On the Trump administration DEI request from EU companies

It was yesterday on the news that the US federal government via its embassies requested EU companies to confirm that they do not have DEI policies in place. The details are sketchy but they seem to have targeted at least French companies and in particular companies who have or are interested in participating in government contracts in the US.

In short the letter sent to the companies asked them to confirm the recipient does not "operate any programs promoting Diversity, Equity, and Inclusion that violate any applicable Federal anti-discrimination laws.” Predictably, the request has been met with scorn and derision in these shores, but highlights how easier it is to find failings in someone else over ourselves. In this case, on using procurement to pursue policy goals that have nothing to do with it.

The EU - and member States by extension - do not bat an eyelid to making foreign companies interested in participating in public procurement or even those just in their supply chains to go through hoops that simply advance policy positions that are not relevant for the act of procurement itself. For example the EU Deforestation Regulation imposes obligations on operators and traders that include the need to carry out due diligence on products being placed in the EU, or else they can be excluded from public procurement. The due diligence obligation extends down the supply chain affecting producers in third countries that do not interact directly with the EU. All those producers who cannot meet the threshold to be deforestation free are naturally going to be purged from any suppliers working with EU customers (including contracting authorities) as the risk will be too high. It's unsurprising that Indonesia is not exactly keen on this Regulation, but at least they're not throwing tantrums about it.

The Corporate Sustainability Due Diligence Directive (at least in the version pre-omnibus) also spread its tentacles well beyond those participating directly in public procurement within the EU and covering as well their business partners and supply chains with at least some interpretations that it is technically part of Article 18(2) of Directive 2014/24/EU and as such contracting authorities would be able to exclude economic operators. And its Article 31 does allow for the obligations to be used as award criteria or contract performance conditions extending its reach further. As above, it will always be smaller suppliers who will struggle with meeting the paperwork requirement and prone to be considered risk factors to be managed.

This is to say that from the perspective of their proponents, using procurement to achieve policy objectives is always a logical move and the goals being pursued, laudable. It is just that this time around the Trump administration has raised a mirror to the EU and it seems we did not enjoy our look in it. I think this might be the first time a large trading partner has used public procurement to pursue their own policy goals in such a brazen fashion as that tends to be the EU's speciality. My way or the highway, right?

I also hope this drives home the message to those advocating pursuing policy goals via public procurement of the subject-matter link's importance.