US and EU’s Procurement Objectives in TTIP Negotiations

Despite a common interest in expanded access to procurement in the TTIP negotiations, the EU has identified more specific objectives.

The United States and the European Union (EU) began negotiations of the Transatlantic Trade and Investment Partnership (TTIP) in July 2013 to expand trade and investment between them.  One of the shared goals in these talks is to create “substantially improved access to government procurement opportunities at all levels of government.”  They developed that goal in the U.S.-EU High Level Working Group on Jobs and Growth (HLWG), which recommended the launch of the TTIP negotiations.  The goal builds on extensive procurement commitments that the U.S. and the EU have developed over more than three decades, principally in the WTO Government Procurement Agreement (GPA).  Building on that goal, the EU has offered a more detailed elaboration of its procurement objectives in the TTIP negotiations than has the United States.

U.S. Objectives:  When the Administration notified the Congress in March 2013 of its intention to launch negotiations of the TTIP, it incorporated the HLWG goal into its two procurement objectives:

  • To “expand market access opportunities for U.S. goods, services, and suppliers of goods and services to the government procurement markets of the EU and its Member States;” and
  • To ensure that U.S. suppliers of goods and services are treated as favorably as “domestic and other foreign goods, services, and suppliers in the EU and its Member States” and that procurement is conducted in a fair, transparent and predictable manner. 

EU Objectives:  In contrast to the broad U.S. objectives, the EU has set out much more specific procurement objectives in initial TTIP Position Papers, which the European Commission published in July 2013.  In the position paper on procurement, the EU identified specific areas in which it is seeking greater access to U.S. procurement in the TTIP negotiations.

  • Central Government Coverage:  The EU would like coverage of U.S. federal government entities that are not covered under the GPA and “procurement currently subject to restrictions or domestic preferences related to federal funding,“ as well as procurement subject to specific policies, such as those related to small businesses (small business set-asides).
  • Sub-central Government Coverage:  The EU is interested in a “substantial expansion of coverage” of states.  That would include the 13 states not covered by the GPA, as well as additional coverage by the 37 states listed in the GPA.  The EU is also interested in coverage of sub-central government entities “operating at the local, regional or municipal level, as well as any other entities whose procurement policies are substantially controlled by, dependent on, or influenced by sub-central, regional or local government and which are engaged in non-commercial or non-industrial activities.”
  • Other Entities:  The EU is seeking access to procurement of “all entities governed by public law, state owned companies and similar [entities] operating in particular in the field of utilities.”  It has indicated special interest in transit/railways, urban railways and urban transport.
  • Services:  The EU wants all services covered under the TTIP, and has indicated a specific interest in “Information society services, in particular cloud-based services.”

These objectives reflect the priority the EU gives to the expansion of access to U.S. procurement in the TTIP negotiations.  When Karel De Gucht, the European Commissioner for Trade, laid out “What we need for a successful TTIP” in September 2013, he labeled procurement as one of four priorities (along with eliminating customs duties, opening up trade in services and reducing regulatory barriers for trade and investment).

In addition to its interest in access to expanded procurement, the EU is seeking procedural disciplines that go beyond those in the revised WTO Government Procurement Agreement, what it terms “GPA plus”.  The procedural areas in which the EU would like improvements include access to procurement information, technical specifications, award criteria, qualification procedures and domestic challenge mechanisms.  The EU has suggested that improved rules negotiated in the TTIP could apply to the U.S. and EU GPA commitments, as well as to additional market access commitments undertaken in the TTIP at both the federal and state levels.

After three rounds of TTIP negotiations in 2013, the work on government procurement can be expected to intensify in 2014 as the two parties elaborate on their interests and respond to each other’s specific requests.  Since the EU appears to place a higher priority on procurement in the TTIP negotiations than the U.S., the procurement negotiations are likely to be challenging.

The interests of the U.S. and EU business communities in the TTIP government procurement negotiations will be explored in upcoming postings.

Jean Heilman Grier

January 14, 2014

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