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U.S. – EU Trade in Government Procurement TTIP/EUR Webinar September 2013

U.S. – EU Trade in Government Procurement TTIP/EUR Webinar September 2013. Kate McNulty Foreign Affairs Officer Office of Multilateral Trade Affairs mcnultyk@state.gov. Introduction. Economic Significance of Government Procurement Typically 10-15% of GDP in developed countries

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U.S. – EU Trade in Government Procurement TTIP/EUR Webinar September 2013

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  1. U.S. – EU Trade in Government ProcurementTTIP/EUR WebinarSeptember 2013 Kate McNulty Foreign Affairs Officer Office of Multilateral Trade Affairs mcnultyk@state.gov

  2. Introduction • Economic Significance of Government Procurement • Typically 10-15% of GDP in developed countries • Much higher in economies with more state involvement • Important source of economic opportunity • Infrastructure and large scale procurements • Also area which is particularly vulnerable to corruption resulting from lack of transparency and accountability

  3. International Standards on GP • WTO Government Procurement Agreement (GPA) • Most significant international agreement on GP • 1994 – Conclusion of current GPA negotiations (in force) • 2012 – Conclusion of revised GPA negotiations (possible entry into force by the end of the year) • Includes obligations on tendering procedures, transparency and publication requirements and also market access commitments by each Party • Applies to procurements above certain thresholds

  4. WTO GPA • GPA is a plurilateral agreement – not mandatory • 15 Parties representing 43 WTO Members have joined the GPA • This includes the United States and the EU, including its 28 Member States • Benefits of GPA: Provides international market access to domestic suppliers, increases transparency, and promotes best value for money

  5. Other Agreements on GP • Free Trade Agreements (FTAs) • The United States also has 13 other FTAs, covering 19 countries, which contain GP commitments, as well as FTAs still under negotiation (TPP) • The EU has four FTAs with GP obligations, and is negotiating numerous others (Canada, Malaysia, etc). • Like the EU, some of the other countries the United States has FTAs with, or is negotiating them with, are also already covered under the GPA (Singapore, Canada, Korea, Japan)

  6. Basic GPA Principles (Also found in U.S. FTAs) • Non-Discrimination • Treat other GPA Parties’ goods, services and suppliers of such goods and services no less favorably than your own • Cannot apply domestic preferences to procurement covered by GPA • Cannot discriminate against suppliers on basis of foreign affiliation • Cannot use offsets (includes requirements of domestic content and technology transfer) • Transparency and Procedural Obligations • Ensures that procurements are transparent, predictable, fair and do not discriminate

  7. Previous US-EU Negotiations on GP • In order to conclude GPA negotiations in 1994, United States signed bilateral MOU with EU covering additional states and cities • To conclude negotiations to revise the GPA in 2012, United States agreed to establish a U.S.-EU Bilateral Procurement Forum to discuss further expansion of market access • Fed in directly to TTIP process after launch of negotiations

  8. TTIP/GP Negotiations • EU has identified GP as a priority area in which to expand market access under the TTIP • United States is also looking to negotiate key sectors of interest in GP; and address concerns relating to transparency • Looking to expand market access beyond GPA coverage

  9. US Coverage Under GPA • United States Buy American Act requirements waived for GPA and FTA partners for covered procurement. • United States covers procurement valued over $400 billion under the 2012 Revised GPA, including over $300b at the federal level and more than $120b at the state level (37 states) • Coverage set out by entity, good/service, and any exclusions

  10. US Procurement System • U.S. federal government controls procurement by federal agencies and entities, most of which follow the Federal Acquisition Regulations (FAR) • U.S. states and other sub-central units have authority over their procurement, cannot be compelled to adopt federal practices or be covered under the GPA • Exception: Federal government can impose requirements on federal government funds used by States

  11. EU Procurement System • EU claims to cover over $400b worth of procurement under the Revised GPA • EU Directives 2004/17 and 18 coordinate general procedures that Member States must adhere to when conducting GP above certain EU thresholds • Applies to GP at sub-national within Member States, provided it is above the EU thresholds • Member States must transpose the procedures specified in the directives into national law

  12. Looking to Posts for Input • Negotiators are looking to posts to provide reporting on potential market access barriers, new initiatives, and issues of concern in the GP arena in EU member states • See 13 STATE 129490 • In addition, reporting is requested if post is approached by European firms, and EU or Member State officials on GP issues (e.g. access to U.S. market)

  13. Additional Information Kate McNulty Foreign Affairs Officer Economic Bureau Office of Multilateral Trade Affairs (202) 647-4367 mcnultyk@state.gov USTR website: http://www.ustr.gov/trade-topics/government-procurement

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