WTO Revises Government Procurement Agreement

December 16, 2011

On December 15, 2011, the Office of the U.S. Trade Representative announced that the Ministers representing Parties to the WTO Government Procurement Agreement (GPA) reached an agreement to revise the text of the GPA and expand the procurement that it covers. The revised agreement will give U.S. suppliers access to more than 150 additional central government entities in European Union Members States, as well as access to additional central government entities in other GPA parties, including Aruba, Hong Kong, Israel, Liechtenstein, Korea and Switzerland. Several Parties, including Israel, Japan and Aruba also agreed to reduce their monetary thresholds for including contracts in the GPA.

Japan, Korea and Israel each added a number of sub-central entities to the scope of the agreement, while Canada agreed to provide access to its provinces under the revised GPA. Parties to the agreement such as Israel, Japan, Korea, Liechtenstein and Chinese Taipei will include new enterprises in the revised GPA. The inclusion of more than 50 new categories in the services sector in Aruba, Hong Kong, Israel, Japan, Korea, Singapore and Switzerland will provide opportunities for U.S. service suppliers. Furthermore, Israel has agreed to phase-out its current requirements for domestic content from twenty percent to zero over the next fifteen years. Under the revised Government Procurement Agreement, the United States maintains all of its current exclusions and exceptions, including its exclusion of set-asides for small and minority firms.

According to the Ron Kirk, the U.S. Trade Representative (USTR), China, which joined negotiations for acceding to the GPA four years ago, still has progress to make in terms of matching the procurement standards of current GPA Parties. China has submitted three offers of terms for joining the GPA, all of which have been rejected by current GPA parties for failing to match the standards of the current Parties to the agreement. USTR Kirk recently encouraged China to include state-owned enterprises as well as more sub-central entities and services, reduce its thresholds for the size of covered contracts, and remove other broad exclusions in its accession proposal.

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