Post on 22-Dec-2015
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The New WTO Government Procurement Agreement – Its Impact
on World Procurement Markets
The George Washington University Law School
13 May 2014
Jean Heilman GrierPrincipal Consultant on Trade
Djaghe, LLC
© 2014 Djaghe LLC
Introduction
Work programs
Arbitration process
Expansion of market access under revised GPA
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Work Programs
Work Program on Small and Medium-sized Enterprises (SMEs)
Work Program on the Collection and Reporting of Statistical Data
Work Program on Sustainable Procurement
Work Program on Exclusions and Restrictions in Parties’ Annexes
Work Program on Safety Standards in International Procurement
For more information, see Work Programs for Unfinished Business in Revision of GPA, Trade Blog: http://trade.djaghe.com
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GPA Arbitration Process
New approach to facilitate resolution of disputes over whether a Party should be allowed to withdraw an entity from coverage
Will be implemented after WTO Committee on Government Procurement adopts:
Arbitration procedures
Indicative criteria that demonstrate effective elimination of government control or influence over an entity's covered procurement
For more information, see Need to Initiate GPA Arbitration Process , Trade blog: http://trade.djaghe.com
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Covered Procurement under Revised GPA
Incorporates concept of covered procurement to simplify references to procurement covered under the GPA
Means procurement for government purposes:
Of goods and services as specified in each Party’s annexes to Appendix I and not for commercial sale or resale
By any contractual means, including purchase, lease, and rental or hire purchase, with or without option to buy
For which the value is estimated to equal or exceed relevant threshold
By a procuring entity (an entity covered under Party’s annexes)
Not otherwise excluded from coverage.
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Thresholds under GPA
Annex 1: Central government goods and services 130,000 SDRs (before some reductions in revised GPA)
Annex 2: Sub-central government goods and services Most Parties: 200,000 SDRs Canada and United States: 355,000 SDRs; Israel: 250,000 SDRs
Annex 3: Other entities goods and services Most Parties: 400,000 SDRs U.S.: $250,000 threshold for federal government enterprises
Construction services procured by all entities Most Parties: 5,000,000 SDRs Japan & Korea: 15,000,000 (for Annexes 2 & 3); Israel: 8,500,000 SDRs
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Thresholds Reducedunder Revised GPA
Israel: Will lower central government threshold for construction services from 8,500,000 SDRs to 5,000,000 SDRs in 2019
Japan and Netherlands with Respect to Aruba: Reduced central government threshold for goods and services from 130,000 SDRs to 100,000 SDRs
Aruba: Reduced central government threshold for construction services from 5,000,000 to 4,000,000 SDRs
Korea: Reduced Annex 3 threshold for goods and services from 450,000 SDRs to 400,000 SDRs
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Annex 1: Central GovernmentScope of Coverage
Annex 1 coverage based on: Positive lists (most Parties specify entities covered) Description/category coverage
Executive/administrative entities: Parties cover all or most central government entities
Judiciary: Several Parties cover courts
Legislature: Several Parties cover legislatures
Coverage varies based on governmental system
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Expansion of Central Government Coverage under Revised GPA
European Union: Added 1 EU-wide entity - the European External Action Service plus Member State entities
Hong Kong China: Added Chief Executive’s Office and Secretariat, Commissioner on Interception of Communications and Surveillance
Israel: Added 5 central government entities, including Small and Medium Business Agency; and removed several product exclusions for Ministry of Health
Korea: Added 8 entities, including National Emergency Management Agency, Defense Acquisition Program Administration, Korea Communications Commission and Fair Trade Commission
Liechtenstein: Added courts and Parliament
Aruba: Added 9 entities, including Parliament
Switzerland: Added federal judicial and criminal prosecution authorities, including Federal Supreme Court, Federal Criminal Court, Federal Administrative Court, Federal Patent Court and the Office of the Attorney General; and 3 federal assembly entities: National Council, Council of States and Parliamentary Services
United States: Added 11 federal entities, including Social Security Administration, Federal Energy Regulatory Commission and Millennium Challenge Corporation; covered Transportation Security Administration
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EU “Catch-all” Central Government Coverage for Member States
Offers comprehensive “catch all” coverage of all central government entities of its Member States – both existing and future entities
Only provides comprehensive coverage to 5 Parties: Iceland, Aruba, Norway, Liechtenstein and Switzerland
Gives Israel 2nd best coverage: access to all listed entities (not future entities)
Provides 3rd level of coverage (all listed entities, except those marked by asterisk) to 8 Parties, including Armenia and U.S.
Refined its coverage with 4th category for U.S., Japan and Chinese Taipei: access to entities marked by double asterisk
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Annex 2: Approaches to Sub-central Coverage
All GPA Parties cover their sub-central entities
Two approaches to coverage of sub-central entities
Positive list of specific entities, used by Armenia, Canada, Israel, Japan, Korea, Switzerland and United States
Coverage by description or definition (may include partial list of entities), includes EU, Iceland, Liechtenstein and Norway
Type of coverage depends on governmental structure
Centralized procurement systems, such as EU
Federal systems such as U.S.
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Expansion of Sub-central Coverage under Revised GPA
Canada: Extended to all Parties (except Iceland &Liechtenstein) coverage of provinces & territories that it had provided to U.S. in 2010
Japan: Added 7 designated cities: Saitama-shi, Shizuoka-shi, Sakai-shi, Niigata-shi, Hamamatsu-shi, Okayama-shi and Sagamihara-shi
Korea: Added Ulsan Metropolitan City and local governments entities in 3 metropolitan cities: Seoul (25 local governments); Busan (16 local governments); and Incheon (10 local governments)
Chinese Taipei: Added bureau-Level administrative units of Kaohsiung County Government, which merged with Kaohsiung City Government
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Annex 3: Coverage of Government Enterprises and Other Entities
Coverage includes utilities, government enterprises, state-owned entities, state-invested entities and other entities where government has control or influence
Coverage of specific entities
Canada, Hong Kong China, Israel, Japan, Korea, Netherlands with respect to Aruba, Singapore, Chinese Taipei and the United States
Coverage by sectors or general categories
Armenia, EU, Iceland, Liechtenstein, Norway and Switzerland
Sectors covered include electricity, urban transport, airports, ports and water
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Expansion of Annex 3 Coverage under Revised GPA
Israel: Added 9 government enterprises, including Environmental Services
Co. and three development companies
Japan: Added Japan Alcohol Corporation
Korea: Added Korean Rail Network Authority
Chinese Taipei: Added National Taiwan College of Physical Education
United States: Added financing of telecommunications projects by Rural Utilities Service (waived “buy American” requirement)
Aruba: Withdrew all Annex 3 entities due to privatization
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Annex 4: Expansion of Goods Coverage under Revised GPA
Annex 4 (Goods Annex) added
Israel: Removed exclusions for several goods procured by its Ministry of Health
United States: Removed exclusion of Transportation Security Administration, except for textile and apparel goods
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Annex 5: Coverage of Services
Positive list of services and construction services
Access provided only to listed services
Used by all Parties except United States
Negative list of services and construction services
Provides access to all services except those listed
Covers new services that are created
Only used by the United States
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Expansion of Services Coverage under Revised GPA
Telecommunication services: EU, Hong Kong China, Iceland, Aruba, Liechtenstein, Norway and Switzerland expanded partial coverage of telecommunications services to all of sector
Hong Kong China: Added 5 services categories
Israel: Added 6 categories of services, including commercial courier services, financial services (insurance, banking & investment) and armored car services.
Japan: Added 18 service categories, but only for its central government entities; New services include management consulting services and packaging services
Korea: Added 5 service categories, including computer services
Aruba: Added 12 categories of services, including all services related to management consulting, accounting, auditing and bookkeeping service and market research and opinion polling services
Singapore: Added executive search services.
Switzerland: Added more than 10 services, including certain legal advisory and taxation services
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Annex 6: Coverage of Construction Services
Positive list of construction services
Access provided only to listed services
Used by all Parties except United States
Negative list: U.S. uses
Parties cover all construction services, except for U.S. exclusion of dredging
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Expansion of Construction Services Coverage under Revised GPA
EU Covered works concessions contracts under national treatment regime
when the contracts are awarded by central or sub-central government entities covered under the GPA
Limited access to Iceland, Liechtenstein, Norway, Aruba and Switzerland
Japan: Extended coverage to procurement based on its Private Finance Initiative
Korea: Covered build-operate-transfer contracts
Liechtenstein: Added several construction services so that it now covers all construction services
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Offsets Commitments under Revised GPA
Israel: Commitment to end its use of offsets
Will not apply offsets for procurement below 3,000,000 SDRs
Will phase-out use of offsets over a 15-year period by progressively reducing
Number of entities that apply offsets Level of offsets from the current 20% level to zero
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Contact Information
Jean Heilman GrierPrincipal Consultant on TradeDjaghe, LLCjhgrier@djaghe.comWebsite: www.djaghe.com
Trade Blog: http://trade.djaghe.com
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