The European Defense Procurement Directive: An American Perspective

Abstract:     
On August 21, the new European directive on defense and security procurement, Directive 2009/81/EC, entered into force. See, e.g.,EU Adopts New Defense and Security Procurement Directive, 6 IGC ¶ 65. Previously, most European defense procurement was considered exempt from the European procurement directives that have harmonized procurement, with greater transparency and competition, across Europe. Under the new defense directive, all but the most sensitive defense and security procurements in Europe will have to be conducted under rules consistent with the new directive.

From an American vantage point, however, it is not yet clear how the new directive will be implemented. If the defense directive merely brings new competition and transparency to the European procurement markets, the directive will be a welcome improvement in what was traditionally a closed and uncompetitive market. But if, in practice, the directive is used as an excuse to discriminate against U.S. exporters - or if it is perceived as a tool of discrimination - the directive threatens to trigger serious trade frictions in the transatlantic defense markets.

Keywords: public procurement, international trade, government contracts, international public procurement, European defense directive, transatlantic defense

JEL Classifications: H57, K33, F13, F14, H57

Accepted Paper Series