How the EU wants to slow down China’s bidding process – economy – UK Parents Lounge

Daniel Caspary cannot help but raise a point against the Council of Ministers: the European Parliament’s trade committee has taken a position on the bill in less than three months, says the CDU MEP. The Council of Ministers, on the other hand, the legislative chamber of the Member States, took “almost ten years”. Caspary is the Member of Parliament responsible for an important piece of legislation designed to make it easier for European companies to do business in China and elsewhere. On Monday evening, the Trade Committee adopted Parliament’s position on this subject without a dissenting vote.

This “international procurement instrument”, hence its bulky name, is intended to give the European Commission a sharp sword in order to break isolated markets for European companies. In Brussels, the set of rules is generally called IPI, which is the abbreviation in English. The regulation does not mention China, but the country is clearly the primary target. After all, the legal act is directed against the grievance that countries like China do not allow European companies to bid on public tenders, for example for construction or purchase contracts. computers for government offices. The US government also discriminates against foreign manufacturers with “Buy American” rules. Conversely, the EU is very open to the participation of Americans and Asians in state tenders.

Such tenders are worth two trillion euros a year in the 27 member states – a huge market that could be closed to Chinese companies in the future. If Chinese companies or other isolated markets wish to participate in tenders, for example for the construction of a highway, the commission can sabotage that according to the law. The Brussels authority can force the advertising agency to apply a penalty to Chinese offers. Officials would then have to treat the offer as if the price was higher than it actually is. This improves the chances of European rivals. The Commission also has a second, even tougher option: it can completely prohibit Member States from allowing certain companies to act.

The Commission should use this leverage to open up foreign markets to EU companies during negotiations. The goal is not to seal Europe, but to open China – threatening to otherwise copy China’s protectionist practices. However, many EU governments have long been uncomfortable with this instrument. They fear that the EU will isolate itself with all the rules. In addition, contracts could become more expensive for authorities and therefore ultimately for taxpayers if cheap Chinese companies are kicked out.

How much should the penalty be for the Chinese?

The commission presented a first bill in 2012, but revised it in 2016 following opposition from governments. But it was not until the summer of 2021 that the Council of Ministers agreed on a negotiating position – these are the “almost ten years” of which MEP Caspary speaks. Parliament’s plenary will approve the trade committee’s deal in January. Negotiations on the law between Parliament and the Council of Ministers can then begin. Caspary says he’s aiming for consensus by spring, which is “really ambitious”, however. Of course, he qualifies the differences between the two positions as “compassionate”.

One of the differences is that Parliament demands a higher penalty. A second point concerns exceptions: in certain circumstances, companies in isolated markets should be spared, for example if their products are important in a health crisis. But MEPs want to make it harder to use such clauses.

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