'More US public contracts open to foreign firms than GPA partners'

22 March 2017

Efforts by the US to open up its government contracts to overseas firms have not been matched by other countries, a report claims.

The Government Accountability Office (GAO) said that the US had reported a much larger amount of government procurement opened to foreign firms under the WTO Agreement on Government Procurement (GPA) than vice versa.

However, it cautioned that the data available is old and possibly unreliable.

US data reported $837bn in GPA-covered procurement – nearly twice as much as the amount covered by the next five largest parties to the agreement: the EU, Japan, South Korea, Norway and Canada combined.

The report also said the US government spends less on procurement than the EU, Japan, South Korea, Norway and Canada combined. However, comparison is difficult because the most recent available figures come from 2010.

With global government procurement spend estimated to be $4.4tn annually, it constitutes a significant opportunity for global trade.

The GAO blamed deficiencies in the statistical reporting of government procurement, which limits detailed comparisons, as well as transparency – one of the GPA’s stated goals.

Reports submitted by many countries that had signed the agreement lacked required data and showed differing interpretations of key terms used in the agreements, which also led to inconsistencies.

The agency added that parties to the North American Free Trade Agreement (NAFTA) are required to exchange government procurement data annually but have not done so since 2005.

“As a result, policymakers and others have limited information with which to monitor the agreements or assess their financial benefits,” said the agency.

And while US methodology for calculating GPA-covered government procurement spend has improved, it has created a six-year reporting delay, though the GPA requires reporting to be carried out within two years.

The US has also failed to develop accurate methodology to report state government procurement spend, said the report.

Meanwhile, expertise needed to report government procurement data to the WTO is fragmented among the four agencies involved, which leads inconsistencies, errors, and deficiencies.

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