© 2014 Djaghe LLC BRICS AND THE WTO GOVERNMENT PROCUREMENT AGREEMENT George Washington University Law School Colloquium November 4, 2014 Jean Heilman Grier Principal Consultant on Trade Djaghe, LLC

© 2014 Djaghe LLC Introduction  BRICS: Brazil, Russia, India, China and South Africa  Relationship to GPA  BRICS with commitments to join GPA  BRICS with observer status in GPA Committee  Procurement constraints in BRICS  U.S. policy relating on BRICS and GPA

© 2014 Djaghe LLC BRICS with Commitments to Join GPA  Commitments in WTO protocols of accession  China  Became WTO member in 2001  Commenced GPA negotiations in 2007  Has submitted five offers of coverage  Committed to submit 6 th offer in 2014  Russia  Became WTO member in 2012  Committed to start GPA negotiations by 2016

© 2014 Djaghe LLC BRICS with Observer Status in GPA  Observers  China (2002)  Russia (2013)  India (2010)  Not Observers  Brazil  South Africa

© 2014 Djaghe LLC Brazil and International Trade Agreements  MERCOSUR (Southern Common Market): Brazil, Argentina, Paraguay and Uruguay:  2006 Protocol on Government Procurement not yet implemented  Other preferential trade agreements avoid procurement commitments  International negotiations  Brazil-EU FTA negotiations  Free Trade Agreement of the Americas (FTAA) negotiations  No plans to join GPA (2013 WTO Trade Policy Review)

© 2014 Djaghe LLC Brazil’s Preference Policies  Recent adoption of preferential policies complicates GPA accession prospects  Domestic preferences a permanent feature of procurement regime  Allows preferential margins of up to 25% for goods and services produced in Brazil and in accordance with Brazilian technical standards

© 2014 Djaghe LLC India  No overarching government procurement policy  Procurement policies and practices lack transparency and consistency among ministries and states  State-owned enterprises give preferences for domestic firms  National Manufacturing Policy increased use of local content requirements in procurement in certain sectors (ICT and clean energy)  No international procurement obligations

© 2014 Djaghe LLC South Africa  Uses competitive tenders for procurement, but tender evaluation based on Preferential Procurement Policy Framework Act  Extensive array of domestic preferences include:  Local Procurement Accord: target is to source 75% of procurement locally  National Industrial Participation Program: industrial participation obligation on government and parastatal purchases and lease contracts  Broad-Based Black Economic Empowerment strategy: preferential procurement requirements.  International negotiations  Southern African Customs Union (SACU): Botswana, Lesotho, Namibia, South Africa, Swaziland: no procurement obligations  US-SACU FTA negotiations unsuccessful

© 2014 Djaghe LLC U.S. Policy on BRICS and GPA  Sought GPA commitments from BRICS that joined WTO in past 15 years  China (2002)  Russia (2012)  Prior unsuccessful FTA negotiations  Brazil in Free Trade Agreement of Americas (FTAA)  South Africa in U.S.-SACU FTA negotiations  India: encourage accession as part of government reform  Brazil: U.S. focus on Brazil’s adoption of preferential policies

© 2014 Djaghe LLC ] Contact Information Jean Heilman Grier Principal Consultant on Trade Djaghe, LLC Website: Trade Blog: © 2014 Djaghe LLC