Central Asia, China to Sign WTO Government Procurement Agreement

Kazakhstan informed the Committee on Government Procurement at its 26 February meeting of the progress it has made to initiate negotiations to join the WTO plurilateral Government Procurement Agreement (GPA). The Committee also discussed the ongoing negotiations of China, the Kyrgyz Republic, North Macedonia, Tajikistan and Russia to join the GPA.

Kazakhstan said that it hopes to submit its initial market access offer to the Committee in the near future. The delegation also said that opportunities for foreign bidders to participate in its overnment procurement market have been broadened by the creation of a new portal for government procurement and the acceptance of electronic forms under a new government procurement law. GPA parties welcomed the announcement and said they look forward to receiving the relevant documentation from Kazakhstan.

In addition to an initial market access offer, Kazakhstan is required to submit replies to a checklist of issues regarding its government procurement legislation to kick off negotiations.

Kazakhstan, the host of the WTO's 12th Ministerial Conference from 8 to 11 June 2020, was granted observer status by GPA parties in October 2016 and submitted its application to join the GPA on 29 November 2019. This is in line with the commitment it made upon joining the WTO in 2015 whereby it would start negotiating its GPA accession within four years of becoming a WTO member.

Parties also welcomed the announcement by Switzerland that its Parliament has adopted the revised GPA and all implementing legislation and that it will subsequently submit its Instrument of Acceptance to the Committee later this year. The objective is to have both the revised GPA and the updated federal and cantonal government procurement legislation enter into force on 1 January 2021. The Chair welcomed this "encouraging" news. Switzerland is the last party that has yet to accept the revised GPA, which entered into force in April 2014.

The GPA is a plurilateral agreement — potentially open to all WTO members but binding only the parties to the Agreement. Each applicant's terms of participation are negotiated with GPA parties and set out in its respective schedule, which contains several annexes defining the party’s commitments with respect to:

· the procuring entities whose procurement processes will be open to foreign bidders

· the goods, services and construction services open to foreign competition

· the threshold values above which procurement activities will be open to foreign competition

· exceptions to the coverage.

Currently, 48 WTO members are bound by the Agreement. Australia is the latest member to have acceded to the Agreement in 2019. The GPA aims to open up, in a reciprocal manner and to the extent agreed between WTO members, government procurement markets to foreign competition, and make government procurement more transparent. It provides legal guarantees of non-discrimination for the products, services and suppliers of GPA parties in covered procurement activities, which are currently worth an estimated USD 1.7 trillion annually. Government procurement typically accounts for about 15% of developed and developing countries' economies.

Ongoing negotiations

Also under discussion at the meeting were other ongoing negotiations on accession to the GPA, including those by China, the Kyrgyz Republic, North Macedonia, Tajikistan and the Russian Federation. GPA parties reiterated their interest in seeing progress in these accession processes. The Chair encouraged the acceding members to keep engaging with GPA parties "with creativity and pragmatism."

China

China said that its sixth revised offer submitted in October 2019 contains substantive progress, including on threshold values, inclusion of provinces and state-owned enterprises, the coverage of services and construction works and the notes on exclusions. China also noted that replies to the checklist of issues have been updated and will be submitted to the Committee once internal clearance has been given. Parties encouraged Beijing to address remaining concerns and to promptly submit the updated replies to the checklist of issues.

Kyrgyz Republic

The Kyrgyz Republic informed parties of a new government procurement law circulated in June 2019 and of the active steps taken to revise its market access offer "to smooth out parties' concerns." The Chair encouraged Bishkek to submit its revised market access offer in advance of the next Committee meeting in May to allow a revision by parties.

North Macedonia

A delegation from Skopje, North Macedonia, reported on bilateral meetings with other GPA parties and expressed "hope to become a full-fledged party to the GPA in the near future". Parties appreciated the delegation's constructive engagement in bilateral meetings and encouraged Skopje to address their concerns. The Chair called on parties to keep engaging with each other to find a mutually-agreed path forward as quickly as possible.

Russian Federation

Russia reported ongoing work on a future federal law seeking to make its procurement system more transparent. The delegation also said that while it continues to examine parties' questions and comments, it remains open for consultation. Parties urged Moscow to submit the revised relevant documentation, including a significantly improved market access offer, as early as possible.

Tajikistan

A senior official from Dushanbe introduced Tajikistan's latest market access offer, which was recently submitted. He also reported on several constructive bilateral meetings with parties. Several parties said that the issue of a price preference programme has yet to be satisfactorily addressed.

Other negotiations

The United Kingdom, no longer a member State of the European Union since 1 February, became an observer to the GPA Committee at the meeting. The UK is seeking to accede to the revised GPA in its own right after the transition period (provided under the EU-UK Withdrawal Agreement) during which the United Kingdom is treated as an EU member State.

Other accession-related developments

Other WTO members with currently pending accession negotiations include Albania, Georgia, Jordan and Oman. In addition to Kazakhstan, four other members have GPA-related commitments in their respective accessions to the WTO, which they negotiated with WTO members. These are Afghanistan, Mongolia, Saudi Arabia and Seychelles.

Afghanistan announced a new law whereby government procurement markets are open to foreign bidders.

Albania informed parties that submissions of foreign bids are now possible online. New information has recently been made available online under a new law passed to further increase the efficiency and effectiveness of government procurement procedures.

Georgia said that the chapter on government procurement contained in its free trade agreement with the European Free Trade Association member States was based on the GPA. To that extent, GPA-based obligations were fully enforceable in Georgia, it said. The country also announced the creation in the near future of an independent and centralized review body for government procurement and said that all government procurement procedures can be completed electronically.

Seychelles announced the current review of its internal government procurement system, which it aims to complete in 2021.

The Chair welcomed the updates and expressed "hope for new developments from these WTO members in the course of the year."

Notifications for transparency

The Chair reminded parties of the importance of notifying national legislation, threshold values and statistics. The Netherlands with respect to Aruba mentioned a recent workshop organized by the WTO in cooperation with the European Bank of Reconstruction and Development, which helped to address the challenges Aruba faces when notifying recent developments to the Committee.