EU fights back: Bloc plans powers to stand firm against Joe Biden’s ‘America First’ policy
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To boost their pandemic-stricken economies, the EU and US are pushing the importance of supporting home-grown industries and creating jobs locally. The European Commission is working on new legal powers to bolster the bloc’s industrial firms after decades of neglect. Eurocrats are planning to lock out companies where European businesses are blocked from bidding on large-scale public contracts.
Initially, Brussels had hoped its new law would counter protectionist markets in Asia, such as Japan, South Korea and China.
But now eurocrats believe it could be used to fight back against President Biden’s “Buy American” policy in the coming years.
The US President last week told Congress that core technologies should be manufactured domestically to boost the country’s economy.
He said the move was “guided by one principle: ‘Buy American.’”
“American tax dollars are going to be used to buy American products made in America that create American jobs,” he added.
“The way it should be.”
As a result, Brussels is planning on introducing “reciprocity” into big public contracts.
With opposition against the strategy now falling away in Berlin and the Nordic states, EU officials are confident negotiations can begin on a draft legal text.
They hope the document will be ready in time for a meeting of EU trade ministers later this month.
Wrangling over the final agreement with the European Parliament is expected to start before the end of June.
German MEP Daniel Caspary, of the European People’s Party, told the Politico website: “It’s a good sign that the Council is finally approaching a conclusion.”
French MEP Marie-Pierre Vedrenne, of the liberal Renew group, added: “‘Buy American’ in the United States has raised the awareness of European states, and also of EU companies, that we need to strengthen the tools of our strategic autonomy.
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“We have to make our partners understand that we are open and we want to remain open, but it has to be reciprocal and fair.
“We need to avoid being squeezed between China and the US.”
EU countries already have the powers to exclude Chinese companies from bidding on public contracts.
This is because Beijing has not signed up to the World Trade Organisation’s Government Procurement Agreement.
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Inès Van Lierde, head of the AEGIS Europe industry association, said: “Ultimately it comes down to whether one can access the third market or not.
“It’s true that under Buy American policies, one has to be established there to a certain extent.
“But a lot of EU companies are already established in the US and are able to access the market in a transparent way, while in other countries like China there is wide discrimination in procurement to favour domestic manufacturers.”
Washington has joined the WTO’s procurement pact but EU trade boss Valdis Dombrovskis believes President Biden’s America First approach contravenes the agreement.
Eurocrats want their new weapon to give Brussels more leverage to force the White House to keep its markets open.
If Brussels believes that a market is closed to EU bids, it would start work with the country’s authorities in an effort to reopen market.
Should the talks fail, the European Commission could completely exclude companies from that state from bidding on EU contacts.
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