RESTRICTED  WORLD TRADE  
ORGANIZATION  GPA/M/24 
8 December 2004 
 (04-5401) 
Committee on Government Procurement  
 
   
MINUTES OF THE MEETING HELD ON 17 NOVEMBER 2004 
 
Chairman:  Mr. Niklas Bergström (Sweden)
 
  
1. The Committee adopted
 the following agenda, as outlined in Airgram 
WTO/AIR/2427/Rev.1 of 5 November 2004: 
A. Negotiations under Article XXIV:7 
 
B. Modifications to the Appendices to the Agreement 
 
C. Accessions 
 
D. Review of National Implementing Legislation 
 
E. Israel's Commitment in Relation to Offsets 
 
F. Adoption of the Annual Report 
 
G. Other Business 
 A. N
EGOTIATIONS UNDER ARTICLE  XXIV:7 
2. Summarizing work undertaken since the formal meeting of the Committee on 
23 April 2004, the Chairman  reported that the Committee had held two informal meetings, in 
June and October 2004, addressing non-market-access-related provisions in the text of the 
Agreement.  The results of drafting work at the latter meeting were reproduced in the updated 'clean' version (Job No. 7315 of 28 October 2004) and 'side-by-side' version (Job No. 7317 of 28 October 2004) of the revised text of the Agreement.  His summary of negotiations during that 
meeting had been circulated electronically on 8 October 2004. 
3. As to elements 2 and 3 of the work programme, on 8 October 2004 the Committee had 
held a first session of negotiations on the extension of coverage and the elimination of discriminatory measures and practices.  In accordance with the Decision on the Modalities for the Negotiations on Extension of Coverage and Elimination of Discriminatory Measures and 
Practices (GPA/79 of 19 July 2004), that session had taken up matters that were to be addressed 
in the Committee as a whole.  In particular, the session had provided an opportunity to hold a 
preliminary discussion on a submission by Japan (Job No. 5582 of 26 August 2004).  Delegates 
had also had before them a List of Papers Relating to the Elimination of Discriminatory 
Measures and Expansion of Coverage, which the Secretariat had been requested to prepare 
(Job No. 6685 of 7 October 2004), and which had been subsequently updated 
(Job No. 6685/Rev.1 (7734) of 11 November 2004).  Upon the request of Parties, the Secretariat 
had prepared a summary of that first session (Job No. 6910/Rev.1 (7076) of 20 October 2004). GPA/M/24 
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  4. As indicated in the Airgram and the Chairman's communication sent to delegates by fax 
on 19 October 2004, the formal meeting had been preceded by a second informal session on 
matters that, pursuant to the Decision on Modalities, were to be addressed in the Committee as 
a whole.  Further to the request made at the informal session, a summary of the discussions 
would be prepared by the Secretariat in due course.  These matters would be next taken up at 
the first Committee meeting in 2005.  The Chairman proposed that the Committee reserve 
sufficient time during that meeting for an in-depth discussion of those horizontal matters. 
5. The representative of Japan
 believed that the Committee had had a good discussion on 
that item at the informal session earlier that day.  Although there had been divergent views on 
some points, his delegation believed that all Parties shared the importance of the horizontal issues to be negotiated in the Committee as a whole.  Those issues were essential to facilitate the 
upcoming bilateral negotiation process.  His delegation thanked the Chairman for holding the 
morning informal session and the Secretariat for preparing a summary of that informal 
meeting, which would be helpful in sharing the discussions with capital-based experts.  He 
hoped that after reflection on the meeting, the Committee would be able to make progress in market access negotiations as a whole. 
6. He went on to emphasize three points.  First, his delegation would make every effort and 
continue to actively participate in ongoing negotiations.  Second, he reiterated that Parties 
concerned would need to make every effort to resolve pending notifications pursuant to 
Article XXIV:6, as set out in the Decision on Modalities.  His delegation continued to make its 
best effort and urged all Parties concerned to co-operate in solving the long-pending issues as soon as possible.  The matter was not merely a case of individual notification but the Committee 
as a whole was facing a systemic issue.  Third, his delegation was looking forward to having 
some model format for requests and offers and appreciated that the Chairman was willing to 
provide an informal paper regarding possible headings of requests. 
7. The representative of the United States
 agreed with Japan that the horizontal issues 
were important and he was looking forward to a discussion on them and to them being addressed by some, if not all, of the Parties in their initial requests.  His delegation felt that after 
seeing those requests, the Committee would be in a better position to determine, not on an 
abstract or educational, but on a practical basis, the most effective way of addressing concerns 
as they arose.  To reiterate a few points that he had made at the informal session, he said that, 
while uniform coverage would be an objective, it should not be an obligation.  With respect to the structure of Annexes, he supported the notion of a common approach, but the lack of such an agreement or any guidelines at that point should not deter progress in the negotiations.  He 
suggested that each Party use the format that would work best for it at that time, thus making it easier for Parties to submit their requests and offers on time. 
8. The representative of Canada
 said that his delegation shared Japan's interest in the 
Committee addressing horizontal issues as that was going to be an important part of market access negotiations.  As to the interest of Japan in getting some ideas on what other Members 
were doing in terms of format for their requests and offers, he noted that the Committee would 
have an opportunity to talk about the format of offers at future meetings.  Nevertheless, it 
would not have that opportunity as regards requests before the deadline for submitting initial 
requests at the end of the month.  If Japan could benefit from any assistance that the Chairman could provide them, it would certainly be welcome for Japan.  His delegation's process for preparing its requests was well under way.  Thus, his delegation would not be able to benefit 
from any proposed models or formats, which might come from the Chairman or the Secretariat, 
as timing would simply not allow that.  That said, his delegation would be willing at any time to 
consult informally with Japan or any other delegation if they were seeking advice on questions 
as to how his delegation intended to formulate its requests.  His delegation expected to submit its  GPA/M/24 
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  request by 30 November, and hoped that other Members would also;  in the meantime, his 
delegation was more than willing to speak to any Party if they had specific questions. 
9. The representative of Korea  appreciated the Chairman's initiative to suggest a short 
informal list to be taken into account in the preparation of requests.  His delegation wished to 
participate in the market access negotiations.  Raising a few specific points to be taken into 
account in future negotiations, he said that, although there was no consensus on the idea of 
guidelines, Parties had to bear in mind that a common understanding of some points, such as a 
uniform level of coverage or at least some direct criteria for including local government in 
Annexes, was an important factor to be taken into account in negotiations.  Further, to enhance 
transparency and to strike a balance of rights and obligations, there was a need to address the presentation of each Annex, and to have some common understanding on using a positive list 
approach at least in Annexes 1-3. 
10. The representative of the European Communities
 emphasised the importance of all the 
horizontal issues listed in the Decision on Modalities.  Her delegation was looking forward to 
discussing them at forthcoming Committee meetings.  She stressed the need to be ambitious in the forthcoming coverage negotiations because ample room for improvement remained under the existing Agreement.  Her delegation had taken this ambitious position since it had started to 
discuss the forthcoming coverage negotiations. 
11. In conclusion, the Chairman
 suggested that, as the representative of Canada had 
pointed out, it might be perhaps too late to try to agree on some kind of a model format for 
requests because the deadline was coming up soon.  Nevertheless, he was available as a 
facilitator if any delegation felt he could help.  He reiterated that, if delegations had written 
comments on horizontal matters, those would be most welcome, so that more papers would be 
available for future discussions, which could take place in parallel with market access 
negotiations. 
12. The Committee took note  of the Chairman's report and of the statements made. 
B. MODIFICATIONS TO THE APPENDICES TO THE AGREEMENT  
(i) Modifications certified since the meeting in April 
13. The Chairman  noted that since the last meeting of the Committee discussing 
modifications to the Appendices to the Agreement on 23 April 2004, various modifications had 
become effective.  Detailed information on these modifications was available in 
paragraphs 5 and 6 of the annotated agenda for the meeting (Job No. 7843 of 2 November 2004). 
(ii) Outstanding modifications 
14. The Chairman noted that proposed modifications by Japan remained outstanding with 
respect to the following entities: 
(a) NTT; 
(b) East Japan Railway Company, Central Japan Railway Company and West 
Japan Railway Company; 
(c) Railway Construction Public Corporation and Corporation for Advanced 
Transport and Technology; GPA/M/24 
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  (d) Japan Consumer Information Center, Water Resources Development Public 
Corporation, Japan Green Resources Corporation, the Japan Science and 
Technology Corporation, RIKEN (The Institute of Physical and Chemical 
Research), National Stadium and School Health Center of Japan, the 
Association for Welfare of the Mentally and Physically Handicapped, and 
National Agriculture Research Organization; 
(e) National Aerospace Laboratory; 
(f) Social Welfare and Medical Service Corporation and Japan Institute of Labour;  
and 
(g) proposed modification to Annex 3 of Japan's Appendix I. 
15. The Chairman
 pointed out that the details of notifications with regard to such 
outstanding modifications, as well as the developments, if any, since the meeting of the 
Committee in April 2004, were contained in the annotated agenda.  He also mentioned that since 
the annotated agenda had been circulated, Japan had notified a further proposed modification, 
namely concerning the National Center for Industrial Property Information and Training 
(GPA/MOD/JPN/16 of 9 November 2004).  He noted that Japan had submitted a paper relating 
to the first two of the above proposed modifications (GPA/MOD/JPN/17 of 15 November 2004). 
16. Upon the request of the representative of Japan , the Committee discussed these 
outstanding proposed modifications by Japan item-by-item. 
 NTT-Communications 
17. As to the proposed modification concerning NTT-Communications, the representative 
of Japan  pointed out that his delegation had submitted the proposed modification in 1999.  It 
was unusual that such a long-pending issue had not been resolved, and there had not been any 
progress since February 2003.  His delegation strongly requested that the objecting Party 
provide updated information and withdraw its objection immediately. 
18. The representative of the European Communities , in response to the request by Japan, 
said that the NTT-Communications file was still under consideration.  She expected to have a more positive view on this file in the light of new developments in the sector but such a decision 
would need to be based on mutual agreement with Japan. 
19. The representative of Japan
 thanked the European Communities for the explanation.  
His delegation had carefully taken note of the comments made by the European Communities, and wished to continue conducting bilateral talks with the European Communities.  He noted that he would convey the points made by the European Communities to his capital-based 
experts and come back to this issue in the future. 
 East Japan Railway Company, Central Japan Railway Company and West Japan Railway Company 
20. As to Japan's proposed modification concerning the three railway companies, another 
representative of Japan
 introduced his delegation's recent submission on pending modifications 
(GPA/MOD/JPN/17).  The Decision on Modalities adopted on 16 July 2004 stated that "Parties 
concerned will make every effort to resolve pending notifications."  He stressed that there were 
long-pending notifications despite the provision of ample information to Parties concerned 
through the numerous questions & answers sessions and a series of oral explanations.  These 
issues should not be carried over to the revised Agreement.  GPA/M/24 
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  21. He noted that the proposed modifications concerning the three Japanese railways 
companies and NTT-Communications were typical examples in this context.  He stressed that 
the influence of the Government of Japan on the three railway companies and NTT-
Communications had already been effectively eliminated, and was considered as being at the 
same level as that of other private companies.  Even if it was necessary to examine the 
notifications carefully, too much time and effort had been spent in order to respond to endless 
questions and it was too much of a burden for the notifying Party. 
22. His delegation believed that one reason for having such long-pending notifications was 
the way those were addressed in the current Agreement.  Therefore, his delegation sought to 
establish new, speedy and effective procedures, such as arbitration procedures, in order to prevent these pending issues from arising under the revised Agreement. 
23. Carrying over these pending issues to the revised Agreement was not appropriate.  He 
stressed that his delegation had been and would be making every effort to solve these issues.  
Should these four long-standing notifications unfortunately not be effected by the time the 
revised Agreement came into force, his delegation would be obliged to understand that it would be most appropriate to consider these four pending cases as cases that had been withdrawn from the relevant Annex. 
24. He reiterated the firm determination of his delegation to make its best effort to solve this 
issue and wished to ask other Parties to make the same effort and sought their co-operation in 
solving these long-pending issues. 
25. As an additional specific comment on the Japanese railway companies, he mentioned 
that the position of his delegation was clearly stated in the paper that he had just introduced.  
His delegation was convinced that it had provided sufficient information in good faith to settle 
this matter.  His delegation requested the United States and the European Communities to seek 
a speedy solution to this extremely long-standing issue.  His delegation believed that it had been 
most sincere and forthcoming in answering all questions to the full – repeatedly over three years.  Nevertheless, his delegation had been placed under extreme duress by not receiving appropriate responses over these three years.  Especially, as regards the European 
Communities, although his delegation had requested it to specify the reasons for its objection, the European Communities had only reiterated questions, including ones that were not 
necessarily relevant to government control and influence.  He noted that last June his delegation 
had submitted written answers to the fourth set of questions from the European Communities.  
Moreover, a responsible official from the relevant Ministry had visited Brussels in person to 
provide the European Communities with all the necessary information.  Four months had 
passed since then, and his delegation considered that there had been already enough time for 
the European Communities to assess the responses and clarifications provided by Japan.  His 
delegation expected no more questions from the European Communities and requested the European Communities to let it know the exact situation as regards its consideration of this critical matter.  In order not to carry over this issue to the revised Agreement, his delegation 
strongly requested the European Communities and the United States to withdraw their 
objections expeditiously. 
26. The representative of the European Communities
 thanked Japan for its recent 
submission.  Her delegation shared the position expressed by Japan about the need to work as 
expeditiously as possible on Article XVI in the draft revised text of the Agreement and to come 
up with an improved Article as regards both substance and procedural guarantees.  She 
emphasized that as long as an objection on a specific notification had not been lifted, her 
delegation understood that the entity in question was still included in the relevant Annex of the 
Party concerned. GPA/M/24 
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  27. Commenting on the specific case of the Japanese railway companies, she noted that her 
delegation had exchanged views, questions and answers with Japan on this.  The European 
Communities had also conducted an extensive round of internal consultations.  Her delegation 
still believed that the conditions under Article XXIV:6 of the Agreement for the withdrawal of 
the Japanese railway companies from the relevant Annex were not met, but it was willing to co-
operate and further discuss this matter with Japan. 
28. The representative of the United States
 also thanked Japan for its recent paper and said 
that his delegation was still reviewing it. 
29. The representative of Japan  thanked interested Parties for their explanations and 
clarifications.  He requested the European Communities to provide concrete reasons for not 
withdrawing its objection to this issue.  He noted that his delegation was willing to engage in 
further discussions or negotiations with interested Parties. 
 Other outstanding modifications proposed by Japan 
30. As regards the other outstanding notifications, the representative of Japan  mentioned 
that his delegation had submitted responses to the questions in September and hoped that the 
Parties concerned would finalize their examinations expeditiously.  He was looking forward to 
receiving positive responses from objecting Parties, and urged Parties concerned to focus on the 
essential questions, should they seek further clarifications. 
31. As regards other Japanese entities that had yet to submit answers to objecting Parties, 
his delegation was preparing responses and hoped to submit responses as soon as those were 
finished. 
32. In any event, his delegation wished to sound the alarm that any pending notifications 
would be a serious problem.  Therefore, his delegation urged all relevant Parties, including 
Japan itself, to make further efforts and co-operate towards the resolution of these pending 
issues.  His delegation hoped that all Parties as well as the relevant experts in capitals shared 
this important message. 
33. The representative of the European Communities  thanked Japan for its answers to the 
questions posed by her delegation.  Her delegation was examining the answers, and would come back to Japan as soon as possible.  Her delegation wished to show its willingness to come up 
with a satisfactory solution on the overall set of notifications from Japan. 
34. The representative of the United States
 thanked Japan for its most recent answers and 
said that his delegation was in the process of examining those answers. 
 Outstanding modifications pr oposed by other Parties 
35. Turning to outstanding modifications proposed by other Parties, the Chairman  noted 
that there was a proposed modification by Korea concerning Korea Telecom as well as a 
notification by the United States concerning proposed modifications to reflect changes in the 
administrative structure of the Federal Government as regards the Uranium Enrichment Corporation.  The details of notifications concerning such outstanding modifications, as well as the developments, if any, since the meeting of the Committee in April 2004, were contained in 
the annotated agenda. 
36. The representative of Japan
 said that the previous month his delegation had withdrawn 
its objections with regard to the notification by the United States concerning proposed  GPA/M/24 
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  modifications to reflect changes in the administrative structure of the Federal Government, 
except for the Uranium Enrichment Corporation.  His capital-based experts were carefully 
examining the notification as regards this latter, remaining entity.  As stated earlier, his 
delegation would try to make its best effort to conclude this matter as soon as possible. 
37. The representative of the United States  said, following up on Japan's comments, that his 
delegation was looking forward to Japan's favourable decision on this matter.  Should Japan 
need additional information, his delegation would be happy to respond.  The same applied to 
the European Communities, which was the other Party that was still objecting to the 
withdrawal of the Uranium Enrichment Corporation.  If the European Communities had 
additional questions, his delegation would be happy to answer those. 
38. The representative of Korea , concerning the proposed modification relating to Korea 
Telecom, noted that since his delegation had circulated its notification in September 2002, it had 
conducted constructive bilateral negotiations with interested Parties, especially with the United 
States, the European Communities and Canada.  As a result, almost all concerns had been 
resolved, and the United States and the European Communities had withdrawn their objections concerning Korea Telecom, which his delegation appreciated.  There was still one remaining objection from Canada, which his delegation had tried to resolve on many occasions.  While not 
wishing to reiterate the details of the process, he said that his delegation had submitted the 
proposed withdrawal of Korea Telecom from Appendix I on the grounds that government 
control and influence had been effectively eliminated.  His delegation was urging Canada's early 
responses to that.  He also noted that the General Notes to Appendix I of Korea stated that "for goods and services (including construction services) of Canada and suppliers of such goods and 
services, this Agreement does not apply to procurement by the entities listed in Annexes 2 and 3."  
For this reason, his delegation believed that Canada did not have a substantial interest in the 
withdrawal of Korea Telecom from Annex 3 and that it was inappropriate for Canada to 
maintain its objection given the absence of its substantive interest in this entity.  His delegation was ready to discuss this matter on every possible occasion and was looking forward to an early conclusion. 
39. The representative of Canada
, in response to the intervention by Korea, noted, as a 
point of principle, that his delegation did believe that its objection was based both on interest 
and on principle.  This was an important issue for the Government of Canada.  His delegation 
had received information from Korea in mid-October, and had had regular and frequent contacts with the Korean Government, as recently as the previous day, when in Ottawa a member of the Korean Embassy had come to speak to Canadian technical experts.  A further 
meeting was scheduled for 7 December.  His delegation was actively engaged with Korea on this issue and was proceeding expeditiously with the information received from Korea.  The 
frequency of meetings was evidence of his delegation's commitment to engage with Korea to try to find a mutually satisfying resolution to this issue. 
40. The representative of Korea
 thanked Canada for its response.  He was concerned that 
Canada might be linking the withdrawal of Korea Telecom to the bilateral Telecommunications 
Equipment Procurement Agreement.  His delegation appreciated Canada's constructive 
approach to resolving this bilateral agreement, but believed that the matter of Korea Telecom 
could be tackled on the grounds of the relevant provisions of Article XXIV:6(b) of the Agreement, notably whether government control and influence had been effectively eliminated.  Accordingly, his delegation could not accept any kind of linkage between other bilateral 
agreements and this issue. 
41. In response, the representative of Canada
 said that he did not consider it appropriate 
for Korea and Canada to engage in bilateral negotiations during a plurilateral meeting. GPA/M/24 
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  42. The Committee took note
 of the statements made. 
C. ACCESSIONS  
 Georgia 
43. The Chairman  noted that Georgia had sought accession in October 2002 (GPA/71), had 
replied to the GPA/35 checklist in April 2002 (GPA/W/187), and had submitted its entity offer in December 2003 (GPA/SPEC/34).  The Parties and Georgia had exchanged a number of questions and answers, the most recent of which were listed in paragraph 9 of the annotated 
agenda.  Since the circulation of the annotated agenda, Japan had submitted responses 
(GPA/ACC/GEO/6) to Georgia's replies in document GPA/ACC/GEO/3. 
44. The Chairman invited comments on the accession process of Georgia and on the idea, 
raised at the last informal meeting of the Committee in October, of holding plurilateral consultations on Georgia's accession process at the first meeting of the Committee in 2005.  He 
proposed that he would contact the delegation of Georgia if Parties wished to organize such 
plurilateral consultations. 
45. In response to the Chairman's question and proposal, the representative of the United 
States  noted that in September his delegation had submitted questions to Georgia relating to 
Georgia's market access offer.  As far as the process was concerned, his delegation was looking 
forward to Georgia's response to those questions and to working with Georgia towards 
accession. 
46. The representative of Korea  noted that his delegation did not have any strong view on 
the process of Georgia's accession and would follow the Chairman's initiative and any consensus that might emerge among Parties on this issue.  As to the process, he recalled that his delegation had submitted a special questionnaire to Georgia in April 2004 but had not yet 
received an answer.  He was expecting Georgia to respond quickly to those questions, especially 
to the ones relating to General Notes 8 and 9 of Georgia's draft initial offer. 
47. The representative of Japan
 noted that, although the delegation of Georgia was not 
present at the meeting, his delegation wished to express its appreciation for Georgia's prompt 
response to Japan's questions.  Having carefully examined Georgia's reply, his delegation had just submitted new comments, hoping that Georgia would consider those positively as soon as 
possible.  As regards the Chairman's proposal, his delegation was open to meet with the 
delegation of Georgia at a plurilateral session. 
48. The representative of the European Communities
 stressed that her delegation was still 
waiting for Georgia's replies to some further questions posed by her delegation.  As to the Chairman's suggestion, her delegation was open to meeting with Georgia on a plurilateral basis 
in early 2005. 
49. In conclusion, the Chairman
 suggested that he would contact the delegation of Georgia 
to see when it might be able to respond to the questions received, and on that basis he would further consult with Parties as to whether the first meeting of the Committee in 2005 would be a good opportunity to hold plurilateral consultations with Georgia. 
50. The Committee so agreed
. 
 Jordan  GPA/M/24 
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  51. With regard to Jordan, the Chairman  noted that two rounds of informal plurilateral 
consultations between Parties and Jordan had taken place on 23 April and 7 October 2004.  The 
consultations in October 2004 had addressed Jordan's revised market access offer 
(GPA/ACC/JOR/4 of 30 September 2004).  Jordan had informed Parties that its new 
comprehensive legislation was expected to be finalized by the end of 2004 and would hopefully 
pass the legislative process by summer 2005.  It had been agreed that Parties should submit 
their comments on Jordan's revised offer by 15 December 2004 through the Secretariat.  In 
turn, Jordan had agreed to prepare a further revised offer by 15 February 2005.  This would 
allow holding another round of plurilateral consultations at the first Committee meeting in 
2005. 
52. The representative of the European Communities  welcomed the revised offer submitted 
by Jordan during the last round of negotiations in October as a significant improvement.  Her 
delegation would submit its questions and remarks on that revised offer, and was looking 
forward to meeting with Jordan in early 2005. 
53. The representative of the United States  expressed appreciation for Jordan's revised 
offer, and was looking forward to working with Jordan towards accession. 
54. The representative of Japan  noted that, although his delegation had not had bilateral 
consultations with Jordan, it was interested in Jordan's accession process;  it was watching the 
process as a whole positively and was looking forward to hearing good news in due course. 
55. The representative of Israel  thanked Jordan for its revised offer and regretted that his 
delegation was not available during the last plurilateral consultations.  His delegation welcomed 
the opportunity next year to discuss it with Jordan.  He also reiterated his delegation's support 
for the offer and the quick accession of Jordan. 
56. In conclusion, the Chairman  said that before taking a decision on holding another round 
of plurilateral consultations at the first occasion in 2005, Parties may wish to see the 
developments first and then take a decision on holding another plurilateral round on Jordan's 
accession.  He suggested that he would consult with Parties, possibly through the Secretariat, on 
the relevant arrangements. 
57. The observer of Jordan  noted that her delegation was making all efforts to meet the 
agreed deadline of 15 February 2005 for preparing the newly revised offer.  She welcomed the 
plan to hold another round of consultations. 
 Chinese Taipei 
58. With respect to the accession of Chinese Taipei, the Chairman  noted that all bilateral 
consultations had been successfully concluded with interested delegations on the substantive 
issues.  However, the issue of nomenclatures remained outstanding.  He believed that there was 
a continued interest in resolving the last outstanding issue, and said that he remained fully 
committed to assisting this process as much as possible in his capacity as Chairman, and took it 
that his successor would do the same. 
59. The representative of Japan  noted that nearly two years had passed since all Parties had 
completed the bulk of the substantive issues.  His delegation was looking forward to the day 
when Chinese Taipei would become Party to the Agreement.  He encouraged the Chairman to 
contribute to the resolution of this long-pending issue. 
60. The Committee took note  of the statements made. GPA/M/24 
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   Other accession processes 
61. The Chairman
 noted that, in addition to the above three WTO Members, accession 
negotiations were under way with Albania, Bulgaria, the Kyrgyz Republic, Moldova, Oman and 
Panama.  However, in the case of these WTO Members, no new developments had taken place 
since the meeting of April 2004.  Basic information on earlier developments on their accession 
processes was included in Annex 1 of the annotated agenda.  Further, the following additional 
WTO Members had provisions in their respective Protocols of Accession to the WTO regarding 
accession to the GPA:  Armenia, China, Croatia, the Former Yugoslav Republic of Macedonia, 
and Mongolia.  Information concerning the commitments of those WTO Members was 
contained in Annex 2 of the annotated agenda. 
D. REVIEW OF NATIONAL IMPLEMENTING LEGISLATION  
62. The Chairman  noted that at the meeting of 23 April 2004, the Kingdom of the 
Netherlands with respect to Aruba said that the Government of Aruba had informed it that it 
had originally intended to introduce new implementing legislation and to subsequently answer 
the questions in GPA/1/Add.1 on the basis of such newly introduced legislation.  Since that would be a lengthy process, the Government of Aruba had now decided to answer the 
questionnaire on the basis of the current legislation.  The responses had been finalized but were 
awaiting the final signature of the Minister of Economic Affairs of Aruba. 
63. The representative of the Netherlands with respect to Aruba
 said that his delegation had 
recently received the answers to the questionnaire from Aruba and would be transmitting them 
to the Secretariat.  These answers were based on the present legislation, which was being 
amended. 
E. ISRAEL 'S COMMITMENT IN RELATION TO OFFSETS  
64. The Chairman  said that on 4 November 2004 Israel had submitted a formal request to 
include on the agenda of the meeting an item entitled 'Israel's commitment in relation to 
offsets'.  Accordingly, a revised Airgram had been circulated adding an agenda item on this 
issue.  Subsequently, Israel had informed him that it had had consultations with Parties. 
65. The representative of Israel  thanked Parties for their attention to a matter that was of 
great importance to his delegation.  He also thanked the Secretariat for its assistance, and 
expressed appreciation to all Parties for the constructive approach that had prevailed in the 
bilateral consultations held thus far. 
66. According to his delegation's Note to its Appendix I to the Agreement, the level of offsets 
invoked by Israeli procuring entities should be set at 20% of the value of the contract, beginning on 1 January 2005. 
67. His delegation intended to submit shortly a notification in accordance with 
Article XXIV:6(a) of the Agreement requesting the modification of its Note to Appendix I 
concerning the level of offsets, in order to maintain its current level of offsets at 30% for a defined period of time and to incorporate a gradual process to reduce the level to 20%. 
68. He mentioned the following reasons behind Israel’s request. 
69. As an economy, highly reliant on international trade, Israel attached great importance 
to its integration into the global market and the multilateral trading system.  In addition to the 
mandatory multilateral trade agreements embodied in the WTO, Israel had been participating  GPA/M/24 
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  in other plurilateral initiatives under the auspices of the WTO in recent years, such as the 
Information Technology Agreement and the Agreement on Government Procurement.  By 
doing so, while ensuring its economic and industrial development needs, Israel had 
demonstrated its commitment to the multilateral trading system as well as to progressively 
liberalizing its economy. 
70. Israel had been a Member of the Government Procurement Code since 1985 and had 
been a Party to the Agreement on Government Procurement since its entry into force on 
1 January 1996. 
71. In recent years, the Government of Israel had been facing severe criticism by the 
domestic industry concerning Israel’s membership in the GPA.  The domestic industry held that 
the GPA had failed to meet expectations in terms of its contribution to the Israeli economy.  The 
industry claimed that, on the one hand, the GPA had not led to the expected results of increased 
gains for Israeli companies in foreign public tenders, and, on the other hand, the domestic 
industry had lost its advantages and share of the local government procurement market. 
72. He stressed that the Israeli procurement market was open and competitive.  The offset 
provision had not at all hindered foreign enterprises from bidding and winning tenders in 
Israel.  For instance, the two major public procuring entities in Israel, the Israel Electric 
Company and the Israel Railway Company, purchased an estimated 80% of their annual 
procurements from foreign suppliers. The procurement of the above mentioned entities was 
estimated to constitute more than 50% of the total procurement of Israeli public entities that 
were subject to the GPA. 
73. At the same time, the offset provisions to which Israel was entitled under the GPA had 
played a major role in developing the Israeli industry in recent years.  Furthermore, the offset 
provisions still stood to serve as a vital instrument in promoting industrial co-operation between 
foreign companies and Israeli small and medium-sized enterprises, which constituted a major 
component of the Israeli economy, in terms of contribution to both GDP and employment.  Small and medium-sized enterprises (employing 1-100 workers) comprised 96% of the total number of industrial plants in Israel, employed 47% of the industrial labour force and 
contributed 30% to total annual industrial revenue. 
74. In light of the above-mentioned structure of the Israeli industry, in which SMEs played 
such a major role, the vast majority of Israeli enterprises, due to their size, were incapable of 
bidding as prime contractors in most of the public tenders issued in Israel and in other GPA 
Parties. 
75. At the same time, Israeli companies had proved to be successful in acting as sub-
contractors in such tenders.  Hence, a development-oriented instrument, such as offsets, was 
essential in creating the opportunities for industrial co-operation between foreign prime contractors and Israeli SMEs.  Experience had shown that industrial cooperation between 
foreign and Israeli enterprises had led in many cases to long term business relationships for the 
benefit of both sides involved. 
76. Israeli industry was exposed to the practices, standards and methods of leading global 
companies.  Foreign enterprises, which were awarded government contracts in Israel, had been 
introduced to the capabilities and innovative technologies of Israeli industry.  Several foreign 
enterprises that had been awarded public contracts in Israel had recognized the importance of 
maintaining offsets at the current level as a means to develop industrial co-operation. GPA/M/24 
Page 12  
 
  77. A further important factor was that during the last couple of years the Israeli economy 
had been undergoing a recession and had being facing economic difficulties.  This was reflected 
inter alia in an unemployment rate of almost 11%, in a decrease in the level of GDP per capita 
and, last but not least, in the closing down of companies.  Israeli small and medium-sized 
companies were particularly vulnerable and they were the first to suffer in this situation, since 
they were often the beneficiaries of the offsets mechanism. 
78. In conclusion, he pointed out that, in light of the above circumstances and at that point 
in time, it was of utmost importance for his delegation to maintain its level of offsets at 30% for 
an additional well-defined period of time, after which his delegation would be ready to 
incorporate a gradual process of reducing the level of offsets to 20%, as appeared in Israel's Note. 
79. In order to move forward with this process, he proposed that a tentative date for a 
meeting be set before the end of 2004 in order to allow Parties to follow up on the process 
prescribed in Article XXIV:6(a) of the Agreement and to arrive at a positive conclusion. 
80. His delegation stood willing to consult with interested Parties on matters concerning this 
issue.  He thanked the Parties for having worked with his delegation in this short time and for 
their willingness to continue working together with his delegation in the coming weeks. 
81. The representative of the United States
 thanked Israel for its presentation as well as for 
Israel agreeing with his delegation that it was premature for the Committee to make a decision 
in such a short time, i.e. in the two weeks since Israel had first proposed this concept for 
consideration.  His delegation, as a Party to the Agreement, would need more time to examine 
Israel's request and its economic effects and other implications.  His delegation appreciated 
Israel providing better explanation of the legal context in which Parties would be moving 
forward with this request, namely Article XXIV:6(a).  His delegation was looking forward to 
receiving Israel's formal request as soon as possible and it was prepared to work with Israel and 
any other Party between now and the end of 2004 to address Israel's request. 
82. The delegation of Korea  thanked Israel for its introductory remarks.  His delegation 
believed that the formal process of notification pursuant to Article XXIV:6(a) was an 
appropriate one.  His delegation expected more detailed information and data for the 
maintenance of the present level of offsets and was closely examining this notification.  His 
delegation was looking forward to constructive consultations and dialogue with Israel, and thus 
to an early conclusion of this matter.  Further, while his delegation took note of all the 
difficulties faced by Israel, this matter concerned the exceptions to the implementation of its 
commitments;  so his delegation preferred that a more detailed proposal be submitted, 
specifying a certain period of time for maintaining the 30% offset ratio and what would happen 
after that specific period, which would allow his delegation to consider the request in a 
favourable manner. 
83. The representative of the European Communities  thanked Israel for its presentation.  
She noted that her delegation had taken note of Israel's request, was reflecting on it, and 
understood the importance of the issue for Israel. 
84. The representative of Canada  said that his delegation believed that the process put 
forward by Israel was the right one as it allowed his delegation to consider Israel's proposal in 
detail.  He thanked Israel for putting that idea forward.  He was certain that his delegation 
would be in touch with the delegation of Israel over the coming weeks to discuss questions and 
comments once the notification was received.  GPA/M/24 
 Page 13 
 
 
  85. The representative of Japan  expressed his delegation's appreciation for the presentation 
made by a capital-based Israeli expert.  Japan had experienced economic crisis in the 1990's and 
had faced a long recession.  His delegation felt sympathy with the economic situation that Israel 
was facing. 
86. As a general remark, he considered it reasonable to ask the Party in question for a 
clarification on the necessity to provide S&D measures because developing country Parties 
differed from economy to economy.  Since the one-size-fits-all approach did not apply to Parties 
that needed an offset, a transitional period of offsets should be decided on a case-by-case basis, 
depending on the situation. 
87. With specific regard to Israel's case, his delegation had appreciated clarifications from 
the delegation of Israel at bilateral meetings.  His delegation needed more information in 
writing, which should be legitimate enough to convince his capital of the proposal.  Further, his 
authorities needed more time to carefully examine the proposal because this was a matter of 
legal obligations.  If Israel could provide his delegation with reasonable and convincing 
explanations, including some data concerning the government procurement market and the relevant economic situation, his delegation would be able to examine the paper expeditiously.  His delegation urged Israel to provide justifiable reasons for its proposal. 
88. The representative of Switzerland
 thanked Israel for its presentation and for its 
willingness to meet his delegation informally and to explain the situation that Israel was facing.  
His delegation found it premature to have a decision on such short notice and it needed more 
time for his capital-based experts to make a precise assessment of Israel's request.  His 
delegation was looking forward to receiving Israel's request through the Article XXIV:6 process 
as soon possible and it would keep in close touch with the delegation of Israel to obtain the 
additional information his delegation needed to make its assessment.  His delegation was ready 
to work constructively towards finding a mutually satisfactory solution by the end of 2004. 
89. The representative of Israel , in response to the above comments, thanked Parties for 
their constructive approach to this important issue for Israel.  He reiterated that his delegation was expecting to submit a notification the following morning.  His delegation stood ready to 
continue its consultations with all interested Parties and hoped to successfully conclude such consultations before the end of 2004. 
90. In conclusion, the Chairman
 noted that a notification on a proposed modification 
pursuant to Article XIIV:6(a) could be expected from Israel shortly.  Article XXIV:6(a) called 
for the Committee to be convened promptly in such cases to try to resolve the matter.  He 
suggested that a Committee meeting be held in the morning of Thursday, 16 December 2004. 
91. The Committee so agreed . 
F. ADOPTION OF THE ANNUAL REPORT  
92. The Chairman  noted that Article XXIV:7(a) of the Agreement required the Committee 
to review annually the implementation and operation of the Agreement and to inform the 
General Council of developments during the periods covered by such reviews.  A draft of the 
Committee's Annual Report to the General Council for the period since the Committee last 
reported to the General Council in July 2003 (GPA/75 of 15 July 2003) had been circulated by 
the Secretariat on 5 November (Job No. 7563). 
93. The Chairman proposed that the necessary modifications be made to the draft Annual 
Report.  He suggested that the Secretariat make the necessary changes in the light of the present GPA/M/24 
Page 14  
 
  meeting of the Committee and circulate the updated draft Annual Report by the end of the 
week.  Subsequently, Parties would have until Wednesday, 24 November to provide comments 
and to suggest any further changes. 
94. The Committee so agreed
. 
G. OTHER BUSINESS  
 Statistics 
95. The Chairman  noted that, in line with the requirements of Article XIX:5 of the 
Agreement, statistics for 2003 had been submitted by Hong Kong, China (GPA/80, dated 
29 September 2004). 
96. The representative of Hong Kong, China said that her delegation's submission on 
statistics was available both in hard copy and electronically, and Parties were welcome to consult it. 
 Thresholds 97. The Chairman
 noted that, in accordance with the Decision on Modalities for Notifying 
Threshold Figures in National Currencies (GPA/1, Annex 3), Korea had notified its threshold figures expressed in national currencies for 2003-2004 (GPA/W/251), and Switzerland had notified its threshold figures expressed in national currencies for 2004 (GPA/W/285/Add.7).  
Further, the following Parties had notified their threshold figures expressed in national 
currencies for 2004-2005:  Canada;  the European Communities;  Hong Kong, China;  Israel;  
Japan;  Korea;  the Kingdom of the Netherlands with respect to Aruba;  Norway;  Singapore;  
Switzerland;  and the United States (GPA/W/285, GPA/W/285/Add.1-6 and GPA/W/285/Add.8-9). 
 Date of the meetings in 2005 
98. The Chairman
 said that, as to the first Committee meeting in 2005, at the end of the 
informal meeting in October 2004 delegates had discussed the week of 14 March 2005 as a 
possible date.  Although no objections had been made to that date, no decision had been made at that point either.  In the meantime, the Secretariat had tentatively reserved a meeting room for that week.  Given the heavy demand on meeting rooms, the Committee should try to agree on 
the date of this meeting. 
99. As to the structure of the first meeting in 2005, beyond the usual items, it should elect a 
new Chairman.  Further, as discussed at the informal meeting in October, the Committee 
should continue the drafting work on the text of the agreement and take up the horizontal 
matters that were to be discussed by the Committee as a whole according to the Decision on 
Modalities.  Also, in line with the Decision on Modalities, the Committee could take stock of the 
bilateral processes relating to initial requests, which were to be submitted by the end of the 
month.  Finally, as discussed, Parties could hold plurilateral consultations with Jordan, and 
possibly with Georgia, on their accession processes.  In the light of the potential workload, the Chairman suggested to schedule a full week's meeting from 14 to 18 March 2005. 
100. The Committee so agreed
.  GPA/M/24 
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  101. As to subsequent Committee meetings in 2005, the Chairman  noted that the previous 
week Parties had received a fax indicating growing constraints on the availability of meeting 
rooms for the remainder of 2005 and suggesting the following meeting dates: 
(a) the week of 30 May 2005; 
(b) the week of 25 July 2005;  and 
(c) the week of 10 October 2005. 
102. In response to that fax, one delegation had pointed out that, for religious reasons, it 
would have difficulties attending a meeting during the month of October 2005, and had asked 
for rescheduling that meeting for a later date.  The Chairman was, however, informed by the 
Secretariat that rescheduling the October meeting for sometime in the last two months of 2005 
seemed virtually impossible, given the vicinity of the Hong Kong, China Ministerial Conference.  Further, since the Decision on Modalities provided for the presentation of revised and improved 
offers by the end of October 2005, he believed that it was essential to offer another opportunity 
for bilateral negotiations back-to-back with a meeting of the Committee beforehand. 
103. The representative of Israel
 said that the unavailability of rooms pointed to the heavy 
workload of the organization as a whole.  He reiterated the concern of his small delegation with 
overloading the agenda.  While his delegation could accept the dates put forward, it would be 
rather wary of adding further dates to the work programme of the Committee. 
104. The Committee took note  of the statement made by Israel, and agreed  on the meeting 
dates of the weeks of 30 May and 10 October 2005. 
105. As to the meeting scheduled for the week of 25 July 2005, the representative of the 
European Communities  said that her delegation would find it easier to hold that meeting one or 
two weeks earlier. 
106. The Chairman  said that the Secretariat would explore if the week of 18 July 2005 was 
possible and, if yes, he would consult with Parties to see whether they had any serious problems 
with holding a meeting that week. 
__________