Medical device ban shows EU would rather echo protectionism

The European Union's latest decision to impose a five-year ban on Chinese companies bagging public procurement tenders for medical devices worth more than 5 million euros ($5.68 million) is either a bold stand for "fair competition" or a hypocritical swing of the protectionist bat. Brussels calls it a reciprocal move, alleging that China's procurement favors domestic players. It is a strategic miscalculation that risks fracturing one of the world's most crucial economic partnerships.

Announced just one day before Chinese Commerce Minister Wang Wentao and EU Commissioner for Trade and Economic Security Maros Sefcovic met in Paris on Tuesday, Brussels' move reveals its short-sightedness. At a time when both sides should have been standing together against Washington's unilateralism, the EU has instead chosen to tread Washington's path.

The EU justifies the ban under the International Procurement Instrument, claiming China's procurement policies unfairly favor domestic firms. The instrument, a unilateral tool adopted by the EU in 2022, aims to ensure so-called market reciprocity in public procurement. However, this argument collapses when one takes into consideration the fact that European medical giants like Siemens and Philips have long dominated China's high-end imaging and surgical equipment markets.

China's push for strengthening the resilience of domestic supply chains mirrors Europe's own "strategic autonomy" drive. Worse, the ban targets a sector where Chinese innovation has lowered costs for European hospitals, meaning the ban will force taxpayers to foot the bill for more costly alternatives.

In recent years, emerging economies like China and their enterprises have demonstrated growing global competitiveness, securing business opportunities in the EU's public procurement market. However, the EU claims its companies have not gained "reciprocal" market access in those economies. It was against this backdrop that the EU introduced the International Procurement Instrument in 2022, authorizing investigations into non-EU enterprises and imposing punitive measures including restricting market access.

The measures against Chinese and other emerging economies' companies participating in the EU member states' public procurement projects are particularly harsh, especially in the engineering sector.

The immediate impact seems to be limited. Related Chinese firms have said they will not sign any deal worth 5 million euros or above with their European counterparts even though they are willing to expand their business in Europe. In fact, the real damage lies in the erosion of trust, particularly after years of deepening collaboration in healthcare. European companies have helped modernize China's hospitals. Now, Brussels risks squandering that goodwill for marginal gains.

There is a better path forward. Rather than unilateral bans, the EU should negotiate mutual procurement openings. China's market is vast but complex. Dialogue, not diktats, can level the playing field. And if the "WTO rules" mean anything, Brussels should practice the non-discrimination it preaches.

As the United States' protectionism forces a global realignment, Europe has the choice of either serving as a bridge between the East and the West, or acting as the US' junior partner in fragmentation. The medical device ban is troubling. But with China still offering cooperation, it is not too late for Brussels to recalibrate. After all, in medicine as in trade, the best remedies heal rather than harm.