Foreign bidders on EU public contracts could face curbs from mid year - France

By Michel Rose and Leigh Thomas

PARIS (Reuters) - Companies from non-EU countries could face curbs as soon as this summer when they bid for public contracts in the European Union unless their home country opens its markets, France's trade minister said on Wednesday.

The curbs are an example of a new more assertive approach to EU trade relations, which Trade Minister Franck Riester said had been largely inspired by France.

Many EU companies have long found themselves shut out of bidding for public procurement contracts outside Europe even though their home markets in Europe are largely open to competitors from non-EU countries.

Riester said in an interview that years of discussions on a mechanism to level the playing field could be wrapped up in the coming months so it could become operational during France's EU presidency ending in June, or shortly after that.

"Should we in Europe keep opening our public markets to all countries, when European companies only have access to barely 50% of global public procurement markets?" he told Reuters.

"Well, that's finished, now we want to put an end to that," he added.

The new legislation could allow for companies from countries not opening their public markets to EU companies to be excluded outright from public tenders within the 27-nation bloc.

The legislation would also make it possible to add a financial penalty on top of non-EU companies' bids when they try to compete for a public contract in Europe, Riester said.

The curbs would likely be the first of a series of new instruments the European Union is preparing to better defend the interests of EU companies.

Riester said work on the international procurement instrument, as it is known, was more advanced than a separate mechanism that would allow the EU to retaliate against countries that put economic pressure on the bloc's members to change their policies.

The European Commission published plans for the anti-coercion instrument in December, and France wants to reach a consensus among member states on that package too during its EU presidency.

Economic pressure from China on Lithuania for letting Taiwan set up a de facto embassy is helping to focus minds in EU capitals on the need for such a tool, Riester said.

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"We are overhauling the European trade paradigm. It is firmer and tougher," he said.

With tensions between Russia and the West high over the Ukraine crisis, Riester said that France was ready to cope with the trade consequences Paris and its allies could face if they end up putting sanctions on Moscow.