By Foo Yun Chee
BRUSSELS (Reuters) - EU countries and lawmakers are expected to agree on rules next week which would force Europe-based companies to prioritise production of key products to prevent a supply chain crisis, a key lawmaker in charge of the legislation said on Wednesday.
The European Commission proposed the Single Market Emergency Instrument last year in the wake of bottlenecks caused by the COVID-19 pandemic and Russia's Ukraine invasion.
The draft legislation, which echoes similar measures in the United States and Japan, is now being thrashed out between EU countries and EU lawmakers before it can become law.
"I am optimistic we can conclude an agreement next week," lawmaker Andreas Schwab told Reuters in an interview, ahead of the fourth round of negotiations with EU countries set to take place on Feb. 1.
Businesses have voiced concerns that requiring them to prioritise the production of crisis-relevant goods may force them to breach commercial agreements and expose corporate secrets. EU countries had last year scrapped the provision from their negotiating position.
EU governments will likely agree to restore the clause to the draft but in a softer form, Schwab said, adding the final shape would depend on negotiations next Thursday.
He said it remains to be seen if the legislation will include the Commission's proposed requirement that EU countries build up strategic reserves following opposition from governments.
Mandatory information requests obliging companies to share information on sensitive products and supply chains with an advisory group will be part of the draft, Schwab said.