Members Fall Short of Government Procurement Agreement Revision, Target First Half of 2011

22 December 2010

WTO members this month fell short of agreeing on an update to a plurilateral agreement on government procurement, but a deal that would further liberalise access to billions of dollars worth of public procurement contracts among over forty countries is within reach in the first half of 2011, sources say.

Earlier this year, officials had hoped that the December meeting of the Government Procurement Committee would see members agree on a revision to the Agreement on Government Procurement (GPA), a plurilateral WTO accord that has since 1996 opened up access to several types of public tenders to companies from all participating countries. However, as the meetings approached, many recognised that this timeline, set out in a roadmap by the chair, was overly optimistic.

An agreement on revising the GPA would have required parties to the accord to agree on both a revised text for the agreement and on the extent of each others' future commitments on liberalised public procurement. Ultimately, negotiators fell short on both, when a week of meetings of the government procurement came to an end on 13 December.

While most aspects of the revised text, which was first provisionally agreed to in 2006, are now effectively finalized, with legal translations of most articles finalised. However, the last article of the new text, which deals with so-called ‘final provisions' (Article XXII), remains under active discussion. This section will establish rules for when the new text would come into force, when the new coverage commitments would be phased in, and possibly include details about the committee's future work programme. Sources report that countries are not at loggerheads - indeed, they made some progress on simplifying the text - there are still some differences over the details of the article, particularly with regard to the future work programme. Part of the reason for the differences would be that a revised GPA would represent the first significant overhaul and replacement of a WTO agreement, so there are no clear precedents for when and how governments should sign the accord, or what thresholds should be for its entry into force.

On the coverage of the revised GPA, the main sticking point remains disagreements between the EU and the US. Historically, the EU has believed its coverage under the GPA to be broader and more comprehensive than that of the US; Washington has rebuffed demands for reciprocation by pointing to metrics according to which its own public procurement are even more open. In addition to greater concessions from the US, Brussels is also seeking more concessions from Japan. During the recent talks, the US and Japan tabled new offers. The EU did not, although a new EU offer is expected soon. Sources report that the US was unhappy with the EU's failure to table an offer, to the extent that one stage, it seemed as though the US lead negotiator might walk out. In the end, however, the talks did not end abruptly, although they did not run as long as had been allowed for in the WTO's agenda.

Nicholas Niggli, the senior Swiss trade official who chairs the government procurement talks, now hopes that the talks can be brought to a close in the first half of 2011. Officials familiar with the talks believe that this timeline is realistic. The next rounds of government procurement talks are scheduled for late February and mid-March. The gap is intended to give capital-based officials in participating countries time to prepare, and work on final offers.

Other developments during the recent talks included progress done on the future work programme for the committee (i.e., after the revision is finalised). The is growing convergence on including an item about the treatment of small businesses in terms of access to public procurement programmes, an issue that many countries, including the EU, have been interested in exploring.

Also during the session, the committee invited Armenia to accede to the agreement, following the acceptance of the country's coverage offer and proposed public procurement laws. Armenia would become the forty-second party to the GPA, including the 27 EU member states.

ICTSD reporting.

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