MEPs win stronger negotiation role

Date: 14/03/1996

By Tim Jones

THE European Parliament can look forward to playing a greater role in future negotiations on opening up international public procurement markets in the wake of a ruling by the European Court of Justice (ECJ).

The Court declared last week that the Council of Ministers should have consulted MEPs when concluding an interim bilateral agreement on public procurement with the United States in the spring of 1993.

Between 1992 and 1993, the European Commission, in consultation with the Council, negotiated an interim agreement in an attempt to stave off threats of sanctions from Washington.

The Government Procurement Code, negotiated under the General Agreement on Tariffs and Trade (GATT), was drawn up to create a uniform set of global practices to apply to tenders for government contracts.

National and local governments are major purchasers of goods and services and where an industry is nationalised or a company operates as a monopoly, governments can be the only effective buyers of a product or service in a national market.

This meant that Washington was keen to ensure full access to this crucial market for US firms and was incensed at the EU's insistence that a 3&percent; tariff should be added to tenders to supply the local market coming from outside the Union.

The US imposed sanctions and the Commission and Council responded by negotiating, under pressure from the US, using the powers conferred by Article 113 of the Treaty of Rome. This allows the Commission to negotiate agreements with third countries in consultation with the special Article 113 Committee appointed by the Council, with no reference to MEPs.

An agreement was reached on this basis and passed into EU law. But the Parliament, angry at being sidelined, brought action against the Council, arguing that the negotiations should also have been conducted under Articles 57, 65 and 66 on the freedom to provide services and 100a on the approximation of member states' laws.

Under these articles of the treaty, MEPs must be consulted on proposals relating to rights of establishment and services.

Although both the Commission and the UK government supported the Council's position, the Court found in favour of the Parliament and annulled the agreement, which had expired in March 1995 anyway.

The interim agreement has been replaced with a multilateral agreement on government procurement under the GATT, which was signed as part of the Uruguay Round settlement in April 1994.

This negotiation was carried out with parliamentary assent and the Court decision does not apply to the new agreement. Although the Court voided the interim agreement, its effects were nevertheless enforced and the Council was ordered to pay costs. However, the Commission and the UK government will have to bear their own costs.