RESTRICTED
WORLD TRADE GPA/M/6
18August 1997
ORGANIZATION(97-3419)
Committee onGovernment Procurement
MINUTES OFTHE MEETING HELD ON21MAY 1997
Chairman: Mr.Harald Ernst (Switzerland)
1. Thefollowing agenda wasadopted:
A. Modifications totheAppendices totheAgreement
B. Loose-leaf system forAppendices totheAgreement
C. Notification ofnational implementing legislation
D. Modalities forthethree-year review
E. Accessions:
(i) Hong Kong
(ii) Chinese Taipei
F. Newly acceding WTO Members
(i) Bulgaria
(ii) Mongolia
(iii) Panama
G. Other Business
(i) United States -Measures affecting government procurement
(ii) Japan -Procurement ofanavigation satellite
(iii) ProcurementofsupercomputersbytheUnitedStatesNationalScienceFoundation
(iv) DateofnextmeetingGPA/M/6
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A. MODIFICATIONS TOTHE APPENDICES TOTHE AGREEMENT
2. Therepresentatives oftheEuropean Community1,Norway2,Switzerland3,Korea, Canada
andtheUnited States4saidthattheywould propose modifications totheirrespective Appendices. The
relevant notifications would besubmitted before 31May1997 inorder toenable theincorporation
ofthemodifications inthefirstcertified copyoftheloose-leaf system ofAppendices.5
3. TheCommittee tooknoteofthestatements made andagreed torevert tothisagenda itemat
itsnextmeeting.
B. LOOSE-LEAF SYSTEM FOR APPENDICES TOTHE AGREEMENT
4. Inresponse toarequest forclarification, therepresentative oftheSecretariat saidthatinits
operation theloose-leaf system would giveeffect totherectification andmodification procedures under
Article XXIV:6(a). Itwasenvisaged thattheParty proposing tomake modifications orrectifications
should notify themtotheCommittee byidentifying theproposed changes ontherelevant pages ofthe
loose-leaf system. Certified truecopies ofthereplacement page(s) incorporating theamendments would
becirculated once theprocedures under Article XXIV:6(a) hadbeen completed (c.f.GPA/W/35,
paragraph 4andGPA/M/5, paragraph 20).
5. Therepresentative ofJapan sought theCommittee 'sunderstanding that,under theprocedures
forthecertification ofchanges totheloose-leaf system ofAppendices, certification ofamendments
totheloose-leaf system relating toJapan'sAppendices should incorporate thetextthatdescribed the
proposed amendments aswellasthereplacement page(s) oftheloose-leaf system. Thiswould facilitate
theNational Diet'sapproval ofsubstantive modifications toJapan'sAppendices, inparticular those
involving anincrease ofJapan'sobligations under theAgreement.
6. TheCommittee tooknoteofthestatements andagreed torevert tothisagenda itematitsnext
meeting.
C. NOTIFICATION OFNATIONAL IMPLEMENTING LEGISLATION
7. TheChairman saidthat,atitsmeeting of4June1996, theCommittee hadagreed thatParties
would notify national implementing legislation, including responses tothechecklist ofissues, notlater
than31December 1996 (GPA/1/Add.1). Areminder hadbeen senttodelegations inairgram
WTO/AIR/480of1November1996.Asof21May,threedelegations-Canada,KoreaandNorway-had
notified theirnational implementing legislation including theirresponses tothechecklist ofissues
(GPA/10, GPA/12/Rev.1 andGPA/13).6
1Subsequently notified indocument GPA/W/51
2Subsequently notified indocument GPA/W/46
3Subsequently notified indocuments GPA/W/42 and45
4Subsequently notified indocument GPA/W/41
5Postponed from 1Julyto1October 1997
6Switzerland subsequently notified indocument GPA/15GPA/M/6
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8. TheCommittee tooknoteofthestatements made andagreed torevert tothisitematitsnext
meeting andatthattimetotakeupthequestion ofprocedures forreview ofimplementing legislation
onthebasis oftheinformal notebytheSecretariat describing suchprocedures developed byother
WTO bodies, which hadbeenprepared attheCommittee 'srequest.
D. MODALITIES FOR THE THREE-YEAR REVIEW
9. TheCommittee pursued itsinformal consultations onthemodalities forthethree-year review
onthebasisofthenon-papers presented bythedelegations oftheEuropean Community onthethree-year
review (JobNo.3885) andCanada oninformation technology (JobNo.3887). Asaresult ofthese
consultations, itwasagreed that: (i)theChairman would update theinformal checklist ofissues of
7March 1997; (ii)priortoitsnextmeeting, theCommittee would holdfurther informal consultations
onthisitem; (iii)inthose consultations delegations could come forward withfurther proposals
concerning theelements ofthereview.
E. ACCESSIONS
(i) Hong Kong
10. TheChairman saidthatHong Kong haddeposited itsinstrument ofaccession on20May1997.
Hong Kong would become aParty totheAgreement on19June1997 (GPA/14 andWT/Let/141).
11. Therepresentative ofHong Kong saidthatHong Kong would doitsbesttoestablish therequired
bidchallenge procedures assoonaspossible sothatitcould fullyimplement Article XXbefore the
expiry ofthetransitional period ofoneyearforeseen intheDecision ontheAccession ofHong Kong.
12. Therepresentatives oftheEuropean Community7andNorway8saidtheGeneral Notes totheir
respective Appendices Iwould bemodified toreflect theextension oftheAgreement asregards the
award ofcontracts intheelectricity sector withrespect tothesuppliers andservice providers inHong
Kong. Therepresentative ofSwitzerland saidthatthemodifications toAppendix I,Annex 3of
Switzerland would benotified toreflect theextension ofbenefits toHong Kong intheelectricity sector.
Themodifications would enter intoforce afterthecompletion ofSwitzerland 'sinternal ratification
procedures inSeptember 1997.9
(ii) Chinese Taipei
13. Therepresentative ofChinese Taipei saidthat,following thebilateral consultations heldwith
Parties totheAgreement, Chinese Taipei hadsubmitted arevised offer inMarch 1997
(GPA/SPEC/1/Rev.1). Hisdelegation 'sposition onthethreemajor areas ofconcern raised byParties
intheconsultations wasasfollows: first,hisdelegation accepted theproposal byoneParty concerning
General Note 14,thatChinese Taipei acceded totheAgreement within oneyearafteritsaccession
totheWTO. If,however, thenational government procurement lawwasenacted priortoitsaccession
totheWTO, Chinese Taipei would accede totheAgreement within oneyearaftertheenactment of
thelaworatthetimeitacceded totheWTO, whichever waslater. Second, concerning General Note 6,
7Subsequently notified indocument GPA/W/44
8Subsequently notified indocument GPA/W/43
9Communication circulated indocument GPA/W/47GPA/M/6
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Chinese Taipei would carefully review therequests ofthree Parties thatacertain number ofitems
thatwereofparticular interest totheirsuppliers should notbeexcluded fromtheelectricity andtransport
projects. Third, concerning Note6toAnnex 3ofAppendix I,Chinese Taipei agreed that,under the
circumstances inwhich aParty'stelecommunication sector might berunbytheprivate sector andits
procurementwasconductedwithoutinfluenceorcontrolfromthegovernment,thereciprocityrequirement
would notapply tothatParty. Hisdelegation encouraged those Parties whohadnotalready doneso
toprovide theircomments, inwriting, assoonaspossible.
14. TheCommittee tooknoteofthestatements made under thisitem.
F. NEWLY ACCEDING WTO MEMBERS
(i) Bulgaria
15. Therepresentative ofBulgaria saidthathisdelegation wasintheprocess ofpreparing itsoffer
withaviewtoinitiating negotiations foraccession totheAgreement asearly aspossible.
(ii) Mongolia
16. TheChairman saidthattheWorking Party ontheAccession ofMongolia hadtaken noteof
acommitment bytherepresentative ofMongolia thathisGovernment would seekobserver status in
theCommittee onGovernment Procurement atthetimeofitsaccession totheWTO withaviewto
initiating negotiations formembership thereafter (WT/ACC/MNG/9, paragraph 59andProtocol, PartI,
paragraph 3).Mongolia hadbecome aWTO Member on29January 1997.
(iii) Panama
17. TheChairman saidthattheWorking Party ontheAccession ofPanama hadtaken noteofa
commitment bytherepresentative ofPanama thathisGovernment would notify theCommittee on
Government Procurement atthetimeofPanama 'saccession totheWTO ofitsintention toaccede to
theAgreementonGovernmentProcurement,andthatPanamawouldinitiatenegotiationsformembership
intheAgreement bytabling anentity offer prior to30June1997.10Itwasalsoconfirmed that,if
theresults ofthenegotiations weresatisfactory totheinterests ofPanama andother members ofthe
Agreement,PanamawouldcompletenegotiationsformembershipintheAgreementby31December1997
(WT/ACC/PAN/19,paragraphs68and116andProtocol,PartI,paragraph2,dated26September1996).
18. TheCommittee tooknoteofthestatements made.
G. OTHER BUSINESS
(i) United States -Measures affecting government procurement
19. Therepresentative oftheEuropean Community saidthattheEuropean Community remained
deeply concerned about thelegislation enacted bytheCommonwealth ofMassachusetts regulating State
contracts withcompanies doing business withorinMyanmar. TheEuropean Community remained
oftheviewthatthisandother similar initiatives taken byMassachusetts aswellasbyother sub-federal
authorities wereinbreach oftheUnited States obligations andthattheyresulted inadefactoreduction
10Subsequently circulated indocument GPA/SPEC/3GPA/M/6
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oftheUnited States offerunder theAgreement. TheEuropean Community wasclosely monitoring
theaction taken bytheGovernment oftheUnited States toaddress itsconcerns and,inthisrespect,
theEuropean Community hadmade informal bilateral contracts withtheUnited States. TheEuropean
Community looked forward toreceiving responses oftheUnited States tothewritten questions by
Japan regarding thisissue andreserved allitsrights under theWTO agreements withrespect tothis
matter.
20. Therepresentative oftheUnited States saidthatherdelegation hadtaken seriously theconcerns
expressed bytheEuropean Community withrespect tothelegislation enacted bytheCommonwealth
ofMassachusetts aswellasvarious other pending State laws. Herauthorities hadrecently held
consultations withofficials inbothMassachusetts andConnecticut. Thelegislation inConnecticut was
notexpected tobevoted onduring thisyear'slegislative session. Herauthorities were concerned,
however, thatvarious Member States oftheEuropean Community hadbeen encouraging State
governments intheUnited States toenactthistypeoflegislation, inparticular, withrespect toIndonesia.
21. Therepresentative ofJapan urged thedelegation oftheUnited States toexplain howtheFederal
Government oftheUnited States intended toprovide asolution concerning thetrade-related aspects
ofthisissueandtorespond tohisdelegation 'srequest forinformation pursuant toArticle XIXofthe
Agreement (GPA/W/39).
(ii) Japan -Procurement ofanavigation satellite
22. TherepresentativeoftheEuropeanCommunitysaidthattheEuropeanCommunityhadrequested
consultations withJapan pursuant toArticle XXII:2 oftheAgreement andArticle 4.4oftheDispute
Settlement Understanding (WT/DS73/1-GPA/D1/1).
(iii) Procurement ofsupercomputers bytheUnited States National Science Foundation
23. Therepresentative ofJapan saidthathisauthorities wereconcerned about theintervention of
theGovernment oftheUnited States inarecent supercomputer procurement. InMarch 1995, the
University Corporation forAtmospheric Research (UCAR) hadreleased aRequest forProposal (RFP)
to14vendors tosupply supercomputers. TheRFPhadsought proposals toleaseforaperiod offive
years thebestpossible computing system thatcould beobtained foraprice ofapproximately
US$35 million. On17May1997, theUCAR hadannounced thatithadselected acertain Japanese
company tosupply thesupercomputers andthatitwould enter intocontract negotiations withthat
company. TheUCAR supercomputer procurement wasfunded bytheNational Science Foundation
(NSF) which retained theauthority toapprove ortodisapprove anyprocurement decision made by
UCAR. On20May1996 anofficial oftheUnites States Commerce Department hadsentaletter to
theNSFwarning thatthesupercomputers oftheJapanese company might havebeenoffered tothe
UCAR ataprice below "fairvalue" andthatthedumping margin waslikely tobeveryhigh. That
letter hadalsocautioned theNSFthattheCommerce Department hadsignificant concerns thatthe
UCAR'sproposedpurchasewouldthreatenthesupercomputerindustryintheUnitedStateswithmaterial
injury. Inaddition, theCommerce Department official hadalsotransmitted totheNSFaCommerce
Department "Predecisional Memorandum" thathadindicated thatthecompany 'ssupercomputers were
tobeleased atlessthanfairvalue, withestimated dumping margins ranging from 163to280%,
depending onthenumber ofcomputers andtheterms ofthelease arrangement ultimately reached.
Asaresult oftheCommerce Department 'saction, theUCAR 'slease oftheJapanese companies '
supercomputers hadbeendelayed. On20August 1996, theNSFhadissued astatement stating that
itwould beinappropriate fortheNSFtoapprove thatprocurement untilthedumping issue hadbeen
resolved. TheNSFwascovered under theGPA, whereas theUCAR, notwithstanding thatitwas
established andfunded bytheNSF, wasnotacovered entity. Thismeant thatprocurement byacovered
entity wasconducted through anon-covered entity inorder tocircumvent theobligations oftheGPA/M/6
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Agreementonnon-discrimination.JapanhadtheintentionofseekinginformationfromtheUnitedStates
onthismatter pursuant toArticle XIXoftheAgreement.
24. Therepresentative oftheUnited States saidthatJapan hadraised thisissueintheCommittee
onAnti-Dumping Practices. Theprocuring entity wasnotcovered bytheAgreement and,therefore,
thecontract inquestion wasnotsubject totheobligations oftheAgreement.
25. Therepresentative oftheEuropean Community saidthatthisissueappeared tohaveacertain
similarity toamatter thattheEuropean Community hadraised withKorea, where theEuropean
Community hadconsidered that,theKorean Government, byprocuring through aprivate entity which
felloutside thecoverage oftheAgreement, hadviolated Article IIIofGATT 1994onnational treatment.
26. TheCommittee tooknoteoftheabove statements.
(iv) Dateofnextmeeting
27. TheCommittee agreed toholditsnextmeeting on29September 1997.