Conundrum for Europe - Fair Versus Free Trade

Europe has opened a can of worms by trying to reconcile free trade with fair trade ( say the Americans).

Under pressure from the French president, Nicolas Sarkozy, the European Commission adopted proposals March 21 that could shut foreign companies out of the bidding for public contracts in the European Union unless their home countries provided similar access to European companies.

The commission, which has historically promoted free trade and opposed protectionism, insists that the measure is intended to pry open lucrative government contracts in countries like Japan, the United States and China, and not to close E.U. markets. 

Public procurement worldwide, including the building of highways and railroads, the supplying of software and the running of data networks, amounts to an estimated €1 trillion, or $1.33 trillion, a year. The European market is far more open than those of competitors, the commission says.

Japan allows overseas companies to bid on fewer than 3 percent of public contracts, and the United States is only slightly more open. E.U. officials are irked by more “Buy American” provisions that have been creeping into recent U.S. legislation.

Note EU-Digest: this could be a good proposal and beneficial to local EU industries. We all can remember when the US Government changed an already approved multi-billion order for an Airbus Industries tanker to be used by the US Air Force in favor of Boeing.

For more: Conundrum for Europe - Fair Versus Free Trade - NYTimes.com