Public procurement Brussels, 15 December 2011
Successful conclusion of the WTO’s government procurement negotiation: EU succeeds in gaining more market access
The World Trade Organisation’s negotiations on government procurement concluded successfully on 15 December after the Parties of the Government Procurement Agreement (GPA) reached an agreement on an updated set of tender rules and additional market access commitments. The GPA covers trade in the domain of public procurement worth 500 billion Euros globally annually. According to WTO estimates, the revision of the GPA will bring extra procurement opportunities worth around 100 billion Euros.
In total, 15 Parties, with the European Union counting as one Party, made commitments to expand market access that they offer to foreign companies. This means the Parties open up their domestic public procurement markets to foreign bidders. With the world currently facing economic turbulence, and temptations to increase barriers not reduce them, the GPA Parties showed their commitment to international trade. Having open and transparent rules on procurement is the best way to achieve value for money for government expenditure as it optimises competition.
Internal Market Commissioner Michel Barnier, who was conducting these negotiations, declared today in Geneva:
"Today, we have agreed on a significant opening of public procurement markets. Despite the temptations of protectionism during these times of global crisis, we have broken down barriers, not increased them. This will lead to more trade and benefit all economies, including Europe's.
We've won through on an important point. During the negotiations, the EU rightly insisted on a fairer global level playing field – keeping its markets open and ready to open them further, but only if other Parties did the same. In this spirit of mutual benefit and reciprocity, we have achieved good results for Europe's businesses and citizens. The new public procurement opportunities on offer for companies will be worth 100 billion Euros.
On behalf of the European Union, I express my thanks and would like to acknowledge the excellent cooperation with all GPA members."
EU Trade Commissioner Karel De Gucht said:
"Securing an international procurement deal during the WTO Ministerial meeting shows that the global trading family can and does deliver results to help boost our economies at this critical time. Today's deal is hard evidence of the relevance of the WTO and the global framework for trade. We wrapped up a decade of discussions and constructive engagement with all our GPA partners. Moreover, today's positive talks with our Japanese partners bode well for future specific trade discussions with us."
The main gains of the negotiation:
- More transparent rules for international public procurement: The international procurement of GPA Parties will be now be subject to more transparent rules. These rules are broadly similar to the EU's procurement rules, known for their fairness and clarity.
- New market access opportunities: The EU and U.S. expanded access to their central level entities, including important US Federal agencies. Canada offered access to procurement of its Provinces and Territories. Korea provides access to railway and urban transport procurement and Japan offered access to Public private partnerships and construction projects. Israel committed to phase out its offsets schedules and to lower its construction thresholds.
- Accessions and benefits for developing countries: The new text facilitates future accessions of other WTO members, including China and developing countries.
- Future work: The Parties agreed on work programmes that address issues such as sustainable procurement, support for small and medium enterprises and monitoring of exclusions and restrictions.
The Agreement on Government Procurement (GPA) governs the procurement activities of its parties and is the only legally binding agreement in the WTO on the subject of government procurement. It is a plurilateral treaty with 15 parties: Armenia, Canada, EU, Hong Kong, Iceland, Israel, Japan, Korea, Liechtenstein, the Netherlands with respect to Aruba, Norway, Singapore, Switzerland, Chinese Taipei, United States.
The WTO Ministerial meeting takes place in Geneva between 15-17th December.