EU Enlargement: Key to Expanding the GPA

The enlargement of the European Union has been the major contributor to the expansion of the membership in the GPA.

On May 1, 2014, the European Union (EU) marked the 10th anniversary of its 2004 enlargement in which it added 10 new member states (Cyprus, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia and Slovenia). Since 2004, the EU bloc has expanded further to include three more countries: Bulgaria and Romania (2007) and Croatia (2013). These 13 member states were added to the roster of the WTO Government Procurement Agreement (GPA) by virtue of their EU membership — and not as separate GPA parties. EU enlargement has brought far more countries into the GPA than have been added through the formal accession process. Since 2001, only three new parties have acceded to the GPA: Iceland in 2001, Chinese Taipei in 2009 and Armenia in 2011.

The role of the GPA parties differs when a country accedes to the GPA as opposed to when a country is added through EU enlargement. The GPA accession process is based on negotiations between the GPA parties and the acceding country on the conformity of its procurement system to the GPA and the procurement that it will cover under the agreement. With respect to its procurement system, the GPA parties must be able to confirm that the acceding country’s “laws, regulations and administrative procedures” are in conformity with the GPA. As to the procurement that it will conduct in accordance with the GPA, negotiations continue until the parties are satisfied with the level of procurement offered by the acceding country and with all the terms and conditions of its accession. Until there is mutual agreement, negotiations will continue, as they have on China’s accession to the GPA, which are entering their 7th year.

In contrast to their involvement in the accession process, the GPA parties have a much more limited role when a new country is added to the GPA through EU enlargement. When the EU brings a new member state into the GPA, it is undertaken as a modification of its annexes under the GPA. The GPA requires the EU to formally notify the other parties of the procurement that it proposes to add to its annexes for the new member state. The other parties have 45 days to object to the EU’s proposal. The modification will not become effective until all objections are resolved. But, prolonged consultations only delay the addition of the new member state to the GPA.

In terms of the procurement covered by a new EU member state, the European Commission requires it to take on the same obligations and level of coverage as the existing EU member states. As a consequence, the GPA parties’ examination of the procurement to be covered by the new member state is limited to its list of central government entities and the indicative lists of its sub-central entities and utilities.

The GPA parties do not confirm that the new member state’s procurement regime is in conformity with the GPA. That responsibility is assumed by the European Commission, which requires the new member state to comply with the GPA through its implementation of the EU procurement directives.

Even though EU enlargement gives only a limited role to GPA parties in adding a country to the GPA, it has had an important beneficial effect on the GPA. Without EU enlargement, the GPA would have a much smaller membership. The EU, which is itself a party to the GPA, plus its 28 member states constitute two-thirds of the 43 WTO members covered by the GPA. Only 14 are outside the EU.

Jean Heilman Grier

May 5, 2014

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