In a policy letter disclosed by the French media outlet La Lettre on the Industrial Accelerator Act (IAA), the French government called on 4 August for the European co-legislators to define “more robust requirements” as regards European content criteria in order to maximise the effect of the IAA and “increase production in the EU27” (see EUROPE 13922/9).
In this note, seen by Agence Europe, the French government consequently proposes two criteria for establishing this framework: preference for production in the EU27 for the allocation of public support, and targeted extensions to certain trusted EU partners – in the framework of public procurement – which must be conditional, among other things, on reciprocity guarantees and robust criteria serving the EU’s economic and industrial interests.
As regards public procurement, the French authorities advocate reversing the approach of the Commission’s initial text.
“This would therefore involve reversing the approach of the initial proposal, by leaving the Commission the possibility of extending eligibility to trusted partners (an 'opt in' approach) subject to conditions, rather than removing a country (the current 'opt out' approach),” France argues.
This is also the approach taken by the European Parliament’s rapporteurs, as explained to Agence Europe before the summer by one of the authors of the future parliamentary draft report, the French MEP Christophe Grudler (Renew Europe). He considers it more sensible and easier to understand to add trusted third countries that meet the criteria, rather than starting from the outset with a broad geographical scope from which countries would then be excluded.
France explains that “public support arrangements and those relating to public procurement pursue two complementary objectives, but of a different nature, hence the differentiation in geographical scope between public support arrangements, for which an 'EU 27' scope seems essential to us, as European funds should finance the development of European industry and not imports; and public procurement, for which an ‘opt in’ approach should be preferred, in order to guarantee genuine and effective reciprocity with our partners”.
Among the advantages of such a reversal in the approach of including third countries is an improvement in the Union’s capacity to obtain concrete commitments from its partners on reciprocity, especially in public procurement, France believes. “This would give the EU additional negotiating leverage, while many of its main trading partners have for several decades in some cases applied national preference policies”.
Besides the question of geographical scope, the French authorities also support three corrections to the exclusion criteria for these third countries. “The criterion for excluding tenders from third countries not covered by an international commitment on public procurement (Article 11(1)) should be based on the origin of the products, rather than solely on the nationality or ownership structure of the economic operators. In fact, the Commission proposal could open the way to circumvention strategies,” France explains, among other points.
Example: an import-export company established in the Union could submit a tender made up predominantly of products of uncovered origin, merely acting as an intermediary between a European public buyer and suppliers established in third countries excluded from the scope, without the mechanism being able to prevent this.
On foreign direct investments, France also wants the threshold triggering investment screening lowered from €100 million to €50 million “in order to ensure that screening mechanisms pertinently target operations liable to present a risk to economic security, the Union’s strategic interests or the resilience of its value chains”.
The French authorities would also like the mechanism to be extended to a larger number of strategic sectors (nuclear, wind power, electricity grid equipment, heat pumps, hydrogen and fuel cells, industrial robotics, rolling stock, shipbuilding).
The European Parliament’s three rapporteurs are expected to present their draft report on 7 September. (Original version in French by Solenn Paulic)