Improved EU Proposal: Access to EU Procurement Markets

EU-Commission in Brussels © Jai79/Pixabay

The European Commission has published an amended proposal for the contested EU Regulation on the access of third-country goods and services to the EU’s public procurement market. This is an improvement over the last proposal, but the threat of bureaucratic burdens and market distortions still remains.

At the end of January 2016 the European Commission published an amended proposal for a Regulation on the access of third-country goods and services to the EU’s public procurement market (International Procurement Instrument). It replaces the first, contested proposal from 2012 that failed to find a majority in the Council and was also rejected by BDI. The objective of the regulation is to increase pressure on third countries to open their procurement markets, which are often closed to EU-based suppliers, and to strengthen the EU’s position in trade negotiations. In the case of a possible market foreclosure the regulation permits the Commission to pursue consultations with the affected third state and potentially to impose sanctions on offers originating from it.

Burdens and Market Distortions Loom

BDI welcomes the Commission’s intention to open up closed third-country markets. However, both BDI and the German government rejected the original draft because the sanctions would have created drawbacks, including additional bureaucracy and market distortions. While industry largely welcomes the revisions now proposed by the Commission, the revised proposal still risks creating additional bureaucratic burdens and market distortions. Moreover, the construction sector sees the revised proposal endangering national options for responding to market foreclosure in the construction sector in third countries. BDI is preparing a response to the amended proposal.