Europe Targets China Medical Device Trade

The European Commission has initiated for the first time an investigation under the International Procurement Instrument (IPI).

This investigation has been launched in response to measures and practices in the Chinese procurement market for medical devices which discriminate unfairly against European companies and products.

"We are launching this investigation with China so that we can achieve a level playing field in our procurement markets for producers of medical devices, on both sides," said Valdis Dombrovskis, Executive Vice-President and Commissioner for Trade while announcing the move.  "Regrettably, our repeated discussions with China on this trade irritant have been fruitless."

Evidence gathered by the Commission indicates that China's procurement market for medical devices has gradually become more closed for European and foreign firms, as well as for products made in the EU. This is due to measures introduced by China that unfairly differentiate between local and foreign companies, and between locally produced and imported medical devices.

Having previously raised its concerns directly and repeatedly with Chinese authorities, and in the absence of satisfactory replies or actions, the Commission has decided to address this issue through the Regulation pursuant to the IPI.

United States Trade Representative Katherine Tai applauded the move “The United States and the EU have worked extensively under the U.S.-EU Trade and Technology Council’s Global Trade Challenges working group in identifying and exploring ways to address the non-market policies and practices used by the PRC in a range of sectors, including medical devices, to unfairly advantage domestic products and companies and displace foreign products in the Chinese market to ultimately dominate markets globally.  The International Procurement Instrument is a trade tool that can potentially help address the unfair procurement policies and practices pursued by the PRC, in a manner similar to the way that the United States’ Trade Agreements Act of 1979 already addresses reciprocal procurement.” 

This investigation into Chinese public procurement for medical devices will follow this approach, aiming to rebalance the EU-China trade relationship, promoting open and fair access to both European and Chinese public procurement markets.

Next steps

The Commission will now invite the Chinese authorities to submit their views, provide relevant information, and open a consultation with an aim to eliminate the discriminatory measures.

The Commission will regularly inform Member States on the progress of the investigation. The investigation and consultations will be concluded within a nine-month period, which the Commission may extend by five months in justified cases.

Once the investigation and the consultations are concluded, the Commission will make publicly available a report setting out its main findings and proposed course of action. The report will be presented to the European Parliament and Council.

The Commission may suspend the investigation and the consultations at any time if China takes satisfactory corrective actions or commitments. It can resume the investigation and the consultations, if it later concludes that the reasons for the suspension are no longer valid.

If, following the investigation and consultations, the Commission concludes that the Chinese discriminatory measures exist and China is not offering a satisfactory solution, it may adopt an IPI measure. Such measures can take the form of score adjustments for bidders originating in the third country concerned (a reduction in their overall score in the selection process, thus lowering their chances to win the bid), or their full exclusion from the relevant tender in the EU, depending on certain criteria.

Background

The EU public procurement market is one of the largest and most accessible in the world. Moreover, Chinese exports of medical devices towards Europe experienced a surge of more than 100% between 2015 and 2023, demonstrating the overall openness of the EU markets.

The International Procurement Instrument entered into force on 29 August 2022. The tool is conceived to restore the balance of opportunities for EU companies tendering outside the EU and promote open and fair access to public procurement markets around the world. Its main goal is to encourage the reciprocal opening of public procurement markets to EU economic operators.

For More Information

Official Journal

International Procurement Instrument