WTO GPA Market Access Talks Off To Slow Start As Requests Lag

Original Publication Date: 
13 Gennatio, 2005
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Inside US Trade
January 14, 2005

WTO GPA market access talks off to slow start as requests lag

World Trade Organization negotiations aimed at improving countries' market access commitments under the plurilateral Agreement on Government Procurement have gotten off to a slow start as all parties to the agreement missed a November deadline for tabling initial requests for improved market access, and those requests have only recently started to trickle in. Major players in the government procurement talks like the European Union, Korea and Switzerland have still not submitted their initial requests.

In late December, the U.S., Canada, Japan, Norway and Hong Kong tabled their initial requests, and a Geneva source said Singapore tabled its initial request just this week. That leaves the EU, Korea, Switzerland, Iceland, Israel, Liechtenstein and the Netherlands on behalf of Aruba still table their initial requests.

Geneva sources said these countries could table their requests in the coming weeks, while one source speculated that some countries might not feel any pressure to move until closer to a March meeting of the government procurement committee.

Geneva sources said the 35 WTO members covered by the agreement, 25 of which are EU member states, do not for the moment feel any great sense of urgency in trying to move the talks forward. As evidence, one Geneva source noted that the committee has yet to name a replacement for outgoing chairman Niklas Bergstrom of Sweden.

One Geneva source said the lack of urgency could in part be attributed to the fact that the market access negotiations are not part of the single undertaking of the Doha round.

Other Geneva sources speculated that ultimately, some parties to the agreement might begin to press others to ensure that the market access negotiations are completed no later than the end of the Doha round. One Geneva source speculated that such a push could come from the U.S. and EU, who are seen as the most eager to secure improved market access commitments.

One Geneva source said pressure to conclude the negotiations in tandem with the Doha round could be an effective way at getting countries perceived to be reluctant at participating in the talks, such as Israel, to increase their level of involvement. This source said Israel is extremely reluctant to engage in the negotiations, believing that whatever the outcome, the talks will provide little in the way of new opportunities for Israeli firms. For the moment, this source said Israel has no intention of tabling its initial request.

Last July, the government procurement committee agreed on negotiating modalities that call on members to finish the market access negotiations by the beginning of 2006. One Geneva delegation source said parties to the agreement would still prefer to complete the negotiations so as to meet the more ambitious early 2006 deadline.

For now, Geneva sources said it is too early to clearly identify the most contentious market access issues that could complicate the negotiations.

However, one source noted that should Israel fully involve itself in the negotiations, it is likely to wage a strenuous defense of its government procurement offset rules. Those rules call on any foreign firm that wins an Israeli government procurement contract to devote a certain percentage of the contract to Israel, with the firm able to work out a specific arrangement for doing so with the Israeli government.

The July modalities call on members to aim to submit their initial market access offers by March 1, but to have them in no later than May 1. In line with the modalities, the market access talks are to be conducted primarily on a bilateral basis. Following the submission of initial offers, the modalities call on members to make arrangements for rounds of bilateral negotiations that will ultimately lead to countries having to table revised offers by the end of October.

The various bilateral negotiating rounds will most likely take place "back-to-back" with regular government procurement committee meetings, according to the modalities. The committee is scheduled to meet again March 14-18 and then again during the weeks of May 30, July 25 and October 10.

Outside of the largely bilateral market access negotiations, which are meant both to improve the existing market access coverage and eliminate discriminatory measures that distort open procurement, the modalities call for the conclusion of a range of multilateral talks on non-market access issues by the beginning of 2006.

Among the issues members are to tackle multilaterally are whether to harmonize the threshold levels above which foreign firms can bid for government contracts, and whether there should be a uniform level of coverage of the entities covered by the agreement. Countries have also been tasked with concluding negotiations on whether the annex where countries list the entities covered by the agreement should follow a positive or negative list approach.

Article XXIV:7 of the government procurement agreement calls on members to begin negotiations on improving the agreement and extending market access coverage and eliminating discriminatory measures no later than three years after the agreement took effect. However, until the July modalities were agreed to, the majority of this work focused on making non-market access related improvements to the deal.

So far the market access negotiations have generated little interest in the U.S., as only three submissions were tabled with the U.S. Trade Representative's Office last year in response to a Federal Register notice soliciting comments on the negotiations.

A submission from the Initiative for Software Choice (ISC) urged the Bush Administration to join the EU in pressing China to join the government procurement agreement. ISC's submission noted that China's WTO accession protocol calls on the Chinese Government to initiate negotiations to join the agreement by tabling an appendix listing the government entities it is willing to subject to the agreement's provisions.

However, the government procurement committee's annual report noted that there were no developments in 2004 regarding China's possible accession to the agreement.

A Public Citizen submission called on the Bush Administration not to "recruit" the 13 remaining U.S. states that are not covered by the government procurement agreement and not to make any commitments that would subject municipal and county governments to the provisions of the agreement.

Public Citizen also called on the administration not to use the market access negotiations to eliminate numerous U.S. exceptions and reservations covering national security, set-asides for small and minority-owned businesses, federal funds for mass transit and highway projects as well as certain state-specific carve-outs including those covering automobiles, software, construction services and beef.