Croatia Added as Designated Country in Federal Procurement Regulations

The United States opened its procurement to Croatia when it became the 43rd WTO Member to join the GPA roster.

When the Republic of Croatia was added to the roster of WTO members subject to the WTO Government Procurement Agreement (GPA) on July 1, 2013, the United States had to respond with two actions to fulfill its obligations under the GPA.  The United States is obligated to treat Croatian goods, services and suppliers the same as domestic goods, services and suppliers when it conducts procurement covered by the GPA.  That meant that the United States must allow federal agencies to purchase Croatian goods and services, and to do so without applying the Buy American Act of 1933.

The Trade Agreements Act of 1979, as amended (TAA) provides the authority for the United States to open its procurement to Croatia.  The TAA generally prohibits federal agencies from purchasing goods and services that the United States covers under the GPA from a country unless it has been designated under the Act as a party to the GPA or other agreement and will provide reciprocal competitive opportunities to U.S. goods and services and suppliers (or meets similar conditions for designation).  When a country is eligible for designation, the Act authorizes the President to waive discriminatory purchasing requirements, such as the Buy American Act, with respect to that country.  The President has delegated this waiver authority to the United States Trade Representative (USTR).

As the first measure, USTR determined that the European Union (EU), including Croatia, met the requirements for designation under the TAA as a Party to the GPA that will provide reciprocal competitive procurement opportunities, as required by the TAA.  That means that the TAA purchasing prohibition will no longer apply to Croatia’s goods and services or suppliers.  Based on the determination, USTR waived the application of discriminatory purchasing requirements with respect to the goods, services and suppliers of Croatia, as a new EU member state.  The waiver, which was published in the Federal Register, became effective on September 30, 2013.

The second U.S. measure was needed to reflect the USTR determination in federal procurements rules.  Based on the USTR waiver, the Department of Defense, General Services Administration and National Aeronautics and Space Administration issued an amendment of the Federal Acquisition Regulation (FAR) to add the Republic of Croatia as a designated country under the list of WTO GPA countries.  The amendment of the FAR became effective on November 25, 2013.

The new reciprocal procurement opportunities, which Croatia is providing to U.S. goods and services under the GPA, are set out in the EU annexes to Appendix I of the GPA.  According to the EU’s Annex 1, Croatia’s central government coverage includes the Office of the President, a wide range of ministries, the courts and national bank.  Its coverage of sub-central entities and other entities is the same as other EU Member States.

Croatia and its fellow EU Member States are not separate parties to the GPA; rather, they are subject to the GPA by virtue of their membership in the EU.  The EU assumes rights and responsibilities under the GPA on behalf of its Member States.  Croatia is bound to comply with the GPA through its implementation of the EU procurement directives.

The measures that the United States has taken to open its procurement to Croatia are the same measures that it must take whenever a country joins the GPA or enters a trade agreement that opens its procurement to U.S. goods, services and suppliers.

Jean Heilman Grier

Dec. 23, 2013

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