Transcript Congressional European Parliament Initiative

The New WTO Government
Procurement Agreement – Its Impact
on World Procurement Markets
Jean Heilman Grier
Principal Consultant on Trade
Djaghe, LLC
The George Washington University Law School
13 May 2014
© 2014 Djaghe LLC
Introduction
 Work programs
 Arbitration process
 Expansion of market access under revised GPA
© 2014 Djaghe LLC
Work Programs
 Work Program on Small and Medium-sized Enterprises (SMEs)
 Work Program on the Collection and Reporting of Statistical Data
 Work Program on Sustainable Procurement
 Work Program on Exclusions and Restrictions in Parties’ Annexes
 Work Program on Safety Standards in International Procurement
 For more information, see Work Programs for Unfinished Business
in Revision of GPA, Trade Blog: http://trade.djaghe.com
© 2014 Djaghe LLC
GPA Arbitration Process
 New approach to facilitate resolution of disputes over whether
a Party should be allowed to withdraw an entity from coverage
 Will be implemented after WTO Committee on Government
Procurement adopts:
 Arbitration procedures
 Indicative criteria that demonstrate effective elimination of
government control or influence over an entity's covered
procurement
 For more information, see Need to Initiate GPA Arbitration Process,
Trade blog: http://trade.djaghe.com
© 2014 Djaghe LLC
Covered Procurement under Revised
GPA
 Incorporates concept of covered procurement to simplify
references to procurement covered under the GPA
 Means procurement for government purposes:
 Of goods and services as specified in each Party’s annexes to Appendix
I and not for commercial sale or resale
 By any contractual means, including purchase, lease, and rental or hire
purchase, with or without option to buy
 For which the value is estimated to equal or exceed relevant threshold
 By a procuring entity (an entity covered under Party’s annexes)
 Not otherwise excluded from coverage.
© 2014 Djaghe LLC
Thresholds under GPA
 Annex 1: Central government goods and services
 130,000 SDRs (before some reductions in revised GPA)
 Annex 2: Sub-central government goods and services
 Most Parties: 200,000 SDRs
 Canada and United States: 355,000 SDRs; Israel: 250,000 SDRs
 Annex 3: Other entities goods and services
 Most Parties: 400,000 SDRs
 U.S.: $250,000 threshold for federal government enterprises
 Construction services procured by all entities
 Most Parties: 5,000,000 SDRs
 Japan & Korea: 15,000,000 (for Annexes 2 & 3); Israel: 8,500,000 SDRs
© 2014 Djaghe LLC
Thresholds Reduced
under Revised GPA
 Israel: Will lower central government threshold for construction
services from 8,500,000 SDRs to 5,000,000 SDRs in 2019
 Japan and Netherlands with Respect to Aruba: Reduced central
government threshold for goods and services from 130,000 SDRs to
100,000 SDRs
 Aruba: Reduced central government threshold for construction
services from 5,000,000 to 4,000,000 SDRs
 Korea: Reduced Annex 3 threshold for goods and services from
450,000 SDRs to 400,000 SDRs
© 2014 Djaghe LLC
Annex 1: Central Government
Scope of Coverage
 Annex 1 coverage based on:
 Positive lists (most Parties specify entities covered)
 Description/category coverage
 Executive/administrative entities: Parties cover all or most central
government entities
 Judiciary: Several Parties cover courts
 Legislature: Several Parties cover legislatures
 Coverage varies based on governmental system
© 2014 Djaghe LLC
Expansion of Central Government
Coverage under Revised GPA

European Union: Added 1 EU-wide entity - the European External Action Service plus Member State entities

Hong Kong China: Added Chief Executive’s Office and Secretariat, Commissioner on Interception of
Communications and Surveillance

Israel: Added 5 central government entities, including Small and Medium Business Agency; and removed several
product exclusions for Ministry of Health

Korea: Added 8 entities, including National Emergency Management Agency, Defense Acquisition Program
Administration, Korea Communications Commission and Fair Trade Commission

Liechtenstein: Added courts and Parliament

Aruba: Added 9 entities, including Parliament

Switzerland: Added federal judicial and criminal prosecution authorities, including Federal Supreme Court,
Federal Criminal Court, Federal Administrative Court, Federal Patent Court and the Office of the Attorney General;
and 3 federal assembly entities: National Council, Council of States and Parliamentary Services

United States: Added 11 federal entities, including Social Security Administration, Federal Energy Regulatory
Commission and Millennium Challenge Corporation; covered Transportation Security Administration
© 2014 Djaghe LLC
EU “Catch-all” Central Government
Coverage for Member States
 Offers comprehensive “catch all” coverage of all central government
entities of its Member States – both existing and future entities
 Only provides comprehensive coverage to 5 Parties: Iceland, Aruba,
Norway, Liechtenstein and Switzerland
 Gives Israel 2nd best coverage: access to all listed entities (not future
entities)
 Provides 3rd level of coverage (all listed entities, except those marked
by asterisk) to 8 Parties, including Armenia and U.S.
 Refined its coverage with 4th category for U.S., Japan and Chinese
Taipei: access to entities marked by double asterisk
© 2014 Djaghe LLC
Annex 2: Approaches to Sub-central
Coverage
 All GPA Parties cover their sub-central entities
 Two approaches to coverage of sub-central entities
 Positive list of specific entities, used by Armenia, Canada, Israel, Japan,
Korea, Switzerland and United States
 Coverage by description or definition (may include partial list of entities),
includes EU, Iceland, Liechtenstein and Norway
 Type of coverage depends on governmental structure
 Centralized procurement systems, such as EU
 Federal systems such as U.S.
© 2014 Djaghe LLC
Expansion of Sub-central Coverage
under Revised GPA
 Canada: Extended to all Parties (except Iceland &Liechtenstein)
coverage of provinces & territories that it had provided to U.S. in 2010
 Japan: Added 7 designated cities: Saitama-shi, Shizuoka-shi, Sakaishi, Niigata-shi, Hamamatsu-shi, Okayama-shi and Sagamihara-shi
 Korea: Added Ulsan Metropolitan City and local governments entities
in 3 metropolitan cities: Seoul (25 local governments); Busan (16 local
governments); and Incheon (10 local governments)
 Chinese Taipei: Added bureau-Level administrative units of Kaohsiung
County Government, which merged with Kaohsiung City Government
© 2014 Djaghe LLC
Annex 3: Coverage of Government
Enterprises and Other Entities
 Coverage includes utilities, government enterprises, state-owned
entities, state-invested entities and other entities where government
has control or influence
 Coverage of specific entities
 Canada, Hong Kong China, Israel, Japan, Korea, Netherlands with
respect to Aruba, Singapore, Chinese Taipei and the United States
 Coverage by sectors or general categories
 Armenia, EU, Iceland, Liechtenstein, Norway and Switzerland
 Sectors covered include electricity, urban transport, airports, ports and
water
© 2014 Djaghe LLC
Expansion of Annex 3 Coverage
under Revised GPA
 Israel: Added 9 government enterprises, including Environmental Services
Co. and three development companies
 Japan: Added Japan Alcohol Corporation
 Korea: Added Korean Rail Network Authority
 Chinese Taipei: Added National Taiwan College of Physical Education
 United States: Added financing of telecommunications projects by Rural
Utilities Service (waived “buy American” requirement)
 Aruba: Withdrew all Annex 3 entities due to privatization
© 2014 Djaghe LLC
Annex 4: Expansion of Goods Coverage
under Revised GPA
 Annex 4 (Goods Annex) added
 Israel: Removed exclusions for several goods procured
by its Ministry of Health
 United States: Removed exclusion of Transportation
Security Administration, except for textile and apparel
goods
© 2014 Djaghe LLC
Annex 5: Coverage of Services
 Positive list of services and construction services
 Access provided only to listed services
 Used by all Parties except United States
 Negative list of services and construction services
 Provides access to all services except those listed
 Covers new services that are created
 Only used by the United States
© 2014 Djaghe LLC
Expansion of Services Coverage
under Revised GPA

Telecommunication services: EU, Hong Kong China, Iceland, Aruba, Liechtenstein, Norway
and Switzerland expanded partial coverage of telecommunications services to all of sector

Hong Kong China: Added 5 services categories

Israel: Added 6 categories of services, including commercial courier services, financial services
(insurance, banking & investment) and armored car services.

Japan: Added 18 service categories, but only for its central government entities; New services
include management consulting services and packaging services

Korea: Added 5 service categories, including computer services

Aruba: Added 12 categories of services, including all services related to management consulting,
accounting, auditing and bookkeeping service and market research and opinion polling services

Singapore: Added executive search services.

Switzerland: Added more than 10 services, including certain legal advisory and taxation services
© 2014 Djaghe LLC
Annex 6: Coverage of Construction
Services
 Positive list of construction services
 Access provided only to listed services
 Used by all Parties except United States
 Negative list: U.S. uses
 Parties cover all construction services, except for U.S.
exclusion of dredging
© 2014 Djaghe LLC
Expansion of Construction Services
Coverage under Revised GPA
 EU
 Covered works concessions contracts under national treatment
regime when the contracts are awarded by central or sub-central
government entities covered under the GPA
 Limited access to Iceland, Liechtenstein, Norway, Aruba and
Switzerland
 Japan: Extended coverage to procurement based on its
Private Finance Initiative
 Korea: Covered build-operate-transfer contracts
 Liechtenstein: Added several construction services so that it
now covers all construction services
© 2014 Djaghe LLC
Offsets Commitments
under Revised GPA
Israel: Commitment to end its use of offsets
Will not apply offsets for procurement below 3,000,000
SDRs
Will phase-out use of offsets over a 15-year period by
progressively reducing
Number of entities that apply offsets
Level of offsets from the current 20% level to zero
© 2014 Djaghe LLC
Contact Information
Jean Heilman Grier
Principal Consultant on Trade
Djaghe, LLC
[email protected]
Website: www.djaghe.com
Trade Blog: http://trade.djaghe.com
© 2014 Djaghe LLC