Britain’s GPA Market Access Offer Approved

On November 27th, the parties to the WTO Government Procurement Agreement (GPA) approved in principle the United Kingdom’s final market access offer for membership in the GPA, in its own right, after it leaves the European Union. They must still approve a decision that includes the terms for the UK’s accession. The parties want Britain to “continue participating in the Agreement in a seamless manner post-Brexit”. But, the timing for the UK to move from coverage under the GPA as a member of the EU to its own membership is uncertain. This post considers Britain’s accession to the GPA in the midst of the ongoing UK debate over Brexit and the importance of maintaining GPA membership.

The UK market access offer approved by the GPA parties replicates the procurement that it covers currently under the GPA as a member of the EU. Britain intends to update its GPA schedule of commitments within three months of their coming into effect, to reflect the evolution of the structure of its government procurement market. For example, Britain’s current list of covered entities does not include the Department for International Trade nor the Department for Exiting the European Union, both of which were created in 2016, following the Brexit referendum. 

While the “agreement in principle” puts Britain on track for post-Brexit membership in the GPA, the UK still needs to ratify the terms for its withdrawal from the EU. In mid-November, the EU and Britain concluded a 585-page draft Withdrawal Agreement, which sets out the arrangements for the UK to withdraw from the EU. It is accompanied by a 26-page Political Declaration that provides a framework for the future relationship between the EU and the UK.

The EU member states endorsed the legally binding Withdrawal Agreement and Political Declaration on November 25, leaving a vote by the European Parliament as the EU’s final step. However, approval by the British Parliament, which has scheduled a vote for December 11, is far from certain. There are deep divisions in the country on the contours of Brexit. If Parliament rejects the deal, a number of scenarios are possible: a “no-deal” Brexit (the UK would leave the Union without an agreement and revert to WTO terms); an attempt to negotiate a better deal with the EU; a no-confidence vote in Prime Minister Theresa May; an early general election; or even a second referendum. 

The draft Withdrawal Agreement provides for a transition period that will run from the UK’s planned EU exit on March 29, 2019 until the end of 2020, unless it is extended. During the transition period, the UK would be treated as an EU member state, bound by EU rules and the commitments in the EU’s international agreements, including the GPA; only after the transition period ends will the UK be able to join the GPA in its own right.

The Withdrawal Agreement allows the UK to negotiate, sign and ratify international agreements during the transition period, in the areas of exclusive competence of the Union, such as government procurement, provided those agreements do not enter into force or apply during the transition period, unless authorized by the Union. Government procurement provisions in the Withdrawal Agreement include rules that will apply to procurements that are undertaken during the transition period, performance of framework agreements and review procedures.

The GPA committee could meet informally in mid-December “to resolve the wording” of a draft decision on the UK’s accession. The parties would likely then need time to consult with their home governments on the draft decision. Based on those consultations, the GPA committee might be in a position to take up the decision on the UK’s accession at its next regular meeting in February 2019.

An important factor in finalizing the UK’s accession will be whether its Parliament approves the terms of withdrawal. If Britain crashes out of the EU without an agreement, then GPA accession in its own right will be necessary to ensure that the GPA parties and the UK have reciprocal access to each other’s procurement markets. That would be particularly important for UK access to U.S. procurement. The Trade Agreements Act of 1979 prohibits federal agencies from purchasing goods and services from countries with which it has not exchanged reciprocal obligations in a trade agreement.

Jean Heilman Grier

December 3, 2018

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    Book: The International Procurement System Government procurement required 40 years and substantial efforts to become part of the international trade regime, even though it comprises a significant part of the global economy. The international system requires governments to balance protectionist forces favoring local suppliers against the pressures of liberalization, which expand procurement markets and lower prices.