Europe Wants to Buy European. What Happens to Its Free Zones?

FTZ News: The European Commission wants governments to stop awarding contracts solely to the lowest bid. For the free zones and industrial parks of the continent, the question is simple: Will the €2.6 trillion public-sector market reach factories located inside the zones, or will it once again go to the cheapest foreign shipment?

According to a Commission report on September 9, 2026, the proposal for a regulation on public contracts and concessions, numbered COM(2026) 590, has been registered. The aim of this proposal is to move away from purchasing based solely on the lowest price; quality would carry a weight of at least 30 percent, up to 50 percent in labor-intensive contracts, along with the possibility of favoring European content or suppliers. Of course, this proposal has not yet become law and still has to go through multiple stages, from the European Parliament to the Council of the European Union.

Basically, when we talk about the European Union, we are dealing with a huge market. Government procurement accounts for about 15 percent of the EU’s gross domestic product. Some official and news sources estimate the figure at between €2.5 trillion and €2.6 trillion per year. Of that amount, about €600 billion is subject to EU rules; the rest is national procurement, which has always been in the hands of member-state governments. The European Commission says that simplifying the three 2014 directives into a single regulation would reduce administrative costs by €650 million a year: €80 million for public-sector buyers and €570 million for companies. For now, these are only promises and have not been finalized.

What appears in the text is not stricter than the “Buy European” slogan, but it does move somewhat beyond the current situation. A buyer can reject an offer in which less than 50 percent of the value consists of European content or content “covered” by reciprocal agreements. It can limit a tender to EU operators. In strategic sectors, preference may be given to European companies. However, a blanket “Made in Europe only” requirement has not been imposed across all public procurement. Partners covered by the GPA and free-trade agreements — Norway, Switzerland, Japan, Australia, New Zealand, and several others — are not left out the back door.

For free-trade zones and special economic zones, this 50 percent is more important than anything else. A product assembled in Europe’s free zones, if it cannot establish EU origin and value added, will not receive an advantage in a tender for a school, hospital, or rail line. Duty deferral, processing, and warehousing are among the most important features of free-trade zones. If quality and the European supply chain capture 30 to 50 percent of the score, a factory inside a zone in Spain, Poland, or the Port of Antwerp benefits only when it can put a Made-in-Europe sheet on the table, not when it merely takes advantage of import exemptions.

France, Italy, and probably Germany want to request safeguards for PET, epoxy resins, and glass fibers. That trade-defense case is separate from the public-procurement proposal and has not yet become official. But the direction is the same: cheap inflows from outside become harder, while domestic orders become more expensive and more central. A logistics zone that is a warehouse for Chinese resin gets no share of government procurement. A production zone that converts the same resin into a component within the EU, if it has the proper origin documentation, may be closer to the €600 billion tender market.

But the numbers should not be analyzed incorrectly. €2.6 trillion is total public procurement. €600 billion is the scope of the Brussels rules. Europe’s free-trade zones can touch only a fraction of that €600 billion, and only after approval, and only if the member state uses the “European preference” option. Germany and several northern countries were still sensitive as of this summer to a strict “Made in Europe” formula. France was further ahead. A unified regulation reduces this disagreement but does not eliminate it.

If the final text retains the same 30 percent quality floor and the ability to reject offers with limited European content, the likely winner is a production unit with a local supplier, not a transit warehouse. The likely loser is also an intermediary that brings third-country goods from a zone into a government tender and relies on the final cost.
Of course, all of these interpretations currently concern a proposal, and it has not yet become law. Until the Parliament and Council vote, the zones will continue doing what they have always done: bringing in goods, storing them, and, if permitted, manufacturing. The difference this time is that Brussels has, for the first time, explicitly tied public spending to the European supply chain. For a free zone, that means origin becomes more important than the fence./.