Barriers to International Trade in Procurement after the Economic Crisis, Part II: Opening International Procurement Markets: Unfinished Business

Abstract:     
This paper, presented at the West Government Contracts Year in Review Conference (covering 2010), discusses developing issues in international public procurement. Among other things, the paper suggests that, in 2010, the international procurement market continued to mature, as cross-border barriers to trade continue to fall. Large developing nations - including China and, potentially, India - moved to join the World Trade Organization (WTO) Government Procurement Agreement (GPA), the leading instrument for opening procurement markets. In the United States, while open issues remained regarding how to ensure that the United States meets its own free-trade obligations in procurement, the United States and Canada were able to reach a compromise on U.S. - Canadian procurement purchasing that may open the way for future agreement. That thaw in international procurement markets was in contrast, though, to a new U.S. tax on foreign contractors selling to the U.S. government who fall outside the protection of the GPA and other agreements. More broadly, there was a growing international trend in favor of unified defense-civilian procurement, bolstered by a recent European directive on defense procurement. Freer trade in defense procurement may, however, be affected by efforts to ensure security of supply (including efforts in Europe and the United States) - an area where comparison between the two systems may be useful, as the debate over protecting “critical materials” in the U.S. system is rapidly advancing.

Number of Pages in PDF File: 16

Keywords: government contracts, international public procurement, World Trade Organization, Government Procurement Agreement, protectionism, international trade, China, India

JEL Classification: F13, F14, H42, H57

Accepted Paper Series