European Commission proposes EU preference in public procurement, excluding Chinese firms
European Commission Proposes EU Preference in Public Procurement
Poinews.com – The European Commission proposes EU preference rules that could give public authorities more scope to favour European companies and products when awarding major contracts. The legislative proposal, presented on Wednesday, covers essential services including energy, water, rail transport, ports, airports and postal operations.
Brussels is seeking stronger economic safeguards in its relationship with China as concerns grow over trade imbalances. The EU’s trade deficit with Beijing has been estimated at around €1 billion a day, adding pressure for measures that strengthen European industrial capacity and resilience.
Public procurement is a major economic tool for the bloc. European public bodies spend about €2 trillion each year on contracts, equivalent to roughly 15% of EU gross domestic product. The Commission wants public purchasing power to support European standards, quality and strategic interests rather than focusing overwhelmingly on the lowest bid.
Authorities could favour European suppliers
Under the proposal, national, regional and local authorities could exclude companies from outside Europe if their home countries do not provide comparable access to public procurement markets for European businesses. The measure could also apply to European bidders offering goods that originate in countries without reciprocal market access.
The European Commission proposes EU preference as a way for contracting authorities to consider both the origin of a company and the origin of the goods included in a tender. Buyers would therefore have greater flexibility to assess more than price when choosing among competing offers.
“Public money must serve our collective interests,” Commission Vice-President Stéphane Séjourné said on Wednesday.
Séjourné said authorities could establish a European preference and reject operators from countries where the EU considers public markets insufficiently open. That assessment could be based on the nationality of the company or on the origin of the products it supplies.
“A municipality will be very clearly able to exclude a Chinese company or a European company that offers Chinese products,” Séjourné added.
Authorities could also give European offers more points and greater visibility during tender evaluations. The potential impact would be significant for infrastructure and service contracts that shape local and national investment.
Quality would receive a larger role
A key element of the proposal is that quality would have to account for at least 30% of the evaluation of supplies in public procurement procedures. Price would still matter, but public buyers would have less reason to choose a bid solely because it is the cheapest.
This approach is designed to make room for considerations such as durability, environmental performance, social requirements and economic resilience. Suppliers may need to demonstrate not only competitive prices, but also the longer-term value, quality and origin of their goods or services.
“The new standard is the best quality-price ratio, and not just the price,” Séjourné said. “Our choices must also be able to meet social and environmental demands, but also sovereignty.”
The sectors targeted by the initiative are central to daily life and economic activity. Choices involving water networks, transport links, energy systems, airports and postal services can affect households and businesses well beyond the immediate cost of a contract.
China raises concerns over competition
China reacted quickly to the announcement. The China Chamber of Commerce to the EU said a European preference could undermine fair competition for Chinese businesses operating in the European public procurement market.
“Public procurement should not discriminate against suppliers or goods on the basis of the supplier’s nationality or the country of origin of the goods.”
The chamber argued that such rules could distort the level playing field for Chinese companies seeking public contracts in Europe. Its response underlines the wider trade sensitivity surrounding the proposal and the EU’s increasingly defensive approach to economic relations with Beijing.
Supporters of the plan are likely to see it as a means of ensuring that public spending advances EU industrial, environmental and strategic objectives. Critics may question whether restrictions based on market access or product origin could limit competition and increase costs for public authorities.
FAQ: EU Public Procurement Preference
What would the proposed EU preference change?
It would allow public authorities to give greater weight to European suppliers and products, particularly when bidders come from countries that do not offer European firms comparable access to their own public procurement markets.
Could Chinese companies be excluded from contracts?
Authorities could be permitted to exclude companies from countries where the EU finds insufficient reciprocal access to public markets. The proposal could also affect European companies offering products originating in those countries.
Would the lowest price still win public tenders?
Not necessarily. The European Commission proposes EU preference alongside a stronger quality requirement, with quality accounting for at least 30% of the evaluation of supplies in procurement procedures.
Which services are covered?
The proposal concerns important public-service areas, including energy, water, rail transport, ports, airports and postal operations.