European Union Plans Retaliation in Public Contract Bidding BRUSSELS - In a move likely to increase tensions over protectionism in international trade, Chinese, American or Japanese companies could be blocked from bidding for public contracts in Europe if their home countries are thought to be excluding bids from European firms. Plans outlined Wednesday mark a significant shift in European thinking, reflecting frustration in countries like France that the European Union does not appear to receive reciprocal treatment on public procurement contracts from non-Europeans. Nicolas Sarkozy, the French president who is campaigning for re-election, has called for a "Buy European Act" modeled on U.S. laws that favor domestically made products. But while supporters of the proposal from the E.U. executive, the European Commission, say it is designed to end unfair competition, critics contend that the plan risks increasing protectionism and inciting trade wars. A British official, who requested anonymity in line with official policy, said it was akin to "hoisting a big flag over Europe saying, "Closed for business."" Though China is the main target of the proposed legislation, European officials also think they face discrimination in the United States and Japan, both of which are part of the General Procurement Agreement in the World Trade Organization, a deal intended to create a level playing field in this area. The measures proposed Wednesday would offer a way of dealing both with countries that are part of the G.P.A. and with developing countries that remain outside. European officials say they would be used as a lever to open markets rather than as a protectionist tool. "Our commercial partners apply a lot of protectionist measures to their procurement market," Michel Barnier, the European commissioner for the internal market, said at a press conference Wednesday. This is true of the U.S. and Japan, where we have the G.P.A. agreement. It is also true of countries that don't fall under the G.P.A., the emerging countries where we have no secure access. Mr. Barnier added in a statement that the E.U. "should no longer be naïve and should aim for fairness and reciprocity in world trade." Karel De Gucht, the European trade commissioner, said the plans would "increase the leverage of the E.U. in international negotiations." The reaction from Beijing was dismissive even before the formal announcement. "The E.U."s new pact, when adopted, won't have an immediate effect on Chinese companies bidding for E.U. contracts and won't scare China into making concessions over the government procurement agreement proposal, as they expect," Suo Bicheng, director of the Department of World Trade Organization Affairs at China's Ministry of Commerce, was quoted as saying Wednesday in the official China Daily newspaper. He added that it was unlikely that China, which entered the W.T.O. in 2001, would join the G.P.A. this year. Under the plan, which needs to be approved by the 27 E.U. member states and the European Parliament, the authorities in Europe could exclude foreign companies from competing for contracts worth more than €5 million, or $6.5 million, if European companies are being excluded by the bidder's home country. The European Commission, which would have to approve any exclusion, expects around 30 to 40 applications a year for contracts that would meet the criteria. The commission would also have a broader mechanism allowing it to restrict access to the European market for countries that limit the access of E.U. companies to their markets. Of €420 billion of advertised public procurement contracts, the E.U. says it makes €352 billion worth open to foreign bidders, while the U.S. market offers €178 billion worth to outside bidders and Japan €27 billion, according to European Commission figures. The office of the U.S. Trade Representative said Wednesday it had no comment yet as it had not seen the formal European proposal. But a spokeswoman, Nkenge Harmon, disputed the E.U. figures, saying by e-mail that the United States covered "over $400 billion of procurement under the W.T.O. Government Procurement Agreement."