Azevêdo Urges More WTO Members to Consider Benefits of Joining GPA

24 September 2015

More WTO members should consider the benefits of signing onto the organisation’s Government Procurement Agreement (GPA), urged Director-General Roberto Azevêdo last week, citing the many improvements that have come from the deal – and from the accession of some of its newer participants – since the revised version entered into force just over a year ago.

The Government Procurement Agreement commits participants to certain core disciplines regarding transparency, competition, and good governance, covering the procurement of goods, services, and capital infrastructure by public authorities.

Unlike the majority of agreements at the global trade body, the GPA is one of the WTO’s “plurilateral” pacts, covering a subset of the organisation's membership – specifically, those who sign onto its commitments.

“Every accession has added to the overall value of procurement of the GPA. They also elevate the Agreement’s significance as a tool for shaping good procurement practises internationally,” Azevêdo said during a symposium held at the WTO’s Geneva headquarters on the government procurement pact.

Furthermore, he noted, the GPA has also served as a template for elements in other bilateral and regional trade deals that have lately been negotiated – a result that gives the agreement a far-wider reach than just within its current, formal membership.

“There is a sense of momentum behind the GPA,” said Azevêdo.

Revised GPA

While the original government procurement deal entered into force in 1996, negotiations to streamline and modernise the Agreement – including by expanding its coverage – began just a few years later, and dragged on for over a decade.

The revised Government Procurement Agreement was finally agreed in December 2011 at the WTO’s Eighth Ministerial Conference, with the new version entering into force in April 2014. (See Bridges Weekly, 16 December 2011 and 10 April 2014, respectively)

The revised version of the deal is estimated to have increased the value of the GPA’s market access commitments by between US$80-100 billion, according to WTO statistics.

One of the goals of the GPA revision was to make it easier and more attractive for new parties to sign on, such as by adding government ministries, agencies, and other new entities to its coverage, as well as bringing more services and goods into the deal. The revised GPA also includes new and simpler rules on transparency and due process, with the goal of preventing corruption or protectionism.

Concluding the revision of the GPA, as well as reaching a global deal on trade facilitation a few years later during the WTO’s 2013 ministerial conference, are among the few new agreements reached during the global trade body’s twenty-year history. Negotiations to update the global trade body’s rules via the Doha Round agreement have, for the most part, struggled to move forward, with the talks’ fate uncertain as the WTO heads into its next ministerial conference this December in Nairobi, Kenya. (For more on the Doha Round, see related story, this edition)

While noting that reaching new agreements is an important element of the global trade body’s work, the WTO chief also highlighted the importance of implementing existing deals.

“Taking these agreements forward strengthens the trading system and bolsters opportunities for economic growth and development,” Azevêdo told last week’s symposium, which was designed as a technical cooperation event on government procurement.

“With this in mind, I encourage more WTO members – especially developing and emerging economies – to look at the benefits of GPA accession,” he added, referring among others to the improved transitional measures included in the revised GPA for developing countries.

The government procurement pact currently has 17 parties, comprising 45 WTO members. The most recent member to join the GPA was New Zealand this past August.

Of the WTO members that were already party to the GPA when the revision negotiations were completed, two of these – South Korea and Switzerland – are still working on ratifying the new version of the deal domestically.

Moldova gets green light, Ukraine likely to follow

Accession was also one of the main topics on the agenda of the Government Procurement Committee’s most recent meeting, which was held last week just ahead of the symposium.

After nearly 14 years of negotiations, Moldova is now set to join the GPA, with its entry taking effect 30 days after the Eastern European country deposits its instrument of acceptance to the WTO.

Ukraine is likely to be the next GPA accession, sources say, after having circulated a draft final offer in late June. A draft committee decision on the subject has also been released. Kiev has been in the process of negotiating GPA accession since early 2011, with the Government Procurement Committee expected to approve the final decision formally in November.

China, Australia updates

One of the biggest possible accessions to the GPA is that of Beijing, which has been under negotiation since 2007. China, with its vast government procurement sector, agreed to join the GPA in its 2001 WTO accession protocol, subject to special negotiations.

The Asian economic giant has already submitted six offers – its initial offer and five revisions – since it began the talks to join the plurilateral pact.

The last revised offer submitted by China was in December 2014, which included changes such as an expansion of coverage of new services sectors and construction services; the expansion of GPA coverage to new procuring entities and procurement in five additional provinces; and lower thresholds for contract coverage that more closely approximate those of the current GPA membership.

Parties reportedly urged Beijing at the latest committee meeting to continue making improvements to its offer, citing concerns over the lack of coverage for certain provinces and state-owned enterprises, among others. China, in turn, indicated that it may take some time for the necessary national conditions to be in place so that it can build on its offer.

Meanwhile, Australia submitted its initial offer for GPA accession in early September, just months after first launching its bid to join the procurement pact. (See Bridges Weekly, 11 June 2015)

Sources familiar with last week’s Government Procurement Committee meeting say that Australia’s first offer was welcomed by many as comprehensive and ambitious, though some questions were raised regarding certain general exceptions included in the offer, among others. Canberra has said that it hopes to complete its accession talks next year.

Seychelles is now the first African country to become an observer of the GPA, with the request approved at last week’s meeting. The Indian Ocean archipelago is one of the WTO’s newest members, having joined this past April. As part of its commitments at the global trade body, Seychelles agreed to begin talks to join the GPA within 12 months of becoming a WTO member. (See Bridges Africa, 5 May 2015)

ICTSD reporting.

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