The EU International Procurement Instrument - in the Age of Economic Nationalism Rome, 4 July 2017 Dr. Aris GEORGOPOULOS University of Nottingham, School of Law, Public Procurement Research Group

Outline Introduction The EU International Procurement Instrument (IPI)2012 The EU IPI 2016 Perception v Reality Reversing gear? Food for thought

Introduction The Claim: - The EU is more open in PP than other countries (e.g. EUR 352 Billion of EU PP market open to bidders for other GPA countries – 178 billion the US PP Market open to GPA partners) The situation ‘is’ even more problematic with third countries who are not GPA signatories (e.g. BRICS) Some third country pp markets are de jure or de facto closed to EU contractors

Introduction The Solution: Need to create a level playing field for EU contractors The Method: EU International Procurement Instrument Regulating the access of third country goods and services to the EU PP market

EU IPI 2012 The IPI Proposal of 2012 had two parts: “Covered” Procurement i.e. referring to existing pp market access international commitments of the EU “Non-covered” procurement, where the EU has no international commitments e.g. below GPA threshold procurement

EU IPI 2012 For “Non-covered” procurement there were two proposed mechanisms/procedures: A “decentralised” one where a contracting authority would be allowed to exclude a third country tender after seeking the Commission’s approval A “centralised” one where the Commission would investigate the situation and decide to exclude the third country tender or impose a penalty. The IPI was meant to be part of the 2014 PP Package but was not included eventually.

EU IPI 2016 The Juncker Commission revived the process and submitted a new amended proposal in 2016 Key Features: No autonomous “Decentralised” mechanism Possibility for the imposition of “price adjustment measures” financial penalty - but no exclusion of third country tenders Commission findings about market barriers in other jurisdictions should be made public (transparency of the investigation)

EU IPI 2016 Key Features (cont.): - Presumption that third country tenders will be subject to “price adjustment measure” unless they (the tenderers) can show that than less than 50% of the value of the tender consist of “non covered” good or service originating a third country. MSs authorities will decide which procuring entities will be implementing such price adjustment measures. European SMEs and bidders and products from developing countries(GPS+) will not be subject to such measures

EU IPI 2016 Key Features (cont.): Possibility to target territories at national and regional level Aim: - To incentivise third countries to open their pp markets on a reciprocal basis

Perception v Reality

Perception v Reality Are EU PP markets more open than third country pp markets?? Public procurement markets: import penetration (WIOD data) Source: World Output-Input Database, November 2013. Messerlin Miroudot calculations.

And then later in 2016… #AmericaFirst #covfefe

Reversing gear? US Presidential elections: “America First…” In the US pre-election rhetoric has been matched with post election actions: US Withdrawal from the Transpacific Trade Partnership (TPP) “Buy America, Hire America” Commitment; American Steel for pipelines (Presidential order)

Reversing gear? Two main risks: To actually start reversing gear (particularly if the signal is given by the economies that championed the post Bretton Woods global free market system) To conflate the plausible concerns about the limitations of the current regulatory framework(s) vis-à-vis policies of social sustainability with the protectionist agenda

Food for Thought Will the EU IPI facilitate or impede trade?

Thank You Dr Aris GEORGOPOULOS School of Law University of Nottingham Public Procurement Research Group Nottingham NG7 2RD UK Email: aris.georgopoulos@nottingham.ac.uk