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WTO Members Looking to Strike Deal on Revamped Procurement Agreement
October 13, 2010

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Geneva. Trading powers are in a final push to liberalize the market for purchases by public authorities worth hundreds of billions of dollars a year as they seek to lock China into the global procurement system.

The talks are separate to the World Trade Organization’s long-running Doha round to free up global trade, but could arguably have more impact on businesses.

Government procurement has moved center stage after the economic crisis put public infrastructure spending at the heart of economic stimulus packages, while US “Buy American” policies and similar measures in other countries have raised fears of protectionism in the sector.

And the huge infrastructure needs and projects of emerging economies have raised the prospect of lucrative new markets opening in an area so far dominated by rich nations.

Diplomats at the WTO say a new government procurement agreement, or at least an outline, could be concluded this year and talks to get members to sign on to the GPA have gathered pace.

“Our objective is to wrap up the revision as soon as possible and continue to work closely with China and others as they enter the process of accession,” Robert Kasper, a US trade diplomat to the WTO, said at a forum last month.

Reliable figures on how much is at stake are hard to come by, but deputy US Trade Representative Demetrios Marantis said in July that procurement accounted for as much as 15 percent of GDP in most countries and the global market was worth $1.6 trillion in 2008, including more than $1 trillion in the United States.

The GPA is a voluntary agreement of 41 of the WTO’s 153 members, including the United States, European Union, Canada and Japan. Taiwan joined last year and China is expected to join soon.

It sets out transparent rules for public contract tenders to ensure that domestic suppliers are not favored unfairly over bidders from other parties to the agreement.

For many members the real game-changer will be bringing China into the agreement. China, which promised to become a member of the GPA when it joined the WTO in 2001, submitted a revised offer in July which was surprisingly well received, even if it did not meet all the demands of existing GPA states.

Talks are continuing on China’s accession to the GPA which ultimately could do much more for businesses in the United States and other rich countries than the extra opening by China in the broader Doha negotiations that Washington is pushing for.
 

Reuters