In the coming weeks, Brussels may take a countermeasure to press EU member states to "Buy European", in retaliation for Washington's "Buy American" drive, Politico reports.
According to the US news outlet, the so-called International Procurement Initiative is touted as "a new legal tool" that stipulates sticking to the concept of "reciprocity" in major public contracts to shore up the EU's industrial giants.
The new law aims "to effectively shut out companies from countries where European businesses are barred from tenders, leveraging the EU's giant €2 trillion [$2.4 trillion] procurement market in everything from highways and trains to public IT systems", Politico underlined.
President Biden to Sign Executive Order Strengthening Buy American Provisions, Ensuring Future of America is Made in America by All of America’s Workers | The White House https://t.co/I1MkX1VPgz— candacemariecooper (@candies2639) January 25, 2021
The news outlet cited unnamed sources as saying that the International Procurement Initiative is expected to provide Brussels with more authority "to force Washington to keep its market open".
The law will allow the European Commission to investigate whether certain procurement markets in countries outside the EU are closed to the bloc's bids. If Brussels concludes that those markets are closed, it will start consultations to make local authorities open them, according to the sources.
They added "should that fail, the Commission would then decide whether to propose a 'score adjustment' — essentially making bids from the penalised country more costly through a points-based regime — or to completely exclude bids from companies based in that country".
EU Trade Boss Vows to Assess Biden's 'Buy American' Push for Compliance With WTO Rules
The comments come after European Commissioner for Trade Valdis Dombrovskis told Politico in February that the EU is concerned about the Biden administration's push to implement its "Buy American" plan.
Dombrovskis pledged that the EU would keep a watchful eye on whether preferential treatment for US contractors working on public projects was in line with Washington's international obligations. At the same time, the commissioner kept mum on whether the Biden administration is breaking World Trade Organisation (WTO) rules with the "Buy American" mantra.
"As regards 'Buy American', this is something which will require some more in-depth assessment, what are the exact implications, what are the implications for EU companies, what does it mean for US commitments in the WTO framework", Dombrovskis noted.
Last summer, then-White House trade adviser Peter Navarro accused then-presumptive Democratic presidential candidate Biden of trying to copy part of former President Donald Trump's 2016 economic plan.
"He's just blatantly ripping off the president's 'Buy American' agenda […]", Navarro told Fox News at the time, describing Biden as a "poll-driven plagiarist".