(Sept 9): The European Union is pushing governments to direct more of their €2.6 trillion (RM12.28 trillion) in public contracts toward local suppliers — and away from China.

The European Commission, the EU’s executive arm, approved a legislative proposal on Wednesday that would prefer European suppliers when governments hand out contracts, including for crucial public services like energy, water, railway, ports, airports and postal services. Governments could also reject a bid if the offer sources more than half its supplies from outside the EU.

“Public money needs to serve our collective aims,” EU industry chief Stephane Sejourne told reporters on Wednesday. “It doesn’t matter how good our legislation is if public money is not being spent on European objectives.”

The proposal, dubbed the Public Procurement Act, adds momentum to the EU’s drive to cut economic reliance on China and the US. The bloc’s leaders say the continent must be able to function on its own if needed as a fracturing world order casts doubts on once-reliable supply lines.

“A municipality, for instance, would be able to exclude either Chinese companies or a European company selling Chinese products,” Sejourne said, “and would be able to award more points to European bids.”

Bloomberg previously reported on the proposal, which will now go to EU capitals and the European Parliament for consideration.

The new guidelines would revamp nearly 1,000 pages of rules — which Sejourne showed off during a Wednesday press conference — with the goal of simplifying public contract criteria as the EU updates its priorities.

The change, Sejourne said, is "a big revision, a vast revision”.

In addition to the “Made in Europe” preference, the new rules would place greater emphasis on sustainability and security. The legislation would also create a single platform to view all EU public procurement offers.

The new European prioritisation would also extend to medicines and climate-friendly products like electric vehicles and solar panels. Next-generation technologies like cloud computing and artificial intelligence are another targeted area.

All are industries where the EU wants to establish greater autonomy from the US and China.

The EU has prioritised its concerns about China this year, reopening talks with Beijing over a widening trade gap that has reached nearly €360 billion for the bloc. Numerous European sectors are under severe pressure from subsidised Chinese competitors.

Another category set to receive priority under the new rules are foreign suppliers that have agreed to certain World Trade Organization procurement rules, which include the US and UK. It would similarly privilege countries that agreed to open their own markets to the EU for public contracts via trade deals.

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