Key facts
- The European Commission has proposed new public procurement rules to encourage EU bodies to favor domestic goods and services.
The European Commission has proposed new public procurement rules to encourage EU bodies to favor domestic goods and services, aiming to counter China's economic influence. The proposals emphasize quality and sustainability over the lowest bid, with minimum weightings for non-price factors.
The proposed 'Buy European' rules represent a significant shift in EU trade policy, potentially reshaping global supply chains and increasing costs for public projects, while also signaling a more assertive stance in protecting domestic industries against foreign competition.
The European Commission has unveiled proposals to overhaul public procurement rules, encouraging national authorities and public bodies to prioritize goods and services made in Europe. This initiative aims to counter China's growing economic influence and ensure public money supports domestic industries, particularly in sectors like transport and infrastructure where Chinese firms are seen to benefit from state subsidies.
Under the proposed regulations, public sector buyers will be given greater legal certainty to favor European bids and can restrict or reject offers from countries that lack public procurement agreements or do not adhere to international rules. Stéphane Séjourné, the European Commission's lead official on industrial policy, stated that purchasers can adopt a more preferential approach to European bids. The proposals also aim to enhance democratic scrutiny over public spending by local authorities.
Brussels is concerned about Chinese companies gaining market share in Europe through subsidized pricing. The commission has previously intervened, blocking a Chinese rolling-stock company from a Lisbon metro project and investigating a Chinese security firm for alleged unfair advantages. Séjourné emphasized that preferring foreign products over European ones should be a deliberate political choice, not a consequence of EU rules.
The draft regulation also seeks to simplify existing rules by consolidating three laws into one. It mandates that public agencies give a minimum 30% weighting to quality when awarding contracts, with this rising to 50% for labor-intensive contracts, shifting focus from solely the cheapest bid to factors like environmental sustainability and local supply chains. The proposals are not expected to disadvantage UK firms due to existing reciprocal agreements, and non-EU countries with procurement agreements will also likely be unaffected.
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