Government Procurement at Gatt/WTO: 25 Years of Plurilateral Framework

Abstract

Governments are significant buyers of goods and services, and these markets represent immense opportunities for international trade. Government procurement accounts for a substantial proportion of Gross Domestic Product (15-20% or more in most countries). According to OECD data, the world total government procurement is estimated to amount to US$5550 billion in 1998, which is equivalent to 82.3% of the world merchandise and commercial services exports in 1998. The world value of government procurement that is potentially opened up to international trade is estimated at US$2083 billion, which is equivalent to 7.1% of the world Gross Domestic Product (GDP) or 30.1% of the world merchandise and commercial services exports. For the OECD countries as a whole, the ratio of total procurement for all levels of government is estimated at 19.96% of GDP in 1998 or US$4733 billion, and for non-OECD countries, it is estimated at 14.48% of GDP or US$816 billion.

However, despite governments being among the largest purchasers of goods and services in individual countries, this market has nevertheless been one of the most protected in respect of international trade. Most countries enforce some level of control over government procurement practices that discriminates against foreign suppliers in favour of domestic entities. This paper traces the evolution of the GATT and WTO multilateral disciplines with regard to government procurement since the last 25 years and attempts to address some of the fears and myths about the WTO Government Procurement Agreement (GPA) so as to provide a better understanding of the benefits arising from improved multilateral disciplines in government procurement and the gains to be derived from membership in the GPA.