EU and US agreement on Procurement Sanctions

Add comment March 8th, 2006 Sean Delaney - Iasta UK

I read last week that the EU and US had come to an agreement on Procurement Sanctions for US companies operating in the EU. This reciprocal agreement is aimed specifically at liberalising the EU telecommunications market. The deal was brokered by Peter Mandelson, EU trade commissioner. As we in the UK have found on 2 previous occasions Peter’s words and actions do not often converge!

On reading the press release I couldn’t help but feel there was a catch in this somewhere.

Even within the EU there are difficulties with cross-boarder trade. The French Government have outlined 11 strategic Industries in which they will not allow foreign ownership. (Something I wrote about in Sept 05).

There are numerous examples of bids within the EU which have the threat of being blocked by member states i.e. Germany’s power company, Eon launched a $35m takeover of Spain’s Endesa the Spanish government announced “it would everything in it power to ensure Spain’s energy companies remain Spanish”. This is while Spanish companies have bought O2, Abbey National etc.

The French Government have threatened to block India’s Mittal Steel from taking over Arcelor saying that due to the large French workforce the government was a key stakeholder. They believe they are entitled to review everything from R&D spending to is social behaviour.

The rising tide of Protectionism by member states is beyond control of any commissioner so what ever he agrees is unlikely to work at Country level.

Entry Filed under: General, Global Supply Issues/Risk