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]
1.1. 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.
2.1. 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.
3.1. 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.
4.1. 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.