WTO: 2016 NEWS ITEMS

GOVERNMENT PROCUREMENT


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The committee agreed to reappoint John Newham (Ireland) as chair for 2016.  Mr Newham thanked parties for their support and outlined what he hoped could be achieved this year. First, the chair said he hoped all parties will have accepted the revised GPA by the end of the year; only Switzerland’s acceptance is pending. Mr Newham also said he hoped the committee would conclude work this year on as many additional accessions to the GPA as possible, notably those of Australia, Tajikistan and the Kyrgyz Republic.  He also expressed hope that discussions on China’s accession to the GPA move closer to a mutually satisfactory conclusion and that there would be new developments on the accession of some other WTO members that have committed to join the GPA, including possible first steps from Russia.

The GPA committee approved Moldova’s request for additional time to ratify the GPA; Moldova was originally given until 16 March to submit its instrument of accession, but will now have until 16 June to do so.  The GPA committee approved Moldova’s accession terms on 16 September 2015. Ukraine told the committee that parliamentary approval for GPA accession was on track and that it expected to forward its instrument of accession in March; the committee approved Ukraine’s accession terms on 11 November 2015.

Pending accessions

Australia reiterated its intention to complete its membership negotiations this year, following the launch of its bid in June 2015. Australia said its market access offer would open up a procurement market to parties valued at over A$ 100 billion (US$ 71 billion) at the federal, state and local levels. A dozen parties took the floor to praise Australia for its ambitious offer, although some called for further improvements. Australia said it would appreciate any additional views on its initial offer be submitted as soon as possible so it could submit a revised offer by the next GPA committee meeting in June.

Following its initial market access offer in February 2015, Tajikistan submitted a revised offer on 10 February which received a positive reception from the parties.  Tajikistan said GPA accession was a priority in promoting more transparent practices and that the Agreement would serve as a good foundation for national policy reforms.

The Kyrgyz Republic also submitted a revised market access offer in January — nearly 17 years after it submitted its initial offer — as well as a draft domestic procurement law for review.  Parties welcomed the renewed interest of the Kyrgyz Republic in the GPA and noted positive discussions with the Kyrgyz delegation in bilateral meetings which took place earlier in the week.

China reaffirmed its desire to join the GPA and outlined a series of steps it has taken to lay the groundwork for progress in the future, including recent focused discussions with the European Union and New Zealand.  China also noted that it had held bilateral talks with a number of GPA parties earlier in the week and that it was willing to continue such exchanges in the future.  Several parties encouraged China to continue its active engagement and identify ways forward in order to submit a revised and improved offer, if possible, by the end of the year.

The Seychelles said that it was facing capacity constraints and needed technical assistance before it could commence its GPA accession talks; Seychelles had earlier said it intended to start negotiations within a year of joining the WTO, which occurred in April 2015.  Albania emphasized the importance of government procurement for development and prosperity, said that consultations were now under way domestically with various stakeholders and expressed the hope to overcome persisting obstacles to pursue its GPA accession in due course.

Work programmes

The GPA committee advanced in its discussions and/or agreed timelines under work programmes focusing on four issues:  small and medium-sized enterprises (SMEs); the collection and reporting of statistical data; sustainability in international procurement; and exclusions and restrictions in parties’ schedule annexes.  Inputs are currently being received from parties in all four areas, and compilations reflecting submissions already circulated have been prepared with regard to some of the work programmes.

Background

Government procurement accounts for about 15 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.

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.

The schedule of each party setting out terms of participation contains several annexes which define the party’s commitment with respect to four dimensions of coverage:

  • the procuring entities covered by the Agreement
  • the goods, services and construction services covered by the Agreement
  • the threshold values above which procurement activities are covered by the Agreement
  • exceptions to the coverage.

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 in April 2014.

The GPA is a plurilateral agreement within the framework of the WTO, meaning that not all WTO members are parties to the Agreement. Currently, it covers 45 WTO members: Armenia; Canada; the European Union, with its 28 member states; Hong Kong, China; Iceland; Israel; Japan; Korea; Liechtenstein; Montenegro; the Kingdom of the Netherlands with respect to Aruba; New Zealand; Norway; Singapore; Switzerland; Chinese Taipei; and the United States.

Other WTO members that have started the process of acceding to the GPA are Albania, Australia, China, Georgia, Jordan, the Kyrgyz Republic, Oman and Tajikistan. Moldova and Ukraine successfully concluded their accession negotiations last year and are expected to become parties to the Agreement in the coming months. A further five members — the Former Yugoslav Republic of Macedonia, Mongolia, Russia, Saudi Arabia, and Seychelles — have provisions regarding accession to the Agreement in their respective protocols of accession to the WTO.

Further information on the WTO and government procurement is available here.

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