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Practice Areas

Expanded WTO Pact on Government Procurement Takes Effect

Thursday, April 10, 2014
Sandler, Travis & Rosenberg Trade Report

An expanded plurilateral agreement designed to eliminate discrimination in government procurement took effect April 6 for ten economies. The World Trade Organization estimates that the revised Government Procurement Agreement will yield market access gains of $80-100 billion a year for participating WTO members, an 8-10% increase from the GPA’s existing coverage.

A WTO press release states that changes to the GPA include the following.

- numerous government ministries and agencies added to the scope of the agreement

- coverage extended to new services and other areas of public procurement activities

- text streamlined and modernized to include, for example, standards related to the use of electronic procurement tools

- new provision added relating to the prevention of corrupt practices in the parties’ procurement systems

- scope of original agreement reinforced to promote the conservation of natural resources and protect the environment through the application of appropriate technical specifications

- improved transitional measures incorporated to facilitate accession by developing and least-developed economies

The revised GPA is now in force for Liechtenstein, Norway, Canada, Taiwan, the United States, Hong Kong, the European Union, Iceland, Singapore and Israel. It will come into force for Japan on April 16 and 30 days after formal adoption and notification to the WTO by the other four GPA parties (Armenia, South Korea, the Netherlands with respect to Aruba, and Switzerland).

According to the WTO, the GPA ensures that signatories do not discriminate against the products, services or suppliers of other parties with respect to the government procurement opportunities that are opened to foreign competition. It also requires transparent and competitive purchasing practices in the markets covered.

In addition to the 43 WTO members that already participate in the GPA (including the EU’s 28 member states), ten other WTO members — Albania, China, Georgia, Jordan, the Kyrgyz Republic, Moldova, Montenegro, New Zealand, Oman and Ukraine — have applied to join and another five — the former Yugoslav Republic of Macedonia, Mongolia, Russia, Tajikistan and Saudi Arabia — have provisions regarding GPA accession in their respective WTO accession protocols.

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