WORLD TRADE
ORGANIZATIONGPA/25
30 October 1998
(98-4241)
Committee on Government Procurement
REPORT (1998) OF THE COMMITTEE ON
GOVERNMENT PROCUREMENT
I. GENERAL
1. This Report is submitted pursuant to Article XXIV:7(a) of the Agreement on Government
Procurement, which requires the Committee to revi ew annually the implementation and operation of
the Agreement and to inform annually the General Council of developments during the periods
covered by such reviews.
2. The Agreement on Government Procurement entered into force on 1 January 1996.  The
period covered in this Report is November 1997 - October 1998, but the Report also reflects, wherenecessary, the work of the Committee up to November 1997 (GPA/8 and Add.1 and GPA/19).  The
Committee on Government Procurement held three meetings in 1998:  on 18 February, 25 June and
7 October (GPA/M/8-10).
3. The following WTO Members are Parties to the Agreement:  Canada;  the European
Community and its fifteen member States;  Hong Kong, China;  Israel;  Japan;  Korea;  Liechtenstein;the Kingdom of the Netherlands with respect to Aruba;  Norway;  Singapore;  Switzerland;  and the
United States.  Ten WTO Members have observer status:  Argentina;  Australia;  Bulgaria;  Chile;
Colombia;  Iceland;  Panama;  Poland;  Slovenia;  and Turkey.  Four non-WTO Members,
Chinese Taipei, Estonia, Latvia and Lithuania, and two intergovernmental organizations, the IMF and
the OECD, also have observer status.
II. IMPLEMENTATION OF THE AGREEMENT
Modifications of Appendices to the Agreement
4. Article XXIV:6 of the Agreement requires Parties to notify rectifications of a purely formal
nature or other modifications relating to Appendices I through IV, which set out the mutually agreed
coverage provided under the Agreement.  Consequential rectifications or modifications become
effective once they are agreed to pursuant to the procedures under this Article.
5. Since the 1997 Report of the Committee, Canada (GPA/W/61);  Hong Kong, China
(GPA/W/57 and 69);  Israel (GPA /W/68);  Japan (GPA/W/60, 63 a nd 74);  Korea (GPA/W/59);  and
Singapore (GPA/W/70 and 72) made rectifications of a formal nature relating to their respective
Appendices.  In accordance with the procedures of Article XXIV:6, these rectifications were certified
respectively on 5 December 1997 (WT/Let/209);  23 November 1997 and 24 April 1998 (WT/Let/206and 218);  8 March 1998 (WT/Let/214);  23 November 1997, 31 December 1997 and 14 August 1998
(WT/Let/208, 211 and 238);  23 November 1997 (WT/Let/207);  and 9 May and 15 July 1998
(WT/Let/243 and 232).  Pursuant to the accession of Singapore to the Agreement on 20 October 1997,
Switzerland and Norway made modifications to their respective General Notes to Appendix I
reflecting the derogations from the provisions of Article III of the Agreement as regards the award ofcontracts by entities listed in Annex 3 with respect to suppliers and service providers from Singapore,GPA/25
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respectively in the electricity and water sectors (GPA/W/58) and in the electricity sector (GPA/W/62).
These modifications entered into force for Switzerland on 19 November 1997 (WT/Let/205) and for
Norway on 20 December 1997 (WT/Let/210).  Proposals for modifications relating to
Appendices 1-IV have also been notified by th e European Community (GPA/W/51).  Following the
clarifications sought by the United States in September 1997, consultations have been held betweenthe two Parties regarding these proposed modi fications (GPA/W/51/Add.1 and Add.2).  The
procedures are under way for putting these modifica tions by the European Community into effect in
accordance with Article XXIV:6.
6. During the period under review, the Committee also discussed the follow-up to Canada's
offer, contained in its Appendix I, Annexes 2 a nd 3, to cover subcentral government entities and
enterprises in all ten Provinces, on the basis of comm itments received from the Provinces, with a final
listing to be provided within 18 months after the conclusion of the Agreement.  Canada's statedposition since the entry into force of the Agreem ent, linking the tabling of its schedule at the
subcentral level to achieving increased market access in sectors of priority interest to Canadian
suppliers and improving security of market access through circumscribing the use of small business
and other set-aside exceptions under the Agreement, remained unchanged.  Some other Parties
expressed their disappointment over the situation, stressed the need for Canada to honour itscommitments and considered that the problems raised by Canada with respect to expanded coverage
of the Agreement could only be addressed once Canada had come forward with offers pursuant to its
commitments in its Annexes 2 and 3.  Canada has asserted that it did not undertake obligations
regarding Annexes 2 and 3, and has reiterated that its coverage was to be based on commitments
received from the Provinces.  Canada has also asserted that, as no commitments have been received, itis under no obligation to put forward an offer under these Annexes.
Loose-leaf System for Appendices
7. As agreed at its meetings of 4 June 1996 and 24 February 1997, the Committee will establish
a loose-leaf system with legal effect to mainta in up to date the Appendices to the Agreement.
Subsequent modifications to the loose-leaf system will be made in accordance with the procedures
agreed to by the Committee.  In addition to being made available in hard copy form, the loose-leaf
system and future new or replacement pages will be circulated to Parties and other WTO Members in
electronic form through the WTO Document Dissemination Facility.  An up-to-date copy of the
loose-leaf system will also be available to the general public through the government procurement site
on the WTO Home Page on the Internet.  At its meeting of 29 September 1997, the Committee agreed
to postpone the first issue of the loose-leaf system until after the entry into force of the extensivemodifications that had been notified by the European Community in document GPA/W/51
(c.f. paragraph 5 above and GPA/M/7, paragraphs 9-10) .  Meanwhile, a draft of the loose-leaf system
of Appendices has been available since 15 May 1998 on the government procurement site at the
WTO Home Page in order to provide information on the Appendices including the modifications that
have been certified since the signature of the Agreement on 15 April 1994(http://www.wto.org/wto/go vt/loose.htm).  The procedures agreed by the Committee concerning
certification and circulation of the loose-leaf system of schedules will be carried out after the
certification of the proposed modifications to the Appendices of the European Community
(GPA/W/35, paragraph 4 and GPA/M/5, paragraph 20).
Accessions
8. Iceland applied for accession to the Agreement on 22 June 1998.  During the period under
review, Iceland initiated bilateral consultations with interested Parties on the basis of its draft offer
(GPA/W/73).GPA/25
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9. In accordance with a commitment undertaken by Panama in the Report of the Working Party
on the Accession of Panama to the WTO (WT/ACC/PAN/19, paragraphs 68 and 116 and Protocol,
Part I, paragraph 2), Panama applied for accession to the Agreement and tabled an initial offer on
24 June 1997 (GPA/W/53 and GPA/SPE C/3).  During the period under review, Panama pursued the
bilateral consultations with interested Parties.
10. Chinese Taipei applied for accession to the Agreement in June 1994 (GPA/IC/5).  During the
period under review, Chinese Taipei continued and, in some cases, completed bilateral consultations
with interested Parties on the basis of it s offer of March 1997 (GPA/SPEC/1/Rev.1).
Notification and Review of National Implementing Legislation
11. Pursuant to the Decision on the Procedures for the Notification of National Implementing
Legislation and the Checklist of Issues (GPA/1/Add.1), as of [5 October] 1998, six delegations -Canada, the European Community, Korea, Norway, Switzerland and the United States - have notified
their national implementing legislation including their responses to the Checklist of Issues (GPA/10,
GPA/20, GPA/12/Rev.1, GPA/13, GPA/ 15 and GPA/23).  At its meeting on 7 October 1998, the
Committee initiated the review of national implementing legislation by taking up the legislation of the
European Community and Korea.  In accordance with the arrangements and the schedule for thereview agreed to by the Committee at its February and June 1998 meetings, the review is being
conducted on the basis of responses provided by the European Community and Korea to written
questions put by other Parties in advance of the review.
Thresholds
12. In accordance with the Decision on Modalities for Notifying Threshold Figures in National
Currencies (GPA/1, Annex 3), Canada;  the Europ ean Community;  Hong Kong, China;  Israel;
Japan;  Norway;  Singapore;  and the United States have notified threshold figures in their respective
national currencies for the period s 1998-1999 (GPA/W/66 and Addenda 1-7).
Request for Information under Article XIX
13. At its February, June and October 1998 meetings, the Committee took note of statements
concerning the coverage of the Korea Airport Construction Authority under the Agreement
(GPA/M/8, paragraphs 27 and 28 and GPA/M/9, paragraph 16).  A request for information by the
United States, pursuant to paragraphs 1 and 2 of Article XIX of the Agreement and dated
11 September 1998, was circulated in document GPA/W/76.
Statistical Reporting
14. Article XIX:5 requires Parties to collect and provide on an annual basis statistics on their
procurements covered by the Agreement.  During the period under review, Norway and Canada have
provided statistics for 1996 (GPA/21 and Add.1) and, Hong Kong, China for July-December 1997
(GPA/22).
Derestriction of Documents
15. In accordance with its Decision on Procedures for the Circulation and Derestriction of
Documents (GPA/1/Add 2), the Committee agreed to derestrict the documents listed in
document GPA/24 as of 10 March 1998.GPA/25
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Demonstrations on the Use of Informati on Technology in Government Procurement
16. Demonstrations of the application of information technology to the area of government
procurement and panel discussions on related policy issues were held on 24 June 1998 with the
participation of experts from Canada, the European Community, Finland, Japan, Mexico, Norway,Poland, Singapore and the United States.
Government Procurement Site on the WTO Home Page
17. A site on Government Procurement was established at the WTO Home Page on the Internet in
order to provide information to the public at large on WTO activities relating to the area of
government procurement.  The section of the site on the Agreement on Government Procurement
includes an overview, the text of the Agreement, an up-to-date copy of the loose-leaf system ofAppendices, a list of Parties and observers, a table of thresholds of individual Parties and notifications
of threshold figures as expressed in national currencies, information on the work of the Committee
(decisions of the Committee on procedural matters, notifications of national implementing legislation,
annual report to the General Council) and information on dispute settlement.  Where appropriate,
linkage is provided to WTO documents on-line.  Other sections on this site relate to the activities of
the Working Group on Transparency in Government Procurement and of the Working Party on GATS
Rules.  Links are also provided to other sites on government procurement, for instance to those
providing information on procurement opportunities and contract awards.  The site address is
http://www.wto.org/wto/govt/govt.htm.
Relationship of the Tokyo Round Agreement on Government Procurement to the 1994 Agreement on
Government Procurement
18. At its meetings in February and June 1998, the Committee discussed the legal and procedural
aspects of the relationship of the Tokyo Round Agreement on Government Procurement to the
1994 Agreement on Government Procurement on the basis of a note prepared by the Secretariat inresponse to the Committee's request (GPA/M/8, paragraphs 5-10, GPA/M/9, paragraphs 3 and 4).
The Committee took note of the following legal opinion expressed in the note by the Secretariat
circulated in document GPA/W/65 while also noting that any delegation could revert to the matter at a
future meeting:  "It seems clear from the provisions of Article XXIV:3(c) of the 1994 Agreement on
Government Procurement, which relates to the same subject-matter as the Tokyo Round Agreement
(plus some additional subject-matter), that all th e Parties to the Tokyo Round Agreement intend that
the matters covered should be governed by the 1994 Agreement.  Therefore, in the light of theprovisions of Article 59.1(a) of the Vienna Convention on the Law of Treaties, 1969, it would appear
that the Tokyo Round Agreement has been considered as  terminated with effect from the time that all
its Parties became Parties to 1994 Agreement, that is to say 20 October 1997.  In the light of the
above, it would not appear necessary for any specifi c further action to be taken, whether in the form
of individual countries withdrawing from the Tokyo Round Agreement or in the form of a decision ofthe Committee of the Tokyo Round Agreement formally terminating its existence".
Consultations and Dispute Settlement
19. At its meetings in 1997 and February and June 1998, the Committee took note of statements
concerning the legislation enacted by the State of Massachusetts regulating State contracts withcompanies doing business with or in Myanmar (GPA/M/5, paragraphs 47-52 and GPA/M/6,
paragraphs 19-21, GPA/M/7, paragraph 26 and GPA/ M/8, paragraph 29 and GPA/M/9, paragraph 17).
A request for information by Japan, pursuant to paragraphs 1 and 3 of Article XIX of the Agreement
and dated 10 March 1997 (GPA/W/39) was responded to by the United States on 8 August 1997
(GPA/W/52).  A request for consultations by the European Community was communicated on20 June 1997 pursuant to Article XXII of the GPA and Article 4 of the DSUGPA/25
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(WT/DS88/1-GPA/W/D2/1).  Japan requested to join  these consultations under Article 4:11 of the
DSU on 27 June 1997 (WT/DS88/2).  In a s ubsequent communication dated 18 July 19 97, Japan also
requested consultations regarding this matter pursuant to Article XXII of the GPA and Article 4 of the
DSU (WT/DS95/1-GPA/W/D3/1).  The European Comm unities requested to join those consultations
under Article 4.11 of the DSU on 23 July 1997, (WT/DS95/2).  In a communication dated8 September 1998, the European Community requested the establishment of a panel pursuant to
Article XXII of the GPA, with the terms of reference provided for in Article XXII:4 of the GPA
(WT/DS88/3).  In a communication dated 8 September 1998, Japan requested the establishment of a
panel pursuant to Articles 4.7 and 6 of the DSU and to Article XXII of the GPA, with the terms of
reference provided for in Article XXII:4 of the GPA (WT/DS95/3).
20. At its February and May 1997 meetings, the Committee took note of statements concerning a
procurement tender published by the Ministry of Transport of Japan to purchase MTSATSatellite-based Augmentation System (MSAS)  (GPA/M/5, paragraphs 53-55 and GPA/M/6,
paragraph 22).  A request for consultations by the European Community was communicated on
26 March 1997 pursuant to Article 4.4 of the DSU (WT/DS73/1-GPA/D1/1).  The United States
request of 9 April 1997 to join the consultations (W T/DS73/2) pursuant to Article 4.4 of the DSU was
accepted by Japan on 14 April 1997 (WT/DS73/3).  In a communication dated 31 July 1997, theEuropean Community notified that it had found a mutually agreed solution with Japan within the
meaning of Article 3.6 of the DSU (WT/DS73/4/Rev.1 and GPA/D1/2/Rev.1).  In response to the
request for information by the United States, the European Community, in a statement made jointly
with Japan at the meeting of 18 February 1998, prov ided information regarding the mutually agreed
solution reached between the two Parties (GPA/M/8, paragraph 31).
III. NEGOTIATIONS UNDER ARTICLE XXIV:7
21. Article XXIV:7(b) and (c) of the Agreement calls on the Parties, not later than the end of the
third year from the date of its entry into force,  to undertake further negotiations, with a view to
improving the Agreement and achieving the greatest possible extension of its coverage among all
Parties and eliminating any remaining discriminatory measures and practices.  As stated in its1996 Report to the General Council, the Committee agreed to undertake an early review which was
initiated in February 1997 in informal consultations, with an examination of modalities.  This review
has covered, in particular, the following elements:  simplification and improvement of the Agreement,
including, where appropriate, adaptation to advances in the area of information technology;
expansion of the coverage of the Agreement;  and elimination of discriminatory measures and
practices which distort open procurement (GPA/8 and Add.1 and GPA/19).  An objective of the
negotiations under Article XXIV:7 is the expansion of the membership of the Agreement by making itmore accessible to non-Parties.  In this connection, a communication was sent by the Chairman of the
Committee to the WTO Members, drawing their attention, as well as the attention of governments
which are in the process of acceding to the WTO, to  this work and inviting them to participate as
observers in the meetings of the Committee (WT/L/206).  During the period covered by this report,
Parties pursued their informal consultations in December 1997, February, June and October 1998 onthe basis of an informal checklist of issues, the latest version of which is dated 8 September 1998
(circulated with footer "gpa60") and the proposals by various Parties.  At the meeting on
25 June 1998, the Committee agreed to a time-frame for the negotiations under Article XXIV:7 and
the overall work programme that should be envisaged within that time-frame on the basis of a
proposal by the Chair, the text of which is attached to this report.  In the consultations to be held inDecember 1998, the Committee will focus discussions on:  issues of information technology,
statistical reporting, monitoring and enforcement and procurement methods.  It will also continue its
Article-by-Article examination of the Agreement and will discuss the types of discriminatory
provisions in the Appendices and coverage of services.GPA/25
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ATTACHMENT
Time-frame and the Work Programme for the Negotiations under Article XXIV:7
The Committee agreed to proceed in accordance with the following proposals by the Chair
regarding a time-frame for the negotiations under Article XXIV:7 and the overall work programme
that should be envisaged within that time-frame, the text of which incorporates suggestions by
delegations agreed to by the Committee:
"I sense a widespread view that we should aim to complete the negotiations, at least in respect
of the simplification and improvement of the Agreement, by the third WTO Ministerial to be
held at the end of next year with a view to, in particular, increasing the attractiveness of the
Agreement to new members.
"If this is to be done, we would need to rese rve the whole of the fall of next year to an
intensive negotiating process.  This, in turn, would require that by the summer of next year
there would be in existence a document, reflecting the outstanding proposals, that could
constitute the basis for these negotiations.  The preparation of such a document would require
that all the proposals and suggestions for improvement of the text would have been
thoroughly discussed and digested by that time.  In order for this to be done, we might wish to
set a target date of the end of April next year for the tabling of all such proposals and
suggestions – without, of course, prejudice to the right of participants to put forward at a later
date modified or additional proposals where necessary.
"To sum up therefore I would suggest the following key elements of a timetable and work
programme:
- The tabling of suggestions and proposals no later than the end of April 1999.
- The preparation of a document reflecting all outstanding proposals and suggestions,
as a basis for the final negotiating phase, no later than the summer of 1999.  I would,
of course, hope that in the course of the review and discussion of the proposals andsuggestions that would already have been undertaken by that time a considerable
measure of agreement would already have been reached on many points and that the
number of outstanding points left for the final negotiating phase would be kept to a
manageable minimum.
- A target of the third WTO Ministerial for the completion of the negotiations, at least
on the simplification and improvement of the Agreement.
"We would in parallel continue work on the other elements of the negotiations, namely on the
elimination of discriminatory measures and practices which distort open procurement and the
expansion of the coverage of the Agreement.  We will revert at our next meeting to the
timetable and work programme for these parts of the negotiations.  To the extent that the
objective of the elimination of discriminatory measures could be achieved through
modifications to the Agreement itself, this work would also have the target date of the thirdMinisterial Meeting.
"If this way of proceeding were to be acceptable to you, we would need to give some thought
to the sort of meeting schedule that should be envisaged for the remainder of this year and for
next year.  My own suggestion would be that you might consider two meetings in the fall of
this year (our October meeting already scheduled and maybe one in mid-December), andthree meetings in the first part of next year (for example February, May and July).  In theGPA/25
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autumn period of 1999, we would need to envisage a semi-continuous process of negotiation,
i.e. the Group would need to be on call for the whole period.
"WTO Members, not parties to the GPA, and other observer governments to the GPA would
be invited to participate fully in the work, it being understood that the final decision on the
outcome would remain with Parties to the GPA."
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