Brussels, 24/01/2007 (Agence Europe) - For nearly a year, France has been working among its European partners and the Commission to promote the participation of SMEs in the public procurement of the Union (EUROPE 9245 and 9292): Paris takes the view that the current renegotiation of the WTO government procurement agreement (GPA) offers a window of opportunity to bring back a level playing field, for the benefit of European SMEs, which has been lost, French Trade Minister Christine Lagarde explained to members of the INTA (International Trade) committee of the European Parliament on Tuesday.
If the multilateral agreement concluded in 1994 allows its 36 signatories, including 25 Member States of the Union, access to the public procurement markets and their partners, five countries (Canada, South Korea, the United States, Israel and Japan) have nonetheless introduced provisions into their legislation, which gives privileged access to national SMEs for their public procurement. In the view of Ms Lagarde, as the Community rules on public procurement remain subject to the GPA without exception, European SMEs find themselves in a position of unfair competition. "European SMEs are defenceless against large groups, some of which enjoy major locational advantages", she stressed (our translation), explaining that France would therefore like to take advantage of the renegotiation of the GPA in Geneva to "break down the WTO barrier which prevents the Member States from implementing a privileged access measure for SMEs, should they so wish".
The French arguments are weighty. Within the framework of the Lisbon strategy, it should be essential to guarantee better access to public procurement contracts for innovative SMEs. "SMEs represent 75 million jobs in the Union, 50% of community GNI and an important source of creativity", Ms Lagarde stressed. However, although the number of SMEs created as a proportion of the economic tissue is equal in the United States and in Europe, European companies do not achieve a critical size quickly enough, she said, laying emphasis on the fact that the export capacity of the company depends precisely on this. However, by setting a minimum percentage of direct or sub-contracted public procurement contracts to be allocated to small companies in order to promote their development, the American Small Business Act (SBA) allows national SMEs to reach this critical threshold very quickly.
France, however, has no wish to bring in similar provisions to those under the SBA. "Positive discrimination, with the establishment of quotas as is done in the United States, is not a good idea", said Ms Lagarde. It is the principle of the SBA which she defends. France, therefore, wishes the Commission to "break down the barriers of the WTO", to obtain a derogation as part of the revised GPA, to allow the Twenty-Seven to be able to bring in "preferential measures" or "privileged means of access to public procurement contracts" for European SMEs. The idea is, first and foremost, to restore "equality of treatment", in order to accelerate competition and avoid locational advantages, which allow large groups to tender. And, if necessary, to create a discrimination mechanism in favour of the smallest in order to bring back equality, the French minister explained. "More virtuous than virtue itself, we are maintaining a position without offering an exception to European SMEs. With the accession of Bulgarian and Romanian, we are offering an even larger territory, with no exceptions or reservations for our partners. Let us not give up on a vital liberty for our SMEs", Ms Lagarde concluded.
The French Trade Minister enjoyed the unstinting support of several MEPs. French members Jean-Pierre Audy (EPP-ED) and Jean-Louis Bourlanges (ALDE) were the most enthusiastic of all. "We are not an academy of moral science, we are defending our future. This is not being less virtuous than defending our position with increased ardour", the latter explained. Calling on the Union to "mirror the American position precisely", Mr Bourlanges stated that he was in favour of "offering, are under equal conditions, the choice for the allocation of a public contract to the smallest". British Conservative member Syed Kamall (EPP-ED), for his part, stressed that in the United Kingdom, "SMEs do not ask for preferential treatment, but equal treatment". In answer to British MEP Robert Sturdy (EPP-ED) and Greek MEP Georgios Papastamkos (EPP-ED), who instead stressed the need for the simplification of red tape and an improved regulatory framework in favour of SMEs, Ms Lagarde stuck to her guns on the importance of the French viewpoint. "Less bureaucracy, I agree with you. But when I went to ask the bosses of Yahoo and Google how they managed to grow so quickly, they explained to me that there were two determining factors: privileged access to public contracts via the SBA, and enjoying facilitated access to funding and venture capital", she replied.
The French minister has until the month of April to convince Commissioner Charlie McCreevy (Internal Market), who has shown reluctance to defend the French proposals, to change his mind. She said that Mr McCreevy believes that it is up to the Americans, Canadians, Israelis, Japanese and South Korean is to withdraw their exception measures as part of their revised offers to the WTO. By request of the INTA committee, Mr McCreevy is to come to debate the issue at the plenary session to be held in Brussels on 1 February. (eh)