Newspaper article International Herald Tribune

E.U. Proposes a Pushback on Giving Public Contracts

Newspaper article International Herald Tribune

E.U. Proposes a Pushback on Giving Public Contracts

Article excerpt

Chinese, U.S. or Japanese companies could be blocked from bidding for public contracts if their home countries are thought to be excluding bids from European companies.

In a move likely to increase tensions over protectionism in international trade, Chinese, U.S. or Japanese companies could be blocked from bidding for public contracts in Europe if their home countries are thought to be excluding bids from European companies.

Plans outlined Wednesday mark a significant shift in European thinking, reflecting frustration in countries like France that the European Union does not appear to receive reciprocal treatment on public procurement contracts from non-Europeans.

Nicolas Sarkozy, the French president, who is campaigning for re- election, has called for a "Buy European Act" modeled on U.S. laws that favor domestically made products.

But while supporters of the proposal from the E.U. executive, the European Commission, say it is designed to end unfair competition, critics contend that the plan risks increasing protectionism and inciting trade wars.

A British official, who requested anonymity in line with official policy, said it was akin to "hoisting a big flag over Europe saying, 'Closed for business."'

Though China is the main target of the proposed legislation, European officials also think they face discrimination in the United States and Japan, both of which are part of the General Procurement Agreement of the World Trade Organization, a deal intended to create a level playing field in this area.

The measures proposed Wednesday would offer a way of dealing both with countries that are part of the agreement and with developing countries that remain outside. European officials say they would be used as a lever to open markets rather than as a protectionist tool.

"Our commercial partners apply a lot of protectionist measures to their procurement market," Michel Barnier, the European commissioner for the internal market, said Wednesday. "This is true of the U.S. and Japan, where we have the G.P.A. agreement. It is also true of countries that don't fall under the G.P.A., the emerging countries where we have no secure access. …

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