The proposed 'buy European' procurement regulation: an analysis

The European Commission recently advanced a ‘Buy European’ proposal for a regulation on the access of third-country goods and services to the EU’s internal market in public procurement.2 Reciprocity, or the practice of lowering barriers to trade in return for similar concessions from another country, is the core principle behind this proposed scheme. The key objective is to improve the conditions under which EU businesses can compete for public contracts in third countries. The European Commission has pointed out that while about €352 billion of EU public procurement is open to bidders from member countries of the WTO agreement on government procurement (GPA), this market access is not matched by other countries. The estimated value of US procurement offered to foreign bidders is currently just €178 billion, €27 billion for Japan, and even less for China. As a result, only €10 billion of EU exports (0.08% of EU GDP) reach foreign procurement markets, leaving an estimated €12 billion of EU exports unrealised because of third-country restrictions. The European Commission’s proposal notes the stark contrast this is to the EU which has not exercised its power to regulate the access of foreign goods, services and companies to the EU’s public procurement market, except in certain utilities sectors. The European Commission’s proposal therefore seeks to create an autonomous instrument that would both enhance the EU’s position in negotiations on market access, and preserve a competitive procurement regime in the EU. This analysis sets out the main features of the proposed regulation as currently available. It then assesses the main implications of this proposed regulation, should it be adopted