RESTRICTEDWORLD TRADE
ORGANIZATIONWT/WGTGP/M/18
7 July 2003
(03-3617)
Working Group on Transparency
in Government Procurement
REPORT ON THE MEETING OF 18 JUNE 2003
Note by the Secretariat
1. The Working Group on Transparency in Government Procurement held its eighteenth
meeting on 18 June 2003 under the chairmanship of Ambassador Ronald Saborío Soto (Costa Rica).
2. The agenda for the meeting consisted of:  (i) transparency-related provisions in existing
international instruments on government procurement and national procedures and practices;
(ii) technical assistance and capacity building as called for by paragraph 26 of the Doha Ministerial
Declaration;  and (iii) other business, in particular the preparation of the Group's Report to theGeneral Council before the Cancun Ministerial Conf erence.  The Working Group agreed to adopt the
agenda as proposed.
A. TRANSPARENCY -RELATED PROVISIONS IN EXISTING INTERNATIONAL INSTRUMENTS ON
GOVERNMENT PROCUREMENT AND NATIONAL PROCEDURES AND PRACTICES
3. The representative of the European Communities introduced a written contribution relevant to
this item (entitled "Positive Effects of Transparency in Government Procurement and Its
Implementation") contained in document WT/WGTGP/W/41.  In so doing, he reminded Members of
the Working Group that the Group had been undertaking work since 1997 "to develop elements for
inclusion in an appropriate Agreement"1 on the basis of a mandate which had been agreed upon at the
Singapore Ministerial Meeting.  He considered that this meeting would be the last step of the Working
Group's study phase and that, on the next occasion, following the Cancun Ministerial Conference,
Members would have a negotiating mandate.  Reflecting on the work undertaken during the past sixyears, he considered that the study phase had been valuable and fruitful.  He noted that written and
oral contributions made by Members on many areas related to transparency in government
procurement, including descriptions of national procurement systems, had enabled Members to
identify advantages of a transparency agreement as well as some difficulties, which confronted
Members in the lead-up to negotiations.  He suggested that Members discuss what the advantages anddisadvantages of a transparency agreement were, and identify the difficulties associated with the
implementation of a multilateral agreement covering this subject-matter.  He noted that the work of
the Working Group concentrated on 12 issues identified by Members set out in the Chairman's "List
of Issues Raised and Points Made" (JOB(99)6782 of  November 1999), and that those issues would be
of paramount value during the negotiating phase.
4. For his delegation, transparency meant ensuring that information about a government's
procurement regime and individual procurement opportunities were made available to all interested
parties, particularly potential suppliers and service providers.  Further, it meant that such parties were
provided the right to access that information.  It also meant ensuring that procurement policies and
practices were transparent and that information provided was respected by all in order to provideconfidence and legal certainty.  In international trade, suppliers needed legal certainty and
                                                     
1 Singapore Ministerial Declaration, WT/MIN(96)/DEC, para. 21.WT/WGTGP/M/18
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predictability, regardless of whether they were participating in tendering procedures in their own
country or abroad.
5. While transparency in government procurement was not per se  a difficult issue, at least not
technically, it was perceived as politically controversial by some Members.  However, he considered
that it should not be so perceived given the numerous benefits associated with transparency ingovernment procurement and given that the issue of market access did not arise.  Rather than the
focus being on market-access commitments, it was on a rules-based agreement that would render
more transparent a part of international trade currently outside the scope of the WTO.  He stated that
transparency was one of the key governing principles of the WTO and the GATT, and it was
embedded in all WTO agreements.  Noting that all Member governments purchased goods and
services both domestically and abroad, he stated that there was a significant amount of international
trade generated by public entities when, in the exercise of their sovereign powers, they decided topurchase internationally.  Given the volume of international trade generated by such activity,
transparency in public procurement was fully justified and, accordingly, rules ensuring transparency
should be negotiated in the WTO.  He stressed that his delegation would not seek negotiation of
market access;  nor would his delegation seek to limit countries' ability to decide which procurement
opportunities would be open to foreign bidding.  In this regard, he noted that paragraph 26 of theDoha Declaration was clear on these issues and they were, therefore, not contestable.  However, while
the scope of negotiations would be limited to transparency issues and would not extend to market
access issues, in his delegation's view, the outcome of future negotiations would have an impact on
Members' trade relations.  Some of the benefits in trade relations that transparency in government
procurement would yield were contained in his de legation's communication.  He suggested that the
price to be paid for a transparency agreement was relatively low compared to the potential benefits
deriving from the optimisation of public expenditure.
6. His delegation's communication highlighted some of the major benefits associated with a
future multilateral agreement on transparency in go vernment procurement that would accrue not only
to procuring entities, but also to participating bi dders.  First, transparency would result in enhanced
efficiency and increased innovation.  Specifically, public procurement applied in a transparent
environment with a clear set of rules defined in advance and respected by all parties might allow
tendering companies from both developed and developing countries to foster enhanced competition,
which would, in turn, stimulate innovation amongst  bidders.  Secondly, a multilateral agreement
would result in better value-for-money.  In particular, transparent tendering should lead to effective
competition between bidders (in some cases from foreign bidders).  The differences in terms of value
and quality offered in the various bids would often reduce the level of bids.  This, in turn, wouldreduce the amount of public expenditure.  Thirdly, transparency rules would encourage investment
and partnership.  He stated that this was of particular importance for developing countries that were
trying to develop their markets.  Fourthly, a transp arency agreement would have the effect of reducing
corruption.  While his delegation did not consider that this would be the objective of the future
multilateral agreement on transparency in procurement, it was, nevertheless, considered as a welcomeside-effect for all countries.
7. Turning to the future implementation of a tr ansparency agreement, he stated that his
delegation had examined the legislation and regulations of many Members of the WTO.  On the basis
of the information available, his delegation had established that many countries, including developing
countries, already had transparency rules in place.  Accordingly, the implementation of any futuremultilateral agreement would not be a major difficulty for those countries.  For countries that did not
have a procurement system in place, the costs that might be associated with the introduction of such a
system would be far outweighed by the resultin g benefits.  He also emphasized that a future
multilateral agreement on transparency in government procurement would not in any way affect or
reduce countries' ability to give preference to domestic supplies – in other words, to limit the scope oftendering procedures to national bidders.  Nevertheless, the rules contained in a transparency
agreement should apply without distinction between na tional or international bidders.  In other words,WT/WGTGP/M/18
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transparency should be ensured even when a tender was not open to foreign bidders.  More
particularly, foreign bidders should have information regarding tendering opportunities that were not
open to foreign participation.
8. He noted that his delegation's contributi on suggested that the Working Group focus on
thresholds above which the rules would apply and be low which such rules would not apply.  He stated
that different thresholds might apply for developing countries or, at least, for least-developed
countries, if that was considered the way to accommodate such countries' concerns.
9. Finally, he emphasized the need for technical assistance during and after the negotiations – as
was agreed in the Doha Declaration.  His delegation was committed to providing technical assistance
to developing countries, acknowledging that it was an important element in ensuring that such
countries were in a position to implement a multilateral agreement of transparency in government
procurement.
10. The representative of Brazil, responding to the paper submitted by the European
Communities, stated that while the paper contained a convincing argument for transparency in
government procurement, it failed to make a strong case for an agreement on transparency and
government procurement.  He stated that the general concepts and proposals were, on the whole, not
controversial.  No delegation had put forward the vi ew in the Working Group that transparency in the
procurement process was not a good thing;  nor had they denied the benefits for Members associated
with transparency in government procurement.  His delegation had been firmly committed to open
and transparent rules in the public sector for many years.  It was also conscious of the many benefits
that had accrued to the government and to entities through the application of such open and
transparent rules.  It was necessary to demonstrate and understand how an agreement on transparencyin government procurement would enhance relatio ns among Members and how one Member applying
enhanced transparency in government procurement affected and benefited its trading partners.
11. The representative of Malaysia, also responding to the contribution made by the European
Communities, stated that that contribution had been useful insofar as it expounded the position of the
European Communities on certain issues and their level of ambition and aspirations in this area.  Atthe very least, the European Communities had reiter ated that the mandate given by Ministers in the
Doha Declaration was limited to transparency and did not extend to market access.  He also expressed
appreciation for the reference in that contribution to the concept of thresholds.  It was his delegation
together with a few other developing countries that had emphasized the need for thresholds since the
inception of the work of the Working Group.  A transparency agreement would become too onerous
without the inclusion of thresholds, particularly for developing countries given that otherwise the
agreement would apply even to the smallest procurements.  Given the reference to the notion ofthresholds in the European Communities' contribution, it had gained acceptance at least by the
European Communities and perhaps by other major proponents, as well.
12. Nevertheless, his delegation did not agree with the statement in the paper that Members were
"on the verge of a decision on modalities".
2  This was not true given the continuing disagreement in
the Working Group.  He acknowledged that a larger  degree of consensus existed in the Working
Group as compared with Working Groups on other Sing apore issues or, at least, those concerned with
investment and competition policy.  He also acknowledged that some level of consensus had emerged
in relation to several of the elements in the informal note by the Chairman containing the "List of
Issues Raised and Points Made".3  However, convergence had not yet been achieved in relation to a
large number of those elements.  In particular, convergence had not been achieved in relation to thedefinition of transparency and the issue of whether the scope of the agreement should be limited to
goods or include services and concessions.  In addition, there were two elements that his delegation –
                                                     
2 WT/WGTGP/W/41, p. 1.
3 JOB(99)6782 of November 1999.WT/WGTGP/M/18
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together with those of other developing countries – had repeatedly emphasised, namely domestic
review procedures as well as linkage to the WTO's DSU.  In his view, these elements were not
concerned with transparency and should never be a part of an agreement on transparency in
government procurement.
13. Continuing, he emphasized that while Members were not on the "verge of a decision on
modalities"4, they were on the verge of a discussion on modalities, a process which would be
undertaken by the Chairman of the Working Group as a "friend" of the Chairman of the General
Council in an informal setting and not as part of the Working Group.  He emphasized that precision
was necessary given that developing countries would be seriously disadvantaged if they were required
to enter into negotiations without understanding what they were negotiating about.  Having
emphasized the need for precision as regards the parameters of negotiations, he conceded that
pre-negotiation of every element was not necessary.  For example, once it had been accepted that theconcept of a threshold should be incorporated into the scope of the agreement, the actual value of the
threshold could be left to the negotiations.  Similarly, the representative of India stated that her
delegation could not share the view expressed by the European Communities that Members were "onthe verge of a decision on modalities".
5  Despite the fact that the Working Group had had a long study
phase, a number of crucial issues remained for which clarification was still necessary.  These issuescould not be clarified during the negotiating phase.  Before entering into a negotiating phase, there
needed to be a clear conception of what would be involved if there was to be any agreement on
transparency.  Her delegation did not even know precisely what transparency would entail, nor what
the scope or coverage of an agreement would be.  The representative of the Philippines noted that the
European Communities had made it clear that it was not seeking market access.  Indeed, it had
provided assurances about national preferences and the issue of thresholds, although the devil lay in
the detail.  Despite confirmation that the European Communities was not seeking market access, the
paper contained a plethora of reassurances regarding national sovereignty, the use of national
preferences, thresholds, proportionality, technical assistance and capacity building, which had the
effect, if anything, of raising doubts on the issue.  Further, while the European Communitiesconcluded in its paper that Members were on the verge of a decision on modalities for the
negotiations, for his delegation, a few fundamental considerations precluded such a conclusion.  He
stated that leaving such considerations to be a ddressed during the negotiating stage would be highly
imprudent if not irresponsible.  In particular, the paper submitted by the European Communities did
not address the issue of domestic review and dispute settlement, although it was acknowledged that
the nature of the subject-matter of that paper did not call for such elaboration.  Nevertheless, these
issues were of fundamental concern to his delegation.  Moreover, the European Communities alreadybenefited from positive moves towards institutionalised and greater transparency in many developing
countries, whose procurement markets were presumed to be of considerable importance.  The
question, therefore, arose as to why the European Communities and other proponents required
payment for something developing countries had already determined for themselves that they
required.  In response, the representative of the European Communities stated that while the comment
that "Members are on the verge of a decision on modalities"6 might sound optimistic, that was the way
his delegation viewed the current situation.
14. The representative of Egypt, also responding to the contribution by the European
Communities, noted that the paper appeared to be based on the premise of a future agreement on
transparency in government procurement.  The mandate from the Singapore Ministerial Conference asaffirmed at the Doha Ministerial Conference was to conduct a study, on the basis of which the
Working Group would develop elements for inclusion in an appropriate agreement on transparency in
government procurement.  Therefore, it was of utmost importance to recognise that any future
agreement would depend on the outcome of the study exercise rather than simply on the expiration of
                                                     
4 WT/WGTGP/W/41, p. 1.
5 WT/WGTGP/W/41, p. 1.
6 WT/WGTGP/W/41, p. 1.WT/WGTGP/M/18
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time.  Furthermore, the Doha Declaration imposed another condition, being to develop and agree by
explicit consensus on the modalities of negotiations.  This could only be achieved following the
conclusion of the study process.
15. The representative of Switzerland stated that his delegation considered that the contribution
submitted by the European Communities was extremely useful and timely insofar as it allowed
Members to refresh their memories on the various elements that had been studied by the Working
Group.  His delegation agreed that the issues of scope and coverage and enforcement mechanisms
were perhaps the most sensitive and difficult to tackle in future negotiations.  His delegation agreed
with the European Communities that the study phase was over because the elements and the
differences of positions were clear.  What remained was to make "bridges" during the negotiations
phase.  The representative of Poland, expressing support for the paper submitted by the European
Communities, stated that his delegation was in favour of establishing a multilateral framework for
transparency in government procurement.  Many important benefits would flow from such an
approach.  His delegation also shared the view that the study phase should be concluded and that the
Working Group should commence work on the modalities of negotiations for a future agreement.  The
representative of Hungary stated that her delegation supported the aim and content of the European
Communities' contribution.  After a seven-year study phase, it was a good time to underline the
general aims to be achieved by establishing an agreement on transparency in government procurement
while recognizing difficulties that could be cause d by the absence of transparency in government
procurement.  Her delegation was convinced that an agreement on transparency in government
procurement would be an important addition to the ru les-based international trading system in that it
would set out basic transparency obligations that suppliers throughout the world could expect to findin the government procurement systems of all Members.
16. The representative of Japan stated that her delegation generally shared the views reflected in
the European Communities' contribution.  The Working Group had completed a study of transparency
in government procurement practices and had made progress to develop elements for inclusion in an
appropriate agreement during the last six years.  Her delegation was also aware of difficulties fordeveloping countries to implement a future agreement.  Therefore, the framework of such an
agreement should be simple, focussing on core principles such as transparency in procurement
opportunities and other elements as illustrated in the items in the Chairman's "List of Issues Raised
and Points Made" (JOB(99)6782 of November 1999).  The details of tendering procedures should be
dealt with in each Member's domestic laws and a transparency agreement should ensure that such
procedures were transparent.  The representative of Morocco stated that his delegation welcomed the
work done so far in the Working Group, whatever the decision adopted in Cancun as to negotiations
on a future agreement.  The agreement could contain the principles referred to by Japan, which would
help contracting entities to transpose transparency  rules into national regimes in a manner that took
account of national conditions.  His delegation agreed that the agreement should be simple and
flexible, placing emphasis on transparency.  Such an  approach would greatly facilitate the negotiation
of the future agreement.
17. The representative of Australia stated that his delegation viewed the contribution by the
European Communities as a good basis that supporters of a transparency in government procurement
agreement could endorse.  The contribution clearly explained the benefits deriving from a
transparency agreement.  It emphasized the point that implementing transparency rules should not be
viewed as onerous;  it underlined that the freedom of Members to provide preferences to domesticsuppliers was not being challenged;  and it recognized  the need for technical assistance to ensure that
developing countries were in a position to abid e by obligations that would flow from such an
agreement.  His delegation strongly endorsed the conclusion reached by the European Communities
that the real benefit of an agreement would derive from the construction of a minimum set of rules
applicable world-wide that would have the effect of introducing legal certainty to existingprocurement procedures.  More generally, his delegation considered that the discussion to date in the
Working Group had been extremely valuable in fleshing out the objectives and expectations ofWT/WGTGP/M/18
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Members.  Australia continued to support the development of an agreement in transparency in
government procurement and saw value for all Memb ers in its development.  An agreement should
encompass a robust principles-based approach both with respect to transparency and due process
aspects, but which at the same time was not prescriptive and which did not confer a right to challenge
tender outcomes.  Such an agreement could be the first step towards a genuine multilateral instrumentdesigned to facilitate companies' access to information about procurement opportunities, processes
and practices and, at the same time, could provide the benefit of a more competitive procurement
market.
18. The representative of the United States believed that an agreement on transparency in
government procurement would yield important benefits for suppliers in Members' countries.  Such an
agreement would establish core transparency elements that suppliers throughout the world could be
assured of finding in the procurement systems of every WTO Member.  Such an agreement wouldalso be an important addition to the rules-based international trading system, building upon the
transparency elements found in other agreements within the WTO.  Her delegation also considered
that predictability and certainty provided by a transparent, rules-based government procurement
system would build on other efforts within the WTO to ensure full integration of all Members into the
global trading system.  She noted that some Members considered that convergence existed in respectof many of the elements in the Chairman's "Lis t of Issues Raised and Points Made" (JOB(99)6782 of
November 1999) but that a divergence of views exis ted in relation to particular elements, and that
some Members had suggested that Members should not move forward until convergence on all
elements had been achieved.  However, that was the purpose of negotiations and not of the study
phase.  Her delegation considered that Members had exhausted the study phase and that it was nowtime to move to the development of an agreement, taking on those issues for which convergence had
not yet been achieved with the objective of working through differences.
19. Reflecting on the specific benefits associated with transparency in government that had been
identified by the European Communities' paper, the representative of Thailand stated that government
procurement not only involved the government but also investors, bidders and other local people.  It
was for that reason that Members tended to be more protective and conservative in approaching the
issue of transparency in government procurement.  Nonetheless, his delegation advocated that
transparency, being one of the cornerstones of the WTO, was something it was mindful of.  The
enhancement of transparency in government procurement attracted more international bidders and
foreign investment.  In Thailand, all government agencies including local and national government
entities alike were required to observe the same rules and regulations governing government
procurement.  He acknowledged that local government agencies still found it more difficult toimplement transparency principles as compared to national government agencies.  He also stated that
there was a need to restrict international bids in favour of domestic bids in some cases.  However, he
suggested that procurement for very large projects should be open to all bidders on a
non-discriminatory basis.  Procurement of services could be the subject of further study.  He also
stressed that Members could not pre-empt what Ministers would decide on modalities at Cancun.
20. The representative of Colombia stated that, over the last few years, Colombia had undertaken
substantial reforms in the area of government procurement that were primarily aimed at enhancing
transparency.  By way of example, he noted recent action by the government to implement concrete
measures to fight administrative corruption, particularly in the area of government procurement.
Additionally, the public had been involved in the development of procurement processes through"citizen watch" organizations.  The use of information technology had been promoted to, inter alia ,
optimise the management of this process, to reduce costs of transactions and to eliminate corrupt
practices through an integrated electronic system for government procurement.  On the basis of
Colombia's experience, his delegation considered that governments could, through a general scheme
for transparent procurement, ensure more efficient public expenditure.  Despite the foregoing, heacknowledged that this was not necessarily a sufficient basis upon which to create multilateral rules in
the area.WT/WGTGP/M/18
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21. The representative of India stated that her delegation considered transparent, rules-based
procurement procedures to be extremely important.  India constantly sought improvements in the
procurement systems and the relevant procedures.  Such improvements included the adoption of the
latest technologies, taking into consideration capacity and funding constraints, for the purposes of
disseminating information.  India had significantly decentralized its procurement regime and themajor procuring entities had been provided with flexibility to carry out the procurement procedure
within the guiding financial rules and on the basis of standardized documents and procedures.
Decentralization had, in her delegation's view, made procurement more efficient in that it provided
better value-for-money to citizens.  Such experience had made her delegation sceptical of any effort to
be prescriptive in terms of procurement procedures and systems given that there was no way that the
diverse nature of the WTO membership could lend itself to such a process.  Nevertheless, sharing
experiences regarding procurement systems used by various Members would, no doubt, be very usefulgiven that some of the practices described could be adopted by others with suitable modifications
reflecting domestic particularities.  Additionally, her delegation fully agreed that the provision of
timely information was crucial and that all Members had to endeavour to provide such information in
an easily accessible format and place.  However, it was a moot question as to whether a
comprehensive binding agreement was needed to achieve  this purpose.  In this regard, she noted that
her delegation had repeatedly expressed its reservations regarding any binding obligations,
particularly because the issue at stake was only one of transparency.
22. The representative of Peru stated that while the reduction of corruption, better administration,
and more efficient allocation of public budgets were important objectives, his delegation was not
necessarily convinced of the usefulness, particularly for developing countries, of a multilateralagreement on transparency in government procurement.  His delegation had encountered serious
problems in other areas of negotiations and considered that the inclusion of a new area of
negotiations, particularly transparency in government procurement, would further complicate those
difficulties.  Similarly, the representative of Cuba stated that his delegation attached great importance
to transparency in government procurement since th is constituted one of the basic principles of the
WTO.  While recognizing efforts made by the European Communities in identifying in their
contribution the benefits that might accrue from a possible multilateral agreement, his delegation
considered that this was not sufficient to demonstrate the need of a multilateral agreement at this
stage.  The representative of Brazil also stated that value-for-money was not always the most
important factor in public procurement.  In some cases, technical aspects and/or strategicconsiderations were more significant than the cost  of the procurement.  The representative of the
Philippines stated that his delegation did not deny that there were valuable benefits associated with a
system of transparency in government procurement, even in the area of corruption, although, as many
delegations had said, this was beyond the WTO's competence and mandate. Undoubtedly, many
developing countries had already applied rules on transparency in government procurement.  In fact,
the Philippines, was increasingly relying on electronic means for procurement purposes, and the
experience thus far had been quite positive.
23. The representative of Canada stated that her delegation shared the views expressed by the
European Communities on the positive effects associated with a multilateral agreement on
transparency in government procurement.  In her delegation's view, an agreement on transparency in
government procurement would improve the efficiency of the international trading system;  improve
economic efficiency, including improved competition and best value-for-money;  and improveconfidence in the procurement system, including through the reduction of the possibility of
corruption.  In noting that his delegation supported the adoption of a multilateral agreement on
transparency in government procurement, the represen tative of Chinese Taipei stated that, in an effort
to ensure greater economic efficiency in government expenditure and in order to reduce corruption,
the threshold for open tendering had been reduced from US$140,000 to US$3,000 in May 1999.Opinion polls revealed that 80 per cent of people surveyed considered that this measure had had a
considerable positive effect on government expenditure and also on the reduction of corruption.
Further, it was discovered that the average percentage cost reduction of open tenders as comparedWT/WGTGP/M/18
Page 8
with non-open tenders was more than 15 per cent.  The representative of Switzerland expressed
appreciation for the fact that the European Communities' contribution put forward compelling
arguments in favour of an agreement on transparency in government procurement.  His delegation
agreed that transparency would ensure better value-for-money.  While the use of transparency to
increase investment and partnership through joint ventures and transparency rules in the governmentprocurement area was a market access issue, it was possible to find new investment possibilities.
Switzerland, as a major investment country, was interested in access to government procurement
through joint ventures.  In his delegation's vi ew, an agreement on transparency in government
procurement would increase investment and partnership, including for countries that maintained
domestic preferences and/or would not allow direct competition with domestic companies.
24. As to the limitation of a multilateral agreement to transparency issues, the representative of
Thailand stated that his delegation was satisfied with the confirmation by the European Communities
in its contribution that transparency in governme nt procurement would not lead to market access
issues being taken up.  His delegation was also comforted with the confirmation that government
entities might apply restrictions on bidding procedures, provided that such restrictions were made
known to foreign bidders prior to their entry into the bidding process.  The representative of Peru
supported the statement made by the European Co mmunities in its paper that the coverage of a
possible multilateral agreement in the area of transparency in government procurement would be
clearly limited to transparency and would not reduce the ability of countries to grant preferences to
domestic suppliers or to impose market access conditions.  The representative of Colombia reiterated
the sentiment emphasized in the European Communities' contribution that a future multilateralagreement would be limited to issues of transparency and would not seek to open up new markets norto increase existing ones.  This was fully consistent with basis of the Doha Declaration as it concerned
transparency in government procurement.  In princi ple, his delegation supported the view that a future
agreement on transparency in government procurement should apply to all procurement without
distinction between nationals and foreigners.  Howeve r, the issue of coverage required further analysis
if consensus was to be reached in Cancun.
25. The representative of Brazil noted that th e European Communities' paper referred to
procurement for which foreign bids were allowed.  However, while foreign access might be granted to
procurement markets in some cases, the Working Group's mandate did not entail a market access
component.  The representative of Egypt referred to what he considered a contradiction in the
European Communities' contribution.  The paper suggested application of an agreement ontransparency in government procurement to all procurement without drawing a distinction between
cases where bids were restricted to national bidders and those where international bids were accepted.Simultaneously, the paper recalled the Doha mandate according to which the scope of the Working
Group's work was clearly limited to transparency – without limiting the ability of countries to provide
preferences to domestic supplies and suppliers.  The representative of Nigeria sought clarification as
to whether the European Communities would seek progression from a transparency agreement to oneaimed at securing market access in the future.  The representative of India also sought clarification as
to whether the European Communities intended a fu ture agreement on transparency to be applied
without distinction between tenders open to international bids and those that were not.
26. In response to requests for more clarification regarding the scope for transparency, the
representative of the European Communities expressed his scepticism about the likelihood of an
agreement defining such parameters.  Further, he stated that his delegation would fully respect
preferences to domestic suppliers because that had already been made clear in the Doha Declaration.
It was for that reason that his delegation's contribution did not contain much detail in this regard.  He
also noted that it had been stated in his delegation's paper that the future agreement on transparency in
government procurement should be applicable without making a distinction between the national and
the international level because his delegation believed that the rules should apply, but withoutimpinging upon the right of governments to decide what ultimately would remain exclusively
reserved for national bidders.WT/WGTGP/M/18
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27. As regards the level of government that might be covered by a transparency agreement, the
representative of Malaysia stated that his delegation disagreed with the suggestion in the European
Communities' contribution that an agreement on transparency in government procurement would beextended to the sub-federal level.  He noted that while his delegation's views had evolved on this
issue, the current position was that a multilateral agreement on transparency in governmentprocurement should be limited to procurement by federal entities and should not extend to
procurement by entities at the sub-federal level.  Similarly, the representative of Morocco stated the
future agreement on transparency in government procurement should be limited to central authorities,particularly in countries where local entities encountered capacity problems.  The representative of
India sought clarification as to whether the European Communities sought coverage of provinces
municipalities, and the like at the sub-federal level.  In response, the representative of the European
Communities stated that the transparency agreement would be applicable at the federal level as well
as the sub-federal and municipal levels.
28. In relation to the issue of thresholds, the representative of Brazil questioned the concept of
thresholds in the context of transparency in gove rnment procurement.  He noted that transparency
should yield benefits for each and every procurement conducted by Members.  Accordingly, he
questioned whether an appropriate message was being sent to Members by suggesting thattransparency was good only above a certain limit and that below that limit Members were free to act
in a non-transparent manner.  In his view, Members needed to be flexible to adopt the most
appropriate procurement method.  However, there should be a commitment to transparency and
openness even for small tenders.  He noted that the concept of thresholds in the European
Communities' contribution appeared to be inconsiste nt with the opinion in that contribution that the
future agreement on transparency in government procurement should apply to all procurement.
29. The representative of Switzerland stated that while theoretically thresholds had nothing to do
with transparency, for reasons of flexibility, it might be useful to have thresholds.  In addition, he
indicated that his delegation could also support flexibility in a future agreement that ensured that
undue burden was not placed on countries implementing such an agreement.  He emphasized theimportance of taking practical measures to help developing countries to live up to possible future
obligations.  The representative of Morocco agreed that transparency was relevant for all
procurement, whatever the threshold.  Nevertheless, thresholds would allow rules to be avoided incases in which they were not essential.
30. The representative of Malaysia expressed disagreement with the point made in the European
Communities' contribution that all procurement above the prescribed threshold should be subjected to
a multilateral agreement.  In Malaysia's view, only procurement open for foreign bidding and abovethe prescribed threshold would be subject to the disciplines of a multilateral agreement on
transparency.  The decision of whether a particular procurement should be open to foreign bidders or
should only be limited to its nationals or local suppliers was one that should be left to the discretion of
the procuring entity.  If such discretion was not respected, market access issues would arise.
Nevertheless, he stated that if the intention of the European Communities in its contribution was to
ensure that in cases when a tender was closed to foreign competition and only limited to domestic
suppliers, information to that effect should be provided a priori , his delegation certainly agreed.  The
representative of Nigeria sought clarification as to whether the European Communities had any views
on the value of thresholds that would apply to developed and developing countries.
31. In response, the representative of the European Communities stated that on the basis of years
of experience in the European Communities, his delegation had discovered that thresholds could be
practical and useful.  Questions remained as to what the specific levels of those thresholds should be?
Should a distinction be drawn between threshold levels for developed countries on the one hand and
for developing or the least-developed countries on the other?  Should different thresholds apply to
different sectors and to entities at different levels of a governmental hierarchy?  He noted that moreWT/WGTGP/M/18
Page 10
detail regarding the European Communities' position on these issues were contained in previous
papers by his delegation.
32. With respect to the implementation of a tran sparency agreement, the representative of
Switzerland noted that the contribution by the European Communities stated that most countries
already had transparency rules.  Therefore, given that many or most Members already applied certain
kinds of transparency rules, it would not be particularly difficult to establish a multilateral agreement
in the area.  His delegation considered this to be  an important issue because a future agreement on
transparency should be made on the basis of a cost-benefit analysis.  If transparency rules already
existed in many countries, this cost-benefit analysis would obviously yield more benefits than
incurring costs.  The representative of Canada  stated that her delegation believed that the
implementation of an agreement on transparency in government procurement could produce benefits
that outweighed the potential administrative costs.  Her delegation agreed that thresholds couldcontribute to achieving this result.  Canada was committed to providing support through the WTO and
other institutions to enable Members to develop the capacity to implement their obligations.  Her
delegation was of the view that the scope and elements of an agreement would be refined through
negotiations.
33. The representative of Egypt referred to what he  considered to be another contradiction in the
European Communities' contribution.  On the one hand, the European Communities' paper contained
the statement that the cost of applying new and additional WTO rules on government procurement
would be "minimal, if any"7, while in another paragraph the paper recognized that "a minimum of
infrastructure will be needed to respond to these future obligations in an efficient manner:
publications, notifications, etc".8  The representative of Cuba sought clarification on the cost of
implementing an agreement on transparency in govern ment procurement.  He suggested that this cost
might be extremely high and well beyond his country's national budget.  Further, the content of an
agreement would affect human resource and equipment requirements.  The publication of rules and
regulations applying to each of the procuring entities might also prove to be burdensome.  He
suggested that further clarification was required on this issue.  The representative of Nigeria sought
clarification as to whether the European Communities was amenable to providing assistance to
developing countries that might need support in implementing an agreement on government
procurement.  The representative of the European  Communities stated that the issue of cost was a
legitimate concern.  However, as long as Members did not know exactly how the future agreement
would look like and, in particular, what its scope and coverage would be, it was difficult to have a
precise idea of the costs involved in setting up a transparency system.  His delegation was ready to do
what was necessary to make implementation of the rules the least cumbersome and costly as possiblethrough technical assistance and capacity building.
34. The representative of Thailand noted that, in its paper, the European Communities stated that
the procurement process used in a particular case should be proportionate to the value of the goods or
services to be purchased.  Clarification was sought as to how the proportionality principle would work
in practice in this context.  It was his delegation's understanding that certain principles should apply asa minimum regardless of the magnitude of the project in question.  In response to the question posed
by the representative of Thailand, the representative of the European Communities stated that tenders
for major works often required complex rules in order to ensure an effective and efficient tenderingprocedure.  It was for that reason that the concept of proportionality had been introduced.
35. In relation to technical assistance and capacity building, the representative of Thailand
expressed appreciation for the commitment expressed by the European Communities regarding the
provision of assistance on capacity building.  His de legation considered that such assistance would be
meaningful if it was designed according to the requirements prescribed by recipient countries.  As a
                                                     
7 WT/WGTGP/W/41, p. 2.
8 WT/WGTGP/W/41, p. 3.WT/WGTGP/M/18
Page 11
related point, the representative of Colombia sought the views of the European Communities and
other Members on the development priorities mentioned in the Doha Declaration.  It was necessary to
further explore that part of the mandate, particularly for the sake of creating incentives for developing
countries such as his own.  The representative of Morocco noted that his country had never ceased
making efforts to improve transparency in government procurement;  however, authorities had
encountered difficulties in this regard.  Hence his countries' interest in technical assistance.  His
delegation welcomed the mention of technical assistance in the paper submitted by the European
Communities.
36. The representative of Malaysia stated that the European Communities tied the provision of
technical assistance to an eventual agreement on tr ansparency in government procurement or to the
demonstration of a readiness to negotiate.  He stated that if the European Communities was genuine
about helping the developing countries, transition economies and LDCs to improve their governmentprocurement regimes through making them more transparent and more efficient, they should provide
technical assistance even in the absence of an agreement or in the absence of an agreement to
negotiate.  He was not referring to technical assistance to help countries understand the elements of a
transparency agreement, what they would mean an d their implications.  Rather, he was talking about
assisting developing countries generally, particularly those that needed assistance in the establishmentof a more efficient government procurement regime through the adoption of procurement rules that
would enhance transparency.  He encouraged the European Communities to de-link the provision of
technical assistance from the multilateral agreement process.
37. In response, the representative of the European Communities noted that his delegation was
the biggest contributor of technical assistance in many areas, be it through multilateral or bilateral
channels.  His delegation tended to respond positively when genuine requests for technical assistance
were made, which outlined the relevant country's needs.  In counter-response, the representative of
Malaysia stated that his delegation did not require assistance given that laws and regime were in place
and government procurement processes were transparent in Malaysia.  In any event, his statement wasmore general, seeking technical assistance in the absence of an agreement or in the absence of anagreement to negotiate.  The representative of the United States noted that his delegation had been
engaged in the provision of technical assistance to various developing countries to help them developand modernize their procurement systems for a long time.  That assistance had been provided
independently of the work undertaken in the Working Group to develop a transparency agreement.
Rather, the assistance had been provided because his delegation believed that all countries benefited
from having predictable and rule-based procurement systems.
38. With regard to the reference to the reductio n of corruption in the European Communities'
paper, the representative of Switzerland stated that corruption was something that existed in all
countries, even following the application of transp arency rules.  Nevertheless, rules on transparency
had allowed his delegation to better tackle that problem.  In his delegation's view, the rationale
underlying a future agreement on transparency in government procurement was not to reduce
corruption.  Rather, the reduction of corruption would be a side-effect of the agreement.
39. The representative of Brazil stated that reduction of corruption was not a principal objective,
nor something that would be built into any pos sible agreement on transparency in government
procurement.  Similarly, the representative of Thailand stated that his delegation saw the benefit of
reducing corruption but bearing in mind that the reduction or elimination of corruption was not part ofthe objectives of the WTO, his delegation firmly believed that corruption could not be properlyaddressed without the full cooperation of those who offered and received bribes.  The representative
of Morocco stated that the fact that a transparency agreement had the consequence of combating
corruption could only be seen as a positive consequence of transparency under the future agreement.However, it could not be considered as an element of that agreement.  The representative of China
stated that the issue of corruption raised a variety of complicated issues.  In addition, there was no
assurance that an agreement on transparency in government procurement would reduce corruption.WT/WGTGP/M/18
Page 12
The representative of Egypt expressed regret at the fact that the European Communities' contribution
dealt with corruption.  His delegation did not consider that the inclusion of this element in the
Working Group's discussion would be conducive to Members' work, particularly at this stage.
Likewise, the representative of Malaysia stated that his delegation considered that this was not an
issue that the WTO should deal with.  Rather, it was a moral issue.  His delegation had always
maintained that moral, social and similar kinds of issues were not the domain of the WTO.  The
representative of India noted that while reducing corruption is a laudable objective for all national
governments, the WTO was not necessarily the appr opriate forum to pursue that objective.  While
recognising that Members should have efficient and effective national legislation to fight corruption,
the representative of Cuba stated that this issue was outside the domain of the WTO and should be
addressed by each Member in accordance with its own respective legislation.  The representative ofPeru expressed support for the statement made by the representative of Thailand to the effect that the
reduction of corruption, being an objective shared by all, necessitated a cooperation agreement
covering both those who offered and those who receiv ed bribes.  Nevertheless, he could not see how a
multilateral agreement as described in the European Communities' contribution could assist Members
in combating such practices.
40. In response, the representative of the European Communities stated that that a future
multilateral agreement would not contain specific provisions on corruption, nor would it be an
objective of the future negotiations.  However, he emphasized that reduction of corruption was one of
the side-effects of such an agreement.
41. As for the way forward to Cancun, the representative of Korea stated that after almost seven
years since Ministers in Singapore agreed to establish a Working Group to conduct a study on
transparency in government procurement practices, the preparatory work of the Working Group on
transparency in government procurement was nearing completion.  In full accordance with the
instructions given by the Ministers in Singapore and Doha, Members had made meaningful progress
in developing the core elements of a multilateral agreement on transparency in government
procurement in this Working Group.  Korea believed that it was time to proceed to the next phase ofwork as agreed by the Ministers in Doha.  It was clearly stated in the Doha Declaration that
negotiations on transparency in government procurement would take place after the Cancun
Ministerial Conference on the basis of Ministers' decisions on modalities of negotiations and that
negotiations would be treated as part of the single undertaking.  Korea's aim was to establish a
multilateral agreement on transparency in government procurement that was acceptable to all.  To this
end, it was crucial to adjust the level of ambition and to address the interests of developing countries
in an effective and balanced manner.  In this cont ext, he emphasized the following points.  First, his
delegation was aware that a number of Members had reservations on the establishment of a
multilateral agreement on transparency in governme nt procurement.  However, considering the
positive contribution of the GATT and WTO to the world economy in the past, the outcome of the
negotiations on transparency in government procurement would also yield benefits to developing
countries and LDCs alike.  As noted in the European Communities' contribution, a number of benefitswould result from a multilateral agreement on transpar ency in government procurement, benefits that
were produced not just for domestic and foreign suppliers.  In addition, ensuring transparency in
government procurement was a core element of good governance, which was essential to economic
development.  Second, the Doha mandate clearly stated that the future multilateral agreement on
transparency in government procurement would be limited to transparency without hindering national
preferences to domestic suppliers and suppliers.  He noted that the European Communities indicated
in its contribution that the aim in an agreement on transparency in government procurement would be
to establish a minimum set of rules that would have the effect of introducing legal certainty in the
existing procedural process, an aim fully shared by all WTO Members.  Third, Ministers also
instructed that negotiations should take into account Members' development priorities, especiallythose of LDC participants.  Korea believed that in order to take full account of the concerns, burdens
and obligations of developing and LDCs, S&D, TA and support for capacity building should be fully
reflected in the negotiations process.WT/WGTGP/M/18
Page 13
42. The representative of China stated that his delegation attached great importance to
transparency in government procurement.  The Chinese law on government procurement had been
implemented since 1 January 2003.  Detailed regulations were currently being drafted so as to
enhance publicity of procurement processes.  In addition, his delegation recognised the importance of
a multilateral agreement on transparency in government procurement in the WTO.  AlthoughMembers had not achieved consensus on many issues, the results of discussions in the Working
Group had been valuable and could form the basis for future work.
43. Continuing, he noted that in his delegation's vi ew the following steps were necessary in the
context of the Working Group in the lead-up to the Cancun Ministerial Conference.  First, it was
necessary to reiterate that an agreement on transparency in government procurement would only be
limited to transparency, it would exclude market access commitments and would have no impact on
Members' rights to use government procurement to support domestic enterprises and purchasingnational goods.  Second, the elements of the agreement needed to be identified.  His delegation
considered that transparency in government proc urement required Members to publicize information
on laws, regulations and procedures on government procurement through appropriate media.  The
requirements on publication of procurement information, such as procurement opportunities and
contract awards, should be flexible and limited in scope.  Review mechanisms should be consistentwith domestic legal regulations.  Further, given the close relationship with market access, the
application of the DSU should be excluded from an agreement on transparency in government
procurement.  Third, the Working Group should establish a timetable for an agreement on
transparency in government procurement, which did not specify a deadline for the conclusion of the
agreement.  Nevertheless, the Working Group should fully consider the complexities and difficultiesof the negotiations when setting the timetable.  Finally, S&D treatment should be ensured for
developing countries, given the different levels of development of Members' government
administrations.  In particular, exceptions from transparency obligations should apply in certain
circumstances and longer implementation periods should be provided.
44. The representative of the Dominican Republic reiterated that his delegation was in favour of
negotiations being launched in Cancún for a multi lateral agreement on transparency in government
procurement.  In line with the Doha Declaration, hi s delegation expected that such negotiations would
take into account Members' development priorities and would be limited to transparency aspects only.
He indicated his delegation's readiness to cooperate with Members to move forward during the period
until Cancun by agreeing on the modalities of negotiations.
45. The representative of Australia stated that in the lead-up to and following Cancun, it would be
important for Members to focus on ways to assist developing countries and least-developed country
Members to identify technical assistance needs aimed at capacity building.  The representative of
Nigeria stated that his delegation was of the view that it would not be helpful to rush the process.
Rather, a "step-by-step" approach was preferable, although clarification of the EuropeanCommunities' interpretation of a "step-by-step" approach was sought.
46. The representative of the European Communities stated that it was his delegation's view that
the study phase of the Working Group's work was completed.  It was necessary for Members to move
to a negotiating phase with the objective of establishing a multilateral agreement.  His delegation was
convinced that it was appropriate to work towards a multilateral agreement.  He also stated that, for
his delegation, this issue would be part of the single undertaking.
47. The representative of Cuba noted that the Doha mandate indicated that it was necessary to
achieve consensus before negotiations could be launched.  A number of developing countries wanted
to be able to properly participate in the process.   However, they still lacked sufficient skills to
negotiate.  Before an agreement was considered, such countries wanted to be clear about what would
be entailed.  The agreement had to be a win-win agreement, which was beneficial to all and was truly
balanced.WT/WGTGP/M/18
Page 14
48. The representative of Nigeria stated that the discussions that had taken place in the context of
the Working Group had reinforced his delegation's view that the issues were complex and that the
work of clarifying the issues had not yet been completed.  Divergence of views existed in relation to
most issues.  These issues, which were systemic in nature, would have serious implications in terms of
the costs associated with implementation, the effect on national policy, and flexibility.  Such issuesincluded the meaning of "transparency" and the application of the DSU mechanism.  Views on these
issues could not be dismissed easily and needed to be properly addressed.  His delegation valued
greatly the opportunity to take part more actively in the discussion.  However, more time was needed
to build capacity.  One of the key issues of concern for his delegation was market access.
Paragraph 26 of the Doha mandate clearly stated that negotiations would be limited to transparency.
His delegation was opposed to any attempts to expand that mandate.  His delegation was also
concerned about the cost of implementing any potential transparency agreement.  On the scope anddefinition of transparency, his delegation was concerned by any attempt to go beyond the provision of
information on laws, regulations and tenders.  It should not extend to other areas entailing substantive
decisions rather than pure transparency matters, such as the evaluation of offers, decision-making
processes, provision of relief to unsuccessful tender ers, and review of procuring entities' decisions,
etc.  His delegation was also of the view that the process should result in a win-win situation for allMembers and not just to some.
49. The representative of Cuba stated that the debate in the Working Group demonstrated that
many aspects of the Chairman's "List of Issues Ra ised and Points Made" still required more in-depth
work and study.  The central aspect of a future agreement, namely scope and coverage, had not yet
been clarified, and significant divergence existed be tween Members' views in this regard.  In addition,
differences existed in relation to domestic review procedures and the application of the DSU to a
possible agreement on transparency.  With respect to account being taken of the special situation of
developing countries, it was not obvious that a transition period would suffice.  Also, further work
was required to show the relationship between transparency and the use of particular methods of
procurement;  the prescriptions relating to time-limits;  contract award procedures;  and bids in caseswhere there was no consensus.  It was necessary to recognise that Members were far from having
concluded the study that they had been asked to  undertake.  Developing countries wanted more
clarification on each of those aspects during th e study phase, which should not be concluded until
adequate clarification had been provided.
50. The representative of Brazil stated that he was encouraged by the fact that a number of
delegations, including the European Communities, had expressed the view that the existence of a
divergence of views on some issues should not be, in  itself, an impediment to moving forward.  His
delegation fully shared that approach.  His delegation considered that all that was required was a
certain consistency in approach with regard to the various issues.
B. TECHNICAL ASSISTANCE AND CAPACITY BUILDING
51. The representative of the Secretariat stated that technical co-operation activities had been
undertaken by the Secretariat to fulfil the requirements of the Doha Declaration.  The emphasis had
been on regional activities organised, wherever possible, in conjunction with the multilateral
development banks and the regional development banks.  As regards Africa, a workshop for the
English-speaking African countries had been held in Dar-es-Salaam, Tanzania in January 2003.  A
workshop for French-speaking African countries would be held in Dakar, Senegal on 8-11 July 2003.
The latter was being organized in cooperation wi th the World Bank and the African Development
Bank as well as the Government of Senegal.  As regards Latin America and the Caribbean,
information had previously been provided to Memb ers about sub-regional events held for the Central
American countries and the Caribbean countries in 2002.  In addition, a workshop would be
conducted in Buenos Aires, Argentina on 28-30 July in cooperation with the IADB for the Latin
American countries that had not already been covered by the sub-regional events that had taken placein 2002.  As regards Asia factors beyond the Secretariat's control had had some effect on the planningWT/WGTGP/M/18
Page 15
and carrying out of technical co-operation activities in recent months.  Accordingly, it had not been
possible to proceed with a regional government procurement workshop in cooperation with the Asian
Development Bank that had been planned for May 2003.  The Secretariat was seeking to reschedule
that activity as soon as practical.  In addition, a number of other broader technical cooperation
activities had been organized by the Secretariat, which had not been exclusively dedicated togovernment procurement, but included components on government procurement.  In particular, a
regional Doha Development Agenda Advanced Trai ning Course had been held in Johannesburg,
South Africa on 24 June.  This course had been for senior government officials from the African
countries.  A similar type of activity would take place in the first half of July in Tbilisi, Georgia for
government officials from the Caucasian and Central Asian countries.  Further, trade policy courses
conducted in Geneva in March and June 2003 had also included a government procurement
component.  Similarly, the 2
nd Regional Trade Policy Course for English-speaking African countries
had been held in Nairobi, Kenya.  It was also foreseen that a regional trade policy course for OIC
member countries in Jeddah, Saudi Arabia in early July would also contain a government procurement
component.  The representative of the Secretariat also recalled that on 19 June two other events were
being organized in Geneva that fell within the overall ambit of technical cooperation and capacity
building.  An Information Session was planned on technical co-operation and capacity buildingactivities of intergovernmental organizations in the area of government procurement at which a
number of intergovernmental organizations would be sharing information on activities undertaken by
them.  Further, a workshop on capacity building in government procurement at which a number of
developing countries would be sharing informatio n on their respective experiences and needs would
take place.  In conclusion, the representative of the Secretariat noted that general feedback from theactivities that had been undertaken by the WTO Secretariat had been positive.  That feedback was
being used to improve activities in the area.
52. The representative of Nigeria noted that a number of countries lacked capacity in the area of
government procurement.  Some did not even have  procurement laws.  Accordingly, his delegation
believed that the provision of technical assistance through seminars and conferences was insufficient.A concerted effort was needed to provide technical assistance on a case-by-case basis rather than
making it general or adopting a one-size-fits-all ap proach.  Such an approach would ensure that
assistance would really build capacity, and it would help Members to participate in the current and
possibly future process at the WTO on this issue.
C. 
OTHER BUSINESS
53. Regarding the nature and process for preparation of the Working Group's report to the
General Council on its activities in 2003, the Working Group agreed that the Secretariat be asked to
prepare a draft report of the type that had been prepared for the Working Groups on competition
policy, and investment.  The draft report would be circulated to Members during the first week of
July.  The report would then be approved by written procedure.  The Chairman requested that
Members submit any necessary corrections to the document to the Secretariat within seven days of the
circulation of the draft.  The report would then be forwarded to the General Council by 14 July.  If the
changes proposed by Members made it necessary, a short meeting would be convened to discuss and
approve the report.
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