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Government Procurement Agreement
Government procurement accounts for an average of 15 per cent or more of a country’s GDP. The WTO’s Agreement on Government Procurement covers government purchasing of goods services and construction work valued at US$ 1.7 trillion annually. This brochure produced to mark the WTO’s 20th anniversary looks into how the Agreement came about and what it embodies.
The WTO Regime on Government Procurement
Originally an important but relatively obscure plurilateral instrument the WTO Agreement on Government Procurement (GPA) is now becoming a pillar of the WTO system as a result of important developments since the Uruguay Round. This collection examines the issues and challenges that this raises for the GPA as well as future prospects for addressing government procurement at a multilateral level. Coverage includes issues relating to pending accessions to the GPA particularly those of developing countries with a large state sector such as China; the revised (provisionally agreed) GPA text of 2006 including provisions on electronic procurement and Special and Differential Treatment for Developing Countries; and procurement provisions in regional trade agreements and their significance for the multilateral system. Attention is also given to emerging issues especially those concerning environmental social and SME policy; competition law; and the implications of the recent economic crisis.
International Trade and Green Hydrogen
Hydrogen produced exclusively from renewable power – known as green hydrogen – is widely recognised as a key pillar in replacing fossil fuels and decarbonizing sectors that cannot easily be electrified such as some industrial processes shipping and aviation. This publication – jointly produced by the International Renewable Energy Agency (IRENA) and the World Trade Organization (WTO) – explores how trade policies can support the development of green hydrogen markets. The publication highlights in particular how lowering tariffs on key products building reliable infrastructure realigning domestic support programmes and developing green government procurement can foster the development of green hydrogen supply chains and the transition to a low-carbon economy. International trade could also play a significant role in matching supply and demand for green hydrogen as the potential for domestic production in some economies might not be enough to satisfy domestic demand. The publication also addresses the challenges and opportunities for developing economies offered by green hydrogen and its derivatives such as green methanol and green ammonia. It underscores the importance of international cooperation and the need to align regulatory frameworks to encourage technology development enhanced transparency and market growth.
India’s possible accession to the Agreement on Government Procurement: What are the pros and cons?
This chapter examines the pros and cons of accession to the WTO Agreement on Government Procurement (GPA) by India. This discussion is of relevance since despite consistently resisting pressure to negotiate government procurement provisions in its regional and bilateral trade agreements in February 2010 the Government of India became an observer to the GPA. India’s decision to be a GPA observer comes at a time when interest in the GPA appears to be growing and signals that major developing countries such as India are assessing their interests in relation to GPA accession.
The benefits for developing countries of accession to the Agreement on Government Procurement: The case of Chinese Taipei
On 9 December 2008 the World Trade Organization (WTO) Committee on Government Procurement adopted the accession of the Separate Customs Territory of Taiwan Penghu Kinmen and Matsu (Chinese Taipei) to the Agreement on Government Procurement (GPA). After completing the relevant domestic legislative procedures Chinese Taipei delivered its accession document to the WTO in June 2009 and formally became the forty-first signatory to the GPA on 15 July 2009.
Untying aid through the Agreement on Government Procurement: A means to encourage developing countries’ accession to the Agreement and to improve aid effectiveness?
This chapter examines the compatibility of tied aid (i.e. aid granted on condition that goods and services for the aid-financed project are purchased from the donor country only) with the Agreement on Government Procurement (GPA) and investigates whether inserting untied aid commitments within the GPA coverage could favour developing countries’ accession to the GPA while enhancing the development character of the GPA itself and the success and coherence of donors’ development aid policies
A case study of regionalism: The EC–CARIFORUM Economic Partnership
The EC–CARIFORUM Economic Partnership Agreement was the first full Economic Partnership Agreement (EPA) to be negotiated and signed between the EC and an African Caribbean and Pacific (ACP) region as required by the terms of the Cotonou Agreement of 2000. It is also the only EPA under negotiation to dedicate a chapter to the regulation of government procurement policies. As such it stands not only as a reference point for other ACP countries’ EPA negotiations and other north–south regional trading agreements (RTAs) but it might also offer some insight into the perceived role of government procurement regulation in developing countries’ trade agreements with developed countries.
Designing effective challenge procedures: The EU’s experience with remedies
A mechanism for verifying and enforcing the applicable rules is widely considered to be an important feature of a transparent regulatory system in public procurement. An effective remedies system provides tenderers with an effective means of redress deters the contracting authorities from breaching the rules in the first place and builds confidence among businesses and the public. One regulatory regime that provides such a supplier remedies system is that of the European Union (EU) the objective of which is to open up public procurement to EU-wide competition and to encourage cross-border procurement. As part of that system the EU provides for a stringent system of supplier remedies before national review bodies that goes back more than two decades which must be put in place in each of the EU Member States. Based on experience of implementing and operating the system in the different Member States it has recently undergone significant revision at EU level with the aim of ensuring that the system is fully effective to promote its objectives.
The limited case for permitting SME procurement preferences in the Agreement on Government Procurement
Governments of countries with diverse levels of wealth maintain preferential procurement policies to support small and medium-sized enterprises (SMEs). The US is one of the most remarkable examples. With billions of dollars annually set aside for contract awards made exclusively to what in the US are known as small business concerns the US maintains some of the most extensive SME procurement preference policies that can be found anywhere in the world. So much for all the rhetoric on President Obama as socialist; these programmes have been in existence since 1953. Irony is the notion that comes to mind when trying to understand the US approach as the US also is able to liberalize substantial dollar values of its procurements as a contracting party to the World Trade Organization (WTO) Agreement on Government Procurement (GPA) and in unilateral and regional trade agreements. Other countries maintain preferential SME policies. South Africa maintains an evaluation preference system to award points to firms contributing to what is known as broad-based black empowerment in South Africa. Notably South Africa’s programme is nowhere near as broad as the programmes found in the US. Some US programmes benefit firms owned by individuals who belong to historically disadvantaged groups in the US but the US programmes also benefit ordinary SMEs regardless of ownership. Malaysia maintains a substantial preference programme to award government contracts to people of Malay descent the Bumiputera who are the majority population in the country to counter the market-dominant Chinese minority in that country.
Social policies in procurement and the Agreement on Government Procurement: A perspective from South Africa
Public procurement is extensively used in South Africa as a tool to achieve horizontal policies – that is policies that are not necessarily directly connected with the functional purposes of the goods works or services acquired in the procurement. The most pervasive of these policies are the social-policy-underlying mechanisms to redress inequalities in the South African economy created by colonization and apartheid. This policy of economic redress in favour of previously disadvantaged groups generally known as black economic empowerment (‘BEE’) forms part of the larger project of constitutional transformation in South Africa which informs the entire government agenda. In public procurement specifically the primacy of this policy is reflected in the constitutional mandate for BEE mechanisms in procurement. The policy of BEE is so pervasive that it has also found its way into private procurement in South Africa through the Broad-Based Black Economic Empowerment Act (‘BBBEEA’). The South African system thus provides an interesting example to test the ‘fit’ of the WTO’s Agreement on Government Procurement (GPA) in a context where social policy plays a major role in shaping procurement practices.
Developing multilateral rules on government procurement: The value of soft law
Discriminatory government procurement practices in many countries present a significant barrier to international trade. However to a large extent they still remain unaddressed by multilateral market-access rules. Further the WTO’s initiatives to develop multilateral disciplines on procurement have now effectively been put on hold mainly due to the strong opposition against multilateral rules on procurement from many WTO Members especially developing country Members.