Agreement Reached on WTO’s Government Procurement

    View Authors December 2011
    On 15 December 2011 the World Trade Organisation’s negotiations on government procurement effectively completed.
    The parties of the Government Procurement Agreement (GPA) reached an agreement on an updated set of tender rules and additional market access commitments. It is thought that this agreement will open up government procurement contracts worth as much as €100 billion to more foreign competition from GPA members.

    In their press release the European Commission note that the main gains of the negotiation are as follows; firstly and arguably most importantly the agreement enlarges coverage of procurement to embrace a number of central and sub-central entities not previously included in the GPA. The negotiation has facilitated new market access opportunities; the EU and US have expanded access to their central level entities, whilst Canada has provided access to procurement of its Provinces and Territories. Furthermore Korea has offered access to railway and transport procurement, Japan has provided access to public private partnerships and construction projects (but will not open its recently privatised railways operator to foreign bidders) and Israel has committed to phase out its offset schedules and lower its construction thresholds. No agreement on China's entry to the GPA has been reached yet.

    Other gains which have been discussed include the fact that the tender rules provide for more transparency for international procurement; it is envisaged that this will contribute to combating corruption around the globe. Moreover it is also thought that developing countries will reap benefits from the revised GPA.

    Meanwhile, on 20 December 2011 the European Commission is due to present the new directives on public procurement that will adapt and combine existing texts (2004/17 for utilities operating in the water, energy, transport and postal services sectors and 2004/18 for public sector procurement) and a new directive on works and services concessions. Watch this space.