The World Trade Organization's Agreement on Government Procurement: Expanding Disciplines, Declining Membership?

Abstract

March 1995 The authors analyze the new Government Procurement Agreement (GPA) that was negotiated between a subset of General Agreement on Tariffs an Trade (GATT) members in the Uruguay Round, focusing especially on the expansion of coverage to services and on the strengthening of enforcement mechanisms. Coverage objectives were substantially achieved, although commitments contain many exceptions for services. The transparency of signatories - procurement practices was enhanced and enforcement provisions were strengthened, particularly by the introduction of a bid-protest challenge mechanism, which allows private parties (firms) to invoke the Agreement before national courts. (A potential problem: domestic courts could produce divergent interpretations of the GPA). Unlike most of the other Tokyo Round codes - for example, the agreements on technical barriers to trade (standards), import licensing, customs valuation, subsidies, and antidumping - the GPA could not be multilateralized. Its disciplines apply only to World Trade Organization (WTO) members that have signed it. Public procurement represents a major source of demand for goods and services in most countries. Getting domestic procurement policies right can therefore have major effects on welfare. And improving developing countries - access to global procurement markets could help induce governments to adopt multilateral rules, if those could be shown to be in their interests. The authors explore why only a limited number of countries have signed the GPA. They suggest the pursuit of tariffication as one avenue through which the Agreement might be expanded to cover all WTO members. In the process, the GPA could be improved economically by eliminating current provisions that allow for measures with quota-like effects, and by weakening incentives to seek absolute sector-by-sector reciprocity.