# CE2004078EN.01060501.xml

| 27.3.2004 | EN | Official Journal of the European Union | CE 78/605 |
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27.3.2004

EN

Official Journal of the European Union

CE 78/605

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(2004/C 78 E/0639)

WRITTEN QUESTION E-3601/03

by Elly Plooij-van Gorsel (ELDR) to the Commission

(5 December 2003)

Subject:   Buy American Act

Subject:

The Buy American Act is a piece of legislation which relates to products purchased by US government bodies in connection with projects which they finance. The purpose of the Act is to support American businesses and employees by preferentially purchasing their products.

During tender procedures, for example, American businesses are given information about bids by foreign — e.g. European — businesses. The American businesses are then given the opportunity to submit a lower bid.

| 1. | Is the Commission aware of the role played by the US administration and government bodies in tender procedures on the basis of the Buy American Act? |
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1.

Is the Commission aware of the role played by the US administration and government bodies in tender procedures on the basis of the Buy American Act?

| 2. | Is the Commission aware of the disadvantages which this Act entails for many European businesses, for example Dutch biotechnology companies? |
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2.

Is the Commission aware of the disadvantages which this Act entails for many European businesses, for example Dutch biotechnology companies?

| 3. | Is this Act protectionist and does it contravene WTO provisions? |
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3.

Is this Act protectionist and does it contravene WTO provisions?

Answer given by Mr Lamy on behalf of the Commission

(29 January 2004)

(29 January 2004)

The legislation the Honourable Member is referring to is well known by the Commission and originates in a United States Law (the ‘Buy American Act’) adopted in 1933, in the middle of the Great Depression, aiming at developing industry and construction and stimulating jobs creation in the United States. The spirit of this law is maintained in numerous legal acts affecting procurement by United States public entities and agencies. Most of the provisions aim at excluding foreign goods or foreign bidders from tenders launched by public entities. The Buy American provisions apply also to activities financed by the United States public budget. As an example, one could take the obligation to use United States air carriers when the flight is financed by the United States Federal budget (thus obliging all officials or Members of Congress on mission or even students benefiting from public grants to travel in United States-owned air carriers). These protectionist measures are expensive for United States tax payers and introduce inefficiency and unfair competition in many economic sectors.

In 1996 the United States signed the World Trade Organisation (WTO) Agreement on Government Procurement, granting non-discriminatory access to bidders from 12 signatory countries (including the Community as a whole). At that time the United States had to introduce important changes in the ‘Buy American’ legislation to accommodate to the new WTO rules. Unfortunately, the scope of this agreement is quite limited and many important contracts and procurements continue to escape its rules.

The Commission is not aware of any United States provision that may allow a procuring entity to request proposals from foreign bidders and then offer a right to domestic suppliers to overtake the foreign bid. The Commission is ready to examine the WTO compatibility of this and other measures that may create obstacles to Community exporters in the biotechnology sector or in any other sector. The Commission has not received any complaint from Community companies in this regard.

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