2014 International Procurement Developments

In 2014, the major developments in international procurement centered on the WTO Government Procurement Agreement.

In 2014, the implementation of a major revision of the WTO Government Procurement Agreement (GPA) was the most significant development. In addition, the GPA parties gave the green light to two more WTO members to join the GPA.

 WTO Government Procurement Agreement

Implementation of Revised GPA: In April 2014, the GPA reached a milestone with the implementation of a major revision of the Agreement. The revised GPA is in force for 12 of the 15 GPA Parties:

  • Canada, European Union (and its 28 member states), Hong Kong China, Iceland, Israel, Japan, Liechtenstein, the Netherlands with respect to Aruba, Norway, Singapore, Chinese Taipei (Taiwan) and the United States.

Only three Parties have not yet ratified it: Armenia, the Republic of Korea and Switzerland. The 1994 GPA continues to apply to them. See Implementation of Revised GPA.

Revision of GPA Text: The GPA revision significantly improves the GPA text. For an outline of the improvements, see Revising the GPA: Better Procedural Rules to Enhance Use.

Expansion of Covered Procurement: The GPA revision also expands the procurement that is covered by the GPA, by an estimated $80 billion to $100 billion. For details on the expanded procurement commitments, see U.S. Procurement Covered under Revised GPA and New Procurement Opportunities under Revised GPA.

Work Programs: With the implementation of the revised GPA, the WTO Government Procurement Committee (GPA Committee) initiated five work programs, which are intended to address issues not resolved during the GPA negotiations, as well as take up new issues. For a discussion of the work programs, see Work Programs for Unfinished Business in Revision of GPA.

Arbitration Procedures: During 2014, the GPA Committee made significant progress on draft arbitration procedures. The revised GPA requires the Parties to develop arbitration procedures to aid in the resolution of disputes that arise when one Party objects to another Party’s proposed withdrawal of an entity from coverage under the GPA. For background on the arbitration issue, see Need to Initiate GPA Arbitration Process.

Accessions to the GPA: In 2014, the Parties approved the GPA accession of two WTO Members: Montenegro and New Zealand. They are expected to become GPA Parties in 2015, after they deposit their instruments of accession with the WTO (see GPA Gains Two New Members). Also, in November 2014, Australia expressed its intention to seek membership in the GPA (see Australia Prepares to Join the GPA).

Eight WTO members are in the process of negotiating accession to the GPA: Albania, China, Georgia, Jordan, the Kyrgyz Republic, Moldova, Oman and Ukraine.

China: China has been engaged in negotiations on the terms of its accession to the GPA for seven years, since December 2007. It has submitted several revised offers and promised another offer in 2014. For background, see Modest Improvements in China’s 2013 GPA Offer, Obstacles Remain. [Note: China’s 2014 offer will be examined in a subsequent posting.]

Moldova: In 2014, Moldova submitted new revised offers of the procurement that it proposes to cover under the GPA. In addition, the GPA parties reviewed draft amendments to Moldova’s Law on Public Procurement, which is intended to bring it into line with the revised GPA.

Ukraine: In 2014, Ukraine submitted two revised offers in its negotiations to join the GPA.

Observers to the GPA: In 2014, Tajikistan became an observer to the GPA. Currently, 28 WTO Members have observer status in the GPA Committee:

  • Albania, Argentina, Australia, Bahrain, Cameroon, Chile, China, Colombia, Georgia, India, Indonesia, Jordan, the Kyrgyz Republic, Malaysia, Moldova, Mongolia, Montenegro, New Zealand, Oman, Panama, the Russian Federation, Saudi Arabia, Sri Lanka, Tajikistan, the former Yugoslav Republic of Macedonia, Turkey, Ukraine and Viet Nam.

E-GPA Portal:  The WTO Secretariat has established an E-GPA Portal that provides a single point of access to the market access information under the revised GPA, as well as related information provided by the Parties.

World Bank Procurement Reform: In July 2014, the World Bank issued the framework of its proposed procurement reform and sought comments from stakeholders. It plans to begin implementation of the reforms in July 2015. In its proposed reform, the Bank recognized the significant role of the GPA in ensuring that the procurement systems of its members meet international standards. The Bank will allow GPA members that receive Bank funding to use their own national procurement systems instead of the Bank’s procurement rules, subject to certain requirements. For an examination of the reforms, see World Bank Procurement Reform Promotes GPA.

Canada-European Union Agreement: In 2014, the Canada and the European Union made public the terms of their Comprehensive Economic and Trade Agreement (CETA).  Under it, Canada agrees to an unprecedented opening of its procurement market. In exchange, the EU will provide Canada with access to procurement that it is denied under the GPA. For an examination of the provisions, see Update: EU-Canadian Trade Pact Now Public.

 Korean FTA Agreements with Procurement Commitments:  Korea completed negotiations of two agreements. One was with Canada, where access to procurement of goods and services by central government entities was reduced from the GPA threshold of 130,000 Special Drawing Rights (SDRs) (US$204,000) to 100,000 Korean won and Can$100,000. In a second agreement, Korea will open its central government procurement to New Zealand. For a discussion of the agreements, see, Korea’s New Trade Agreements.

Jean Heilman Grier

January 5, 2015