The European Union’s rules on government procurement have traditionally been admirably open and non-discriminatory, with none of the “Buy Local” preferences found elsewhere in the world.

That seems likely to change in view of a draft Regulation, issued by the European Commission, which will allow EU public bodies to exclude certain bids from outside the EU where such tenders comprise a significant element of non-EU goods and services. Despite denials that this is protectionist in nature, the Regulation will allow EU public bodies to discriminate against some foreign bids if they wish to do so.

BACKGROUND

The market for procurement by public bodies in the EU is significant. The EU estimates that approximately €420 billion in contracts is open to public tender each year. This corresponds to approximately 19% of GDP across all 27 EU Member states. The EU estimates that 85% of these contracts are subject to harmonised EU-wide public procurement rules that are designed to ensure that all public purchases are transparent, fair and non-discriminatory. This contrasts with the EU’s estimates that only 32% of the United States’ government procurement market is open to foreign bidders and 28% of Japan’s.