Government Procurement Negotiations NORBERTO IANELLI LAURA ROJAS Trade, Integration and Hemispheric Issues Division BID

 DEVELOPMENT OF INTERNATIONAL DISCIPLINES  FUNDAMENTAL DISCIPLINES  MARKET ACCESS / SCOPE AND APLICATION  DEVELOPMENT OF INTERNATIONAL DISCIPLINES  FUNDAMENTAL DISCIPLINES  MARKET ACCESS / SCOPE AND APLICATION Agenda

Development of International Disciplines

Gatt 1947 excluded Disciplines on GP Gatt 1947 excluded Disciplines on GP  Art. III:8(a) allows favoring nationals if procurement is for government own use, not for inputs or `commercial resale  Art. XVII requires state trading enterprises to buy competitively and to import without discriminating among foreign suppliers Plurilateral was signed in the Tokyo Round in 1979 Plurilateral was signed in the Tokyo Round in 1979 New plurilateral was signed in the Ronda Uruguay in countries are members. New plurilateral was signed in the Ronda Uruguay in countries are members.History

Agreements and Negotiations Subregional SubregionalAgreements Norte America (NAFTA) 1994Norte America (NAFTA) 1994 Mexico – Colombia – Venezuela (G-3 ) 1995 Mexico – Colombia – Venezuela (G-3 ) 1995 Andean C. (services) 2002 Andean C. (services) 2002 Negotiations CAFTA CAFTA Free Trade Area of the Americas (FTAA) Free Trade Area of the Americas (FTAA) WTO WTO Bilateral Agreements Mexico – Bolivia Mexico – Bolivia1995 Mexico – Costa Rica 1995Mexico – Costa Rica 1995 Mexico – Nicaragua Mexico – Nicaragua2001. Chile – Central America 2002 Panama – Central America 2002Panama – Central America Dominican Republic – Central America 1998 Chile - USA CANADA – United States Free Trade Agreement 1993

Fundamental Disciplines in GP Agreements

Fundamental Disciplines Disciplines wich impact on laws and regulaciones related to GP as well procurement practices and procedures for public entities covered by the agreement. Non-discrimination Non-discrimination National Treatment (NT) Most Favored Nation (MFN) Transparency Transparency Due Process Due Process Disciplines wich impact on laws and regulaciones related to GP as well procurement practices and procedures for public entities covered by the agreement. Non-discrimination Non-discrimination National Treatment (NT) Most Favored Nation (MFN) Transparency Transparency Due Process Due Process

Special and Differential Treatment Recognition of the differences in the level of size and development of the economies. Special and Differential Treatment Recognition of the differences in the level of size and development of the economies. Principles/Treatment Special and Differential Treatment  Transitory Measures. Examples Global reserve for Mexico: procurement will no be over $1 billion until 31/12/2003. Global reserve for Mexico: procurement will no be over $1 billion until 31/12/2003. Progresive coverage : 10 years for energy firms and for construction services in the non-energy sector. In NAFTA, G-3, Mexico-Bolivia. Progresive coverage : 10 years for energy firms and for construction services in the non-energy sector. In NAFTA, G-3, Mexico-Bolivia. Permanent Measures. Examples Mexico may apply offsets to encourage domestic content in “turn- key”contracts. Mexico may apply offsets to encourage domestic content in “turn- key”contracts.  40% to labor-intensive projects  25% to capital-intensive projects

Provisions on Transparency Publication of laws and regulations Publication of laws and regulations Publicity of invitation for tender participation Publicity of invitation for tender participation Tender Requirements/Specifications Tender Requirements/Specifications Time limits for tender participation Time limits for tender participation Limited use of non-open tendering procedures Limited use of non-open tendering procedures Evaluation Criteria and Award of the Contracts. Contratcs shall be awarded according to the evaluation criteria set forth in the tender documentation. Evaluation Criteria and Award of the Contracts. Contratcs shall be awarded according to the evaluation criteria set forth in the tender documentation. Provisions on Transparency Publication of laws and regulations Publication of laws and regulations Publicity of invitation for tender participation Publicity of invitation for tender participation Tender Requirements/Specifications Tender Requirements/Specifications Time limits for tender participation Time limits for tender participation Limited use of non-open tendering procedures Limited use of non-open tendering procedures Evaluation Criteria and Award of the Contracts. Contratcs shall be awarded according to the evaluation criteria set forth in the tender documentation. Evaluation Criteria and Award of the Contracts. Contratcs shall be awarded according to the evaluation criteria set forth in the tender documentation. Principles/TreatmentTransparency

Transparency  E ntities Obligations : NAFTA vs. Centra America Model detailed procedures for all phases of the tendering process detailed procedures for all phases of the tendering processor flexibility: application of national laws. flexibility: application of national laws.

Transparency  Party Obligations. Publication of laws and regulations. Publication of laws and regulations. Supervision of entities in the application of principles. Supervision of entities in the application of principles. Information Requirements on specific procurement process (Nafta, G-3 and bilaterals with Mexico) Information Requirements on specific procurement process (Nafta, G-3 and bilaterals with Mexico) Time limits for maintaining documentation (Nafta, G-3 and bilaterals with Mexico) Time limits for maintaining documentation (Nafta, G-3 and bilaterals with Mexico) Statistical Information Requirements (Nafta, G-3 and bilaterals with Mexico) Statistical Information Requirements (Nafta, G-3 and bilaterals with Mexico)

Review and Challenge Mechanisms To establish bid protest or challenge procedures under and independent authority or application of national laws. To establish bid protest or challenge procedures under and independent authority or application of national laws. Complemented by the WTO’s multilateral dispute settlement process. Complemented by the WTO’s multilateral dispute settlement process. Review and Challenge Mechanisms To establish bid protest or challenge procedures under and independent authority or application of national laws. To establish bid protest or challenge procedures under and independent authority or application of national laws. Complemented by the WTO’s multilateral dispute settlement process. Complemented by the WTO’s multilateral dispute settlement process. Principles/Treatment Due Proccess

Market Access Scope and Coverage

What to Include in A Market Access Offer Entities at distinct levels of government that purchase with an obligation not to discriminate against suppliers, goods, and services. Goods, services, construction services/public works that will not be discriminated against

What to Include in A Market Access Offer The value of purchases from which there will not be discrimination: thresholds Exceptions to the obligation of non-discrimination Treatment of the differences in the levels of development and size of the economies.

Formats Positive Lists, Negative Lists Positive Lists: Positive Lists: Countries offer what is specified in their lists. Countries offer what is specified in their lists. Only those entities-goods-services listed will be subject to the provisions of the agreement. Only those entities-goods-services listed will be subject to the provisions of the agreement. Negative Lists: Negative Lists: Countries offer everything. Countries offer everything. Only those entities-goods-services listed remain exempt from the obligation of non-discrimination Only those entities-goods-services listed remain exempt from the obligation of non-discrimination

Scope and Coverage Purchasing Modalities Purchasing Modalities Entities – Level of Government Entities – Level of Government Products (goods/services/construction Products (goods/services/construction Thresholds Thresholds General Exceptions General Exceptions Exclusions/Reservations/qualifications to Exclusions/Reservations/qualifications to coverage coverage Purchasing Modalities Purchasing Modalities Entities – Level of Government Entities – Level of Government Products (goods/services/construction Products (goods/services/construction Thresholds Thresholds General Exceptions General Exceptions Exclusions/Reservations/qualifications to Exclusions/Reservations/qualifications to coverage coverage

 Central government entities are included in all Agreements Levels of Government Coverage shows concessions reached by each Party to the agreement  Independent entities, utilities and state enterprises: Excluded in Chile-CA, except for El Salvador. Excluded in Chile-CA, except for El Salvador. Costa Rica, Bolivia and Nicaragua include them with Mexico but do not do it in other agreements. Costa Rica, Bolivia and Nicaragua include them with Mexico but do not do it in other agreements. USA and Mexico include them but not for Canada. USA and Mexico include them but not for Canada. Panama excludes the procurement of the Panama Canal Authority in regional agreements. Panama excludes the procurement of the Panama Canal Authority in regional agreements.

 Sub-Central entities including Departaments or State Governments, Municipalities and other forms of local government. Excluded from Chile-CA. Included in Chile - USA Excluded from Chile-CA. Included in Chile - USA Bolivia, Costa Rica and Nicaragua include them in Mexico bilaterals, but Mexico does not. Bolivia, Costa Rica and Nicaragua include them in Mexico bilaterals, but Mexico does not. Excluded in G-3. Excluded in G-3. NAFTA has a provision for future negotiations. It is a conditionality to grant Canada NT in American and Mexican electric utilities. NAFTA has a provision for future negotiations. It is a conditionality to grant Canada NT in American and Mexican electric utilities. Niveles de government coverage shows concessions reached by each Party to the agreement

Thresholds GPANAFTAG-3MexicoBilaterals Central America Bilaterals Central Government goods (1) 5050NationalLegislation services NationalLegislation construction NationalLegislation Enterprises goods 545 (2) NationalLegislation services NationalLegislation construction NationalLegislation 000 $ through March 2002

Thresholds GPANAFTAG-3MexicobilateralsCentralAmericabilateralsSub-central goods (3) NationalLegislation services483 NationalLegislation construction (3) NationalLegislation 000 $ through March 2002 (1)US and Canada have a $25,000 threshold (2)EEUU applies a $250,000 thresholld (3)Applied to Nicaragua and Bolivia, not for Mexico

Principles/Treatment National Treatment General Exceptions to the Chapter. National defense (buying of arms, ammunitions or war material), protection of public morals, human, animal or plant life or intellectual property. National defense (buying of arms, ammunitions or war material), protection of public morals, human, animal or plant life or intellectual property. Chile and Central America refer to the FTA general exceptions. Chile and Central America refer to the FTA general exceptions. Partial application of NT in GP Agreements : General Exclusions to Coverage (entities, goods, services, levels of government, thresholds). Negotiated Exclusions to Market Access Commitments: what discriminatory measures are countries allowed to apply and to whom they are applied are found in the national lists.

Exclusions/Reservations Reservations Programs for Small and Medium Firms ( NAFTA, G-3 and bilaterals with Mexico. USA also excluded programs for minority business. Programs for Small and Medium Firms ( NAFTA, G-3 and bilaterals with Mexico. USA also excluded programs for minority business. Social Programs ( Venezuela) Social Programs ( Venezuela) Farm Support and Food programs ( NAFTA, G-3 and bilaterals with Mexico) Farm Support and Food programs ( NAFTA, G-3 and bilaterals with Mexico) Gobal Reservations: % of total purchases (Mexico, Colombia, Venezuela, Nicaragua, Bolivia) Gobal Reservations: % of total purchases (Mexico, Colombia, Venezuela, Nicaragua, Bolivia) Excluded goods (Examples) Ship building and manteinance, railroad and urban transportation (NAFTA) Ship building and manteinance, railroad and urban transportation (NAFTA)

Exclusions/Reservations Services (Examples) Utilities except electricity; telecomunications, research and development, professionals; architecture. ( NAFTA ) Utilities except electricity; telecomunications, research and development, professionals; architecture. ( NAFTA ) Financial ( Chile – CA, NAFTA and bilaterals with Mexico). Financial ( Chile – CA, NAFTA and bilaterals with Mexico). Transportation, linked to the purchase of goods ( NAFTA, G-3 and bilaterals with Mexico) Transportation, linked to the purchase of goods ( NAFTA, G-3 and bilaterals with Mexico)