The 17 parties to the WTO Government Procurement Agreement (GPA) have opened government procurement valued at an estimated $1.7 trillion annually to competition within their membership. Gaining access to that procurement should be a major incentive for countries considering or in the process of negotiating accession to the GPA. The elements of that coverage, explored in detail at the 2015 WTO Symposium on “The Revised WTO Agreement on Government Procurement (GPA): an Emerging Pillar of Twenty-first Century Trade and Development”, are summarized in this post.
Thresholds: Parties generally apply similar thresholds (monetary values above which a procurement is covered), with certain exceptions. For example, Japan and Korea apply thresholds for construction services procured by two categories of entities that are three times those used by other parties.
Entity Coverage: Three categories of procuring entities are covered by the Agreement: central government entities in Annex 1, sub-central government entities in Annex 2 and other entities in Annex 3. The specific entities covered are based on a party’s government structure and negotiations with the other parties when it joined the GPA.
Central government coverage: Parties cover all or most of their major ministries and agencies, as well as a wide variety of other central government entities. Several parties cover courts, and others their parliaments or legislatures. Some parties cover central government entities in Annex 1 that another party covers in Annex 3. For example, Japan lists a number of entities in Annex 3 that are comparable to agencies that the United States lists in Annex 1. In the recent revision of the GPA, four parties (the European Union, Iceland, Norway and Switzerland) offered comprehensive coverage of central government entities, covering existing entities as well as those created in the future. But, the EU withheld that expanded coverage from several parties, including the U.S.
Sub-central coverage: Overall, the parties provide broad sub-central coverage, with some providing more comprehensive coverage than others. They use two different approaches to this coverage:
- Eight parties specify their sub-central coverage by listing the entities: Armenia, Canada, Israel, Korea, Japan, New Zealand, Chinese Taipei and the U.S.
- Five parties base their coverage on classifications of sub-central entities and provide indicative lists of the entities within the classifications: EU, Iceland, Norway, Liechtenstein, Montenegro and Switzerland.
Three parties (Hong Kong, China, the Netherlands with respect to Aruba, and Singapore) have no sub-central entities.
Other Entities: This third category of entities includes utilities, government enterprises, state-owned enterprises and other entities. As with sub-central coverage, the parties use two approaches to their coverage of these entities:
- One group (Canada, Hong Kong, China, Israel, Japan, Korea, New Zealand, Singapore, Chinese Taipei and U.S.) limits coverage to listed entities.
- The second group (Armenia, EU, Iceland, Liechtenstein, Montenegro, Norway and Switzerland) bases coverage on entities that fall within certain classifications and that undertake activities in specified sectors, which include drinking water, electricity, airports, ports and transportation, such as railways and urban transport. Each provides an indicative list of the covered entities.
Aruba is the only GPA party that does not cover any other entities. The parties’ coverage of other entities is detailed in a White Paper, “Comparison of GPA Parties’ Coverage of Other Entities”.
Goods: GPA coverage of goods is based on the principle that all goods are covered unless explicitly excluded. Defense procurement is generally based on a positive list.
Services: For coverage of services, most parties use a positive list, covering just the services that they list. Only New Zealand (the newest party) and the U.S. use negative lists and cover all services, except those they exclude.
Construction Services: GPA members cover all construction services, with the exception of dredging by Canada and the U.S., as well as several entity-specific exclusions. In addition, the EU, Japan and Korea explicitly cover some form of public-private partnerships.
Exclusions and Derogations: Many parties place certain limitations on their coverage. For example, Canada and the U.S. exclude procurement set-aside for small businesses and the EU denies the U.S. and other parties access to several elements of its entity coverage.
Jean Heilman Grier
September 14, 2015