Canada-Europe Free Trade Agreement : What you need to know
As we already mentioned it, Canada and the European Union are about to agree on a free-trade partnership that goes way beyond what we have seen in the past. Yet, we know little about the final agreement, but experts are unanimous about the fact that it will contain a public procurement chapter. Such a chapter could have major impacts on RFP and contract winning procedures. Here are few possible change :
First of all, there will be more competition. What we know about the public procurement chapter is that the openness to foreign competition allowed by this agreement is the biggest Canada ever allowed, even in NAFTA. Such an openness to foreign competitors will bring many new companies on the playground. Experts says this new competition could trigger a drop of 30 % of the value of the public contract (based on past experiences). Then, many Canadian corporations could be noncompetitive in regard to their European rivals, who are generally more vertically integrated which gives them more scale economy benefits. To face that new challenge, a good preparation is needed. If you feel like you may have some adjustment to do, it’s time to do them right now!
Moreover, this new competition will not only be allowed for major contract. Credible sources points out that contract as low as 200 000$ could be open to foreign competition. That mean fierce competition on economic sector of lower importance. According to that information, it will be important to stay competitive even in for smaller contract.
Furthermore, we heard that 70 % of contracts from public society, like Hydro-Quebec, will be open to foreign competition. In other word, that mean that equipment acquisition contract, along with infrastructure building and maintenance will be open to bids by European competitors. This is a premiere in Canadian international trade history.
Finally, we learned that the public procurement chapter will include an exception clause for regional development. In other words, public society, departments and other public organisms will be able to exclude foreign companies to some very specific RFP. However, European negotiators mentioned that this clause is so strict that only very few RFP would fall into its scope (for example, the clause limits the number of RFP that could be restricted to local corporation to a total maximum of 10 millions $ per year per public organisms).
In short, be ready! A rise in the number of competitors is a good news for the tax payers because public procurement prices will fall. Even if there is a few consequences for your business, there is also alot of new opportunities for you, but we’ll talk about that in another article.
In this new context, Solutions Antenne represent a great opportunity for your business by giving you the possibility to always be up-to-date on RFP and procurement in the public sector. We also give many advices and tips to maximize your chances at winning bids. Ask for a free online quote of our services, you won’t be disappointed !