EU proposes 'Buy European' procurement overhaul to shield €2.5tn market from China

The European Commission on Wednesday proposed a sweeping reform of public procurement rules, allowing authorities to favour European suppliers and reject bids from countries like China that don't offer reciprocal access. The plan simplifies 900 pages of rules into 200 and mandates quality criteria account for at least 30% of contract awards. The UK retains access under existing trade agreements.

Bottom line — The €2.5tn annual public procurement market is being turned into an industrial policy tool to strengthen European industry.

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• The proposal replaces three directives and 26 sectoral laws with a single Public Procurement Act, cutting procedures from five to three, per EU Reporter.
• Public buyers must give quality a minimum 30% weighting (50% for labour-intensive contracts), moving away from lowest-price awards, the Commission said.
• The Commission estimates the reform will save businesses and authorities €650mn a year in administrative costs, per Politico.
• China's Chamber of Commerce to the EU warned the plan could 'distort a level playing field' and discriminate based on nationality, Euronews reported.
• The UK remains covered by the WTO Government Procurement Agreement and the EU-UK Trade and Cooperation Agreement, so 'there should not be any difficulties,' Séjourné said, per The Guardian.
• The proposal also creates a framework for a digital EU procurement marketplace, though no technical standard or budget is set, per The Next Web.
• A separate European Innovation Act would require at least 50% of €17bn in R&D procurement to stay within the EU, EEA or Western Balkans, excluding Switzerland, per Bluewin.ch.

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