Agreement between European Parliament and EU Council on International Procurement Instrument

Negotiators from the European Parliament and the EU Council reached an agreement on the International Procurement Instrument (IPI) on Monday 14 March, after ten years of negotiations on the text. “The French Presidency of the Council of the European Union had made this a priority and we worked tirelessly with the European Parliament and the Commission to reach a balanced and effective compromise”, said the French Trade Minister, Franck Riester, who travelled to Brussels for this last meeting of interinstitutional negotiations (‘trilogue’).

In recent weeks, a number of issues had not been agreed upon between the European Parliament and the EU Council (see EUROPE B12909A12). These differences may have been overridden at this last meeting. As regards the amounts of public contracts above which the instrument applies (‘thresholds’), the EU Council’s approach has been adopted: the IPI will only apply to public contracts with a minimum value of €15 million for works and concessions and €5 million for products and services.

Negotiators also agreed to exempt the least developed countries from the instrument, but not those benefiting from the Generalised Scheme of Preferences (GSP), as the Parliament had wanted. “This allows the instrument to be more effective and does not prevent us from assessing what it means for the GSP beneficiary countries”, Franck Riester told EUROPE. In fact, the Commission is committed to taking into account the situation of GSP beneficiary countries when it evaluates the IPI in a few years’ time, according to an EU source.

In addition, the Parliament obtained the removal of a possible exception to the instrument. The EU Council had proposed that the contracting authority of a public contract could bypass the IPI when the bids it has on the table are disproportionately priced and, therefore, that a bid from a country that discriminates against the EU in its public procurement should, exceptionally, not be excluded. This possibility has been withdrawn. The text’s rapporteur since 2012, Daniel Caspary (EPP, Germany), welcomed the agreement reached and the fact that Parliament had secured the removal of the ‘disproportionate prices’ exception clause.

The Chair of the European Parliament’s Committee on International Trade (INTA), Bernd Lange, who participated in the trilogues, also welcomed the agreement: “This is a success for the European Parliament, but also for the EU as a whole: we have created an instrument with which we will bring third countries to the negotiating table and open up their procurement markets”. The agreement will be submitted to the EU ambassadors on 16 March, before being formally referred to the European Parliament.