Background on the Dispute
The European Union (EU) has decided to bar Chinese manufacturers from bidding on public contracts worth over 5 million euros in the medical devices sector starting July. This move comes as a response to the discrimination faced by European companies in China’s medical device industry.
EU’s Retaliatory Measures
The European Commission, acting on behalf of the 27 member states in trade policy, has implemented the European Public Procurement International Instrument (IPI). This instrument sets criteria for proportionality to prevent a complete ban on any third country. The EU aims to create a dissuasive effect for China to stop its discriminatory practices.
- Proportionality: The retaliatory measures are deemed proportional to the barriers imposed by China on European companies.
- Dissuasive Effect: The EU seeks to encourage China to cease discriminatory practices.
- Exclusions: There will be exceptions when no alternative suppliers are available to ensure the supply of medical devices needed by the EU’s healthcare system.
The IPI outlines two possible responses: either adjusting the scoring of offers from Chinese operators or excluding them from bids when contracts exceed 5 million euros. The latter option has been chosen by the EU.
China’s Response
In reaction to the EU’s decision, China has expressed dissatisfaction and opposition. A Chinese Ministry of Commerce spokesperson stated that the EU ignored China’s goodwill and sincerity, using unilateral tools to build new protective barriers. This action not only harmed Chinese companies’ interests but also undermined fair competition.
China has warned that it will take measures to firmly safeguard the legitimate rights and interests of Chinese companies. The country is prepared to adopt actions to protect its businesses from further discrimination.
Historical Context and Relevance
Maros Sefcovic, the European Commission’s Trade Commissioner, has emphasized that the EU desires open, fair, and mutually beneficial trade relations with China. However, he also stressed that market openness, including public procurement, must be reciprocal.
Investigations under the IPI revealed that China imposes significant and recurring legal and administrative restrictions on European entities in the medical devices sector. An alarming 87% of public tenders in this sector are subject to exclusionary and discriminatory measures against EU companies.
Key Questions and Answers
- What is the EU’s reason for banning Chinese medical device manufacturers from public tenders? The EU is responding to China’s discriminatory practices against European companies in the medical device industry.
- What measures has the EU implemented through the European Public Procurement International Instrument (IPI)? The IPI sets criteria for proportionality to prevent a complete ban on any third country and aims to create a dissuasive effect for China to stop its discriminatory practices.
- How has China reacted to the EU’s decision? China has expressed dissatisfaction and opposition, warning that it will take measures to protect its companies’ interests.
- What percentage of public tenders in the medical devices sector are subject to exclusionary and discriminatory measures against EU companies, according to investigations? 87% of public tenders in this sector are subject to such measures, as revealed by investigations under the IPI.
