Australia Set to Join WTO's Government Procurement Agreement

25 October 2018

Australia has been accepted as member of the WTO’s plurilateral Government Procurement Agreement (GPA), capping three years of negotiations with existing parties to join the accord. The Oceanic nation’s bid was endorsed by GPA parties last week, with Canberra now due to complete its domestic procedures and submit the necessary documentation to the global trade club within the next year for its GPA participation to take effect. 

By being admitted into the agreement, Australian goods and services providers bidding for foreign government contracts of GPA parties will have access on par with that offered to domestic companies, though this depends on the sectors and levels of government covered. Canberra will also benefit from the rules framework of the GPA, which sets out legal provisions aimed at ensuring transparency and due process, tackling potential cronyism and discrimination, and preventing possible protectionism.

The GPA has 47 parties when counting the EU and its 28 member states individually, with WTO estimates placing its current value at US$1.7 trillion. Thatnumber could increase dramatically if and when China and Russia are admitted into the accord. Both are negotiating with GPA parties their accession, with Beijing first applying to join in 2007 and Russia applying in 2016.

The Chinese procurement market alone is worth an estimated US$1.5 trillion, according to Australia’s Department of Foreign Affairs and Trade. Analysts and officials alike suggest that Australia’s accession could also increase the attractiveness of GPA participation to potential new parties.

“This is a major achievement for Australia, for the GPA Committee, and for the WTO. It adds value to and strengthens the GPA, while also sending a strong signal to current accession candidates,” said Carlos Vanderloo of Canada, who currently chairs the WTO’s Government Procurement Committee, in a statement.

Other possible GPA accessions in the pipeline include Macedonia and Tajikistan, among others, while the UK government is also negotiating the terms for its continued GPA participation after Brexit. (See Bridges Weekly, 18 October 2018)

A media release from Australian Trade Minister Simon Birmingham, meanwhile, highlighted the various industries where Australian companies would now have better options for bidding for foreign government contracts.

“It's expected the GPA will provide opportunities for Australian businesses to bid for government procurement contracts in a variety of industries offered by the governments of GPA members including healthcare, pharmaceuticals, construction, and financial services,” the statement said.

Revised GPA, upcoming accessions key drivers

The GPA is one of the WTO’s plurilateral accords, and is a “closed” plurilateral in the sense that its commitments are binding on the parties involved, and that concessions do not have to be extended beyond that group.

The latest revision of the GPA, which has been in force since 2014, was cited as an essential factor in sparking the Australian government’s willingness to sign on to the accord, according to the country’s Department of Foreign Affairs and Trade, with Canberra requesting to start talks on GPA accession in 2015. (See Bridges Daily Update, 16 December 2011, and Bridges Weekly, 10 April 2014)

For example, DFAT cites the revised GPA’s changes to incorporate “the expansion of electronic procurement and the often reduced timelines and increased efficiency of government procurement practices,” together with notable improvements in market access coverage. When negotiations for the GPA wrapped up in December 2011, proponents noted that the updated version could ostensibly liberalise an additional US$100 billion in public contracts.

Coming up

Going forward, Australian DFAT officials note that GPA participation will involve “several modest changes to existing practices at the time of implementation, including to procedures for pre-qualification and limited tendering,” as well as setting up “appropriate review procedures” where needed.

According to the global trade club, Canberra, which has a one-year window for moving GPA participation through its domestic ratification processes, will formally become a party to the plurilateral accord 30 days after submitting the relevant WTO documentation.

ICTSD reporting; “Australia accepted into WTO government procurement agreement,” MANUFACTURERS’ MONTHLY, 19 October 2018.

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