GPA pot increases to $100 billion

16 December 2011

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16 December 2011 | Adam Leach

Parties to the Government Procurement Agreement (GPA) will have the chance to compete for more local government and infrastructure contracts after trade representatives agreed to amend the deal.

The refreshed arrangement was signed yesterday as ministers gathered for the World Trade Organization (WTO) summit in Doha. As a result, the value of public contracts to be offered out to signatories is expected to increase to $100 billion a year (£64.4 billion). It currently stimulates trade valued at around $651 million (£419 million).

It will see members broaden the scope of procurements, which they will open up for international competition. New opportunities include rail and transport contracts in Korea, territory and provincial government contracts in Canada and more central government opportunities in the EU and US.

Commenting on the agreement, EU trade commissioner, Karel De Gucht, said: “Securing an international procurement deal during the WTO ministerial meeting shows that the global trading family can, and does, deliver the results to help boost our economies at this critical time.”

US trade representative, Ron Kirk, said: “Government procurement represents one of the most rapidly expanding areas of opportunity for traders of goods and services.”

Despite being an agreement within the WTO, it only enables free trade among the 42 countries of the GPA. In September, Armenia became the latest member, joining the likes of Japan, the EU and Taiwan, which waited more than a decade for its membership to be approved.

In addition to amending the agreement, members also declined China’s application to join for the third time, on the grounds that it was not offering to give the required level of access.

Discussing what China needed to do, Kirk said: “We are urging China to cover state-owned enterprises, add more sub-central entities and services, reduce its thresholds for the size of the covered contracts, and remove other broad exclusions.”

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