EU vows to fight for raw materials, public tenders

Published 11/09/2010, 01:28 PM
Updated 11/09/2010, 01:32 PM

* EU vows will fight for raw materials, energy supplies

* EU may deny public tenders to third countries

* EU importers warn EU threats may yield few results

Bu Juliane von Reppert-Bismarck

BRUSSELS, Nov 9 (Reuters) - The European Union said on Tuesday it aimed to punish countries that hoard raw materials and energy resources or restrict access to bidding for public works contracts as part of its new long-term trade strategy.

But the policy statement left vague what form the restrictions might take, which drew criticism from industry and EU diplomats.

Unveiling the strategy, the EU's executive Commission promised it would be assertive about securing access to foreign markets and scarce natural resources, as part of a plan to help the EU battle the economic crisis.

The policy announcement was a shot across the bows of emerging economic powers who have so far shrugged off EU demands, but was also aimed at reassuring Europeans worried about losing production and jobs to increased globalisation.

It also addresses growing fears about global supply shortages of raw materials from alloys to timber and minerals -- an issue that has emerged since the EU launched its last long-term trade strategy in 2006.

"I am proposing a greater focus on enforcement, using all appropriate means to stand up for our rights," said European trade commissioner Karel De Gucht.

"Europe rejects protectionism," he told reporters.

Legislation due to be proposed by mid-2011 could deny EU public works contracts to countries that don't allow European firms to bid in their public tenders.

Canada, Brazil, Argentina, the United States and China are among the EU's major trading partners that keep such lucrative contracts -- from heavy construction to major infrastructure projects -- reserved for local contractors.

"We have a broad understanding ... whereby we can react to third countries when they don't effectively open their public procurement markets to us," De Gucht said.

"I don't believe that bluntly closing our procurement markets would be a good idea but it should be sectoral, specific and aimed at practices we cannot accept from third countries."

De Gucht said Europe would clamp down on countries that restrict exports of raw materials and rare earths, commodities that are critical to EU output and growth.

"We have to insist with the Chinese that they keep the markets open ... and on the other hand we should also reopen our deposits," he said.

WHIFF OF COLONIALISM

Industry experts and diplomats were unimpressed.

"How exactly are rules on public procurement supposed to work? You can't just go beyond your borders and tell other countries what to do," said Stefan Wengler, director at the Foreign Trade Association, which represents European retailers and importers.

"It's not really helpful to be wagging one's finger like that, telling other countries the right way to do things. It has a whiff of colonialism," Wengler said.

EU diplomats who declined to be named said Tuesday's legal threats could alienate major trading powers.

Members of the WTO should negotiate new rules on export restrictions to address raw materials shortages, Andre Sapir, a senior fellow at Brussels think tank Bruegel, told Reuters.

"One needs to come to an agreement within the framework of the WTO about improving the existing rules on export restrictions in general, including for raw material." (Reporting by Juliane von Reppert-Bismarck, Editing by Sonya Hepinstall)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2025 - Fusion Media Limited. All Rights Reserved.