Sustainable Development in Public Procurement: The EU-Mercosur Trade Agreement

It is expected that the open market sought by the Agreement between the European Union (EU) and Mercosur will have great repercussions for sustainable development. Therefore, this Chapter seeks to provide a study on how the Agreement enables the promotion of sustainable development, specifically in public procurement, as the two blocs understand this matter from very different perspectives. First, the EU has substantially improved its legal norms related to sustainable development in public bidding. In 2014, it introduced “the most economically advantageous tender” as an award criterion that may promote social, environmental, and other objectives contributing to sustainable development. This new criterion is not necessarily connected to the traditional goals of public procurement, such as obtaining the lowest price. However, this broad understanding of sustainability is not present within Mercosur. The term “sustainable development” does not exist in the southern bloc’s most important charters, such as the Treaty of Asunción (1991) and the Protocol of Ouro Preto (1994), and can only be found briefly in the Mercosur Public Procurement Protocol (2017). Nevertheless, the Agreement establishes that the two blocs shall recognize the contribution of transparent, competitive, and open tendering to economic development and set as their objective the effective opening of their respective public procurement markets. Furthermore, it includes the necessity of the inclusion of sustainable development. Therefore, it is clear that the Trade Agreement could face many difficulties in its application, especially related to sustainable development in public procurement, due to the undeniable differences between the two blocs.