RESTRICTED
WORLD TRADE GPA/M/4
7January 1997
ORGANIZATION(97-0014)
Committee onGovernment Procurement
MINUTES OFTHE MEETING HELD ON5DECEMBER 1996
Chairman: Mr.Harald Ernst (Switzerland)
1. Thefollowing agenda wasadopted:
A. Accession byHong Kong
B. Other business
A. ACCESSION BYHONG KONG
2. TheChairman recalled that,inacommunication dated 31October 1996 andcirculated in
document GPA/W/28 andCorr.1, Hong Kong hadapplied foraccession totheAgreement. Attached
tothiscommunication were anoffer from theGovernment ofHong Kong forAppendix Iandlists
ofrelevant publications forAppendices IItoIV.
3. Therepresentative ofHong Kong saidthatHong Kong hadalways beenastaunch supporter
ofthemultilateral trading system andthefundamental GATT principles ofmost-favoured-nation and
national treatment. Herecalled that,asaParty totheTokyo Round Agreement onGovernment
Procurement, Hong Kong hadparticipated actively inthenegotiations ontheWTO Government
Procurement Agreement. Ithadbeenwithconsiderable regret thatHong Kong hadnotbeenableto
signthenewAgreement duetoitscontinued difficulty withthediscriminatory elements introduced
bymany participants attheconcluding stage ofthenegotiations. Though notaParty tothenew
Agreement, Hong Kong continued tomaintain itsopenandtransparent government procurement system.
Inbilateral contacts earlier thisyearwithParties tothenewAgreement, Hong Kong'scontinuing
concerns about thederogations from thenon-discriminatory provisions oftheAgreement hadbeen
acknowledged. Forthose discriminations specifically directed against it,Hong Kong hadreceived
assurances thattheycould beremoved. Inrespect ofthosediscriminatory provisions ofageneral nature,
Hong Kong understood thattheCommittee hadadopted adecision toconduct anearlyreview in1997
oftheAgreement under Article XXIV, paragraph 7(b)and(c)oftheAgreement, withaviewto,among
other things, eliminating thediscriminatory measures andpractices intheAgreement. Hong Kong
therefore considered thatthetimewasripeforittore-engage inthenewAgreement. Itwasonthis
basis thatHong Kong hadexpressed formally inOctober thisyearitsinterest inacceding tothenew
Agreement. Hong Kong hadalsosubmitted itsterms ofaccession onthebasisofitsfinalofferwhich
hadbeenaccepted byallParties attheconclusion ofthenegotiation ofthenewAgreement. His
delegation waspleased that, after several rounds ofbilateral negotiations withallParties tothe
Agreement, adraftdecision ontheterms ofaccession forHong Kong hadbeenworked outforthe
Committee 'sconsideration. Heexpressed hisdelegation 'sgratefulness toallParties concerned for
theirpositive efforts which hadenabled thebilateral consultations tobeconcluded within suchashort
period oftime.GPA/M/4
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4. Specifically, during thebilateral negotiations, afterhaving received assurance fromHong Kong
thattheHong Kong Government neither heldanyinterest intheelectricity companies inHong Kong
norsought toinfluence theirprocurement policy, theEuropean Community, Norway andSwitzerland
hadagreed toremove thediscrimination against Hong Kong intheelectricity sector. This, asHong
Kong understood it,would befollowed upbyformal notifications from allParties concerned once
theCommittee hadadopted theterms ofaccession. Thiswascertainly awelcome move andaddressed
partofHong Kong'sserious concerns about thederogations fromthenon-discrimination provisions.
5. Separately, during thebilateral discussions, Hong Kong hadalsoexplained theneedforitto
delay application ofmostoftheprovisions ofArticle XXforamaximum period ofoneyearinorder
toenable ittosetuptherequired bidchallenge procedures tocover allentities covered bytheAgreement.
Hisdelegation wasgrateful fortheunderstanding andflexibility onthepartofallMembers ofthe
Committee. Itwashisdelegation 'sintention totryitsbesttoestablish thenecessary procedures as
soonaspossible sothatHong Kong could apply Article XXinfullbefore theone-year period expired.
Similarly, Hong Kong would doitsbesttocomplete thedomestic procedures sothat,iftheCommittee
weretoadopt theterms ofaccession, Hong Kong could accede totheAgreement before thevalidity
period oftheCommittee decision expired. Hong Kong verymuch looked forward toparticipating
constructively intheearly review oftheAgreement which itbelieved would contribute notonlyto
theeliminationofthederogationsfromthenon-discriminationprovisionsbutalsotofurtherliberalization
intheareaofgovernment procurement.
6. Therepresentatives ofCanada, theEuropean Community, Japan, Korea, Norway, Switzerland
andtheUnited States supported Hong Kong'srequest foraccession totheAgreement. They saidthat
accession ofanewParty totheAgreement wasasignificant move towards further liberalization of
public procurement markets. Hong Kong'saccession before theSingapore Ministerial Conference
wouldalsosendawelcomemessagetotheWTOMembersontheimportanceofgovernmentprocurement
forthemultilateral trading system.
7. Therepresentative oftheUnited States saidthat,while recognizing theimportance oftheoverall
package offered byHong Kong initsaccession, hisdelegation wasdisappointed withthecoverage
ofservices inHong Kong'sAppendix I,Annex 4.Hehoped thattheearly review oftheAgreement
could achieve auniformly highlevelofcoverage ofservices byallParties. Meanwhile, thereciprocity
provisions included insome Parties 'Schedules withrespect tothecoverage ofservices remained
necessary andrelevant. Therepresentative ofCanada saidthathisdelegation shared theconcerns
regarding thecoverage ofservices inHong Kong'soffer. Canada 'sAppendix I,General Notes,
contained areciprocity provision onservices. Hopefully, theCommittee would come upwithamutually
agreed listofservices initsearlyreview oftheAgreement, tobeinitiated nextyear. Therepresentative
ofHong Kong saidthathisdelegation looked forward toparticipating inanearlyreview which would
address, among others, theextension ofthecoverage ofservices under theAgreement.
8. Therepresentatives ofSwitzerland andtheUnited States saidthattheirdelegations recognized
thatthelegislative process necessary fortheestablishment ofacredible bidchallenge system in
Hong Kong warranted atransition period ofoneyear. Pending theimplementation ofthebidchallenge
system, theyunderstood thatanumber ofexisting independent forawere available toreview any
complaints ofunsatisfied suppliers regarding adecision. Therepresentative ofNorway saidthather
delegationfeltconfidentthatHongKongwouldmakeallpossibleendeavourstoimplementtheprovisions
ofparagraphs 2-8ofArticle XXregarding challenge procedures assoonaspossible, andnolaterthan
oneyearaftertheentry intoforce oftheAgreement forHong Kong. Therepresentative ofHong Kong
saidthat,during thetransition period, hisdelegation would keeptheCommittee informed oftheprogress
made intheestablishment ofabidchallenge mechanism consistent withArticle XX.GPA/M/4
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9. Therepresentative ofSwitzerland saidthatherdelegation hadunderstood fromHong Kong's
explanation ofthescheme governing thetwoprivate electricity companies thattheirprocurement was
notsubject togovernment control. Hong Kong hadtaken abilateral commitment towards Switzerland
toensure thatthese companies procured inanon-discriminatory way. Switzerland would, therefore,
delete thereference tosuppliers fromHong Kong initsGeneral NoteNo.1relating totheelectricity
sector. Switzerland would subsequently submit aformal notification inthisrespect. Therepresentative
ofNorway saidthatherdelegation hadexpressed some concerns inthebilateral consultations regarding
thetwoelectrical utility companies operating inHong Kong. Itwasherdelegation 'sunderstanding
thatHong Kong would forward aletter totheChairman containing aunilateral commitment fromHong
Kong, including interaliaaso-called "self-denial clause", withrespect tothese twocompanies. In
turn,Norway undertook toextend theAgreement tothesuppliers andservice providers ofHong Kong
intheelectricity sector under theconditions laiddown inAppendix I,Annex 3ofNorway. Accordingly,
Norway would remove Hong Kong fromparagraph 1(1)oftheGeneral Notes toNorway 'sSchedule.
Anotification tothiseffect would bemade induecourse. Therepresentative oftheEuropean
Community saidthathisdelegation would notify thedeletion ofthereference toHong Kong inthe
General Note 1,indent point (b),intheSchedule oftheEuropean Community. Inthisconnection,
therepresentative ofHong Kong confirmed thattheself-denial commitments made byHong Kong as
aresult ofitsbilateral negotiations withsome Parties would beapplied onanon-discriminatory basis.
10. Therepresentatives oftheEuropean Community andSwitzerland saidthattheirGovernments
intended towithdraw from theTokyo Round Agreement.
11. TheCommittee adopted adecision ontheaccession ofHong Kong (document GPA/9) and
invited Hong Kong toaccede totheAgreement onGovernment Procurement ontheterms attached
tothatDecision.
12. TheCommittee agreed toamend theCommittee 'sreport totheMinisterial Conference toreflect
Hong Kong'saccession (GPA/8/Add.1). TheCommittee alsoagreed that,intheevent thatHong Kong
werenotalready aMember, itwould beinvited tothenextmeeting oftheCommittee asanobserver.
B. OTHER BUSINESS
- Dateofthenextmeeting oftheCommittee
13. TheCommittee agreed toholditsnextmeeting on24February 1997.