Geneva, 15/12/2011 (Agence Europe) - Despite lack of progress on the Doha Trade Round at the eighth WTO ministerial conference, agreement was reached in principle on revising the GPA agreement on public procurement. In addition to trading opportunities worth an extra €100 billion a year for its signatories, the GPA may pave the way for further opportunities when China and other emerging economies join the WTO down the track.
After 10 years of talks, the 15 WTO members that signed the GPA in 1994, which came into force in 1996, managed to agree on Thursday 15 December 2011, ahead of the start of the eighth ministerial conference, on an updated agreement to ensure greater opening of public procurement in the countries in question. Pascal Lamy, the head of the WTO, said it demonstrated that even in a worsening economic environment which makes international decisions more difficult, hard work can lead to success. The WTO secretariat says that the updated contract will cover new areas and increase the scale of public procurement each year covered by the GPA by €500bn to €600bn or even €1 trillion if new countries like China join the deal. EU Internal Market Commissioner Michel Barnier said the agreement was win-win, pointing out that public procurement accounts for nearly 20% of most countries' GDP.
The agreement reached on Thursday by Armenia, Canada, South Korea, the United States, Hong Kong, Iceland, Israel, Japan, Liechtenstein, Aruba (the Netherlands), Norway, Singapore, Switzerland, Taiwan and the European Union still needs to be finalised and legal niceties will be tied up over the next three months so that it can be officially signed. It extends the GPA deal which, since 1996, has opened up to foreign competition calls for tender for public procurement such as the supply of goods and services, infrastructures (road building, for example), airports, and telecoms.
The new GPA will provide more transparent rules for the parties, similar to the rules governing the issuing of public contracts in the EU, which have a good reputation for clarity and impartiality, explained the European Commission. Lamy said it was an anti-corruption deal aimed at rooting out the evil of public contracts being hived off illegally.
The updated GPA opens new opportunities for market access, reached after much to-ing and for-ing in the talks. The three biggest signatories will continue to discuss the fine-tuning, but the EU and the US have agreed to provide greater access to centralised public contracts, including at big US federal bodies, while Japan will guarantee access to public-private bidding and public construction projects for railways. In the US, greater access will be provided to the tune of a potential of €150bn, with access in Japan being increased by 20%. Canada will provide greater access to provincial and regional contracts (a 4% increase), South Korea to rail and road-building and Israel will reduce its thresholds for construction services.
The updated GPA will make it easier for further WTO members to join. China has been negotiating since 2007 and recently submitted its second revised offer, while Albania, Georgia, Jordan, Kyrgyzstan, Moldova, Oman, Panama and the Ukraine are currently negotiating to join the GPA. (EH/transl.fl)