USTR Comments on the WTO Government Procurement Agreement--January 15, 1999

Comments of the Joint Industry Group (JIG)
in Response to the
Solicitation of Public Comment Regarding
U.S. Preparations for the
Multilateral Negotiations on Government Procurement Issues

This communication constitutes the response of the Joint Industry Group (JIG) to the invitation for public comments issued by the Trade Policy Staff Committee regarding U.S. preparations for multilateral negotiations on government procurement issues [63 Fed. Reg. 68,327 (December 10, 1998)]. Given the early stage of this process, the JIG may provide further comments as the preparations for the negotiations progress.

The JIG is a member-driven coalition of over one hundred-thirty companies, trade associations, and businesses actively involved in international trade. We both examine and reflect the concerns of the business community relative to current and proposed international trade-related policies, actions, legislation, and regulations, and undertake to improve them through dialogue with the Executive Branch, Congress, the World Trade Organization, and the World Customs Organization. JIG membership represents more that $350 billion in trade.

Public sector procurement of goods imported from abroad constitutes a significant portion of international commerce in many parts of the world. As government procurement of goods is generally excluded from coverage under the international disciplines of the General Agreement on Tariffs and Trade 1994, the Agreement on Government Procurement (GPA) -- and its precursor, the Tokyo Round Government Procurement Code -- constitute the primary source of internationally agreed rules on the conduct of government procurement. Yet to date only twenty-six states and separate customs territories are parties to the GPA. The JIG applauds the policy of the United States to urge that each state or separate customs territory that seeks accession to the Agreement Establishing the World Trade Organization (WTO) accedes as well to the GPA.

In the next round of negotiations, the United States should seek to elevate the status of the GPA from a plurilateral agreement to a full-fledged multilateral agreement to which all WTO Members -- new and old -- will be bound as a matter of course. In the meantime, the United States should seek to expand the number of parties to the plurilateral Agreement and pursue the negotiation of a multilateral agreement on transparency in government procurement.

The JIG provides the following specific comments on the substantive issues enumerated by the Committee in its Federal Register notice:

The text of the GPA should be re-organized or simplified to make the Agreement more understandable to officials responsible for its implementation, while maintaining its effectiveness in ensuring open and competitive procurement procedures. The simplification of the text should make it more attractive to new entrants, particularly to developing country Members and acceding states and separate customs territories.
The Agreement should be updated to accommodate electronic communications and other emerging technologies used in modern procurement systems.
The use of electronic communications and other emerging technologies would allow for greater flexibility in the minimum time periods for submission of bids established under the Agreement, while ensuring that all international bidders have adequate time to participate.
The United States should seek to expand GPA parties' market access commitments to cover additional goods and additional central and sub-central government entities.

In addition, the JIG notes the progress made by the Working Group on Transparency on Government Procurement. In particular, the JIG provides the following comments on issues raised in the Report (1998) to the General Council of the Working Group (WT/WGTGP/2, circulated 17 November 1998):

Members should be required to ensure transparency in government procurement at all levels of government (see paragraph 6 of the Report) for all types of goods (and services) being procured (see paragraph 9) and in all types of transactions (see paragraphs 11 through 15).
In response to a question restated in the Report (at paragraph 2), transparency of procurement processes would be of interest to foreign suppliers even when access is reserved to domestic suppliers. For example, an integrated foreign supplier, armed with the knowledge of significant market opportunities created by government procurement reserved to domestic suppliers, might seek to supply parts and components to a domestic supplier of the finished product subject to the tender process.
A multilateral agreement on transparency in government procurement should be drafted in a sufficiently straightforward manner to facilitate the application of its disciplines to developing as well as developed country Members. Developed country Members should provide technical assistance as needed, but the agreement should not include provisions for special and differential treatment of developing country Members with respect to the disciplines of the Agreement themselves.
Finally, a multilateral agreement on transparency in government procurement should be developed in close cooperation with negotiations on transparency in trade in goods generally, which the JIG has suggested in its comments dated October 16, 1998, to the Committee on its solicitation of public comment on preparations for the 1999 Ministerial Conference.

The Joint Industry Group thanks the Trade Policy Staff Committee for the opportunity to comment on the WTO Government Procurement Agreement.