Establishing the GPA in Latin America

Chile, Colombia or Peru should lead Latin America into the WTO Government Procurement Agreement.

The 43 WTO members covered by the WTO Government Procurement Agreement (GPA) do not include any members from Latin America. Moreover, only four Latin American countries are even observers to the GPA, and all became observers in the 1990s: Colombia in 1996 and Argentina, Chile and Panama in 1997. Panama is the only country in that region to have embarked on negotiations to accede to the GPA; but after years of inactivity, it formally abandoned those efforts in 2013. Three countries are prime candidates to join the GPA because they already have agreements with the United States and the European Union (EU), as well as with other key GPA parties. GPA accession would be a relatively easy step for any of the three to take.

Chile, Colombia and Peru have exchanged government procurement commitments with many GPA parties. All three countries have commitments to open their procurement under free trade agreements (FTAs) with the U.S., the EU, Canada and the European Free Trade Association (EFTA), which includes four GPA parties (Iceland, Norway, Liechtenstein and Switzerland).

In addition, both Chile and Peru have procurement commitments under FTAs with three other GPA parties — Japan, South Korea and Singapore. Thus, both Chile and Peru have opened their government procurement under FTAs with 10 of the 15 GPA Parties.

All of these agreements have government procurement provisions and these agreements are closely aligned with the revised GPA. The alignment increases with the more recent FTAs.

Mexico could be a potential member of the GPA, but it may not be in a position to easily accede to the agreement. Mexico has FTAs with a number of GPA parties. Those include the U.S. and Canada under NAFTA, the EU, the EFTA countries, Israel and Japan. Unlike the agreements that Chile, Colombia and Peru have entered, Mexico’s FTA commitments are based on NAFTA, which pre-dates the revised GPA, and thus does not reflect its provisions or its broader coverage. The FTAs that Mexico negotiated after NAFTA cover procurement rules in an asymmetric manner. These FTAs generally provide for Mexico to apply NAFTA procurement procedures, while its partners that are GPA parties apply GPA procedures. Moreover, Mexico has not covered the procurement of its states under any agreement, as it would be expected to do under the GPA.

Mexico is engaged in negotiations of the Trans-Pacific Partnership (TPP) with the United States and 10 other countries. That agreement is expected to follow the model of the revised GPA. Until that agreement is concluded, it does not appear likely that Mexico will undertake GPA-level obligations.

Chile, Colombia or Peru would appear to be the most likely countries to lead their Latin American partners into the GPA since they have FTAs with the U.S. and the EU and many other GPA parties.

Jean Heilman Grier

May 19, 2014

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