How the EU referendum will affect public sector procurement
Within the UK, well established EU procurement regulations provide a framework in which goods and services can be bought by public sector organisations. With the EU referendum set for the 23rd June, many companies will be uncertain about how this will affect procurement.
Procurement specialists Bidbetter has suggested that businesses seeking to build or maintain public sector supplier relationships should consider the impact of an EU withdrawal on procurement. To allay business fears, Bidbetter has highlighted that major changes to procurement policy are unlikely. EU procurement regulations currently set out rules aimed at achieving, quality, value for money and, following the 2014 EU procurement directives, social benefits and innovation in all public sector purchases. As a result of this, Bidbetter will advise businesses to continue to display these attributes when responding to public tenders.
Secondly, EU treaties and directives from which the procurement rules in the UK derive would cease to apply. However, in the event of a Brexit, the legislation that has been put in place to deliver those directives would continue to have an effect. Having worked with a huge number of different business across almost every major industry, Bidbetter believes that the Government is unlikely to reverse EU based procurement laws which have firm principles aimed at transparency, equal treatment, open competition, and sound procedural management.
Philip Norman, the Director of Bidbetter said: "Whilst there is uncertainty over what the consequences of an out vote might be, from a procurement perspective at least, it seems highly unlikely that the procurement landscape will change significantly. Should the UK decide to leave the European Union, we will continue to adapt, identify opportunities and guide businesses through the public sector bid process."
EU and US agree end to Airbus-Boeing supply chain tariffs
The EU and US have agreed to resolve a 17-year dispute over aircraft subsidies, suspending tariffs on billions of dollars' worth of goods that have plagued procurement leaders on both sides of the Atlantic.
Under an agreement reached by European Commission Executive Vice-President Valdis Dombrovskis and US Trade Representative Katherine Tai on Tuesday, the tariffs will be halted for a period of at least five years.
It will bring an end to punitive and disruptive levies on supply chains that have little to do with the argument, which became embroiled in the trade battle. Businesses on both sides of the dispute have been hit with more than $3.3bn in duties since they were first imposed by the US in October 2019, according the EC.
The US imposed charges on goods upto $7.5bn in response to a World Trade Organisation ruling that judged the EU’s support of Airbus, its biggest aircraft manufacturer, unlawful. A year later in November 2020, the EU hit back. The WTO found the US had violated trade rules in its favourable treatment of Boeing, and was hit with EU duties worth $4bn.
In all the tariffs affected $11.5bn worth of goods, including French cheese, Scotch whisky, aircraft and machinery in Europe, and sugarcane products, handbags and tobacco in America. Procurement leaders on both sides of the fence were forced to wrestle with tariffs of 15% on aircraft and components, and 25% on non-aircraft related products.
Boeing-Airbus dispute by the numbers
- The dispute began in 2004
- Tariffs suspended for 5 years
- $11.5bn worth of goods affected by tariffs
- $3.3bn in duties paid by businesses to date
- 15% levy on aircraft and 25% on non-aircraft goods suspended
Both sides welcome end to tariffs
European Commission President Ursula von der Leyen branded the truce a “major step” in ending what is the longest running dispute in WTO history. It began in 2004.
“I am happy to see that after intensive work between the European Commission and the US administration, our transatlantic partnership is on its way to reaching cruising speed. This shows the new spirit of cooperation between the EU and the US and that we can solve the other issues to our mutual benefit,” she added.
Both aircraft manufacturers have welcomed the news. Airbus said in a statement that it will hopefully bring to an end the “lose-lose tariffs” that are affecting industries already facing “many challenges”. Boeing added that it will “fully support the U.S. Government’s efforts to ensure that the principles in this understanding are respected”.
The US aerospace firm added: "The understanding reached today commits the EU to addressing launch aid, and leaves in place the necessary rules to ensure that the EU and United States live up to that commitment, without requiring further WTO action."
This week’s decision expands upon a short-term tariff truce announced in March this year. The EC says it will work closely with the US to try and further resolve the dispute, establishing a Working Group on Large Civil Aircraft led by each side’s trade minister.
Airbus last month signalled to suppliers that post-pandemic recovery was on the horizon, telling them to scale up to meet a return to pre-COVID manufacturing levels. “The aviation sector is beginning to recover from the COVID-19 crisis,” said Airbus chief executive Guillaume Faury, adding that suppliers should prepare for a period of intensive production “when market conditions call for it.”