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EU to Propose Power to Ban Firms From Procurement Pacts

March 20 (Bloomberg) -- The European Commission will present proposals tomorrow that would empower the region’s authorities to ban companies from outside the EU from bidding for public procurement contracts in Europe.

The powers, part of plans to boost the 27-nation bloc’s arsenal against trade discrimination, could be used if other countries don’t grant equivalent market access to European businesses, Olivier Bailly, a spokesman for the regulator, said today in Brussels.

The proposals, to be presented in Brussels by Financial Services Commissioner Michel Barnier and Trade Commissioner Karel De Gucht, come as the EU clashes with China over possible subsidies for Chinese steel exports. The government in Beijing said last month that China’s businesses are “strongly dissatisfied” with an EU announcement that it may impose tariffs.

Wu Hailong, China’s ambassador to the EU, said China’s procurement process is open and transparent. In a speech today in Brussels, Wu said Chinese purchasers may choose domestically produced products because of pricing or because they are more comfortable with local offerings.

“It is reasonable that they go for lower prices,” Wu said.

EU officials plan to propose that the commission have the power to ban companies from winning procurement contracts in the EU if they are based in countries that “repeatedly discriminate” against European firms, Chantal Hughes, spokeswoman for Barnier, said last month.

The measure will be part of a broader proposal that will also clarify what access foreign companies get to EU public procurement markets through free-trade agreements and other accords, according to Hughes. The aim of the initiative is to “re-establish a fair competition on the European market,” she said.

To contact the reporter on this story: Jim Brunsden in Brussels at jbrunsden@bloomberg.net

To contact the editor responsible for this story: Anthony Aarons at aaarons@bloomberg.net

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