EU initiative on the Access to the EU Public Procurement markets

Transcription

1 EU initiative on the Access to the EU Public Procurement markets A Tool to Regain Leverage Anders C. Jessen Head of Unit, Public Procurement and Intellectual Property, DG Trade, European Commission

2 Content 1. Economic Context 2. Policy Context 3. Drivers of the Initiative a) GPA b) Unequal access 4. The main problem Lack of Leverage 2

3 Economic Context for the Initiative Economic crisis and budgetary constraints Important public contracts awarded to non-eu companies Protectionist policies maintained/developed by important trading partners Source: illuminati_world

4 Policy Context for the Initiative: Single Market Act : Create a more level playing field in the EU public procurement market Trade, growth and jobs : Opening markets and ensuring EU businesses benefit from trade

5 Policy Context for the Initiative (2): Public procurement disciplines are excluded from GATT and GATS multilateral trade agreements and their related market access commitments. As a consequence, WTO members and especially countries acceding to the WTO are not bound to offer concessions in the opening of their own procurement markets as a part of their initial commitments to join the WTO. The principle of "most favoured nation" does not apply in the area of public procurement. The WTO framework nevertheless includes a "plurilateral" setting for government procurement, the Government Procurement Agreement (GPA), based on voluntary and negotiated accession by WTO members. The GPA sets down the rules for modern, transparent and non-discriminatory procurement procedures and the partial opening up to international trade goods and services purchased by public authorities. The GPA is, however, a plurilateral Agreement, which means that only some WTO members are Parties to it. At the moment only the EU together with other 14 major industrialised countries (including the US, Canada and Japan) are Parties to the GPA.

6 Drivers of the Initiative: Un-balanced market access commitments Gap between EU s significant commitments in GPA/FTAs and limited/lack of commitments from other key trading partners Combined with «de facto» access enjoyed by non-eu suppliers beyond legal commitments (up to some 85% of the EU's market above the GPA thresholds is open to goods and services from countries that are Parties to the GPA) Protectionist policies outside EU in procurement markets not committed internationally by key trading partners (e.g. «Buy X» policies, Stimulus plans, use of state-aid and IP rules etc) Lack of clear regulatory framework in EU

7 Comparison of Access Above threshold Public Procurement USA Japan Canada Korea Size of above Threshold PP (Billion EUR) % of "direct" access to above-threshold PP Access of EU firms to GPA Partner's PP 12% 23% 3.2% 50% Access of GPA partner's firms to EU PP (w/o c-sp. derogations) 85% 85% 85% 85% Access of GPA partner's firms to EU PP (with c-sp. derogations) 27% 70% 4.3% 77%

8 Estimated domestic markets free of trade barriers ("domestic opening" of EU and main trading partners: TRADING PARTNER EU27 Abovethreshold market DOMESTIC OPENING DOMESTIC OPENING Vis-à-vis trading partner European Union % United States % 100% Japan 96 65% 100% Canada 59 42% 100% Korea 25 71% 100% Mexico 2,1 17% 100% Israel 20 82% 100% China 83 0% 100% Russia 18 1% 100%

9 Consequences: Limited access for EU companies to third countries procurement markets: unequal level playing field MS have doubts about the access of third countries to the procurement market: Risk of divergent practices with implications for the internal market and trade policies Lack of leverage in international negotiations (GPA/FTAs)

10 The Problem Lack of Leverage While the EU has always advocated an ambitious opening of international public procurement markets many third countries are reluctant to further open their domestic procurement markets to international competition. Some Parties to the GPA have already secured their offensive interests through the existing market openings negotiated by the EU vis-à-vis these countries. For example, 80% of US and Japanese goods and services purchased by EU contracting authorities pass through existing commitments. The overall de facto openness of the EU procurement market allows GPA/FTA Parties to obtain contracts in the EU in areas where they have offensive interests and which are not legally opened via those international agreements. Similarly, emerging economies such as China, India or Brazil have few incentives to negotiate a truly ambitious mutual public procurement opening as their companies regularly win contracts in the EU.

11 Objectives of the Initiative General objective: Open procurement markets outside the EU Support the opening of procurement markets in the EU Specific objectives: Rebalance uneven market access Improve legal certainty for non- EU goods, services & companies in EU PP market Strengthen EU leverage in int l negotiations

12 Core Policy Options (I): Option 1 Baseline scenario - no action Option 2 Guidance on EU market access commitments & use of WTO/FTA dispute settlement mechanisms

13 Policy Options (II): Option 3: Legislative Action Define conditions of market access Reflect EU international commitments on market access Approach A: Closure of the EU market for procurement not committed internationally with a system of exemptions and waiver (e.g. urgency, disproportionate cost, non availability)

14 Policy Options (III): Approach B: Developing new tools at the EU level to create leverage to open markets and to permit the adoption of targeted restrictive measures for non-covered procurement: MS entities: possibility, subject to notification to Commission, to reject bids from third countries Commission: possibility to impose restrictive measures when a trading partner maintains protectionist policies/refuses to negotiate Other options?

15 Status of the initiative: On-going Impact Assessment Public consultation closed on 2 August 2011 Public hearing Resubmission to IAB Legislative proposal first quarter 2012

16 Picture of the market access situation: EU railway supply industry have a 60% market share of the world production of railway equipment As regards Japan, the famous GPA "operational safety" provision in railway sector excludes de facto all foreign suppliers from Japanese contracts. This clause, which can be used for almost all important purchases, has been applied in 98% of the Japanese railway procurement procedures.

17 New developments in the context of GPA/Bilateral fronts: Move towards the opening of railways markets in the context of the GPA The EU has undertaken market access commitments on the railways sector for the first time in the GPA context ( Switzerland, other FTA countries reflecting reciprocal market access opening already occurred in the bilateral agreement with them and Korea) Given the impossibility to obtain the lifting of the OPC in the GPA context, the EU has denied access to Japan any market commitments on intercity railways and reserved the access to the urban railways sector ( market access restrictions mirroring the OSCP in terms of goods and services) In return for market access commitments undertaken vis-à-vis Korea, Korea accepted to undertake market access commitments vis-à-vis the EU on railways : access to procurement by the Korea Railroad Corporation (so far not open to the EU suppliers) and Korea Rail network authority (procurement, supervision, management, engineering service of conventional railways facilities) Bilateral track with both US and Japan for further opening

18 Thank you very much! Any questions?