RESTRICTED  WORLD TRADE  
ORGANIZATION  GPA/M/28 
21 November 2005 
 (05-5495) 
Committee on Government Procurement  
  
 
 
MINUTES OF THE MEETING HELD ON 14 OCTOBER 2005 
 
Chairman:  Ambassador Tae-yul Cho (Korea)
 
 
 
 1. The Chairman
 said that, in preparation for the meeti ng, delegations had received an Airgram 
(WTO/AIR/2678 of 4 October 2005) and an annotated  agenda (Job No. 7115 of 5 October 2005).  He 
noted that, under the last item of the proposed ag enda, "Other business", Jordan would make a short 
statement on its accession process.  In addition, he suggested that the dates for the Committee's 
meetings in 2006 be take n up under this item. 
2. The Committee adopted  the following agenda, as outlined in the Airgram: 
A. Negotiations under Article XXIV:7 
 
B. Israel's reques t regarding offsets 
 
C. Adoption of the Committee's annual report 
 
D. Other business. 
 
A. NEGOTIATIONS UNDER ARTICLE  XXIV :7 
3. The Chairman  noted that the meeting had been preceded  by several days of informal drafting 
sessions focusing on the revision of the outstanding non-market-access-related provisions in the draft revised text of the Agreement.  This work had been based on: 
(a) the updated draft revised text of the Agreement as at 21 July 2005
1; 
(b) informal written submissions by Canada and by the United States2; 
(c) a joint non-paper by the European Communities and the United States;  and 
(d) drafting proposals and suggestions made  by delegations throughout the week. 
The results of the drafting work had been introduced  in the clean text, the updated version of which 
would be circulated by the Secretariat the following week.3 
                                                      
1 Job No. 5398, 26 July 2005. 
2 Job Nos. 6763 and 7104, 26 September and 4 October 2005, respectively. 
3 Job No. 7713, 20 October 2005. GPA/M/28 
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4. Continuing, the Chairman said that, as discussed  at the informal closing session earlier that 
afternoon, good progress had been made during the w eek in moving toward agreement on a number of 
the outstanding non-market-access-related provisions in the draft revised text of the Agreement.  
Nonetheless, significant further work was required in a number of other areas.  To facilitate this work, 
the Chairman suggested that the more detailed statem ent that he had made during the informal closing 
session on stocktaking and future work be attached to the minutes of the meeting. 
5. It was so agreed
.  Accordingly, the Chairman's st atement is attached to these minutes.4 
6. The Chairman  said that further progress towards the goal of reaching provisional agreement 
on the non-market-access-related provisi ons would require, first and foremost,  intensive reflection and 
consultations, both in capitals and be tween them, in regard to the issues that he had mentioned at the 
informal closing session and on ways to bridge the re maining gaps in particip ants' positions.  It would 
also require the preparation of written propo sals reflecting agreed positions and language. 
7. Regarding the bilateral covera ge negotiations, the Chairman reminded delegations of the 
revised deadline for the submission of offers that had been agreed at the formal meeting in July 2005, 
namely:  prior to the meeting of the Committee in  October 2005 but in any case not later than the 
Hong Kong Ministerial Conference (13-18 December 2005).5  To date, no offers had been received.  
Parties would, therefore, need to give attenti on to this critical aspect of the Article XXIV:7  
negotiations in the next few weeks, in addition to their positions on the outstanding 
non-market-access-related provisions of the Agreement. 
8. The representative of the European Communities  requested that consideration be given to the 
scheduling of another meeting of the Committee be fore the Hong Kong Ministerial Conference, to 
facilitate the reaching of agreement on the remaining non-market-access-related provisions of the text.  
At a minimum, the possibility of such a meeting should not be excluded pend ing consultations with 
Parties. 
9. The Chairman  expressed his hope that delegations would further discuss this issue among 
themselves.  He said that, through the Secretariat, he would also consult with  interested delegations, 
and would communicate to delegations the outco me of such consultations in November. 
B. ISRAEL 'S REQUEST REGARDING OFFSETS  
10. The Chairman  noted that, in advance of the meeting, Israel had made a request to include on 
the agenda of the meeting an item entitled Israel's request regarding offsets.  Prior developments 
regarding Israel's offset commitments, including at  the Committee's meeting of 21 July 2005, were 
summarized in the annotated agenda for the meeting.6 
11. The representative of Israel  said that, as Parties would recall, in November 2004, his 
delegation had submitted a formal request to the Committee to modify the timetable for a gradual 
reduction of the level of Israel's offset rights.  Due to the urgent nature of the matter and the need for 
more time to study Israel's request, the decision ha d been taken to extend Israel's right to require 
offsets at a level of 30 per cent for an a dditional one year, i.e. until 31 December 2005.7  As reflected 
in the minutes of the Committe e's meeting of 16 December 20048, it had been understood at the time 
that Israel, as well as the rest of the Parties, w ould use this one-year period to further explore and 
negotiate the issue. 
                                                      
4 This statement has also been circulated as Job No. 7591, 18 October 2005. 
5 GPA/79/Add.1, 22 July 2005. 
6 Job No. 7115, 5 October 2005. 
7 GPA/83, 17 December 2004. 
8 GPA/M/25, 18 January 2005.  GPA/M/28 
 Page 3 
 
 
12. At the Committee's meeting of 21 July 2005, his delegation had signalled its intention to 
renew its request regarding offsets.  In a ddition, his delegation had submitted a non-paper 
summarizing an independent study on the implic ations and consequences of the Agreement on 
Government Procurement on Israel's  economy and industry.  The findings of that study highlighted 
the vital importance of offsets for the overall bala nce of benefits and costs arising from Israel's 
participation in the plurilateral Ag reement on Government Procurement. 
13. As had been the case in 2004, once again, his delegation wished to find a long-term solution 
that would redefine Israel's rights and oblig ations under the Agreement of the Government 
Procurement.  For this purpose, his delegation had been  ready, prior to the current meeting, to submit 
an initial offer in the framework of the market access negotiations.  Reaching a long-term solution 
was the best alternative for Israel as well as for the rest of the Parties.  However, following informal 
consultations with some other Parties earlier in  the week, his delegation had understood that most 
Parties preferred, at this  stage, to implement an appropriate short-term solution before a long-term 
agreement could be discussed and agreed upon.  He expressed his delegation's hope that the latter 
would happen in the course of 2006. 
14. As a result, his delegation intended to submit a new proposal for a further interim period, with 
the view of modifying its current commitments re garding offsets.  This proposal, which would be 
shared with the Parties informally prior to its s ubmission, would be intended to be effective as of 
1 January 2006.  The proposal would be based on the following parameters: 
(a) the level of offsets in the proposal would not undermine the starting point of 
negotiations for the long-ter m solution in the future; 
(b) the new interim regime regarding offsets w ould be in place either until the lapse of a 
transitional period of [X] number of years,  or until the conclusion of the ongoing 
market access negotiations pursuant to Ar ticle XXIV:7, whichever would come first; 
(c) the above-mentioned period of [X] years would be longer than one year;  and 
(d) it would be framed as an interim arrangem ent in anticipation of a long-term solution 
that would take into account the interests of Israel as well as of other Parties, and the 
need to find a balance between the two. 
15. His delegation intended to submit this proposal  in accordance with Article XXIV:6(a) in a 
timely manner, in order to allow the Committee to  take a decision on the matter before the end 
of 2005.  During the transitional period and in th e context of the market access negotiations, which 
were expected to gain momentum in the course of next year, Israel intended to negotiate with other 
Parties a mutually  agreeable long-term solution regarding its schedule of commitments, including the 
Note on offsets.  This would be done with the vi ew of reaching a new balance of Israel's rights and 
obligations under the Agreement on Government Pr ocurement.  In conclusion, he expressed his 
delegation's appreciation for the good will demonstrat ed by other Parties on this issue of importance 
to Israel.  He reaffirmed his delegation's readiness to  continue to work closely with other Parties in a 
constrictive manner and in good faith to achieve a satisfactory result. 
16. The representative of the United States  said that her delegation was also looking forward to 
finding a long-term solution to Israel's use of offset s.  For her delegation, such a solution included a 
provision for the phase-out of the offsets.  As her de legation had stated many times before, it believed 
that offsets were not a permanent feature but a transitional measure - a point which had also been reflected in the positions taken by her delegation in  the discussions on the revision of the text of the 
Agreement.  Her delegation was looking forward to working with the delegation of Israel in the 
coming weeks to find common ground for a short-term solution, which would lead to a final resolution of this matter. GPA/M/28 
Page 4  
 
17. The representative of the European Communities
 said that his delegation was looking forward 
to working with the Committee and with Israel to fi nd a solution to the question of offsets.  He was 
glad to see that it had been understood that in the s hort time remaining before the end of the year it 
would not be possible to reach agreement on a long-te rm solution.  He urged the delegation of Israel 
to submit its request as soon as possible.  The kind and duration of the extension to be granted could 
not be prejudged without knowing a ll the parameters.  As in the case of the delegation of the 
United States, one of the parameters important for his delegation was having a phase-out of offsets.  
This parameter would help in finding an agreeable  solution and should be one of the criteria for 
deciding on the level of offsets.  This was also in  line with the position his delegation had maintained 
in the context of the revision of the Article on De veloping Countries in the draft revised text of the 
Agreement. 
18. The representative of Japan  said that her delegation was looking forward to working with 
Israel to find an appropriate solution to its concern.   Given the short time remaining before the end of 
the year, her delegation also wished to find a short- term solution.  In 2006, her delegation would work 
with the Committee and Israel to find a long-term solution. 
19. The representative of Canada  said that her delegation was prepared to work with Israel to find 
a short-term solution, which could lead to an appr opriate long-term solution at a later stage.  Her 
delegation's views on the role of offsets were cons istent with the views that other delegations had 
expressed. 
20. The representative of Korea  said that his delegation also wished to consult with Israel to reach 
a long-term solution to this issue, although at this stage, there was not enough time to find such a 
solution.  Like other delegations, his delegation w ould therefore work toward a short-term solution 
before the end of the year, and would continue working in 2006 to find a long-term solution. 
21. The representative of Switzerland  said that the phase-out of offsets was also important for his 
delegation, both in the context of free trade ag reements and under the Agreement on Government 
Procurement. 
22. The representative of Israel  thanked all Parties for their comments and said that his delegation 
was looking forward to negotiating both a short- a nd a long-term solution with the other Parties in 
good faith and in a constructive manner. 
23. As to the procedure for adopting the d esired short-term solution, the Chairman  noted that the 
Committee could follow the procedure used in 2004.   At the discretion of delegations, the required 
formal meeting of the Committee could be  handled by Geneva-based delegates. 
24. The representative of th e European Communities  pointed out that the necessary meeting to 
implement the desired solution regarding Israel's us e of offsets reinforced the feasibility of holding a 
further substantive meeting before the end of the year, which could also continue the negotiations 
pursuant to Article XXIV:7. 
C. ADOPTION OF THE COMMITTEE 'S ANNUAL REPORT  
25. The Chairman  noted that Article XXIV:7(a) of th e Agreement on Government Procurement 
required the Committee to review annually the impl ementation and operation of the Agreement and to 
inform the General Council of developments during the period covered by the review.  The deadline 
for the submission of this year's report to the Ge neral Council was 18 November  2005.  A draft of the 
Committee's Annual Report for the period since its last report9 had been circulated by the Secretariat 
                                                      
9 GPA/82, 26 November 2004.  GPA/M/28 
 Page 5 
 
 
on 26 September 2005.10  As foreseen at the Committee's m eeting of 21 July 2005, the Committee 
should now discuss and adopt the draft report with any necessary modifications. 
26. The representative of the United States  said that in the light of the week's work, delegations 
might wish to look again at the section in the dr aft annual report describing the negotiations pursuant 
to Article XXIV:7.  Delegations should be given an opportunity to  submit relevant suggestions or 
other corrections to the report.  Other delegations agreed with this proposal. 
27. Following discussion, the Committee agreed  that drafting suggestions, if any, could be 
provided by delegations to the Secretariat up to 28  October, following which a revised draft of the 
report incorporating relevant sugges tions would be circulated by the Secretariat in early November.11  
If no objections were made to the changes incorporat ed in the revised report within one week of its 
circulation, the revised draft report would be consid ered adopted and would be made available to the 
General Council. 
D. OTHER BUSINESS  
(i) Jordan's Accession to the Agreement 
28. The representative of Jordan  said that since the Committee's meeting in March 2005, Jordan 
had continued to work relentlessly towards resolvi ng outstanding issues and concerns in regard to the 
preparation of its second revised offer and the conclusion of its accession to the Agreement.  
Constructive and fruitful bilateral consultations had been held with the European Communities, Japan, 
Canada and the United States concerning both its o ffer and relevant legisl ative developments.  
His delegation had had to face various di fficulties in moving ahead with its accession: 
(a) One of the basic difficulties was to convin ce the private sector and the associations 
that accession to the Agreement on Government Procurement would not affect their 
work negatively, taking into consideration the small size and limited resources of the 
Jordanian economy and industry.  In this regard, his delegati on had embarked on a 
series of meetings with the private sector and other government institutions to respond to their concerns and facilitate accep tance of the Agreement.  Meanwhile, the 
Ministry of Industry and Trade had developed a definition for small- and 
medium-sized enterprises, which had been  submitted to the Cabinet for approval. 
(b) In regard to non-sensitive procurement by th e Ministry of Defence and the Ministry 
of Interior, a number of joint committees were working towards coming up with 
responses to the questions and requests put forward by Parties. 
(c) Negotiations with the Aqaba Special Ec onomic Zone Authority (ASEZA) were in 
progress, and it was hoped that a common unde rstanding could be reached regarding 
the inclusion of Aqaba Special Economic Zone in Jordan's Annex II.  In principle,  
ASEZA did not object to being cove red by the Agreement on Government 
Procurement five years from the date of Jordan's accession, the details of which 
needed to be worked out in due course. 
29. Continuing, he said that the work required to reform Jordan's procurement legislation had 
almost been completed.  The final draft had been submitted to the Cabinet as a first step towards its 
approval through Jordan's legislative process.  The draf t was being translated into English in order to 
be reviewed by the World Bank and the UNCITRAL, upon their request.  In completing the process 
                                                     
 
10 Job No. 6773, 26 September 2005. 
11 The requested revised draft report has subsequently been circulated as Job No. 6773/Rev.1 (8178), 
2 November 2005. GPA/M/28 
Page 6  
 
of its accession to the Agreement,  Jordan needed Parties' suppor t and understanding.  The accession 
could not be done successfully unless the particular si tuation of the Jordanian economy was taken into 
consideration.  Transitional periods, a reasonable set of thresholds, grace periods and the gradual 
phasing out of transitional periods for a list of goods and services would help in convincing the 
Jordanian private sector about the merits of accession.  Jordan should be an attractive model for other 
developing countries and small ec onomies in joining the Agreement on Government Procurement 
without negative effects on different economic sector s and institutions.  This could be achieved only 
with more tolerance and better unders tanding by Parties.  In conclusi on, preparing the second revision 
of the Jordan's revised offer would take some ti me because Jordan needed to respond to all the 
requests received from Parties.  His delegation hoped that, in the coming months, it could present a 
second revised offer that  would r espond to all relevant requests. 
30. The representatives of the United States
, the European Communities , Japan , Canada  and 
Israel  thanked the representative of Jordan for the upda te that he had provided and the efforts that 
were being made to bring its accession process to a conclusion.  Continuing, the representative of the 
United States  indicated that her delegation stood ready to assist Jordan in whatever way it could, and 
was looking forward to seeing Jordan's second revised offer in the coming months.  The 
representative of the European Communities  expressed his delegation's appreciation for the positive 
developments reported by the representative of Jordan  in regard to the inclusion of the Aqaba Special 
Economic Zone.  His delegation wished to see Jord an's second revised offer brought forward as soon 
as possible and was ready to work closely with Jord an to help in overcoming any remaining obstacles 
in this regard.  Successful conclusion of the acc ession process would also facilitate Jordan's full 
participation in the pending coverage negotiations.  The representative of Japan  said that her 
delegation was also ready to provide support to, and share expertise with, Jordan, if and when 
necessary.  She agreed that Jordan could be a m odel for the accession of other developing countries to 
the Agreement on Government Procurement.  The representative of Israel  expressed his delegation's 
full support for Jordan's accession to the Agreem ent on Government Procurement, and called upon 
Parties to work closely with Jord an and to show flexibility in orde r to accommodate its needs and to 
expedite the accession process. 
31. In response to an observation of the Chairman about China's participation as an observer at 
the meeting, the representative of China  said that China had revised its government procurement law 
only in 2002, and had much to learn in this area.   The size and complexity of the Chinese government 
sector and China's status as a developing country w ould necessitate a cautious step-by-step approach 
to any eventual negotiations on its accession to th e Agreement on Government Procurement.  The 
representative of the United States  expressed her delegation's hope th at China would also participate 
in future meetings and that progress would soon be forthcoming on China's accession to the 
Agreement on Government Procurement.  Her dele gation stood ready to assist China in whatever 
ways it could as China began its accession process.  The representative of the European Communities  
indicated that his delegation had taken note of the special importance for China of some issues, such 
as the issue of developing countries, and that it, too, stood ready to work together with China on its accession to the Agreement. 
(ii) Dates of the Committee's meetings in 2006 
32. The Committee agreed
 to the following meeting dates for 2006: 
(a) the week of 6 February 2006; 
(b) the week of 27 March 2006; 
(c) a week to be determined in the second half  of May (subsequently, the Chairman has 
proposed that the meeting be held in the week of 15 May);  GPA/M/28 
 Page 7 
 
 
(d) the week of 10 July 2006;  and 
(e) the week of 16 October 2006, 
with the understanding that, if the number of meetin gs needed to be reduced, the meeting scheduled 
for the week of 10 July 2006 could be considered optional. 
 GPA/M/28 
Page 8  
 
 
ATTACHMENT 
 
INFORMAL CLOSING SESSION, FRIDAY, 14 OCTOBER 2005 
 
Chairman's (Ambassador Tae-yul Cho, Korea) Statement on Stocktaking and Future Work
 
(Made at the Informal Closing Session, 14 October 2005)1 
   
 On Monday afternoon, we agreed to hold an in formal closing session at the conclusion of our 
drafting work this week, in order to take stoc k of progress and to consider next steps in the 
negotiations pursuant to Article XXIV:7.  
A. Stocktaking 
 
 The drafting work completed this week focu sed on the review of the non-market access 
related provisions of the Agreement.  The work was based on:   - the latest draft revised text circulated by the Secretariat on 26 July (Job No. 5398); 
 
 - submissions provided by Canada and by  the United States (Job Nos. 6763 and 7104, 
respectively); 
  - a joint non-paper by the European Communities and the United States;  and  
 - proposals and suggestions by delegations during the drafting sessions. 
  In regard to most provisions of the text, the drafting work took a sequential approach.  On Thursday, the Articles dealing with Modifications a nd Rectifications to Cove rage, and Consultations 
and Dispute Settlement were discussed with the benefit of participation by some Parties' legal experts. 
 
 The discussions on all these elements of the text has led to the inclusion in the clean text of 
relevant written proposals and suggested wording by delegations.  These will be reflected in the 
updated version of the draft revised text of the Agr eement which will be circulated by the Secretariat 
early next week.  
 Overall, I believe it is important to r ecognize that, during the week's drafting work, 
delegations showed increased flexibility on some key issues which enabled us to streamline the text 
and achieve good progress in a number of areas.  However, in other areas, our discussions also showed a need for significant new flexibility if we are to achieve our goal of reaching provisional 
agreement on the non-market-access provisions in a tim ely fashion.  It may facilitate further progress 
if I mention some of these areas now.  Without pur porting to be exhaustive, some of the issues that 
come to mind are as follows: 
  - definitional issues, including with respect to the definitions of:    - commercial goods and services; and 
   electronic means and electronic auctions; 
 
(Of course, the foregoing definitions need to  be considered in light of the relevant 
operative provisions.) 
                                                     
 
1 Also circulated as Job No. 7591 of 18 October 2005.  GPA/M/28 
 Page 9 
 
 
  - various issues relating to Article II (Scope  and Coverage), including with respect to: 
   - the application of the Agreement;   - compliance;  and 
  - valuation; 
  - with regard to Article III (General Principles), issues concerning:    - conflicts of interest;  and 
  - offsets; 
  - as regards Article V:    - the contents of various types of notices; 
  - the procedures relating to their publication;  and 
  - the types of entities to which the various requirements apply;   - a number of issues concerning time-periods (Article VI);   - the final wording of the provision relati ng to use of technical specifications to 
promote the conservation of natural resources and to protect the environment 
(Article VII:9); 
  - a number of substantive issues relating to Article VIII (Conditions for Participation); 
 
 - as regards limited tendering (Article X): 
   - the scope of this tendering method with regard to c onstruction and other 
 services (paragraphs (c), (g) and (h));  and 
   - the question of any reference to proprietary information; 
 
 - the language regarding the prohibiti on of cancellation of procurements and 
potentially the modification of awarded contracts (Article XI); 
  - the need for Article XII and the qu estion of whether it should extend beyond 
electronic auctions; 
  - issues concerning the requirements for collecti on of statistics, particularly in regard to 
the possible use of estimates for procurement by Annex I entities; 
  - finalization of the Article regarding Developing Countries; 
 
 - a number of issues concerning Modifica tions and Rectifications to Coverage; 
  - a number of issues regarding Domestic Review Procedures for Supplier Challenges; 
 
 - as regards Consultations and Dispute Settlement: 
   - the availability of non-violation claims;   - the extent of specific rules for the handling of government procurement 
 disputes as compared to reliance on the DSU;  and 
  - the EC proposal for special remedies. GPA/M/28 
Page 10  
 
 
B. Future work 
 
 I turn now to the question of how we move fo rward from here.  It seems to me that further 
progress toward the goal of reaching provisional agreement on the non-market access related 
provisions will require, first and foremost, intensive reflection and consultations  both in capitals and 
between them, in particular in regard to the areas th at I have mentioned earlier, and on ways to bridge 
the remaining gaps in participants' positions.  It will also require the preparation of written proposals 
reflecting agreed positions and language.  
 As has been suggested to me by a delegation,  if the Committee so wishes, I am prepared to 
call a further meeting prior to the end of this year to finalize provisional agreement on the non-market-access-related provisions.  However, given the extent of remaining divergences in 
viewpoints, I frankly am not sure that, without ex traordinary efforts by delegations, a single meeting 
before the Hong Kong Ministerial Conference will be sufficient.  The alterna tive is that we would 
allow the drafting work to continue into the next year – something which, of course, we all would 
prefer to avoid, if we can.  In this context, it is  for the Committee to decide how it wishes to proceed 
from here.  In any case, as I have mentioned, furt her progress will depend on Parties' own efforts to 
identify new areas of flexibility and bri dges between their respective positions. 
  As to the bilateral coverage negotiations, I would like to take this opportunity to remind 
delegations of the revised deadline for submission of offers that was agreed to at our formal meeting 
in July, namely prior to the October meeting of th e Committee (i.e. this week) but in any case not later 
than the Hong Kong Ministerial Conference (13-18 December 2005).  To date, no offers have been 
received.  Parties will, therefore, need to give a ttention to this critical aspect of the Article XXIV:7  
negotiations in addition to their positions on the out standing non-market access related provisions of 
the Agreement in the coming weeks. 
  As to the "horizontal" cove rage negotiations, it will be important to build on the progress 
made so far in terms of both the market-access-re lated provisions in the text and other horizontal 
coverage matters listed in the Decision on Modalities.   Delegations are encour aged to come forward 
with additional new submissions on these matters. 
 
_______________ 
 
  Note :  In the subsequent discussion, the European  Communities stated its preference that a 
further meeting be held before the end of 2005, to  carry forward the renegotiation of the non-market 
access related provisions of the Agreement.  The Chairman indicated that he would consult with interested delegations regarding this possibility in  two to three weeks' time, taking account of progress 
made by delegations in capitals on identifying pote ntial areas of flexibility and ways of bridging 
remaining differences in pos itions regarding the text. 
 
__________