The revised GPA as part of the new
international best practices &
standards for public procurement
Anna Caroline Müller
Legal Affairs Officer, WTO Secretariat
AfBB & EBRD North Africa and SEMED Regional Public
Procurement Conference
Marrakesh, Morocco
23 April 2013
1
Contents of Presentation
What is the GPA
& overview of
results of
renegotiation
2
Potential
benefits and
costs of
accession
Concluding
remarks/points
for reflection
What is the GPA
o A plurilateral agreement within the WTO system
(not all WTO Members participate)
o Part of the WTO system (and enforceable under the DSU!)
via Annex 4 of the Marrakesh Agreement.
o Renegotiated last year.
o An internationally recognized tool that promotes:
o Access to other GPA Parties’ procurement markets;
o Improved value for money in each participating
Member’s procurements;
o Good governance (transparency, fair competition and an
absence of corruption in covered procurement markets).
o Implementation of internationally recognized best
practices (compatible with e.g. UNCITRAL Model Law
2011).
3
Basic principles of the GPA
onon-discrimination,
otransparency,
integrity and
oprocedural
fairness/fair
competition
4
Basic architecture of the GPA
Text
• Provisions on national
treatment and nondiscrimination (subject to
limitations in coverage).
• Procedural provisions on
aspects of the procurement
process (transparency)
• Enforcement: provisions on
domestic review procedures (bid
challenge systems) and
application of the WTO-DSU.
• Special and differential
treatment for developing
countries.
13. 4. 2015
Appendix I: Coverage
Coverage defined through detailed
schedules (Annexes):
• Annexes 1-3: Central, sub-central
and other entities
• Annexes 4-6: Goods, services and
construction services
• Annex 7: General notes
Appendixes II-IV: Transparency
• Media or website for publication of
laws and regulations, notices,
awards and statistics.
www.ppi-ebrd-uncitral.com
5
The GPA and RTAs
o Increasing number of RTAs with procurement
chapters.
o Modeled on GPA provisions
o Differences between RTAs between GPA Parties
– RTAs with non-GPA Parties.
o “Stepping stones”
to GPA accession.
Overall convergence of
international standards/instruments!
6
Present & future membership
At present, the GPA has 42 WTO Members (mostly developed
countries such as US, EU, Canada, Japan, EFTA countries, and
advanced Asian economies)
o Recent accessions: Armenia, Chinese Taipei
o Accession initiated (10); pending or on-going: Albania,
China, Georgia, the Kyrgyz Republic, Jordan, Moldova,
New Zealand, Oman, Panama and Ukraine.
o Commitment to accede (7): Croatia, the former
Yugoslav Republic of Macedonia, Mongolia,
Montenegro, Saudi Arabia, Tajikistan and Russian
Federation.
o Others: India? Malaysia? Other Asian countries?
7
New requests for observership
o A total of 25 observer countries (+ 4 International
Organizations), out of which nine are negotiating
accession
o New observers since 2010:
o India: 10 February 2010
o Malaysia: 18 July 2012
o Indonesia: 31 October 2012
o Montenegro: 31 October 2012
8
The conclusion of the renegotiation
o 15 December 2011: political
conclusion of the
renegotiation.
o 30 March 2012: Formal
adoption (GPA/113).
o Entry into force: after
submission of instruments of
acceptance by GPA Parties
(2/3).
9
The results
Enhanc
Improv
ed
ed Text
Market
Access
Future
Work
Progra
mmes
10
Package Deal
11
Market access
Additional coverage: $80-100 billion annually
This is on top of market access worth USD 1.6
trillion annually provided under the existing
GPA !
12
What has been added in the
negotiations: a closer look
o Additional coverage of more than 400 new entities (in total, across
Parties);
o New coverage of BOTs/public works concessions by three Parties;
o Expanded coverage of goods and/or services by all Parties,
including new coverage of telecommunications services by eight
Parties;
o Full coverage of construction services by all Parties, for the first
time; and
o Reductions by several Parties in the thresholds applied under the
1994 Agreement.
13
Key improvements in the revised text (1)
o Core principles of the revised text are the same as the existing
one (non-discrimination, transparency, procedural fairness).
However, revised text incorporates:
o A complete revision of the wording to make provisions
more streamlined and user-friendly;
o Updating to take into account developments in current
government procurement practice, notably the use of
electronic tools;
o Additional flexibility for Parties' procurement authorities,
for example in the form of shorter notice periods when
electronic tools are used, or for procurement of goods and
services that are available in the commercial marketplace;
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Key improvements in the revised text (2)
o More explicit recognition of the GPA's significance for good
governance and the fight against corruption, including in new
substantive provisions that require participating governments
to carry out their GPA-covered procurements in ways that
avoid conflicts of interest and prevent corrupt practices; and
o Revised and improved transitional measures ("special and
differential treatment") for developing countries that accede
to the Agreement. Under the revised provisions, such
measures are to be tailored to the particular needs of the
individual accession candidates.
15
Transitional measures
Four possibilities
o Price preferences
o Use of offsets
o Phased-in addition of specific entities or
sectors
o Initial higher thresholds
16
Future Work Programmes
oAmong other things on:
osmall and medium-sized
enterprises,
osustainable procurement
practices,
ostatistical data,
osafety standards
17
Policy context
Enhanced importance of the procurement sector in
light of the global economic crisis
Increased pressures for policies that potentially limit
access to procurement markets
E.g.: 2009 US stimulus package and pending EU
reciprocity initiative
The GPA is the main tool of exporting economies
to preserve market access rights in this crucial
sector.
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Potential costs of accession*
Direct costs of
participating in
relevant
negotiations.
Costs of necessary
institutional
adaptations
Adjustment costs
for local
firms/industry
(but note: may already
have been incurred or may
be independently
desirable for domestic
policy reasons).
(but note: they
may well benefit
overall).
__________
*It is recognized that each acceding WTO Member
must ultimately asses these for itself.
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The GPA: What
are the benefits?
Legally ensured
market access to
other Parties
procurement markets
Benefits of internal reform
according to principles of
integrity, transparency,
and non-discrimination
Double benefit: external and internal!
20
Market access: How much?
o How much you get… depends on the size of procurement markets
covered by the GPA.
o Currently:
o an estimated USD 1.6 trillion market or around 2.5% of World GDP
(2008) of which approximately 75% come from the two largest GPA
Parties (US and EU).
o Now also agreed:
o Further expansion of coverage through conclusion of renegotiation (USD 80-100 billion per year), very possibly accessions.
The benefits … depend, in practice, on your suppliers’ interests and
competitiveness.
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Current market access opportunities…some numbers
Parties
Specific Sectors
European Union
(2007)
(for all covered gov.
entities)
(€ 1=$US 1.3705)
Japan (2008)
(except
otherwise
specified, for central
gov. entities only)
$US 11 billion
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United States
(2008)
(except otherwise
specified, for the US
Department of
Defence (DOD) only)
TOTAL
$US 287 billion
Construction Services
$US 125.7 billion
(central and subcentral gov. entities
only)
Chemical Products
$US 21 billion
$US 7.2 million
$US 2.24 billion
$US 23.25 billion
Machinery and
Associated Products
$US 14 billion
$US 329 million
$US 518 million
$US 14.85 billion
Transport Equipment
$US 9.6 billion
-
-
$US 9.6 billion
Metal and Associated
Products
$US 766 million
$US 18 million
-
$US 784 million
Mineral Products
$US 145 million
$US 129 million
$US 11 million
$US 285 million
Wood Products
$US 195 million
$US 62 million
-
$US 257 million
TOTAL
$US 171.41
billion
$US 11.55 billion
$US 289.77
billion
$US 472.7 billion
(central gov. entities
only)
$US 423.7 billion
Internal benefits
Transparency
Integrity/less
corruption
Enhanced
competition
Better value
for money
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Summary: potential benefits of accession *
Potential trade gains from assured access to other Parties’
procurement markets and insulation from possible protectionist
measures.
Possibilities for achieving enhanced value for money in acceding
countries’ own procurement systems.
Potentially increased incentives for inbound foreign direct
investment.
Opportunity to influence the terms of other Parties’ accessions.
Opportunity to influence the future evolution of the
Agreement.
__________
*It is recognized that each acceding WTO Member must ultimately
asses these for itself.
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Main topics to be addressed in the accession process
o Coverage offer (to be negotiated)
o Consistency of national legislation with GPA
requirements (may require changes to
legislative framework)
o Fulfilment of institutional requirements
(domestic review)
o Flexibilities to be provided (as needed for
developmental purposes)
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Conclusion
o Increased importance of government procurement and
the GPA in the global economy
o GPA the main “insurance policy” of exporting economies
to preserve market access rights.
o Significance for “good governance”, development and
management of public resources.
o Part of emerging standards for international best practices.
Compatible/complementary to internal reforms, RTA
negotiations.
o Overall increased interest in GPA, and accession to it due
to conclusion of re-negotiation.
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For further information:
o Anderson, Robert D. (2010). "The WTO Agreement on Government
Procurement (GPA): An Emerging Tool of Global Integration and Good
Governance," Law in Transition, Autumn 2010, pp. 1-8 to 8-8; available at:
http://www.ebrd.com/downloads/research/news/lit102.pdf.
o Anderson, Robert D. (2012). "The conclusion of the renegotiation of the
WTO Agreement on Government Procurement: what it means for the
Agreement and for the world economy," 21 Public Procurement Law
Review 3, pp. 83-94.
o Arrowsmith, Sue and Robert D. Anderson, eds. (2011). The WTO Regime
on Government Procurement: Challenge and Reform (Cambridge
University Press: 2011).
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