Regulaton & Policy
TTIP: EU seeks widespread access in US procurement markets

As part of the Transatlantic Trade and Investment Partnership (TTIP), the European Union has made the opening of US procurement programmes at all levels of government a priority goal. A report by the Institute for Agriculture and Trade Policy (IATP), which cites leaked text from ‘secret’ ongoing negotiations, states that the EU will insist on commitments for procurement in all goods and in all sectors.

With a potential market of around $463 billion, it’s no wonder EU officials are pushing for European firms to be granted widespread access to state and local procurement programmes. However, there are questions being raised in the US as to whether opening local procurement markets to foreign bidders will really benefit them. In the EU, the same set of procurement rules apply to all levels of government, however, in the US local authorities are able to set their own criteria for contracts to favour local economies and job creation. Specifications such as these are part of “Buy American” programmes, but in the words of French trade minister Nicole Briqc, the EU aims to replace the initiative with “Buy Transatlantic.”

There are concerns on the other side of the Atlantic that TTIP could jeopardise farm-to-institution programmes, which have always been protected in past trade deals. New leaked reports suggest that the EU will not request commitments to school meal programmes, but do not rule out the possibility of public hospital, university cafeteria or similar food programmes.

A deal opening procurement markets between the EU and US would most likely require National Treatment; a set of established rules that prohibit discrimination against foreign suppliers of goods or service, as well as transparency in the bidding process and set thresholds on the size of contracts.

These rules can be decided in bilateral free trade agreements or the Government Procurement Agreement (GPA) set by the WTO. All EU member states and 37 US states are a part of the GPA, however EU is seeking commitments on procurement from the remaining 13 US states not already covered by GPA. The EU is also seeking commitment from certain large cities and all state government executive agencies, including counties with populations over 700,000 (though a more recent leaked text attempts to revise this to 500,000), state capitals and other cities with populations over 250,00. They are also trying to arrange agreements for public universities with enrolment over 10,000 and public hospitals with over 500 stay-in patients.

Clearly the EU is attempting massively to expand its access to local authority contracts, possibly even unconditional access as was agreed in the recent CETA trade deal with Canada. While local foods may not be included in procurement commitments, the EU intends to push for state-level procurement commitments from other sectors including energy, transport and construction. It’s unclear who decides whether a state, county or city must abide by TTIP commitments.

Like CETA, it’s possible that TTIP could also open up state and local procurement using federal grants.

The IATP report states that the deal the EU is pushing for could be burdensome for both parties. As part of a potential agreement, the US is pressuring the EU to adhere to similar US standards in food safety, energy and other sectors, meaning the EU would have to give up a lot as part of the agreement. Meanwhile the EU’s widespread access to US procurement markets, IATP claims, would undermine local decision-making and efforts to promote local economies.

IATP makes a number of recommendations for state and local legislators and civil society groups. This includes making ongoing negotiations more transparent, so as to clarify which sectors and levels of government are contemplating procurement commitments. IATP also says that any decisions which restrict buy local preferences in procurement programmes be informed by a public analysis of the potential impacts on local economies.