Committee on Government Procurement - Tenth anniversary of the entry into force of the GPA 2012 - Held in the Centre William Rappard, Geneva, Room D - 9 October 2024 - Summary by the Secretariat

Committee session on the tenth anniversary of the entry into force
of the gpa 2012

HELD IN THE CENTRE WILLIAM RAPPARD (WTO HEADQUARTERS), GENEVA, ROOM D

9 October 2024

Summary BY THE Secretariat[1]

1  OPENING REMARKS (MASTER OF CEREMONIES: CHAIR OF THE COMMITTEE ON GOVERNMENT PROCUREMENT, MARTIN ZBINDEN)

1.1.  The master of ceremonies opened the event, saying that he was delighted to hold this event to celebrate the GPA 2012 - a unique plurilateral agreement that was aimed at both market opening and good governance in covered procurement markets of its Parties. He mentioned that the event was open to the public, reflecting the wish to share information about the GPA 2012 and raise interest among WTO Members that were not yet parties to the GPA 2012 or observers to the Committee, so that they might consider becoming parties or observers.

2  KEYNOTE SPEECH (WTO DIRECTOR-GENERAL, NGOZI OKONJO-IWEALA)

2.1.  The Director-General expressed her appreciation to the master of ceremonies as well as to the co-organizers - Australia, the European Union, Switzerland and the United States - for initiating the event and for inviting her to participate. She also thanked the moderators and expert panelists who had come from near and far to join the celebrations. She commended the Committee for opening the event to the public. At the WTO, delivering results that improved people's lives and livelihoods was the top priority. But as recent years had made clear, there was also a need to do more to explain to people outside the trade community what the WTO did.

2.2.  The Director-General asked, "How does the GPA 2012 deliver for people and governments?" and suggested that it boiled down to the fact that the Agreement introduced trade as a booster, or a force multiplier, for government procurement systems. She identified four elements in this respect. First, the GPA 2012 helped WTO Members get greater bang for their buck in spending taxpayers' money. Opening up public tenders to potential suppliers from other GPA Parties meant that governments could get better quality goods and services at more competitive prices. Tax revenue was precious and anything that could help it go further, like the GPA, was welcome. Second, the GPA 2012 helped WTO Members improve the quality of public services and infrastructure like public transportation, public education, and public health, where government procurement was front and centre. Delivering better and more affordable public services improved people's lives. Third, the GPA 2012 helped support well-paying jobs by giving export industries access to GPA-covered government markets abroad. The prospect of such market access served to incentivize investment, both domestic and foreign. Finally, the GPA 2012 offered an avenue for WTO Members to clean up local environments and tackle global problems like climate change by using government procurement to purchase green goods or services from a wider supplier base. Quoting Professor Mariana Mazzucato, the Director-General said that government procurement could help shape procurement markets. A global procurement market for innovative green products would help drive greater productivity and lower prices through greater specialization, scale, and competition. In a toolkit of trade policy options to accelerate climate action that had been released at COP28, the WTO Secretariat had pointed to USD 13 trillion in annual public procurement spending – which accounted for roughly 13% of global GDP and a similar share of greenhouse gas emissions – and had argued that governments could use these purchases to shape markets for innovative green goods and services. The 2012 update of the GPA strengthened all four of those impacts by deepening participants' commitments and clarifying the scope for environmental considerations.

2.3.  The GPA 2012 was not just an asset to the 49 Members who were Parties to it. It was an inspiration for the WTO as a whole. Since its origins in the late 1970s, the Agreement had been regularly improved and updated – the GPA 2012 being the most recent version. The Director-General hoped the Agreement would be updated again to reflect new realities. If there was a habit of updating the WTO agreements to be fit for purpose, they would not be calcified.

2.4.  Turning to the GPA 2012 negotiations, the Director-General observed that they had expanded market access opportunities for both goods and services suppliers by an additional USD 80 100 billion annually, bringing the total estimated coverage of the Agreement to over USD 1.7 trillion annually. The GPA 2012 was, however, as much a good governance agreement as it was about market access. It fostered greater transparency and accountability in procurement systems, reducing opportunities for corruption. In fact, the GPA 2012 was the first WTO agreement to impose a specific obligation on its signatories to prevent corrupt practices since one of the biggest sources of corruption around the world was government procurement.

2.5.  Since the GPA 2012 had come into force in 2014, its membership had increased by seven Parties, with further WTO Members, including a first one from Latin America, actively negotiating accession to the Agreement. Since 2014, 15 new observers had been welcomed to the Committee, together with one new international organization observer (the European Bank for Reconstruction and Development). The Director-General was also delighted to learn that the newest WTO Member, Timor-Leste, had just made good on its promise to join the Committee as an observer. In addition, like many WTO rules, those of the GPA 2012 had been referenced in bilateral and regional trade agreements. According to WTO research, out of a set of 385 free trade agreements (FTAs), around 30% used provisions that drew on the text of the GPA 2012. Hence, many WTO Members that had not signed up to the GPA 2012 themselves were already applying GPA-look-alike rules in bilateral or regional contexts. 

2.6.  Looking ahead to the next decade, one thing that came to mind was how emerging markets and other developing Members could be persuaded to join the GPA 2012. The Director-General encouraged emerging and developing countries to look at the GPA-covered markets to see the benefits they could get from being a Party to the Agreement.

2.7.  The Director-General concluded by saying that the future of trade was going to be green, digital and inclusive. The GPA 2012 itself was moving in that direction, with its Work Programmes on sustainable procurement, data and statistics, and SME participation in procurement. She encouraged the Parties to keep up this good work.

3  PANEL 1: THE HISTORY OF THE GPA 2012 (MODERATOR: PERMANENT REPRESENTATIVE OF THE UNITED STATES TO THE WTO, AMBASSADOR MARÍA PAGÁN)

3.1.  The moderator opened the first panel discussion by noting that the revision of the GPA had been an important accomplishment. It had modernized the text of the Agreement and expanded the procurement opportunities covered under it. The first question, which she posed to all the panelists, was: What, in their view, were the enhancements to the revised GPA text that had provided the greatest benefits to the business community, and governments?

3.2.  Robert Anderson (Honorary Professor, University of Nottingham; former Counsellor, WTO Government Procurement and Competition Group) said that he would add to the moderator's question the greatest benefits to citizens. In response to the question, he said, first of all, that the GPA renegotiation had established the GPA as an international gold standard for best practices in government procurement. This was no small accomplishment, meaning  that the GPA 2012 was not just important for the GPA Parties and observers, since  the main elements of the GPA 2012 had been replicated in bilateral and regional trade agreements around the world. In addition, the GPA 2012 was now recognized or cross-referenced in the World Bank Procurement Framework and had been extensively harmonized with the UNCITRAL Model Law.

3.3.  Second, the renegotiation had clearly established the GPA 2012 as a multi-purpose trade agreement. Market access would always be important, but the GPA 2012 was also tremendously important for good governance. The Agreement also very presciently contained provisions to promote sustainability and climate change mitigation. Moreover, it had foreseen the importance of good data and interoperability and the use of e-procurement systems to ensure transparency. Finally, it had shown at the time that negotiations at the WTO could work.

3.4.  Peter Bennett (former Senior Policy Advisor, Public Procurement, UK Cabinet Office) in his response said that the increased transparency and the ability to make more use of information technology had been very important in taking procurement forward and allowing the use of modern practices. A lot of these developments had already been made in the European Union at the time, but it had been very helpful to have them in a WTO agreement as well. On a practical level, he thought that some of the changes in terms of statistical reporting had been a great help to some Parties.

3.5.  Jean Grier (International Trade Principal, Djaghe LLC; former Senior Procurement Negotiator, Office of the US Trade Representative) said that the goal of the negotiators in the revision of the text of the Agreement had been to improve it because the prior Agreement had been patched together over the years, starting with the GATT Code. The goal had been to take the Agreement, rip it apart, and put it back together in a logical way. If none of the negotiators could explain a provision or figure out why it was there, it was discarded. The negotiators also sought to restructure the Agreement, trying to make it follow the procurement process step by step, with the goal of making it user-friendly and easy to understand.

3.6.  Two sets of provisions in the Agreement were particularly important - those on electronic procurement and the transitional measures for developing countries. With respect to the latter, the negotiators had worked hard to identify the kind of measures that developing countries would find useful if they wanted to join the GPA 2012 but were not ready to take on all the obligations immediately. They had drawn some of the measures from other agreements that the Parties had entered into. This aspect of the Agreement was unfinished, because other agreements such as the European Union-Vietnam Free Trade Agreement, the Trans-Pacific Partnership (TPP), or the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) have many more transitional measures. This was an area that probably needed more attention because there is a concern that not enough developing countries were parties to the Agreement. It could be a useful exercise to look at whether the Agreement really has the provisions to attract them.

3.7.  Nicholas Niggli (Associate Principal, Nature Finance; former Chairperson of the WTO Committee on Government Procurement from 2007 to 2012), wanted to first go back to a point that the Director-General had made in her opening remarks, which was that the negotiators' North Star was to deliver for citizens. Whether in the form of hospital care, education in a modern school environment, or great infrastructure for entrepreneurs, government procurement shaped lives. With the revised GPA, it was his conviction that the Members, in their collective wisdom, wanted to create a government procurement system that delivered transformational value through better governance, reduced corruption, and more efficient use of public resources. Done right, procurement was a catalyst with the power to transform societies. For governments, the most critical enhancement, in his opinion, was the increased transparency and accountability embedded in the revised GPA. By committing to open procurement processes, the Parties had the capacity to manage public funds more efficiently. Beyond delivering for citizens, this directly impacted key metrics such as credit ratings, affordability of public debt, and attractiveness to investors and to talent.

3.8.  In addition to financial efficiency, the Agreement also provided the strategic levers to drive the indispensable transition towards a sustainable future with the Work Programme on Sustainable Procurement. Thus, the GPA 2012 did not just equip governments to meet immediate needs; it also created a strategic advantage that led to long-term qualitative growth, resilience, and sustainability, laying the groundwork for an empowering future. For businesses, beyond what had already been mentioned, the user-friendliness, the shift to the digital age, and non-discrimination were also essential. This was true not just for large companies, but also for SMEs; they had much better access to foreign markets now. The GPA 2012 was essentially a Swiss army knife of an international agreement with many sides - market access, rules, and, more fundamentally, better governance.

3.9.  Bonifacio Garcia Porras (Head of SMEs Unit, Directorate-General for Internal Market, Industry, Entrepreneurship & SMEs, European Commission), referred to the Preamble to the Agreement which mentioned opening markets, managing public resources, and addressing corrupt practices. These were the Parties' aspirations, or "key performance indicators" against which the GPA 2012 was delivering. However, the Agreement was not only about opening markets, it was also about the opportunity that it offered to companies in terms of growth, innovation, and competitiveness. At the same time, the Agreement was a driver of promotion for sustainable government procurement practices. To governments, the Agreement offered transparency, efficiency, effectiveness, as well as trust. The Agreement was about trust in the government, in the country, in the procuring entities, leading to more business opportunities, more investments, and more sustainable growth for everybody.

3.10.  The moderator next asked Peter Bennett whether he thought that the revised GPA did enough to make itself attractive to new Members?

3.11.  Peter Bennett recalled the context at the time, starting before the revision of the GPA. The GPA 1994 had been a great leap forward in terms of broadening, extending, and improving the then existing rules. That leap forward had had its own issues in terms of the lack of uniform coverage and questions around reciprocity. The review had started very quickly after the Agreement had come into effect in 1996. As had been discussed previously, its objectives were simplification and improvement, and the elimination of discriminatory measures and practices which distorted competition. Thus, it was not overtly aimed at attracting new Members, but it was hoped that that would be the consequence. At the same time, at the end of the 1990s, there were also discussions at the WTO on a transparency in government procurement agreement for all WTO Members. Unfortunately, this work fizzled out. The developing countries were concerned that the aim of the developed countries was really about getting market access. It was difficult to attract new Members.

3.12.  The text of the revised GPA had been largely agreed early on in the process and then it had taken a long time to achieve relatively little in terms of market access. The work on the structure of the Agreement had been very important and the revised Agreement was a major achievement in terms of simplification. The transitional measures for developing countries in the GPA 2012 did not contain enough flexibility for transition arrangements and could have been improved. The length of time to complete the revision of the GPA had not been helpful in taking things forward. If it had been concluded a few years earlier, it would have been helpful. The lack of increased market access coverage was not too important for prospective Members. What had happened with the negotiations for a transparency agreement showed how difficult it was to attract governments to sign up to procurement provisions generally. A key point on this issue was that the very high standards and core principles of the GPA had been maintained because that was of benefit to all the Parties.

3.13.  The moderator then asked a question to Bonifacio Garcia Porras. She recalled that he had become the EU chief GPA negotiator in 2016, shortly after the revised GPA had entered into force. She asked what, in his view, the main challenges had been back then to make the revised GPA operational and fit for purpose to serve international stakeholders.

3.14.  The first thing Bonifacio Garcia Porras had done when confronting for the first time the highly technical and complex text of the GPA 2012 had been to read the Preamble. It was a clear and good text, an incredible policy tool that needed to be made mainstream and communicated. The top priority and main challenge at the time had been to translate this legal text into concrete benefits for companies, society, and governments. This was, in essence, about building bridges between the legal text and the realities of businesses, and also with the countries that had a special relationship with the European Union, and countries in the process of accession. Therefore, there was a strong interest in ensuring the adoption, for instance, of the 2024 Report emanating from the Committee on Government Procurement's mandated Work Programme on good practices for SMEs, because this was a major development for those who could drive the economy, the SMEs. He was particularly happy to have seen the Committee's decision adopting this Report, because SMEs represented two thirds of employment in the private sector and 53% of the economy in the European Union. There was a need to build bridges with acceding countries or countries with whom the European Union had a special relationship.

3.15.  The moderator directed the next question at Jean Grier and Robert Anderson. She asked them to provide their perspectives as, respectively, a United States negotiator and a WTO Secretariat official. She said that the negotiations to revise the GPA had taken a number of years to complete. Looking back on this experience, what lessons had they learned that could be applied to a future revision?

3.16.  Jean Grier mentioned that the first part of the negotiations had been on the text. They had focused on the text for several years and had reached a conclusion by the end 2006, finalizing it in 2007. Those negotiations had, by and large, been harmonious. They had taken a while because it was a fairly complicated "ripping apart and restitching it together" process. And there had been differences between the Parties in terms of what was more important and what was not important. Nonetheless, the Parties basically had the sense that it was time to improve the text as it had been patched together over the years. After reaching agreement on the text, at the end of 2006-2007, some Parties, including the United States, had argued that they should just simply implement that revised text of the Agreement, and after that turn to market access. Others were concerned that if they did so, they would never get back to market access. The Parties ended up setting aside the text, which meant that the text was now almost 20 years old. Those who were thinking about how to improve the Agreement now should look at the text, for instance, with respect to green procurement, focusing on areas that were known to be a problem as opposed to trying to have a comprehensive Agreement.

3.17.  The market access negotiations had been very difficult. They took five years after setting the text aside. There had been a deep division, as the Parties' levels of ambition differed. Two issues had been important in this context. The first had to do with the fact that the negotiation of the 1994 Agreement had significantly expanded the procurement covered by the GATT Code. The GPA 1994 had added sub-central entities, government enterprises, and services. The decision had been either to reduce the level of procurement covered so it could continue to be a uniform Agreement that applied to the same procurement in all Parties or to allow some exceptions.

3.18.  In this regard, there were two things allowed: the Parties were allowed to include reciprocal provisions and to take exceptions. Regarding the first aspect, Parties could withhold something from a Party that was not matching the same commitment. The European Union was a big user of this. The problem with this approach was that a Party could be withholding market access, but if on a practical level it allowed access to that procurement, then the reciprocal provision was not very effective. This had been a problem, for instance, for the European Union in the area of services. The United States' industry already had access to some utilities or services at the sub-central level that the European Union was offering to open to the United States in exchange for the United States opening other procurement markets. However, the US industry already was in fact selling services to subcentral entities in the European Union.

3.19.  The second point, the exceptions, had been one of the conditions for the United States bringing its States into the GPA in 1994. Some of these States had "buy local" policies, and the United States had taken an exception for these policies because otherwise the States probably would not have agreed to be covered. This had been one of the points that Parties had asked the United States to remove in the negotiations for the GPA 2012. They had also asked the United States to take away its set-asides for small businesses. The United States' response had been to ask what it would get in return; it had to obtain something substantial if it was to expand other Parties' access to its market. In addition, the negotiators would have to go to the US Congress for authorization, which was never something that they wanted to do because in some cases they knew it would be an impossible conversation. The bigger point was that the United States' industry was happy with the procurement covered under the GPA 1994. It was a substantial Agreement, and it covered a lot of procurement. The negotiators would not just offer to give more access to other Parties unless they had industry support and unless they were getting something in return for it.

3.20.  The Parties finally concluded the negotiations, not because they were all happy with the results but because it was considered in the interest of the WTO. If there were to be new negotiations, it was very important to separate the text from market access negotiations. If there were to be market access negotiations, one had to be sure that there was a common understanding of what was going to be put on the table or what the points of agreement would be. The Parties had proceeded through a "request and offer" process. All Parties had made requests to everyone else. They had huge lists of demands that they wanted from other Parties, and then they had put limited offers on the table. Developing countries had to have an incentive to join the GPA 2012. Often, once a country opened its procurement under the GPA 2012 or FTAs, it opened it to all the countries. This took away any incentive for countries to want to join the GPA 2012 because they already had access.

3.21.  Robert Anderson thought that the key to the successful renegotiation had been to ensure a balanced focus on all aspects of the negotiations – text, market access and the Work Programmes. He also referred to the "Roadmap" that they had used for the last two years of the negotiations. The "Roadmap" had been specifically intended to ensure that everyone's interests were reflected, and that attention was given to all three pillars of the negotiations. In addition, leadership and commitment had been vital as well as some calculated taking of risks. As the former lead representative of the Secretariat, he admired the delegates attending meetings in Geneva as well others in the background. The delegations had a great support from the Director-General's office and Director-General Lamy and had a versatile and extremely determined Chairman in Nicholas Niggli whose role had been essential to the conclusion of the negotiations. The human element was vital in the negotiations.

3.22.  A third element without which the negotiations could not have been concluded was the broader political context. At the time, the WTO needed a successful negotiating result. The Doha negotiations were stalled. Not only the Director-General, but also key Parties really wanted to produce a successful negotiating result that they could then hold up as a success. All the countries around the table wanted to have good results for the WTO. The fourth element that contributed to the success of negotiations was a little bit of luck. The negotiations came together only at the very last minute. A result was needed, not just generally for the multilateral trading system, but also for the Ministerial Conference, which was coming up. Until the results had been gavelled, there had been no certainty that it would work. The negotiations had succeeded because of a true team effort on the part of the Chairman, the Secretariat and the delegates in Geneva and in capitals. The WTO and the international community should be proud of the GPA 2012. It was a help to the world to have a WTO Agreement on Government Procurement that supported good governance and ensured fair treatment of suppliers.

3.23.  The moderator then asked Nicholas Niggli, who had been involved in the process for at least six years, to share his insights.

3.24.  Nicholas Niggli mentioned that there had been many high peaks and profound valleys during those five and a half years. Teaming up with the Secretariat was essential and without the Secretariat, the negotiations would not have been successful. It was important to urgently rediscover that negotiations were not a zero-sum game, and to understand what the real ambition was. It was about finding common ground, identifying multiple mutual benefits. The dynamics in the room had been shaped by the diversity of views. They worked day and night to try to create the pathway that would allow them all to deliver and to drive the notion that they were all equally unhappy, because they had to give something up so that at the end of the day they could enlarge the pie. Negotiations had a human dimension, and one had to spend hours talking with people, understanding them and being a disciple of Epictetus, who had said that we have two ears and one mouth so as to listen twice as much as we speak.

3.25.  The second lesson that he wanted to share was that during the critical moments towards the end of the process, they chose to add rather than subtract, to be agile, and to represent everybody's views. They shaped a balance between market access, rules and then ultimately the Work Programmes. They created tailored approaches and special provisions that respected the needs of developing and least developed countries. The third lesson he wanted to share was persistence and seizing opportunities. There had been many moments where disagreements seemed to be intractable, but by keeping the bigger picture in mind and fostering an environment where Parties could continue to engage, they had gradually moved forward. Even in the face of obstacles. such as the fact that the Doha Round was not delivering at the time and the financial crisis of 2007 and 2008, they built momentum. The crisis shifted the perspective of certain Members, and they had become much more open to reaching a result. They transformed the right crisis into the right opportunity.

3.26.  The fourth lesson was that the GPA 2012 was an extraordinary instrument to accelerate the transition towards a more sustainable, resilient and regenerative future for all. The framework provided by the Agreement could be a bridge and a catalyst for enabling the transformation of societies. In this context, the Work Programme on Sustainable Procurement was critical because it offered a concrete pathway for aligning public spending with long-term environmental goals, ensuring that procurement served as a lever for innovation, sustainability and resilience across sectors. In concluding, he noted that "plurilateral" had less appeal than "multilateral" and suggested introducing the concept of "progressive multilateralization". If an agreement brought together a significant number of parties, formed a coalition of the willing, crafted an ambitious framework and created a clear pathway for others to join, it would likely grow over time and move towards multilateralization. This was the type of instrument that they had created.

3.27.  Following this, the moderator took a question from the audience. The representative of the United States asked why specific Work Programmes had been selected and what the negotiators had envisioned would actually come out of the Work Programmes. Jean Grier answered that the Work Programmes had been set up where they could not reach agreement. An exception to this was the Work Programme on Collection and Reporting of Statistical Data, which had been set up because they were trying to figure out how they could make information about the effectiveness of the Agreement more available.  Robert Anderson highlighted the importance of the Work Programme on Sustainable Procurement. Government procurement was one of the essential tools for reckoning with the climate crisis and ensuring a sustainable future. Nicholas Niggli said that the contacts that they had had with the negotiators in the room and in capitals allowed them to understand that there was a significant amount of potential in developing the Work Programmes. He said that procurement related to climate change and the adaptation to climate change was going to be critical in the future. The world to a certain extent had not waited for the GPA 2012 to move forward on this.

3.28.  In conclusion, the moderator recalled how fiercely fought the negotiations had been, in particular on market access. What she took from the GPA 2012 negotiations was that it was possible to arrive at hard decisions. Noting the Work Programmes, she added that the negotiations showed that the Members could find creative solutions if they came together to try and figure out how to get past a particular knot.

4  PANEL 2: HARNESSING THE BENEFITS OF THE GPA 2012 FOR THE FUTURE (MODERATOR: FORMER AMBASSADOR AND PERMANENT REPRESENTATIVE OF SWITZERLAND TO THE WTO, DIDIER CHAMBOVEY)

4.1.  The moderator directed the first question to Leonor Obando (Head of Intellectual Property and Government Procurement at the Ministry of Foreign Trade of Costa Rica). Costa Rica had been an observer to the Committee since 2015 and had recently submitted its application to join the Agreement. Why was Costa Rica seeking to join the GPA 2012? What were the benefits that Costa Rica was expecting to gain from its accession to the GPA 2012?

4.2.  Leonor Obando mentioned that several years ago she had participated in a GPA-related WTO workshop after which she had internally raised the question of the reasons for Costa Rica not joining the GPA 2012. The response at the time was that Costa Rica "had little to gain and much to lose". Costa Rica's political constitution mandated the State to conduct procurement procedures to optimize the use of public funds. Its government procurement regime was based on the GPA principles and was aimed at getting the best goods, services, and works at the best prices regardless of their origin. Thus, the phrase "too much to lose" seemed contradictory. Through the years, foreign policy had demonstrated its significance as an instrument for the modernization of the State and improvement of governance. Additionally, the government procurement policy was strengthened by adhering to international standards. Costa Rica's FTA negotiations with different GPA Parties provided it with necessary information regarding the GPA 2012, as it was also the basis for negotiating the government procurement chapters of FTAs.

4.3.  Costa Rica had learned that access to any market would be incomplete without having access to government procurement markets. After finishing relevant FTA negotiations and implementing the provisions, Costa Rica believed that its domestic legislation was in line with the GPA 2012 requirements. The next logical step was starting the GPA 2012 accession process. Still in 2015, Costa Rica had internal challenges regarding the government procurement framework. There was a need to improve the electronic government procurement system and to unify thresholds for government procurement processes. Becoming an observer to the Committee served the purposes of learning more about the GPA 2012, and of following the Committee's discussions. Improving the domestic procurement framework became an ambitious process for Costa Rica. A law was adopted to address challenges that had been identified previously. Law 9986 and its implementing regulations had come into force in December 2022, after which it had been time to start internal coordination and to look closely at the GPA 2012. Since relevant provisions already existed, little time was necessary to further implement GPA-related provisions in the legal framework.

4.4.  Addressing the benefits of accession to the GPA 2012 for Costa Rica, Leonor Obando said that from an internal point of view, joining the GPA 2012 would lead Costa Rica to better governance. The acknowledgement that Costa Rica's government procurement policies were consistent with international best practices was an important consideration and the GPA 2012 was "the gold standard". Costa Rica also had taken time to think about its procuring entities and to understand what they were procuring. It then made a lot of sense to have an open and robust government procurement market. For instance, a procuring entity named CCSS was providing Costa Ricans with health-related services. The CCSS was procuring medicines and medical devices. In another example, the entity named ICE was granting access to electricity and telecommunication services from San José to rural towns on the coast or in the mountains. Costa Rica wanted to place its procuring entities in the spotlight and make them attractive for GPA Party suppliers. From an offensive point of view, the GPA 2012 granted access to procurement markets that were worth USD 1.7 trillion. As a country for which international trade policy was a key for development, this aspect could not be left out. It was key for domestic goods and services to take a share of that market.

4.5.  In summary, improving good governance and gaining access to the biggest government procurement markets were the benefits that Costa Rica saw when deciding to join the GPA 2012. Moreover, granting access to GPA Parties' suppliers could boost Costa Rica's domestic growth. Leonor Obando finished her comments by saying that she now had an answer to the question she had raised many years ago: there was so much to win and nothing to lose.

4.6.  The moderator's next question was for Alex Naef (Chief Executive Officer of Hess AG, a private sector company manufacturing buses and participating in government procurement procedures). He was invited to provide the perspective of a private company on how that company was using the GPA 2012. What were the benefits derived from the GPA 2012, and what wishes regarding the GPA 2012 did Alex Naef have?

4.7.  Alex Naef explained that Hess AG participated in tenders from Europe, Switzerland, Australia, etc. It became much easier for a small company like Hess AG to participate in tenders in those markets. Innovation was very important for all the challenges that needed to be solved (decarbonization, sustainability, etc.), since the world had undergone a lot of changes in the last ten years. With the adoption of the GPA 2012, innovation had a quicker breakthrough in markets. Up until now, the majority of buses globally were running on diesel. The industry was facing the challenge to decarbonize traffic. while electric buses were not available everywhere. Thanks to the GPA 2012, market breakthrough came much quicker. He gave an example of a tender for electric buses in Nantes (France) five years ago. Hess AG had supplied its solution from Switzerland, and this had created jobs in France and in other countries. Hess AG also almost doubled its workforce in the ten years of the existence of the GPA 2012. It saw a lot of interest all around the globe for its products and thanks to the GPA 2012 accessing markets became quicker and better than in the past.

4.8.  Regarding room for improvement, Alex Naef mentioned the issue of sustainability, which was addressed in the Agreement. Nevertheless, there was room for improvement considering the realities on the ground. A good product sometimes was a bit more expensive at the beginning, but it was cheaper when considering the overall lifecycle costs. Thus, the total cost of ownership should be better addressed in the future.

4.9.  The moderator followed up with Alex Naef asking whether Hess AG had challenged a decision by a government to award a contract to a supplier because it had the impression that its offer had not been considered properly.

4.10.  Alex Naef responded that Hess AG had used the procurement review procedures in Switzerland and elsewhere. His impression was that they had been treated fairly both when they had won and when they had lost a case.

4.11.  The moderator's next question was for Samira Musayeva (Senior Legal Officer in the UN Commission on International Trade Law (UNCITRAL)). She was asked to introduce the UNCITRAL Model Law, explain how it was assisting governments, and whether there was demand for that kind of instrument.

4.12.  Samira Musayeva started by introducing the UN Commission on International Trade Law (UNCITRAL). It was composed of 70 Member states, many of which were Members of the WTO and Parties to the GPA 2012. UNCITRAL had been established by the United Nations General Assembly in 1966 with a mandate to harmonize, modernize, and where possible, unify different areas of the law of international trade. Since then, it had become the core legal body of the United Nations system in that area of law. The reference to the law of international trade in UNCITRAL's context was not to be understood in the same way as in the WTO since UNCITRAL was not dealing with state-to-state trade relations. UNCITRAL's mandate referred to the law that regulated private commercial matters, such as sales and transport of goods, dispute resolution, etc. Not all of transactions took place in a B2B environment. Some of them, like in the case of government procurement, took place in B2G environment.

4.13.  There was a long history of cooperation and coordination between the UNCITRAL and the WTO, and their Secretariats, including on government procurement matters. The first UNCTRAL procurement Model Law was dated 1993-94 and was prepared to provide states with a template for the national enactment of a government procurement law. It had been very timely as Soviet countries as well as the socialist bloc did not have government procurement laws in their domestic jurisdictions. Ten years later, three main developments triggered UNCITRAL's work on the revision of the earlier version of the Model Law.

4.14.  The first trigger was the use of electronic means of communication in government procurement. Suppliers under the earlier version of the Model Law were able to insist on the submission of tenders in paper form. The second trigger was the widespread use of some old procurement techniques, such as closed framework agreements, and the appearance of modern ones, such as electronic reverse auctions and dynamic purchasing systems. The third trigger of the revised 2011 Model Law was the United Nations Anti-Corruption Convention, which had been adopted in 2003 and had entered into force in 2005. The earlier versions of the Model Law had been criticized as not providing sufficient anti-corruption safeguards in government procurement.

4.15.  As the UNCITRAL and the GPA memberships overlapped, and since the negotiations took place in parallel, the negotiations in the WTO gave the right push to the negotiations of the UNCITRAL Model Law regarding the inclusion of anti-corruption safeguards, electronic auction, some aspects of efficient review, etc. The UNCITRAL Model Law also needed to be harmonized with international instruments, otherwise it would not be used by the GPA 2012 and the UNCAC Parties. Thus, the UNCITRAL Model Law had to take a holistic, comprehensive and balanced approach in addressing all the necessary provisions.

4.16.  The moderator then invited Gavin Hayman (UK-based Executive Director of the Open Contracting Partnership (OCP)) to present the instruments developed by the OCP.

4.17.  Gavin Hayman explained that if procurement conducted ten years ago had been mostly based on paper, currently everything was going to be electronic and digital. Importantly, the practitioners were moving from legal compliance to rethinking the performance, the level of competition and the actual outcomes of the procurement. The Open Contracting Data Standard (OCDS) was a tool to help to make that shift. The OCP was a US-based public charity, and the OCDS was a free digital public good that helped to unlock and share all the documents, data and information across the entire cycle of government procurement. The OCDS was developed over a course of years by looking at best practices in global publication of procurement information and matching it to the key user needs. For example, the governments were looking for value for money and improved competition in procurement as well as increased integrity. As a citizen, one would want to follow public works to make sure that schools, roads and hospitals were built to the required standards. If a supplier was looking for procurement opportunities, they would need to understand the process and access information on future opportunities. The OCDS brought all that information together. It was a schema that allowed expressing all the procurement information in a standardized, machine-readable format. The OCDS was not about technology, it was about the change process to unlock and share information on government procurement and to use it to achieve better outcomes.

4.18.  Gavin Hayman congratulated the government of the United Kingdom on its new Procurement Act. When preparing the Green Paper for the Act, the United Kingdom looked across its 20-30 electronic procurement portals and found that despite the abundance of data, it was not possible to get many insights. Thus, the United Kingdom started using the OCDS to bring data together and create an upgraded single contract register where one could follow the entire commercial cycle of procurement. In another example, Ukraine put the OCDS at the heart of Pro-Zorro, its fully digital government procurement system. The system was using sets of data-driven approaches to identify red flags and to drive much better performance. Additionally, one could press a button and generate a report compliant with the GPA standard while others had to go through the government archives to put the necessary information together. Thus, there was a lot of value in allowing the data to be free.

4.19.  The moderator then asked both Samira Musayeva and Gavin Hayman whether the instruments that they had mentioned had an impact on the ground, for instance, whether foreign suppliers were increasingly participating in the government procurement markets in the GPA Parties where the GPA had been properly implemented.

4.20.  Samira Musayeva said that the UNCITRAL Secretariat promoted both the Model Law and the GPA 2012. The UNCITRAL Secretariat had noticed that cherry-picking was involved at the national level. Upon adoption of the 2011 Model Law, the European Bank for Reconstruction and Development (EBRD) and the UNCITRAL and WTO Secretariats had launched a very important initiative in former Soviet and socialist countries. Diagnostic work had been undertaken to see where those countries stood vis-à-vis the 1994 Model Law especially in the light of the enhanced electronic government procurement and anti-corruption agenda. There was an uptake of the 2011 Model Law in Armenia, the Republic of Moldova, Ukraine, Georgia, and with some difficulties in Tajikistan, the Russian Federation and Kazakhstan. In many countries outside this region, there was much cherry-picking, which was expected as some States took a step-by-step approach. They did not yet have the capacity to implement all the provisions of the Model Law, and this was not required since the Model Law was a non-binding instrument. It provided a toolbox to accommodate different types of procurement with different complexity. Some States, for objective or subjective reasons, decided to implement certain provisions of the Model Law, but not necessarily all of them. The UNCITRAL Secretariat was not monitoring the use of the Model Law but was relying on inputs from multilateral development banks and other partners on the ground.

4.21.  Gavin Hayman highlighted that ProZorro was saving about a billion USD annually. It helped to include thousands of new businesses into government supply chains and a lot of foreign suppliers won contracts in Ukraine. In another example, the Dominican Republic integrated the OCDS into their procurement platform. This resulted in a big increase in bids and enhanced competition. The Dominican Republic also saw an increase in the number of open tenders as well as a registration of around 20,000 new suppliers, including some foreign suppliers. Supplier diversity went up by 27%. The Dominican Republic was also looking at economic inclusion of e.g. women-owned business. Lithuania used open data to drive greener procurements. It went from using under 5% of green criteria in its government procurement tenders to about 95% in around three years. The approach was data-driven, offering an open help desk and dashboards.

4.22.  The moderator's next question was for Leonor Obando. Was Costa Rica considering using the UNCITRAL Model Law in the context of implementing the GPA 2012 in the future?

4.23.  Leonor Obando explained that the authorities of Costa Rica made improvements in the government procurement framework by considering different legal instruments and international standards. At the moment, Costa Rica was not considering any further amendments. That was something that the national authorities regulating government procurement might have to consider.

4.24.  The moderator asked Alex Naef two questions. The first was whether he had the impression that the implementation of the GPA 2012 resulted in the convergence of standards. The second question was whether the remaining divergences were burdensome for a private company.

4.25.  Alex Naef responded that adoption of the GPA 2012 was a big step forward since the processes became more efficient and the procedures became more transparent. There were also a lot of differences, the biggest of which was related to the process of homologation of the product, i.e. how a vehicle would go on the road. The rules were different, for example, in Europe and in the United States. There was also growing demand for local content in different regions, which was concerning for the private sector.

4.26.  The moderator opened the floor for questions.

4.27.  The representative of the United Kingdom asked how the OCP was considering using tools based on Artificial Intelligence (AI). Gavin Hayman highlighted that there were three aspects to consider – AI tools to analyse procurement information, the procurement of AI tools and AI tools to improve the conduct of procurement. The OCP was able to build a library of red flags and risk indicators in a procurement market, and it was possible to train the models to identify the red flags. The OCP also published a blog series on AI on their webpage.

4.28.  The representative of Switzerland asked two questions. The first one was for Alex Naef and concerned his experience with the use of foreign subsidies on the ground. The second question was for Samira Musayeva and Gavin Hayman. They were asked whether the potential GPA accession candidates should make use of the UNCITRAL Model Law and the OCDS before or after joining the GPA 2012. Samira Musayeva suggested that it was better to start earlier than later. The GPA 2012 covered procurement above certain thresholds, while the Model Law covered all procurement, including very low-value procurement. In addition, the Model Law envisaged important good governance standards that might be relevant even for a revision of the GPA 2012, if the Parties would so decide. Gavin Hayman highlighted that countries that had the most energy to reform government procurement were the ones that aspired to join the GPA 2012, such as Albania, Dominican Republic, Colombia, Chile, Costa Rica, etc. Those countries worked on the collection of data, which would make their reporting under the GPA 2012 easier. The data was a means to an end; it needed to be used to drive change. Alex Naef had no information on foreign subsidies in the sector of public buses or any other sector.

4.29.  The moderator asked each of the panelists to explain what in their view was the top priority for inter-governmental cooperation on the GPA 2012 in the next five years.

4.30.  Leonor Obando explained that during her years of engaging in government procurement negotiations and the implementation of FTAs, she learned that international relations always contributed to further strengthening the government procurement regime. Costa Rica had the chance of exchanging experiences with different trade partners on how they dealt with issues that might be challenging for Costa Rica. International cooperation did not mean to finance a project, it meant to have technical conversations and to share information.

4.31.  Alex Naef highlighted sustainability and local content as two subjects where there was room for improvement. In terms of sustainability, it needed to be implemented in practice and the procuring entities needed to be motivated to apply relevant provisions provided for in the GPA 2012. Local content requirements needed to be clarified as well. 

4.32.  Gavin Hayman quoted the WTO Director-General as saying that "the future of trade was green, digital and inclusive". Having open data was the backbone of the sharing of information. The idea of making the reporting as frictionless and effective as possible and then leveraging that information for better outcomes for citizens was important. Gavin Hayman suggested to go digital and go open.

4.33.  Samira Musayeva referred to the Committee's Work Programmes and highlighted that they were topical. Sustainability and climate change and the way they affected government procurement practices remained important issues. Regarding the introduction of generative artificial intelligence and the further development of electronic procurement tools, apart from benefits, they could also create concerns related to copyright, data protection, data localization, etc.

4.34.  The moderator summarized the panel discussion and highlighted some key points. First, based on the assessment from the private sector, the GPA 2012 had brought huge improvements. Second, the UNCITRAL Model Law and the tools developed by the OCP were useful for a number of States and were improving the situation on the ground. It was important to keep up with technological developments, to simplify transactions and operations and to increase transparency. Third, green government procurement was an issue which should be seriously considered. Fourth, there was scope for sharing best practices. Finally, the private sector had noticed a rise of local content requirements in government procurement and there might be a need to address this issue.  

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[1] This document has been prepared under the Secretariat's own responsibility and is without prejudice to the positions of Members or to their rights and obligations under the WTO.