The revised GPA as part of the new international best practices & standards for public procurement

1. The revised GPA as part of the new international best practices & standards for public procurement Anna Caroline Müller Legal Affairs Officer, WTO Secretariat AfBB & EBRD North Africa and SEMED Regional Public Procurement Conference Marrakesh, Morocco 23 April 2013

2. Contents of Presentation

3. What is the GPA • A plurilateral agreement within the WTO system (not all WTO Members participate) • Part of the WTO system (and enforceable under the DSU!) via Annex 4 of the Marrakesh Agreement. • Renegotiated last year. • An internationally recognized tool that promotes: • Access to other GPA Parties’ procurement markets; • Improved value for money in each participating Member’s procurements; • Good governance (transparency, fair competition and an absence of corruption in covered procurement markets). • Implementation of internationally recognized best practices (compatible with e.g. UNCITRAL Model Law 2011).

4. Basic principles of the GPA • non-discrimination, • transparency, integrity and • procedural fairness/fair competition

5. Basic architecture of the GPA Appendix I: Coverage Coverage defined through detailed schedules (Annexes): Annexes 1-3: Central, sub-central and other entities Annexes 4-6: Goods, services and construction services Annex 7: General notes Appendixes II-IV: Transparency Media or website for publication of laws and regulations, notices, awards and statistics. Text Provisions on national treatment and non-discrimination (subject to limitations in coverage). Procedural provisions on aspects of the procurement process (transparency) Enforcement: provisions on domestic review procedures (bid challenge systems) and application of the WTO-DSU. Special and differential treatment for developing countries. www.ppi-ebrd-uncitral.com 6.8.2014

6. The GPA and RTAs • Increasing number of RTAs with procurement chapters. • Modeled on GPA provisions • Differences between RTAs between GPA Parties – RTAs with non-GPA Parties. • “Stepping stones” to GPA accession. Overall convergence of international standards/instruments!

7. Present & future membership At present, the GPA has 42 WTO Members (mostly developed countries such as US, EU, Canada, Japan, EFTA countries, and advanced Asian economies) • Recent accessions: Armenia, Chinese Taipei • Accession initiated (10); pending or on-going: Albania, China, Georgia, the Kyrgyz Republic, Jordan, Moldova, New Zealand, Oman, Panama and Ukraine. • Commitment to accede (7): Croatia, the former Yugoslav Republic of Macedonia, Mongolia, Montenegro, Saudi Arabia, Tajikistan and Russian Federation. • Others: India? Malaysia? Other Asian countries?

8. New requests for observership • A total of 25 observer countries (+ 4 International Organizations), out of which nine are negotiating accession • New observers since 2010: • India: 10 February 2010 • Malaysia: 18 July 2012 • Indonesia: 31 October 2012 • Montenegro: 31 October 2012

9. The conclusion of the renegotiation • 15 December 2011: political conclusion of the renegotiation. • 30 March 2012: Formal adoption (GPA/113). • Entry into force: aftersubmission of instruments of acceptance by GPA Parties (2/3).

10. The results

11. PackageDeal

12. Market access Additional coverage: $80-100 billion annually This is on top of market access worth USD 1.6 trillion annually provided under the existing GPA !

13. What has been added in the negotiations: a closer look • Additional coverage of more than 400 new entities (in total, across Parties); • New coverage of BOTs/public works concessions by three Parties; • Expanded coverage of goods and/or services by all Parties, including new coverage of telecommunications services by eight Parties; • Full coverage of construction services by all Parties, for the first time; and • Reductions by several Parties in the thresholds applied under the 1994 Agreement.

14. Key improvements in the revised text (1) • Core principles of the revised text are the same as the existing one (non-discrimination, transparency, procedural fairness). However, revised text incorporates: • A complete revision of the wording to make provisions more streamlined and user-friendly; • Updating to take into account developments in current government procurement practice, notably the use of electronic tools; • Additional flexibility for Parties' procurement authorities, for example in the form of shorter notice periods when electronic tools are used, or for procurement of goods and services that are available in the commercial marketplace;

15. Key improvements in the revised text (2) • More explicit recognition of the GPA's significance for good governance and the fight against corruption, including in new substantive provisions that require participating governments to carry out their GPA-covered procurements in ways that avoid conflicts of interest and prevent corrupt practices; and • Revised and improved transitional measures ("special and differential treatment") for developing countries that accede to the Agreement. Under the revised provisions, such measures are to be tailored to the particular needs of the individual accession candidates.

16. Transitional measures Four possibilities • Price preferences • Use of offsets • Phased-in addition of specific entities or sectors • Initial higher thresholds

17. Future Work Programmes • Among other things on: • small and medium-sized enterprises, • sustainable procurement practices, • statistical data, • safety standards

18. Policy context

19. Potential costs of accession* __________ *It is recognized that each acceding WTO Member must ultimately asses these for itself.

20. The GPA: What are the benefits? Double benefit: external and internal!

21. Market access: How much? • How much you get… depends on the size of procurement markets covered by the GPA. • Currently: • an estimated USD 1.6 trillion market or around 2.5% of World GDP (2008) of which approximately 75% come from the two largest GPA Parties (US and EU). • Now also agreed: • Further expansion of coverage through conclusion of re-negotiation (USD 80-100 billion per year), very possibly accessions. The benefits … depend, in practice, on your suppliers’ interests and competitiveness.

22. Current market access opportunities…some numbers

23. Internal benefits

24. Summary: potential benefits of accession * __________ *It is recognized that each acceding WTO Member must ultimately asses these for itself.

25. Main topics to be addressed in the accession process • Coverage offer (to be negotiated) • Consistency of national legislation with GPA requirements (may require changes to legislative framework) • Fulfilment of institutional requirements (domestic review) • Flexibilities to be provided (as needed for developmental purposes)

26. Conclusion • Increased importance of government procurement and the GPA in the global economy • GPA the main “insurance policy” of exporting economies to preserve market access rights. • Significance for “good governance”, development and management of public resources. • Part of emerging standards for international best practices. Compatible/complementary to internal reforms, RTA negotiations. • Overall increased interest in GPA, and accession to it due to conclusion of re-negotiation.

27. For further information: • Anderson, Robert D. (2010). "The WTO Agreement on Government Procurement (GPA): An Emerging Tool of Global Integration and Good Governance," Law in Transition, Autumn 2010, pp. 1-8 to 8-8; available at: http://www.ebrd.com/downloads/research/news/lit102.pdf. • Anderson, Robert D. (2012). "The conclusion of the renegotiation of the WTO Agreement on Government Procurement: what it means for the Agreement and for the world economy," 21 Public Procurement Law Review 3, pp. 83-94. • Arrowsmith, Sue and Robert D. Anderson, eds. (2011). The WTO Regime on Government Procurement: Challenge and Reform (Cambridge University Press: 2011).