The Debate Over European Preference in Public Procurement
French liberal Member of the European Parliament (MEP), Christophe Grudler, has expressed his concerns regarding the European Commission’s proposed “European preference” policy. This policy, part of the so-called “Industrial Accelerator Act,” aims to prioritize public procurement in strategic sectors such as clean technology, automotive, and energy-intensive industries like aluminum and steel. According to Grudler, this preference should be restricted to a select group of non-EU countries rather than being broadly applied.
The debate surrounding the “Made in Europe” provisions has sparked intense political discussions among EU member states. Supporters, including Germany and Nordic countries, advocate for a broader definition that includes “like-minded” partners. On the other hand, France is pushing for a narrower approach, emphasizing the need for more focused and strategic alliances.
In its proposal unveiled on 4 March, the European Commission leaned towards the broader interpretation. However, Grudler criticized this approach, calling it “very poor” and reflective of an outdated trade policy perspective. He highlighted the example of the United States’ “Buy American Act,” noting that the U.S. did not hesitate to prioritize domestic interests without concern for transatlantic relations. “At some point, we need to stop being naive,” he said.
Grudler is set to play a key role as one of the lead negotiators on the proposed new rules within the European Parliament as discussions commence soon. The European preference is intended to counter foreign competition, particularly from the U.S. and China. The Commission’s proposal suggests excluding non-EU countries based on their openness to EU participation in their procurement markets and existing trade agreements.
A Geographical Approach to European Preference
Grudler argues that geography should be the guiding principle when determining which countries qualify for the “Made in Europe” preference. He suggests limiting the scope to countries closest to the EU, starting with the European Economic Area (EEA), which includes Iceland, Liechtenstein, and Norway.
Switzerland could also be considered a strong candidate, according to Grudler. “Switzerland has had a public procurement agreement since 1989. It is a bilateral agreement stating that all European companies have access to the Swiss public procurement market, and that all Swiss companies have access to the European public procurement market. It is therefore a rather good candidate.”
The UK may also be included to some extent, but Grudler emphasized that “conditions will need to be examined” following Brexit. He added, “There is also a point where Europe has to make sure it comes out financially ahead.”
Grudler hopes the law will send a strong signal to investors supporting key EU industries, particularly those in energy-intensive sectors and clean technologies. “It is another step in Europe’s resilience against unfair competition from other continents.”
China’s Opposition and Strategic Implications
China has voiced strong opposition to the Commission’s proposal, viewing it as a restriction on its access to EU procurement and investment. Grudler stated, “This legislation is Europe standing firm for its strategic industries.”
He pointed out that China has overcapacity in sectors such as cars and steel. “They are relying on the naivety of Europeans to do business, to generate double-digit growth again, and then to invest in research and development and get ahead on everything, all the while cheating through direct subsidies to destroy our industries.”
The proposed European preference is seen as a critical move to ensure that the EU can protect its strategic industries from unfair competition while fostering a more resilient economic landscape. As negotiations continue, the outcome of this policy will have significant implications for the future of European industry and international trade relations.
