Governments face growing pressures to deliver results in an increasingly complex and interconnected world. Meeting these challenges requires coherent, evidence-informed policies that support economic resilience, innovation, and citizens’ well-being. In this context, the links between public procurement, industrial policy, and trade policy have become more critical than ever.
Public procurement is no longer a purely administrative function. As a major component of public spending, it is a powerful tool to shape markets, drive innovation, and support strategic sectors. Through their purchasing decisions, governments can strengthen domestic capabilities, influence supply chains, and set standards that affect both national and international markets.
This makes public procurement a fundamental bridge between industrial and trade policies. Industrial policy defines strategic priorities—such as supporting emerging industries or securing critical supply chains—while public procurement provides a practical mechanism to advance these objectives through demand. At the same time, trade policy establishes the framework within which procurement operates, ensuring openness, competition, and access to global suppliers.
Effectively aligning these three policy areas is essential. Poor coordination can lead to fragmented outcomes or unintended trade tensions, while well-designed approaches can reinforce policy objectives, enhance value for money, and support resilient and diversified supply chains. Strengthening this alignment allows governments to better balance domestic priorities with international commitments.
However, the current context - marked by emerging threats and successive global shocks; including the COVID-19 pandemic, Russia’s war of aggression against Ukraine and the war in the Middle East - has revealed the role of international trade in accessing critical goods and services as well as vulnerabilities in global value chains. These vulnerabilities have exposed growing tensions between industrial policy goals and open trade and prompted governments to reassess their approaches to industrial policies, trade openness, resilience and security of supply. These tensions have direct implications for public procurement where competition, access to technologies or security of supply are all affected.
This report was a background document for the meeting of the OECD Council at Ministerial level “Getting Industrial Policies Right for Open Markets, Growth and Prosperity” held in Paris on the 3rd and 4th of June 2026. It examines the role of public procurement in industrial policy as a lever for strengthening national economies and explores the linkages and dynamics among public procurement, industrial policies, and international trade throughout value chains.