EU plans tougher line on public contract rules

BRUSSELS, Feb 3 (Reuters) The European Union wants to take a tougher line against countries outside the EU that help their small and medium-sized companies to win government contracts, trade diplomats said.

France has long pushed the EU's executive Commission to get an exemption from global trade rules that state public contracts should be open to all bidders, arguing the United States and other countries have waivers to help local companies.

Diplomats said almost all EU countries backed a watered-down version of the French proposals when national trade experts met yesterday.

The compromise says the bloc regrets that other countries which are signatories to a public procurement pact at the World Trade Organisation do not offer the same degree of access to government contracts, the diplomats said yesterday.

It also says Europe might reconsider its ''level of ambition'' if it cannot get balanced access to the procurement markets of the other countries, the diplomats said, suggesting the EU could seek waivers too.

Parts of the WTO's Government Procurement Agreement pact, whose signatories include South Korea, Japan and Canada, are being renegotiated.

The compromise proposal is due to be put to EU ambassadors and then to the bloc's foreign ministers later this month.

The Commission, which negotiates trade deals on behalf of the EU's 27 member countries, had previously expressed concern that the original French proposal was protectionist.

But the new version had the support of Commission trade officials, a spokesman said yesterday.

The French Finance Ministry estimates that small and medium-sized companies provide 75 million jobs in Europe and account for half of gross domestic product.

Reuters SBA VP0625