The WTO Agreement on Government Procurement (GPA) ensures that tender processes are transparent and non-discriminatory. Membership of the GPA would provide Australian businesses with certainty and recourse when bidding for government procurement contracts in the markets of its 47 current members1, valued at US$1.7 trillion2 annually. This market is expected to grow following the accession of China and Russia to the GPA – China’s government procurement market alone is estimated to be worth US$1.5 trillion annually. On 2 June 2015, then Minister for Trade and Investment, Andrew Robb, launched negotiations to accede to the GPA, and Australia presented its accession offer to the WTO Committee on Government Procurement on 16 September 2015.
What is the WTO GPA?
The GPA is a WTO plurilateral agreement which opens government procurement markets between its members. The Agreement’s main principles are transparency and non-discrimination. It requires GPA members to offer other members’ suppliers conditions ‘no less favourable’ than domestic suppliers. In addition, the GPA provides for domestic review procedures to enable aggrieved firms to seek a review of a tender process.
More on the GPA at the WTO website.
Benefits to Australian exporters
Legally binding market access – GPA membership would provide legally binding market access for Australian firms to the procurement markets of GPA Members, most significantly the EU and its 28 member states. This would provide safeguards against any future protectionist measures introduced by GPA parties, while delivering the certainty of a multilateral rules-based system. While Australian firms are currently not automatically disqualified from participation in GPA members’ markets, there are no legal barriers to stop some GPA members from excluding Australian firms.
Access to future GPA market expansion – Nine additional parties are currently in GPA accession talks, including Russia and China. China’s accession to the GPA will, for the first time, secure for GPA member suppliers meaningful and legally binding market access to significant parts of Chinese procurement markets. China’s total procurement market is estimated at $1.5 trillion or around 20 per cent of China’s GDP. China’s accession is a high priority for GPA members. China’s accession may also generate considerable further interest from other WTO members who have not acceded to the GPA.
Review rights for firms – Australian business’ interests would be protected. Aggrieved firms have the right to take a complaint to an independent review body in each jurisdiction.
Improvements in the GPA – A revised GPA entered into force on 6 April 2014. For covered government procurements, the revised GPA improves and updates the Agreement and is more in line with the principles underlying Australia’s government procurement regime and makes GPA accession more beneficial.
- The revised GPA better reflects the needs and realities of modern procurement processes. Notably the revised GPA takes into account the expansion of electronic procurement and the often reduced timelines and increased efficiency of government procurement practices.
- The revised GPA provides gains in market access. Existing GPA members have expanded coverage of government entities (ministries and agencies) and services.
Australia’s compliance – Australia Government procurement practices have evolved over the past decade making us already substantially compliant with the GPA. Australia enjoys a world class government procurement system based on principles of value for money, non-discrimination and competition. Our procurement market is already open to competition from foreign suppliers.
Safeguarding Australian interests – Australia safeguards specific policy and strategic interests in negotiating trade agreements. The Commonwealth Government continues to work closely with State and Territory Governments and other stakeholders to fully reflect Australia’s broad commercial and government procurement policy interests in our GPA negotiating position.
Changes to government procurement procedures – Implementation of the GPA will require several modest changes to existing practices at the time of implementation, including to procedures for pre-qualification and limited tendering.
Australia would also be required to have in place appropriate review procedures. The Department of Finance is working on improving these procedures based on the recommendations of a Senate committee report into Commonwealth procurement practices. These changes, which also satisfy GPA obligations, would provide an accessible review mechanism for all suppliers, including Australian businesses, to raise concerns and seek remedies in a timely manner.
Australia presented its accession offer to the WTO Committee on Government Procurement (GPA Committee) on 16 September 2015. This initial offer was discussed during a meeting of the GPA Committee in Geneva from 15-17 February 2016. Following feedback and questions from GPA members, Australia presented a revised offer on 30 September 2016. The revised offer will be discussed during the GPA Committee meeting scheduled for 17-19 October 2016.
Government procurement – a snapshot
Current and potential market access – Australia’s procurement market is integrated with New Zealand. Australian suppliers already have legally-binding access to the procurement markets of the US, Singapore, Chile, the Republic of Korea and Japan through our bilateral FTAs. Australia has also negotiated procurement market access in the, yet to be ratified, Trans-Pacific Partnership Agreement (TPP).
Consultation and outreach
DFAT has held extensive consultations and outreach with industry stakeholders to determine whether there was a market access case for reviewing Australia’s position on GPA accession. DFAT directly consulted over 45 peak bodies, industry associations and firms during 2014. A further wider public consultation process commenced from 14 November 2014. While a call for public submissions closed on 30 January 2015, the Department welcomes comments from all interested stakeholders throughout accession negotiations.
Comment was received from a wide range of interested parties including industry, business, community and labour representatives. Of the submissions received, a number have agreed to have their submissions included on the DFAT website – see below.
Through this consultation process, the States and Territories indicated their desire to benefit by joining Australia’s GPA accession bid.
The advice received through the consultation process outlined above directly informed the Government’s consideration of GPA accession.
Submissions received* **
* Organisations listed: Some organisations/entities have provided permission to be listed publicly as having made a submission to DFAT. Where an organisation/entity has also agreed to have their submission made available, a link to the text of their submission appears next to their name.
** Copyright and content: Copyright in submissions resides with the author(s), not with DFAT. The views expressed in these submissions are the views of the author(s) and should not be understood as reflecting the views of the DFAT.
Free Trade Agreement Policy and New Issues Section
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