1 n European Commission PPN Italian Presidency Rom - 15 october 2009 Opening public procurement markets: Contribution of trade policies to the recovery in the field of public procurement Marc Poulain Procurement unit DG TRADE

2 n European Commission Outline n n The significance of public procurement in world economy n n How the opening of PP markets can contribute to the recovery n n EC strategy towards the opening of public procurement markets

3 n European Commission the significance of public procurement in world economy Public procurement stand for % of GDP in developed countries and may reach % in developing countries Public procurement stand for % of GDP in developed countries and may reach % in developing countries n PP-related expenditures are reported to have numerous leverage effects :  keynesian multiplier  permissive factor in developing/maintaining a industrial and technological basis  Taking into account of social and environmental considerations

4 n European Commission The temptation of protectionism in public procurement n n Public procurement are therefore a key element in various stimulus packages ( at least 258 billions US $ on 586 billions US $ in Chinese stimulus package for 2009) n n Several developed and developing countries are likely to limit the benefices of the stimulus package to domestic suppliers ( i.e buy American and Buy Chinese policies)

5 n European Commission How the opening of public procurement markets can contribute to the recovery ? n n Macro-economic impact of the opening of public procurement markets on potential growth n n Opportunities and assets for European industries in the context of stimulus package

6 n European Commission Macro-economic impact of the opening of PP on potential growth n n Economical assessments demonstrate an additional growth even for developing countries ( case of India : a potential gain of 0,5 to 1 % GDP) n n Combination of internal and external effects

7 n European Commission Combination of internal and external effects n n Internal effects : best value for money/ enhanced expenditures ( lower prices of domestic and imported goods/services, better quality for the same price, better allocation of public expenditures) n n External effects : boosting exports/ gaining adding value in the supply chain

8 n European Commission Opportunities and assets for European Industry n n Worldwide stimulus packages comprise sizeable opportunities in numerous sectors n n European industry prove competitive in most of those sectors

9 n European Commission Sectors benefiting from worldwide stimulus packages n n Infrastructures ( transportation, energy) n n Health equipments n n Environment n n Innovation

10 n European Commission Competitiveness of EC industry in impacted sectors n n Infrastructures : expertise in PPP solutions, railways equipment, power production and distribution n n Medical devices n n Environment technologies n n Utilities management n n Innovative technologies

11 n European Commission EC Strategy towards the opening of public procurement markets EC Strategy towards the opening of public procurement markets n n Using existing tools such as plurilateral and bilateral framework n n Advocating the opening of markets at the international level and the upgrade of multilateralism n n Concluding complementary/additional agreements in the framework of bilateral FTAs n n Working on market access barriers

12 n European Commission Using existing tools Using existing tools n n WTO and GPA provide for a forum in which protectionist trends by current members or acceding countries is being put under scrutiny ( general monitoring process, specific questions) by EC n n Existing plurilateral and bilateral commitments to refrain parties to elaborate wide-ranging protectionist policies

13 n European Commission Advocating the opening of PP market on the international level and the upgrade of multilateralism Advocating the opening of PP market on the international level and the upgrade of multilateralism n Supporting G20 efforts to promote new disciplines in trade, including public procurement n n Steady commitment to enhance WTO framework   Under GPA : deep involvement in the text revision, in the extension of coverage, and in promoting new accessions such as Taiwan, Jordan and PR China   Under GATS : ambitious proposal to extend multilateral commitments to government procurement in the field of services.

14 n European Commission Concluding complementary /additional agreements in bilateral FTAs Concluding complementary /additional agreements in bilateral FTAs n n Integrating WTO commitments in a wider strategy in favor of opening government procurement markets : Government procurement chapters in bilateral FTAs n n to complement WTO commitments ( to cover additional sectors, entities and contracts) n n or to achieve reciprocal opening with non GPA signatories ( transparency and market access in EC “new-generation” FTAs)

15 n European Commission Working on market access barriers Working on market access barriers n n Identifying in close cooperation with Member States market access barriers ( discriminatory policies in third countries but also administrative barriers) through various tools : barriers lists, hymn sheets, studies, questionnaires n n Conducting regulatory dialogues and workshop on business opportunities to promote EC regulatory models, stress market barriers and highlight mutual benefits of reciprocal commitments n n Advocating European industry’s interests in the context of stimulus packages

16 n European Commission the way forward the way forward n n Tracking protectionism and using appropriate tools to tackle it n n Highlighting promising business opportunities and favour binding disciplines