© 2014 Djaghe LLC The New WTO Government Procurement Agreement – Its Impact on World Procurement Markets The George Washington University Law School 13 May 2014 Jean Heilman Grier Principal Consultant on Trade Djaghe, LLC

© 2014 Djaghe LLC Introduction  Work programs  Arbitration process  Expansion of market access under revised GPA

© 2014 Djaghe LLC Work Programs  Work Program on Small and Medium-sized Enterprises (SMEs)  Work Program on the Collection and Reporting of Statistical Data  Work Program on Sustainable Procurement  Work Program on Exclusions and Restrictions in Parties’ Annexes  Work Program on Safety Standards in International Procurement  For more information, see Work Programs for Unfinished Business in Revision of GPA, Trade Blog: Programs for Unfinished Business in Revision of GPAhttp://trade.djaghe.com

© 2014 Djaghe LLC GPA Arbitration Process  New approach to facilitate resolution of disputes over whether a Party should be allowed to withdraw an entity from coverage  Will be implemented after WTO Committee on Government Procurement adopts:  Arbitration procedures  Indicative criteria that demonstrate effective elimination of government control or influence over an entity's covered procurement  For more information, see Need to Initiate GPA Arbitration Process, Trade blog: to Initiate GPA Arbitration Processhttp://trade.djaghe.com

© 2014 Djaghe LLC Covered Procurement under Revised GPA  Incorporates concept of covered procurement to simplify references to procurement covered under the GPA  Means procurement for government purposes:  Of goods and services as specified in each Party’s annexes to Appendix I and not for commercial sale or resale  By any contractual means, including purchase, lease, and rental or hire purchase, with or without option to buy  For which the value is estimated to equal or exceed relevant threshold  By a procuring entity (an entity covered under Party’s annexes)  Not otherwise excluded from coverage.

© 2014 Djaghe LLC Thresholds under GPA  Annex 1: Central government goods and services  130,000 SDRs (before some reductions in revised GPA)  Annex 2: Sub-central government goods and services  Most Parties: 200,000 SDRs  Canada and United States: 355,000 SDRs; Israel: 250,000 SDRs  Annex 3: Other entities goods and services  Most Parties: 400,000 SDRs  U.S.: $250,000 threshold for federal government enterprises  Construction services procured by all entities  Most Parties: 5,000,000 SDRs  Japan & Korea: 15,000,000 (for Annexes 2 & 3); Israel: 8,500,000 SDRs

© 2014 Djaghe LLC Thresholds Reduced under Revised GPA  Israel: Will lower central government threshold for construction services from 8,500,000 SDRs to 5,000,000 SDRs in 2019  Japan and Netherlands with Respect to Aruba: Reduced central government threshold for goods and services from 130,000 SDRs to 100,000 SDRs  Aruba: Reduced central government threshold for construction services from 5,000,000 to 4,000,000 SDRs  Korea: Reduced Annex 3 threshold for goods and services from 450,000 SDRs to 400,000 SDRs

© 2014 Djaghe LLC Annex 1: Central Government Scope of Coverage  Annex 1 coverage based on:  Positive lists (most Parties specify entities covered)  Description/category coverage  Executive/administrative entities: Parties cover all or most central government entities  Judiciary: Several Parties cover courts  Legislature: Several Parties cover legislatures  Coverage varies based on governmental system

© 2014 Djaghe LLC Expansion of Central Government Coverage under Revised GPA  European Union: Added 1 EU-wide entity - the European External Action Service plus Member State entities  Hong Kong China: Added Chief Executive’s Office and Secretariat, Commissioner on Interception of Communications and Surveillance  Israel: Added 5 central government entities, including Small and Medium Business Agency; and removed several product exclusions for Ministry of Health  Korea: Added 8 entities, including National Emergency Management Agency, Defense Acquisition Program Administration, Korea Communications Commission and Fair Trade Commission  Liechtenstein: Added courts and Parliament  Aruba: Added 9 entities, including Parliament  Switzerland: Added federal judicial and criminal prosecution authorities, including Federal Supreme Court, Federal Criminal Court, Federal Administrative Court, Federal Patent Court and the Office of the Attorney General; and 3 federal assembly entities: National Council, Council of States and Parliamentary Services  United States: Added 11 federal entities, including Social Security Administration, Federal Energy Regulatory Commission and Millennium Challenge Corporation; covered Transportation Security Administration

© 2014 Djaghe LLC EU “Catch-all” Central Government Coverage for Member States  Offers comprehensive “catch all” coverage of all central government entities of its Member States – both existing and future entities  Only provides comprehensive coverage to 5 Parties: Iceland, Aruba, Norway, Liechtenstein and Switzerland  Gives Israel 2 nd best coverage: access to all listed entities (not future entities)  Provides 3 rd level of coverage (all listed entities, except those marked by asterisk) to 8 Parties, including Armenia and U.S.  Refined its coverage with 4 th category for U.S., Japan and Chinese Taipei: access to entities marked by double asterisk

© 2014 Djaghe LLC Annex 2: Approaches to Sub-central Coverage  All GPA Parties cover their sub-central entities  Two approaches to coverage of sub-central entities  Positive list of specific entities, used by Armenia, Canada, Israel, Japan, Korea, Switzerland and United States  Coverage by description or definition (may include partial list of entities), includes EU, Iceland, Liechtenstein and Norway  Type of coverage depends on governmental structure  Centralized procurement systems, such as EU  Federal systems such as U.S.

© 2014 Djaghe LLC Expansion of Sub-central Coverage under Revised GPA  Canada: Extended to all Parties (except Iceland &Liechtenstein) coverage of provinces & territories that it had provided to U.S. in 2010  Japan: Added 7 designated cities: Saitama-shi, Shizuoka-shi, Sakai- shi, Niigata-shi, Hamamatsu-shi, Okayama-shi and Sagamihara-shi  Korea: Added Ulsan Metropolitan City and local governments entities in 3 metropolitan cities: Seoul (25 local governments); Busan (16 local governments); and Incheon (10 local governments)  Chinese Taipei: Added bureau-Level administrative units of Kaohsiung County Government, which merged with Kaohsiung City Government

© 2014 Djaghe LLC Annex 3: Coverage of Government Enterprises and Other Entities  Coverage includes utilities, government enterprises, state-owned entities, state-invested entities and other entities where government has control or influence  Coverage of specific entities  Canada, Hong Kong China, Israel, Japan, Korea, Netherlands with respect to Aruba, Singapore, Chinese Taipei and the United States  Coverage by sectors or general categories  Armenia, EU, Iceland, Liechtenstein, Norway and Switzerland  Sectors covered include electricity, urban transport, airports, ports and water

© 2014 Djaghe LLC Expansion of Annex 3 Coverage under Revised GPA  Israel: Added 9 government enterprises, including Environmental Services Co. and three development companies  Japan: Added Japan Alcohol Corporation  Korea: Added Korean Rail Network Authority  Chinese Taipei: Added National Taiwan College of Physical Education  United States: Added financing of telecommunications projects by Rural Utilities Service (waived “buy American” requirement)  Aruba: Withdrew all Annex 3 entities due to privatization

© 2014 Djaghe LLC Annex 4: Expansion of Goods Coverage under Revised GPA  Annex 4 (Goods Annex) added  Israel: Removed exclusions for several goods procured by its Ministry of Health  United States: Removed exclusion of Transportation Security Administration, except for textile and apparel goods

© 2014 Djaghe LLC Annex 5: Coverage of Services  Positive list of services and construction services  Access provided only to listed services  Used by all Parties except United States  Negative list of services and construction services  Provides access to all services except those listed  Covers new services that are created  Only used by the United States

© 2014 Djaghe LLC Expansion of Services Coverage under Revised GPA  Telecommunication services: EU, Hong Kong China, Iceland, Aruba, Liechtenstein, Norway and Switzerland expanded partial coverage of telecommunications services to all of sector  Hong Kong China: Added 5 services categories  Israel: Added 6 categories of services, including commercial courier services, financial services (insurance, banking & investment) and armored car services.  Japan: Added 18 service categories, but only for its central government entities; New services include management consulting services and packaging services  Korea: Added 5 service categories, including computer services  Aruba: Added 12 categories of services, including all services related to management consulting, accounting, auditing and bookkeeping service and market research and opinion polling services  Singapore: Added executive search services.  Switzerland: Added more than 10 services, including certain legal advisory and taxation services

© 2014 Djaghe LLC Annex 6: Coverage of Construction Services  Positive list of construction services  Access provided only to listed services  Used by all Parties except United States  Negative list: U.S. uses  Parties cover all construction services, except for U.S. exclusion of dredging

© 2014 Djaghe LLC Expansion of Construction Services Coverage under Revised GPA  EU  Covered works concessions contracts under national treatment regime when the contracts are awarded by central or sub-central government entities covered under the GPA  Limited access to Iceland, Liechtenstein, Norway, Aruba and Switzerland  Japan: Extended coverage to procurement based on its Private Finance Initiative  Korea: Covered build-operate-transfer contracts  Liechtenstein: Added several construction services so that it now covers all construction services

© 2014 Djaghe LLC Offsets Commitments under Revised GPA  Israel: Commitment to end its use of offsets  Will not apply offsets for procurement below 3,000,000 SDRs  Will phase-out use of offsets over a 15-year period by progressively reducing  Number of entities that apply offsets  Level of offsets from the current 20% level to zero

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