TENTH WTO MINISTERIAL CONFERENCE, NAIROBI, 2015
Briefing note: WTO Agreement on Government Procurement
The WTO’s Agreement on Government Procurement (GPA) is a plurilateral accord that commits WTO members to certain core disciplines regarding transparency, competition and good governance in one of the most important and rapidly expanding areas of economic activity in any country. The Agreement covers the procurement by public authorities of goods, services and capital infrastructure.
Find out more:
> Government procurement
The aim of the GPA is to open up to international competition as much as possible the government procurement of the parties to the Agreement. It is designed to make the parties’ measures regarding government procurement more transparent and to ensure non-discriminatory treatment regarding the products, services or suppliers of any party to the GPA. It thereby contributes to good governance and to the promotion of value for money in covered procurement markets. It also provides important flexibilities for developing country parties to manage their transition to a more internationally competitive government procurement regime.
Participation in the GPA is entirely optional for most WTO members. However, based on an assessment of potential benefits and costs, a growing number of WTO members are evaluating their options and showing renewed interest in acceding to the Agreement. At present, 10 WTO members are in the accession queue. These include Albania, Australia, China, Georgia, Jordan, Kyrgyz Republic, Moldova, Oman, Tajikistan and Ukraine. Five other WTO members have undertaken commitments in their WTO accession protocols to initiate accession to the GPA. They are Mongolia, the Russian Federation, Saudi Arabia, Seychelles and the former Yugoslav Republic of Macedonia.
There are two key aspects to the accession process: conformity of the acceding member’s legislation with the GPA; and agreement with existing parties regarding the entities and sectors of its public procurement that the acceding member wishes to open to international competition.
Governments are not expected to open up all their procurement activities and they might specifically exclude some sensitive sectors, such as defence-related procurement. The disciplines only apply to the entities, sectors and procurement levels (above certain financial thresholds) specified in an appendix to the GPA, which is the outcome of the negotiations.
Typically, the parties to the GPA cover most entities at the central government level as well as entities at the sub-central government level and other entities, such as state-owned enterprises. All goods are covered in principle (for instance, medicines, machinery and associated products, fuels and petroleum products, and textile products) unless specified otherwise. In addition, a range of services are open to international competition, including:
- telecommunications services
- computer and related services
- financial services
- management consulting and related services.
All parties cover construction services, subject to some minor exceptions.
On 12 August 2015, New Zealand became the 45th WTO member to accede to the GPA. It therefore became the 17th party to the GPA (counting the European Union and its 28 member states as one party).
The 17 parties to the GPA (comprising 45 WTO members)
|Parties||Date of accession|
|Armenia||15 September 2011|
|Canada||1 January 1996|
with regard to its 28 member states:
1 January 1996
1 May 2004
1 January 2007
1 July 2013
|Hong Kong, China||19 June 1997|
|Iceland||28 April 2001|
|Israel||1 January 1996|
|Japan||1 January 1996|
|Korea, Republic of||1 January 1997|
|Liechtenstein||18 September 1997|
|Montenegro||15 July 2015|
|Netherlands with respect to Aruba||25 October 1996|
|New Zealand||12 August 2015|
|Norway||1 January 1996|
|Singapore||20 October 1997|
|Switzerland||1 January 1996|
|Chinese Taipei||15 July 2009|
|United States||1 January 1996|
Observers to the GPA — WTO members
|Observer government||Date of acceptance by GPA Committee as observer|
|Albania *||2 October 2001|
|Argentina||24 February 1997|
|Australia*||4 June 1996|
|Bahrain||9 December 2008|
|Cameroon||3 May 2001|
|Chile||29 September 1997|
|China *||21 February 2002|
|Colombia||27 February 1996|
|Costa Rica||3 June 2015|
|Georgia *||5 October 1999|
|India||10 February 2010|
|Indonesia||31 October 2012|
|Jordan *||8 March 2000|
|Kyrgyz Republic *||5 October 1999|
|Malaysia||18 July 2012|
|Moldova *||29 September 2000|
|Mongolia||23 February 1999|
|Oman *||3 May 2001|
|Panama||29 September 1997|
|Pakistan||11 February 2015|
|Russian Federation||29 May 2013|
|Saudi Arabia||13 December 2007|
|Seychelles||16 September 2015|
|Sri Lanka||23 April 2003|
|Tajikistan*||25 June 2014|
|Thailand||3 June 2015|
|The former Yugoslav Republic of Macedonia (FYROM)||27 June 2013|
|Turkey||4 June 1996|
|Ukraine *||25 February 2009|
|Viet Nam||5 December 2012|
* negotiating accession
History of the GPA
Government procurement was excluded in the first 30 years of the multinational trading system. The first disciplines of the General Agreement on Tariffs and Trade (GATT) were agreed in 1979 and came into force in 1981 (the Tokyo Round Government Procurement Code). This was amended in 1987 and the amendment entered into force in 1988. Parties to the agreement then held negotiations to extend the scope and coverage of the agreement in parallel with the Uruguay Round. Finally, a new Agreement on Government Procurement (GPA 1994) was signed in Marrakesh on 15 April 1994 — at the same time as the Agreement Establishing the WTO — and entered into force on 1 January 1996.
Within two years of the implementation of GPA 1994, the GPA parties initiated the renegotiation of the Agreement according to a built-in provision of the 1994 Agreement. The negotiation was concluded in December 2011 and the outcome of the negotiations was formally adopted in March 2012. The revised GPA entered into force on 6 April 2014.
The revised GPA
The revised GPA streamlines and modernizes the Agreement’s text — for example, by taking proper account of the widespread use of electronic procurement tools. It provides gains in market access for the parties’ businesses that have been estimated to be in the range of $80-100 billion annually. This results from adding numerous government entities (ministries and agencies) to the scope of the Agreement as well as new services and other areas of public procurement activities. The revision also incorporates improved transitional measures that are intended to facilitate accession to the Agreement by developing and least-developed economies.
Parties will continue improving the GPA. The revised GPA clearly sets out that no later than three years after the entry into force of the revised GPA and periodically thereafter the parties shall undertake further negotiations to progressively reduce and eliminate discriminatory measures and to achieve the greatest possible extension of the coverage of the Agreement. In this spirit, the GPA parties have also agreed to undertake a number of work programmes which will have an impact on the future evolution of the Agreement.
The GPA Committee
The GPA Committee was established to administer the implementation of the GPA. It is composed of representatives from each of the parties as well as WTO members and intergovernmental organizations with observer status. The Committee meets regularly, around four times a year, to give parties the opportunity to consult on any matters relating to the implementation and operation of the Agreement or the furtherance of its objectives. It also carries out other responsibilities as may be assigned to it by the parties.
Negotiations for the accession of new members
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 areas:
- 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.
Two WTO members are set to become parties to the GPA in the near future. Moldova’s terms for accession were approved by the GPA Committee on 16 September 2015. It will formally become a GPA party 30 days after it submits its instrument of acceptance to the WTO Secretariat. Ukraine’s terms for accession were approved by the GPA Committee on 11 November 2015; it will also become a GPA party 30 days after it submits its instrument of acceptance.
Of the remaining applicants, the accession processes of China, Tajikistan and Australia are currently the most active. China submitted its sixth offer in December 2014 and has emphasized its continued commitment to joining the GPA. Tajikistan submitted its initial offer in February 2015 and has vowed to complete accession as soon as possible. Australia submitted its initial offer in September 2015 and has said it hopes to secure accession in 2016.
Benefits: non-discrimination and increased competition
Accession to, and participation in, the GPA provides important benefits for parties to the GPA, their entities and suppliers. These include:
- potential trade gains based on legally assured access to the covered foreign procurement markets
- ensuring a transparent, competitive and predictable government procurement regime, contributing to good governance in this sector
- keeping markets open in times of crisis where the temptation for protectionism rises
- in the context of acceding candidates, the GPA can help to reform the government procurement sector in line with international best practices, and lock in the benefits of such reforms
- improved public, supplier and investor confidence in the government procurement system, potentially stimulating inbound foreign direct investment
- enhanced competition for contracts, leading to improved value for money outcomes
- facilitating a more effective and efficient use of public resources.
The GPA provides a useful tool for optimizing value for money, governance and trade objectives in the government procurement sector. Participation in the GPA also affords the opportunity to influence the future evolution of the Agreement.
Contratación pública: la contratación de bienes y servicios en nombre de un organismo público como, por ejemplo, una agencia gubernamental
Entidades contratantes: organismos gubernamentales que adquieren bienes y servicios siguiendo métodos sujetos a las disposiciones del ACP relativas a la contratación.
Valor de umbral: el valor de un contrato por encima del cual son aplicables las disposiciones del ACP.