Regional Trade Agreements and EU Trade Policy CETA and Public Procurement Prof. Dr. Marc Bungenberg, LL.M. University of Siegen / visiting Professor University of Lausanne

Outline Figures/Statistics/Size of Procurement Markets Basics on EU Public Procurement Regulation – Background: Single Market Act – Openess for Non EU Tenders – Third Market Access Regulation – A Comparison: Access to the Canadian Procurement Market Internationalization of Procurement Law via WTO Law – GPA – Transparency – GATS CETA Chapter on Government Procurement – Economic impact assessment – CETA-Procurement Chapter Outlook – A possible connection between ISDS and Procurement? – Public Procurement in TTIP negotiations

Size of general government procurement as a percentage of GDP (2006 and 2008) Source: OECD National Accounts Statistics,

EU Public Procurement Regulation Background: Single Market Act – Create a more level playing field in the EU PP market – Basic Principles Non discrimination Transparency Competition Efficiency „value for money“ One internal market Openness of the internal market – promote/strengthen competition – See whitebook on internal market

EU Public Procurement Regulation Opening of PP markets can be beneficial for the following reasons: – Enhances government abilities to obtain better value for money – Increases efficient use of public resources – Powerful tool to fight corrupt practices – Increases transparency and legal certainty Protectionist policies outside EU in procurement markets – Buy X policies – Stimulus plans in economic crisis – Use of state aids

EU Public Procurement Regulation Background: Single Market Act – Openess for Non EU Tenders Important public contracts awarded to Non-EU companies No Fortresse Europe in Public Procurement German Procurement Market „Open“ since 1960ies Example: – Highway construction by Chinese companies „No Protectionism Policy“

International PP Internationalization of Procurement Law via WTO Law – Public Procurement is exempted from GATT – Public Procurement is exempted from GATS – But in WTO-Context: Agreement on Government Procurement Working Group on Transparency in Government Procurement GATS negotiations on Government Procurement

International PP Agreement on Government Procurement – 15 parties comprising 43 WTO members – revised version entered into force 2014 – Principles of Transparency and Non Discrimination comparable to for Example EU unikateral regulation of PP – Problem: Scope of Application Different scope of application via Annexes Leads to uneven opening of PP marekts

GPA Commitments PartiesCentralSub- Central/Local Other Entities CanadaYESNO EUYES

Resulting Problems Negative impact on internationalisation of EU SMEs Loss of competition Loss of competitiveness

– Un-balanced market access commitments Gap between EEU unilateral commitments and under GPA and limited commitment of key trading partners – Consequence: Limited access to EU market via „Third Market Access Regulation“ Or Multilateral Liberalization of Public Procurement Or Opening up of Canadian Procurement Market via FTAs/CETA Chapter

Bilateral EU Approach Provisions covering PP have already been included in FTAs with: – Mexico, Chile, Colombia, Peru, Central America, Korea Negotiations are ongoing with: – Armenia, Canada, Gerorgia, India, Japan, Malaysia, Mercosur, Moldova, Morocco, Singapore, United States, Vietnam WTO+ approach with GPA members – Based on GPA – Extension of scope of application

CETA objectives Better access of EU and Canadian enterprises to each others procurement markets Extent scope of application Inspire future international PP regulation _______________ Pressure from Canada’s trading partners is supported by their own suppliers who want access to “the entire” Canadian procurement market

CETA Results 25 pages of text on PP 19 articles Comparable to GPA language Basic principles: Transparency and non- discrimination Extension of scope of application in comparison to GPA „Opening up“ – EU is open, thus CETA PP brings more benefits to Canada

CETA Results Commitment to create a single point of electronic access to procurement opportunities within 5 years of entry into force Detailed requirements on the Notices of Intended Procurements Non-Discrimination: Canadian and sub-federal procuring entities must provide treatment no less favourable to European suppliers and goods/services than that provided to domestic suppliers

CETA Results Prohibits discrimination against locally established suppliers based on foreign ownership or links with foreign supply Ability to choose form of procurement (open or selective ) or negotiate with potential suppliers based on criteria in the WTO Agreement ……. Domestic Review Procedures!!! – Timely, effective, transparent and non-discriminatory administrative or judicial review procedure to challenge the award or process

Secondary objectives in PP? – Social and environmental criteria? – Still possible, but only in a non- discriminatory manner – See EU internal market/jurisprudence of CJEU

Québec This Annex covers all: (i) departments, governmental agencies; and (ii) para-public organizations. “Governmental agencies” means the bodies set out in subparagraphs (2) through (4) of the first paragraph of section 4 of the Act Respecting Contracting by Public Bodies (R.S.Q., c.C-65.1), including the Agence du revenu du Québec, and the persons set out in the second paragraph of that section, with the exception of the bodies and persons mentioned in section 5 of the Act.

Québec “Para-public organizations” means the municipalities, the municipal organizations, and the bodies set out in subparagraphs (5) and (6) of the first paragraph of section 4 of the Act Respecting Contracting by Public Bodies, including the legal persons or other entities owned or controlled by one or several para-public organizations.

Above SDR services and goods/ SDR construction Québec This Annex covers government enterprises and legal persons or other entities that are owned or controlled by one or several of these enterprises, which are not in competition with the private sector. “Government enterprise” means a body set out in section 7 of the Act Respecting Contracting by Public Bodies.

Broad coverage and federal, provincial and municipal entities Municipal, Academia, School Boards, Hospitals Unprecedented Mass transit by all provinces and territories

Maintain ability to five preferences to domestic companies for: – Procurements below thresholds – Excluded procurements: – “Health care” services – “Research and development” procurements – “Public private partnerships” for services and Utilities – “Sensitive” goods when procured by security mandated police forces and related services – Canadian airport authorities and Canadian Port Authorities – “In -house” procurements

Commission: – European businesses will be the first foreign companies to get that level of access to Canadian public procurement markets. – No other international agreement concluded by Canada offers similar opportunities.

Outlook Does Canada want liberalisation of PP markets? Connect future of PP with ISDS?

Outlook - TTIP The Agreement shall aim for the maximum ambition, complementing the outcome of the negotiations of the revised Government Procurement Agreement in terms of coverage (procurement entities, sectors, thresholds and services contracts, including in particular public construction). The Agreement will aim at enhanced mutual access to public procurement markets at all administrative levels (national, regional and local), and in the fields of public utilities, covering relevant operations of undertakings operating in this field and ensuring treatment no less favourable than that accorded to locally established suppliers. The Agreement shall also include rules and disciplines to address barriers having a negative impact on each others' public procurement markets, including local content or local production requirements, in particular Buy America(n) provisions, and those applying to tendering procedures, technical specifications, remedy procedures and existing carve-outs, including for small and medium-sized enterprises, with a view to increasing market access, and where appropriate, streamlining, simplifying and increasing transparency of procedures.

Thank you for your attention!!!!