Government procurement in the WTO – the
GPA
1. Background
Government
procurement constitutes a very large market in most countries. These markets
are of particular interest to actors in international trade. Efforts have
therefore been made for some time to develop rules that grant market access to
suppliers from different countries under predictable and transparent
conditions.
The
WTO agreement on government procurement, the Government Procurement Agreement (GPA), came into force in 1996, as a result of
the Uruguay Round and the establishment of the WTO. The GPA is plurilateral,
and includes the following 13 members: Aruba (the Netherlands),
Canada, the EU, Hong Kong (China), Iceland,
Israel, Japan, South Korea,
Liechtenstein, Norway, Singapore,
Switzerland and the USA. Norway
acceded to the GPA when the WTO was set up, but was also party to the
corresponding 1981 GATT agreement on government procurement.
The
aim of the GPA is to ensure transparency in relation to laws, regulations and
procurement practice. It will lay a foundation for well-functioning markets and
better use of resources, by enabling international competition on deliveries to
states and local authorities. This will reduce corruption and other dubious business
practices.
Most
WTO member countries have chosen not to participate in the GPA. Government
procurement is nevertheless also an issue in the global WTO context, in which
all member countries participate. Transparency in government procurement is one
of the four “Singapore
issues”, named after the WTO Ministerial Conference held in Singapore in 1996. A WTO working
group has considered this issue, not least to assess how it can be incorporated
into an expanded WTO agreement. During the Ministerial Conference held in Cancun in 2003, this issue was one of the reasons that the
conference was concluded without achieving a result. Agreement was subsequently
reached in July 2004 on a framework for further WTO negotiations, one provision
of which was that the government procurement issue was to be laid aside for the
time being. The working group has accordingly stopped work.
Government
procurement is also an issue in the WTO services negotiations. GATS Article XIII, which resulted from the Uruguay Round
and the establishment of the WTO in 1995, contains a mandate for negotiations
on the issue. There has been no sign of progress in the negotiations, despite
their having been on the agenda since 1995.
2. Status of the work under the GPA
The
GPA is presently the subject of negotiations. These are independent of the
broad WTO negotiations of the Doha Round. The negotiation mandate is apparent
from Article XXIV, para. 7(b), of the GPA, which states:
“(…) the Parties thereto shall undertake
further negotiations, with a view to improving this Agreement and achieving the
greatest possible extension of its coverage among all Parties on the basis of
mutual reciprocity, having regard to the provisions of Article V relating to developing
countries.”
Negotiations
on improvements to the text of the agreement
have been taking place for an extended period of time. Market access in the
countries party to the GPA is detailed in lists showing the scope of the agreement
in those countries. These lists are appended to the actual GPA, and set out the
public bodies, goods and services that are subject to its provisions.
Negotiations
on market access were begun at the end of 2004, when the parties put forward
their opening demands. Norway’s demands
are largely determined by its current obligations, and principally seek to support
the effort to simplify and harmonise the GPA to make it easier to understand
and more accessible to users.
Norway
also considers conformity between the different legal instruments applicable in
this area (the GPA, the EEA Agreement, the EFTA Agreement and free trade
agreements between EFTA and other countries) to be desirable, to avoid making
administration of the system unnecessarily complicated. Norway’s opening demands in
December 2004 were therefore “generic” demands, which applied to all countries.
In the course of the negotiations, additional demands will be made of
individual countries, based not least on the business community’s experiences
in different countries in relation to access to competitive tender processes.
Norway
made its initial offer
on 29 March 2006. As Norway
already has a very open procurement regime, the opening bid merely entailed
making minor adjustments to the system already in place under existing GPA
obligations.
