Time to Implement the Revised WTO Government Procurement Agreement

The upcoming WTO Ministerial in Bali can spur efforts to implement the revision of the WTO Government Procurement Agreement. 

The upcoming 9th WTO Ministerial Conference in Bali in December provides a significant opportunity for the WTO Members that are Parties to the WTO Government Procurement Agreement (GPA) to implement the revision of the 1994 GPA.  In May of this year, then WTO Director-General Pascal Lamy urged the GPA Parties to quickly carry out their domestic procedures “so that the revised Agreement can enter into force by the Bali Ministerial Conference.”  By implementing this revision, the GPA Parties would demonstrate that WTO negotiations can lead to results.

At a meeting of the WTO Committee on Government Procurement earlier in October, the GPA Parties indicated that they are working toward that goal.  The Chair, Bruce Christie (Canada) was cautiously optimistic the goal would be met.  However, press reports have cast doubt on the likelihood that the Parties will be able to implement the revised GPA this year.

During the past 20 months, only two GPA Parties have ratified it – Liechtenstein in May 2013 and Norway earlier in November.*  In addition, the European Union is likely to ratify it before the Bali Conference.  On November 19, the European Parliament gave its consent to the revision.  It is now awaiting approval by the Council of the European Union.

According to the reports, the United States and several other Parties also expect to be able to ratify the revised GPA by the Bali Ministerial.  But, Japan and Switzerland apparently will not be able to do so.  No ratification in 2013 would mean that two years have passed since negotiations were concluded on the revision — after more than a decade of negotiations.

While the GPA is a plurilateral agreement that only applies to the 43 WTO Members that have signed on to it, the ability of its members to conclude a major revision of the Agreement has ramifications for the whole WTO.  It was at the last WTO Ministerial, in December 2011, that the GPA Parties finally concluded negotiations on the far-reaching revision of the GPA.  When that agreement was reached, the United States Trade Representative observed that the GPA “revision demonstrated the ability of the WTO, through hard work, dedicated effort, and the spirit of collaboration and compromise, to reach agreements that strengthen and clarify international rules and expand the international trading system.”  The GPA agreement was one of the few WTO achievements recognized at the 2011 Ministerial.  Announcement of the implementation of the GPA revision at the Bali Ministerial would further demonstrate the ability of the WTO to conclude negotiations and expand and improve upon its agreements.

The political agreement on the revised GPA at the 2011 WTO Ministerial was given final approval in March 2012 with the adoption of the results of the negotiations in a Decision on the Outcomes of the Negotiations under Article XXIV:7 of the Agreement on Government Procurement.  The revised GPA was then sent to the GPA Parties for ratification, in accordance with their respective domestic procedures.  The revised GPA cannot be implemented until it is ratified by two-thirds of the 15 WTO Parties.

The 2012 revision is the first revision of the GPA since it replaced the GATT Agreement on Government Procurement in 1996.  The GPA revision includes an overhaul of the text to make it more user-friendly and up-to-date with current procurement practices, and provides significant market access results.  According to estimates of the WTO Secretariat, the revised GPA would expand the procurement covered under the Agreement by approximately $80-100 billion annually.

With the next Ministerial fast approaching, the GPA Parties should redouble their efforts to ratify the revised GPA, and not delay any further the opportunity to reap the benefits of the revision.

Jean Heilman Grier

Updated:  November 20, 2013; November 19, 2013

Original Posting: October 14, 2013

*Canada submitted its ratification to the WTO on November 20, 2013.

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Reference

GPA II Won’t Be in Effect this Year, Washington Trade Daily, 2 (Oct. 10, 2013).

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