Countries Press On in Efforts to Join WTO Public Procurement Deal

29 June 2017

The WTO’s Government Procurement Agreement (GPA) may soon see some new additions, with Australia reportedly close to the negotiating finish line, nearly two years after it launched its bid to join the plurilateral accord.

Canberra announced that it would begin negotiating with current GPA parties two years ago, with the talks formally beginning in September 2015. Since then, it has submitted both initial and revised market access offers for parties to consider. (See Bridges Weekly, 11 June 2016)

The progress seen in the market access offer could mean that Australia reaches a deal “in principle” to join the GPA by year’s end, according to a press release from the global trade body. However, this would depend on whether Canberra and the current parties resolve differences on areas such as which sub-central government entities are included in the market access offer, along with other issues such as the minimum values for such public procurement to qualify for GPA coverage.

According to Australia’s Department of Foreign Affairs and Trade (DFAT), the motivation behind joining the public procurement deal is manifold, being driven partly by the improvements seen under the revised GPA that entered into force three years ago. The original GPA dates back to 1996. (See Bridges Weekly, 10 April 2014)

The Oceanic nation has public procurement provisions in various bilateral trade agreements, and its market for government tenders is linked with that of neighbouring New Zealand. The latter country is a party to the GPA.

The GPA currently has 19 parties, counting the EU and its member states as one. Australia is one of 10 WTO members that are currently in talks to sign onto the deal. The GPA’s structure is that of a plurilateral agreement, with only those WTO members that have signed onto the accord bound by its disciplines.

The GPA aims to improve market access when it comes to public tenders for goods, services, and capital infrastructure, along with including provisions focused on good governance, due process, and transparency.

Emerging markets

When the revised GPA was adopted in 2011, one of the major benefits that was touted by proponents was the expectation that it could facilitate the accession of China, which has a large public procurement sector, along with other major emerging markets which also have multi-billion dollar sectors.

Australia and others have previously cited the prospect of a GPA including China as a major draw for joining on themselves, given the Asian economy’s massive procurement market. While estimates vary, some place the annual dollar value of China’s market in the trillions.

Over the years, China has submitted various market access offers for GPA parties to consider, with parties welcoming the efforts to expand coverage while at the same time pressing Beijing to go further. According to the WTO, officials in Geneva last week urged China to continue its efforts towards developing an updated offer for negotiation, with the Asian economy confirming that it is working to do so. Earlier offers had prompted requests from GPA parties, for example, that Beijing cover more provinces and state-owned enterprises. (See Bridges Weekly, 24 September 2015)

Notably, Russia is now in the process of negotiating its GPA accession, in line with the commitments made when joining the WTO in 2012. WTO members reportedly gave feedback on its first market access offer last week, welcoming the move while urging that Moscow take on greater coverage in subsequent offers.

Russia is another procurement market whose value has been estimated in the billions, as have other economies within the BRICS coalition – in other words, Brazil, Russia, India, China, and South Africa. (See Bridges Weekly, 25 July 2012)

Other countries in the region are also working to join the GPA, including Tajikistan and Kyrgyzstan, which are both said to be well advanced in the process. Updated offers are reportedly forthcoming in both cases.

ICTSD reporting.  

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