International Procurement Instrument: Council gives green light to new rules promoting reciprocity

The Council today adopted a regulation to promote reciprocity in access to international public procurement markets.

This legislative act will enable us to introduce a new trade policy tool to ensure access and a level playing field for EU companies on third countries’ public procurement markets, thereby increasing business opportunities for these companies. Public procurement currently accounts for 15 to 20% of global GDP.

The EU’s public procurement markets are among the largest worldwide in terms of value and are broadly open to competition. But European companies do not always have equal access to procurement markets in non-EU countries, where they are often subject to discriminatory restrictive practices. Fewer than half of the world’s public procurement markets are currently open to European companies.

The public procurement instrument will help to promote greater reciprocity in access to public procurement markets. It will give the Commission investigative powers and allow it to adopt measures in the interest of the Union. If the Commission finds that European companies face serious and recurring restrictions on access to public procurement in third countries and if, following consultation with the third country concerned, those barriers persist, it may impose measures limiting the access of that third country’s companies to European public procurement and concession markets in response. Such limitations on access may be imposed either by applying a penalty to the scoring of tenders submitted by economic operators from that country, or by excluding such tenders entirely from award procedures.

In any event, to avoid such measures being applied, all third countries need to do is put an end to their restrictive practices. Existing commitments undertaken by the Union, including under the WTO Agreement on Government Procurement and bilateral trade agreements, are not affected by this instrument.

The IPI measures only apply to economic operators, goods and services from third countries which do not have an international public procurement agreement with the EU or whose agreement does not include commitments to open up markets for these goods or services, and they do not apply to Least Developed Countries benefiting from the Everything But Arms initiative.

Background and next steps

On 29 January 2016, the Commission published an amended proposal for a Regulation of the European Parliament and of the Council on the access of third-country goods and services to the Union’s internal market in public procurement and procedures supporting negotiations on access of Union goods and services to the public procurement markets of third countries. An earlier proposal adopted by the Commission on 21 March 2012 did not receive the support of the necessary qualified majority in the Council.

The Council approved its negotiating mandate on 2 June 2021 and reached a political compromise with the European Parliament on 14 March 2022 at the fifth informal trilogue.

Now that the Regulation has been adopted by the European Parliament and the Council at first reading, it will be signed and published in the Official Journal of the European Union, before entering into force on the 60th day following that of its publication in the Official Journal.