Agreement on Government Procurement (GPA)

Why in news?

• Government recently said “India has no plans to join the government procurement agreement grouping of the World Trade Organization (WTO), but is open to negotiating such agreements as part of bilateral deals”.

What is Agreement on Government Procurement (GPA)?

• To ensure open, fair and transparent conditions of competition in the government procurement markets, a number of WTO members have negotiated the Agreement on Government Procurement (GPA).
• The GPA is a plurilateral agreement within the framework of the WTO
  •  That NOT all WTO members are parties to the Agreement.
• The fundamental aim of the GPA is to mutually open government procurement markets among its parties.
• As a result of several rounds of negotiations, the GPA parties have opened procurement activities estimated to be worth more than US$ 1.7 trillion annually to international competition (i.e. to suppliers fromthe GPA parties offering goods, services or construction services).

Members

• At present, the Agreement has 21 parties comprising 48 WTO members.
• Thirty-five WTO members/observers participate in the Committee on Government Procurement as observers.
• Out of these, 11 members are in the process of acceding to the Agreement.

Components:

• The GPA is composed mainly of two parts:
  • The text of the Agreement and
  • Parties' market access schedules of commitments.
• The text of the Agreement establishes rules requiring that open, fair and transparent conditions of competition be ensured in government procurement.
• However, these rules do not automatically apply to all procurement activities of each party. Rather, the coverage schedules play a critical role in determining whether a procurement activity is covered by the Agreement or not.
• Only those procurement activities that are carried out by covered entities purchasing listed goods, services or construction services of a value exceeding specified threshold values are covered by the Agreement.
• As a binding international treaty, the GPA is administered by the Committee on Government Procurement which is composed of representatives of all its parties.
• The enforcement of the Agreement is realized through two mechanisms: the domestic review mechanism at the national level and the WTO dispute settlement mechanism at the international level.

Evolution of the GPA:

• The agreement was originally established in 1979 as the Tokyo Round Code on Government Procurement, which entered into force in 1981 under the auspices of the General Agreement on Tariffs and Trade.
• It was then renegotiated in parallel with the Uruguay Round in 1994, and this version entered into force in 1996.
• The agreement was subsequently revised in 2012 and the revised GPA applies since 2021.

PRACTICE QUESTION:

Consider the following statements regarding WTO’s Agreement on Government Procurement (GPA)

1. All WTO members are parties to the Agreement

2. The enforcement of the Agreement is realized through domestic review mechanism at the national level and the WTO dispute settlement mechanism at the international level

Which of the statements given above is/are correct?

(a) 1 only

(b) 2 only

(c) Both 1 and 2

(d) Neither 1 nor 2

Answer