The WTO Committee on Government Procurement adopted back-to-back decisions inviting both Montenegro and New Zealand to accede to the GPA on the basis of final market access offers negotiated over the past two years. The accessions will be the first since a revised and expanded version of the GPA entered into force on 6 April 2014.
Director-General Roberto Azevêdo welcomed the addition of Montenegro and New Zealand to the roster of members who participate in the GPA.
“Participation in this agreement means access to $1.7 trillion in procurement opportunities for companies in Montenegro and New Zealand. At a time of sluggish growth across the world, such opportunities are more welcome than ever. Beyond the possible export gains, membership in the GPA also means that governments in Montenegro and New Zealand can benefit from greater competition in their own procurement markets and consequently from lower prices and a wider selection of goods and services from which to choose,” the Director-General said.
WTO Deputy Director-General Xiaozhun Yi congratulated the two members at the 29 October committee meeting, noting that “their accessions highlight the growing interest in the GPA on the part of a diverse set of WTO members, and the increasing importance of the Agreement as an underpinning of global trade and development”.
Accession to the GPA requires, in addition to the existence of GPA-compliant national procurement legislation, the reaching of agreement on the terms of participation by each acceding WTO member. This is achieved through negotiations with the existing parties to the Agreement — negotiations that have now been successfully concluded for Montenegro and New Zealand. The accessions will take effect 30 days after the deposit by the two members with the Director-General of “instruments of accession” incorporating the agreed terms.
DDG Yi said that the conclusion of negotiations on the accessions of Montenegro and New Zealand, while requiring intensive efforts on the part of the two WTO members and the Committee, also showed the efficacy of the accession process. He noted that “each of these two WTO members completed their negotiations to join the Agreement in two years or less — in fact, in Montenegro’s case, in effectively a year”.
The Chairman of the Committee on Government Procurement, Mr Krzysztof Trepczynski of Poland, also congratulated Montenegro and New Zealand, saying that each had shown courage, persistence and skill throughout the process. He predicted that other accessions to the Agreement will follow, noting that the WTO GPA is increasingly at the centre of efforts to promote trade, value for money and fair competition in markets for the procurement of goods and services worldwide.
Government procurement accounts for 15-20 per cent of gross domestic product (GDP) in developed and developing countries. Only a part of this is currently covered by the Agreement on Government Procurement. The aim of the Agreement is to open up as much of government procurement as possible to international trade and competition, while ensuring appropriate transparency and a commitment to good governance.
Recently, the GPA was revised to modernize certain aspects of its rules and to expand its scope. The revised version of the Agreement came into force last April. Currently, it covers 43 WTO members: Armenia; Canada; the European Union, with its 28 member states; Hong Kong, China; Iceland; Israel; Japan; Korea; Liechtenstein; the Kingdom of the Netherlands with respect to Aruba; Norway; Singapore; Switzerland; Chinese Taipei and the United States.
Other WTO members that have started the process of acceding to the Agreement on Government Procurement are Albania, China, Georgia, Jordan, the Kyrgyz Republic, Moldova, Oman and Ukraine. A further five members – the Former Yugoslav Republic of Macedonia, Mongolia, the Russian Federation, Saudi Arabia and Tajikistan — have provisions regarding accession to the Agreement in their respective protocols of accession to the WTO.
Statement by Deputy Director-General, Xiaozhun Yi
Thank you, Chairman Trepczynski. Also on behalf of Director-General Azevêdo, it is an honour to be here with you at the Committee's meeting and to offer some words of congratulation to the delegations of Montenegro and New Zealand. I also want to congratulate the Committee for moving ahead with the conclusion of the two new Parties' accession negotiations -- hopefully, this can be an inspiration for other bodies elsewhere in the house!
In any event, warm congratulations are due to both Montenegro and New Zealand for the historic decisions that have been taken by the Committee this morning, and for the manner in which you have conducted your accession negotiations throughout. You may not know, but the Secretariat has kept me carefully informed of the status of your accession negotiations, all along. I am aware that there were challenging moments for both of your delegations; and that tough discussions had to be held and decisions made. This is always the way it is in negotiating for something that is worthwhile. But the fact is that, in the cases of both your delegations – Montenegro and New Zealand – you have maintained your focus and earned the esteem of all your colleagues among the Parties for your hard work, integrity and determination. Well done!
Membership in the Agreement on Government Procurement can be pursued for a variety of reasons. For some WTO Members, accession is driven first and foremost, or possibly even exclusively, by market access considerations. Membership in the agreement is, indeed, the key to gaining legally assured access to public procurement markets that have been valued at as much as $1.7 trillion annually, and whose value is also certain to grow over time.
For other countries, though, accession to the GPA will bring other benefits, in addition to market access. These other benefits may include assurance of the alignment of national legislation and institutions in the public procurement sector with best practices internationally; and international recognition of a WTO Member's commitment to high standards of transparency and fair treatment for all participating suppliers in the conduct and award of public procurement. This, in turn, can be a factor in encouraging inbound foreign direct investment (FDI). Of course, for all Parties, participation in the GPA brings with it the opportunity to contribute to the shaping of norms and standards for procurement policy that ultimately have an influence even beyond the formal membership of the Agreement, for example through regional trade agreements (RTAs) that often embody essentially the same standards.
For all these reasons, I am pleased to congratulate both the two new Parties and the Committee for this important milestone. I also salute the work done by you, Mr Chairman, and by your predecessor, Bruce Christie of Canada, in facilitating this important result. Clearly, the two accessions that have been gavelled today highlight both the growing interest in the GPA on the part of a diverse set of the WTO's Members, and the increasing importance of the Agreement as an underpinning of global trade and development.
Thank you, Mr Chairman.