The European Commission, the European Parliament and the Council have reached a political agreement to give the EU greater leverage to get access to public procurement markets outside the EU, boosting opportunities for EU companies. The agreement on the International Procurement Instrument (IPI) follows the final trilogue in Brussels on Monday.
“Today’s agreement is a breakthrough. We will guarantee that our European companies will have the same access to the public procurement markets outside the EU as foreign companies have on the European market. The agreement will be an effective door opener for European companies to the global procurement markets while limiting the administrative burden to a minimum”, said Daniel Caspary MEP, European Parliament Chief Negotiator for the International Procurement Instrument (IPI), on the provisional agreement between the Parliament and the EU Member States on Monday evening.
Caspary’s IPI design features “low bureaucracy and high impact” by covering only 15 percent of all procurement contracts but with a value of more than 70 percent of the total global procurement volume of around two trillion Euros. The new rules will apply to tenders worth at least 15 million Euros.
“For far too long, we had the very unsatisfactory situation that foreign companies from China and other non-EU countries succeeded in European procurements with offers that were obviously dumped to get prestigious projects like the tube in Stockholm or the Pelješac bridge in Croatia. On the other hand, European bidders were blocked in public procurements in non-EU countries regularly. With the IPI, this will end because we will have measures limiting the access to open EU public procurement tenders to companies from non-EU countries that do not offer similar access to EU companies”, explained Caspary.
Offers from companies from non-EU countries concerned will be subject to price mark-ups or excluded completely from the tender if the non-EU country refuses to open up its public procurements for EU suppliers as far as the EU does. The European Parliament succeeded in the negotiations in strengthening the IPI by strongly limiting exceptions, giving the authority to use the IPI to the Commission and not to the Member States to ensure a coherent application and insisted that big contracting authorities like city halls of large cities always have to apply the IPI.
“The introduction of the IPI will help create a level playing field in procurement and modernises the EU’s trade toolbox. Together with the planned Anti-Coercion Instrument and the planned Regulation to address distortions caused by foreign subsidies, the EU is strengthening its room for manoeuvre and action in a rough international trade environment”, Caspary concluded.
Inmaculada Rodríguez-Piñero, MEP and S&D negotiator said that the decision will pave the way for a more equal playing field for EU companies. As a result we will see more and better jobs in the EU. “I am proud that our group managed to ensure there will be a uniform application of the regulation to avoid potential loopholes and increase the transparency of the investigations. We also included social, labour and environmental obligations. The EU will be empowered to take more decisive action against discrimination against European companies abroad, while protecting bidders from least developed countries.”
The decision was also welcomed by the European Commission.
Executive Vice-President and Commissioner for Trade Valdis Dombrovskis argued that “a level playing field is vital for the competitiveness of our companies. While the EU has kept its public procurement market open, the same cannot be said for many third countries, where our companies still face unfair barriers. We continue to favour dialogue to resolve such issues. But in the final instance, this new instrument will give us extra leverage to remove these barriers and promote fair competition for the benefit of all.”
The IPI was first proposed by the Commission in 2012 and amended in 2016. The Council adopted its position on the proposal on the International Procurement Instrument in June 2021.
Further to this political agreement, the European Parliament and the Council will formally adopt the amended regulation with a view to its entry into force as soon as possible.