth in the EU and the tender country in question.
Cecilia Malmström, European Commissioner for Trade, said: "I firmly believe that an open
international trading system needs to include public procurement. Openness is good for business, good
for consumers, and leads to an efficient use of taxpayers' money. It also helps in the fight against
corruption. This new proposal will give us the means to show that we are committed to opening up
procurement markets globally."
Elżbieta Bieńkowska, European Commissioner for Internal Market, Industry, Entrepreneurship and
SMEs, said: "Government procurement around the world represents a huge market. We want EU
companies to be able to tap into this market outside the EU just as companies from outside the EU are
able to benefit from our market. What we are doing today will open doors for our businesses and allow
them to compete on an equal footing."
The new Instrument would allow the Commission to initiate public investigations in cases of alleged
discrimination of EU companies in procurement markets. In case such an investigation would find
discriminatory restrictions vis-à-vis EU goods, services and/or suppliers, the Commission will invite the
country concerned to consult on the opening of its procurement market. Such consultations can also
take place in the form of negotiations on an international agreement. As a last resort, the Commission
could, after consultation with EU Member States, apply the new tool. This means that bids consisting of
goods and services from the country concerned would, while compared to other bids, be considered as
offering a higher price than the one they have put forward, thus providing European and non-targeted
countries' goods and services a competitive advantage. To avoid the application of this tool, third
countries have only to stop such discriminatory practices.
The existing EU commitments – including in the WTO Government Procurement Agreement (GPA) and
bilateral trade agreements – remain unaffected by this initiative. EU public procurement markets are
open to foreign providers and increasingly transparent: the Commission's Tenders Electronic Daily
(TED) database covering public procurement opportunities in the EU is now also equipped with a free
translation tool, removing the language constraint.
The Commission is also currently negotiating market openings with some of the EU's major trading
partners, in the context of free trade agreements or in the World Trade Organisation and expects these
negotiations to lead to substantive market openings, making the future use of the new tool vis-à-vis
these countries superfluous.
In addition, the proposal contains other elements to ensure its proportionality in achieving its
objectives, safeguarding that it cannot be used as a tool to protect or close EU procurement markets.
Thus:
- in order to avoid a negative impact on development, the proposed instrument will not apply vis-àvis suppliers from least developed countries or the more vulnerable developing countries
- it will not apply to tenders made by EU small and medium-sized businesses, so as to facilitate their
participation in the EU procurement market
- the application will be limited to contracts above a certain threshold
- the scope of possible action will be targeted to what is deemed necessary: the application can be
limited to certain suppliers from the third country concerned, and its implementation to a select
group of contracting authorities in each EU Member State.
Background
EU companies are often subject to discrimination when selling their products and services to public
institutions in other countries. Such restrictions affect competitive EU sectors such as construction,
public transport, medical devices, power generation and pharmaceuticals. Only a quarter of the world's
annual procurement market is open to international competition.
The 2015 Commission's trade strategy highlights the need for an effective policy that tackles new
economic realities and points at the need to ensure a level playing field in market access also for
procurement. The strategy also calls for more efforts to combat corrupt practices. Corruption is a
world-wide problem and particularly relevant in the case of public procurement.
The EU’s efforts to overcome the existing trade barriers are twofold. On the one hand, the EU includes
comprehensive procurement chapters into the free trade agreements that it concludes bilaterally with
its partners. Also, it negotiates with countries willing to join the WTO Government Procurement
Agreement (GPA) – for instance China and Australia – aiming at bringing more countries to the
agreement and make it eventually apply to all WTO members.
The Commission, in March of 2012, made its first proposal to create incentives for EU trading partners
to opt for more openness in public procurement. Today's proposal brings improvements to the initial
Commission initiative, by allowing the EU to take proportionate and more targeted action – providing
leverage in negotiations, without closing EU markets or adding any unreasonable burden for
contracting authorities.
IP/16/178
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