RESTRICTED  WORLD TRADE  
ORGANIZATION  GPA/O/EEC/4 
25 September 2008 
 
 (08-4535) 
Committee on Government Procurement Original: English 
  
 
 
NEGOTIATIONS ON EXTENSION OF COVERAGE AND ELIMINATION OF  
DISCRIMINATORY MEASURES AND PRACTICES PURSUANT TO 
ARTICLE XXIV:7(b) AND (c) OF THE AGREEMENT 
ON GOVERNMENT PROCUREMENT 
 
Communication from the European Communities
 
   The following communication, dated 24 September 2008, is being circulated at the request of 
the Delegation of the European Communities. 
 
_______________ 
 
 
ANSWERS TO THE QUESTIONS POSED BY THE UNITED STATES ON THE EUROPEAN 
COMMUNITIES' REVISED OFFER IN THE NEGOTIATIONS UNDER ARTICLE XXIV:7  
OF THE AGREEMENT ON GOVERNMENT PROCUREMENT 
 
PART ONE 
  
Annex 1 
 1. Please describe each of the changes in the lists of covered entities in the Revised Offer 
for each member State, the rea son for the change, and how the change affects the member 
State's existing coverage.  As the United States stated during the WTO Committee on 
Government Procurement informal plurilateral discussions on coverage on 20 February 2008, 
changes in the list of entities need to be made  through an Article XXIV:6 notification process. 
 
 As explained during the plurilateral session on coverage issues held on 20 February and 
28 May 2008, the EC does not think that the notifi cation process foreseen under Article XXIV:6 is 
appropriate in the framework of market access negotiations. 
  As regards the proposed Annex 1, the EC would like to recall that it provides for an expansion of coverage as it includes a catch-all  clause which covers all Ministries from the 
27 member States.  In tabling its revised offer, th e EC has sought to improve the transparency and the 
quality of the information provided.  As stated dur ing the plurilateral sessions  on coverage issues, the 
EC stands ready to answer to any specific question or request for clarification on the proposed lists of 
entities.  GPA/O/EEC/4 
Page 2  
 
  2. With regard to bullet 4 of Note 1 to Annex 1 of the Revised Offer: 
  (a) Please describe the "programs funded by EU budget"?  
(b) What percentage of the total EC procurement do these programs comprise? 
 
 Reference is made to the non-paper circulated by the EC to the Committee on Government Procurement on 28 May 2008.  
3. With regard to Note 3 to Annex 1 of the Revised Offer: 
 
(a) What is the reason for, and significan ce of, the inclusion of "only non-sensitive 
and non-warlike materials"?  Is it intende d to limit the coverage set out in the 
List that follows?  If so, please describe. 
  The proposed drafting corresponds to a formal ch ange.  It is a consolidation of the footnotes 
included for each Ministry of Defence or Agency under the EC's current commitments.  Also, it corresponds to the language of draft Article III:1.  
(b) Is the addition, of "or security activiti es" to the description of the entities 
covered by the List intended to expand th e entities to which the list applies?  If 
so, please describe. 
 
 Under the EC's current commitments, procurem ent of non-warlike materials by Ministries of 
Defence as well as by entities operating in the fiel d of security are covered:  please refer to the 
corresponding footnotes in the list of en tities under the EC's current Annex 1. 
 
(c) A comparison of the "List of Supplies and Equipment Purchased by Ministries 
of Defence and Agencies for Defence or S ecurity Activities" in the Revised Offer 
and the "List of Supplies and Equipment Purchased by Ministries of Defence" in the existing Annex 1 shows deletions from the EC's existing coverage of specific goods and categories of goods for Austria and Sweden.  Please explain 
the reasons for withdrawing the coverage of these two member States. 
 
 The list of supplies and equipment purchased by the Ministries of Defence of the EC's member States has been consolidat ed so that the EC would offer a uniform coverage in this field. 
 Annex 2  1. The existing Annex 2 refers to "contracting  authorities of the regional or local public 
authorities", but the Revised Offer refers to "reg ional or local contracting authorities".  What 
is the reason for, and significance of, deleting the reference to "public authorities" in the 
Revised Offer?  How does this deletion affect the EC's existing coverage? 
 
 The proposed language corresponds to a form al change which does not modify the EC's 
current coverage under Annex 2.   All regional and local entities from the 27 member States are 
covered.   GPA/O/EEC/4 
 Page 3 
 
 
  2. The second category of entities in existing  Annex 2 is described as "bodies governed by 
public law as defined in Directive 93/37".  The Revised Offer refers to "bodies governed by public law as defined by EC procurement directive".  
(a) Is Directive 93/37 no longer the rele vant procurement directive?  If Directive 
93/37 is no longer in effect, what is  the relevant procurement directive? 
 
 Directive 93/37/EEC has been replaced by Dir ective 2004/18/EC.  The scope and coverage of 
the Directive remain the same.  Therefore, the pr oposed coverage under Annex 2 is not affected as 
compared to the EC's current commitments under Annex 2. 
 
(b) Why has the EC not included a reference to a specific EC directive? 
 
 The EC has not included any reference to a specific directive as Directive 2004/18/EC is currently being implemented by EC member States. 
 
3. The "indicative list of contracting authorities which are bodies governed by public law" 
in the Revised Offer differs significantly from "the lists of bodies and categories of bodies governed by public law which fulfil the criteria referred to are set out in Annex I to Directive 93/37", in existing Annex 2.  
(a) For example, for Latvia, a number of entities are listed in Directive 93/37 in the 
EC's existing coverage, but in the Revised Offer, there is only a general reference to "Subjects of private law wh ich make purchases according to 'Public 
Procurement Law'".  What is the reason for this change?  How does it affect Latvia's existing coverage? 
 
 Latvia's proposed coverage  under Annex 2 remains the same as under the EC's current 
commitments.  The proposed change clarifies the fact that all the entities covered are those falling 
within the scope of the Public Procurement Law.  
(b) Please describe the differences between the existing coverage under Annex 2 and 
coverage under Annex 2 in the Revised Offer for each member State, and how 
the changes affect the member State's existing coverage. 
 
 The EC would like to recall that its proposed  coverage under Annex 2 remains the same as 
under its current commitments.  It includes all region al or local authorities from the 27 member States 
as well all entities from the 27 member States which fa ll within the scope of the definition of a body 
governed by public law.  No other GPA Party prov ides for such an extensive coverage.  The lists 
given under the proposed Annex 2 are of an i ndicative nature like under the EC's current 
commitments under Annex 2.  A major effort has been undertaken to improve the quality and the 
transparency of the information provided.  This has been acknowledged by the other GPA Parties in 
the course of the plurilateral discussion on coverage issues.  As stated also during these sessions, the 
EC stands ready to answer to any specific question or request for clarification on the proposed lists. 
 GPA/O/EEC/4 
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  4. Please explain the reason for listing mi nistries for certain member States (e.g., the 
Netherlands) in Annex 2 of the Revised Offer, which are also listed in Annex 1.  If the purpose is to indicate the Annex 2 entities that are subord inate to the ministry, what is the relationship 
between such subordinate entities in Annex 2 and coverage of such entities pursuant to Note 2 to Annex 1 of the Revised Offer? 
 
 The Netherlands have given a list of minist ries under the proposed Annex 2 for information 
purposes, e.g to indicate which ministry is the su pervisory body of each of the entities covered (see 
the definition of a body governed by public la w under Annex 2, item 2 in the revised offer). 
 5. With regard to bullet 5 of Note 1 to Annex 2 of the Revised Offer:   (a) Please describe the "programs funded by EU budget"?  
(b) What percentage of the total EC procurement do these programs comprise? 
 
 Reference is made to the non-paper circulated by the EC to the Committee on Government Procurement on 28 May 2008.  
Annex 3 
 
1. Please describe the differences between the existing coverage under Annex 3 and 
coverage under Annex 3 in the Revised Offer for each member State, and how the changes 
affect the member State's existing coverage. 
 
 The EC would like to recall that its proposed  coverage under Annex 3 includes, like under its 
existing commitments, all Annex 1 and Annex 2 entities as well as public  undertakings operating in 
the field of drinking water, ports, airports, urba n transport and electricity.  No other GPA Party 
provides for such an extensive coverage.  The lis ts given under the proposed Annex 3, like under the 
EC's current commitments, are of an indicative na ture.  A major effort has been undertaken to 
improve the quality and the transparency of the in formation provided.  This has been acknowledged 
by the other GPA Parties in the course of the plurilate ral discussion on coverage issues.  As stated also 
during these sessions, the EC stands ready to answ er to any specific question or request for 
clarification on the proposed lists.  
2. The EC's existing Annex 3 is entitled "Entities which procure in accordance with the 
provisions of this Agreement", but the Revised Offer is limited to "Utilities which procure in 
accordance with the provisions of this Agreemen t".  What is the purpose for changing the title 
of the Annex?  Does it reflect a change in the coverage of the Annex?  If so, please describe. 
 
 The proposed change in the title of the Annex is  of a formal nature.  It does not affect the 
substance of the EC's current  coverage under Annex 3. 
 3. The existing Annex 3 refers to "contracting entities within the meaning of Article 2 of Directive 93/38/EEC", while the Revised Offer refers to "all contracting entities whose procurement is covered by the EC utilities directive". 
 
(a) Is Directive 93/38/EC no longer the relevant directive?  If Directive 93/38/EC is 
no longer in effect, what is the relevant directive? 
 
 Directive 93/38/EEC has been replaced by Dir ective 2004/17/EC.  The scope and coverage of 
the Directive are slightly different.  Directiv e 2004/18/EC continues to include procurement by 
utilities in the field of drinking water, ports, airports  and electricity.  However, as far urban transport  GPA/O/EEC/4 
 Page 5 
 
 
  is concerned, it covers not only th eir operation but also their provision.  This change results in a 
proposed expansion of coverage in the EC's revised  offer (please see the description of the sectors 
offered under the proposed Annex 3).  
(b) Why has the EC not included a reference to a specific EC directive? 
 
 The EC has not included any reference to a specific directive as Directive 2004/17/EC is currently being implemented by EC member States.  
4. Note 1 to Annex 3 of the Revised Offer im poses a condition for the coverage of Annex 3 
entities that is not included in the EC's existing coverage. 
 
(a) What is the rationale for the new condition and how does it affect the EC's 
existing coverage? 
 
(b) What are the criteria and basis for determining when an activity is "exposed to 
competitive forces in the market concern ed"?  When and by whom is that 
determination made?  Is it made on a procurement-by-procurement basis?  Is it 
published, and if so, where? 
 
 The proposed note is close to the note included by Japan under its notes to Annexes 2 and 3.  
The EC is of the view that procurement by an A nnex 3 entity should not be covered by the Agreement 
in as much as the activity in th e framework of which the procur ement is made is exposed to 
competition.  Basically, the EC believes that deta iled rules on procurement are necessary to ensure 
that award decisions are taken in a competitive mann er.  In case there is no longer government control 
or influence, these rules are replaced by th e pressure and the competition on the market. 
 
5. With regard to Notes 3, 4 and 5 to Annex 3 of the Revised Offer, please describe how 
each Note affects the EC's existing coverage in Annex 3.  
 As stated above, the EC would like to stress that the EC is the only GPA Party who offers 
such a wide coverage of utilities.  In view of the magnitude of th e proposed coverage, some precisions 
are needed to determine its scope.  This is the purpose of Notes 1 to 5 under Annex 3 of the EC's 
revised offer.  
 
 (a) Note 3 to Annex 3 is necessary to clarif y the scope of the activities covered under the 
proposed Annex 3.  The proposed note simply  aims at excluding from the scope of 
the EC's proposed commitments secondary ac tivities in the field of electricity and 
drinking water of public undertakings who se primary activities are not covered.  As 
foreseen by the proposed note, procurement in the field of these activities will not be covered by the Agreement provided two cumu lative conditions are met.  First, the 
production of drinking water and electricity by the public undertaking concerned is 
necessary to carry out its activity.  Second, supply to the public network has not 
exceeded 30 per cent of the public undertaking's total production of drinking water 
and energy, having regard to the average for the preceding three years, including the 
current year. 
  (b) Note 4 to Annex 3 aims at clarifying that some "in-house" procurement awarded 
either by an entity covered under Annex 3 to  an affiliated undertaking, or by a joint 
venture formed exclusively by entities c overed under Annex 3 to an affiliated 
undertaking are not covered, provided the conditions laid down under 4.II are met.  
For the sake of transparency, a definition of an affiliated undertaking within the meaning of EC law is provided. GPA/O/EEC/4 
Page 6  
 
   
 (c) Note 5 to Annex 3 fulfils the same purpose as Note 4.  It also aims at clarifying that 
some "in-house" procurement are not c overed by the Agreement provided the 
conditions laid under 5(ii) are met.  
 
6. With regard to bullet 14 of Note 6 to Annex 3 of the Revised Offer: 
  (a) Please describe the "programs funded by EU budget"?  
(b) What percentage of the total EC procurement do these programs comprise? 
 
 Reference is made to the non-paper circulated by the EC to the Committee on Government Procurement on 28 May 2008.  
Annex 4 
 
 Note 2 to Annex 4 of the Revised Offer a dds a new condition with respect to Annex 4 
coverage (" Except for services which entiti es have to procure from another entity pursuant to an 
exclusive right established by a published la w, regulation or administrative provision ."). 
 
(a) What is the reason for inclusion of this  condition?  Would the exclusive right be 
one that is "established" as of the date of entry into force of the commitment, or 
would this refer to an exclusive right "established" at any point in time? 
  (b) How does this condition affect the EC's existing coverage? 
  The proposed note is close to the note in cluded by Iceland, Liechtenstein, Norway and 
Switzerland.  As far as the EC is concerned, it co rresponds to a consolidation of its member States' 
commitments.  On substance, the proposed note ai ms at clarifying that some "in-house" procurement 
are not covered by the Agreement provi ded some strict conditions are met. 
 
Annex 6 
 
 Note 2 of Annex 6 includes "the postal sector", but that sector is not included in the EC's existing General Note 6.  What is the rea son for excluding the postal sector from coverage 
in the Revised Offer? 
  The proposed language of Note 2 to Annex 6 aims  at clarifying the fact that the postal sector 
is not covered by the EC's revised offer at it is  not covered under the proposed Annex 3, which is 
already the case under the EC's current commitments.    GPA/O/EEC/4 
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  PART TWO 
 
 
1. With regard to the increase in the thresh old for goods and services for Annex 1 entities 
from the existing threshold of 130,000 SDRs to  200,000 SDRs in the Revised Offer, what 
compensation will the EC provide for this  withdrawal of its existing coverage? 
 2. With regard to bullet 4 of Note 1 to Annex 1 of the Revised Offer, what compensation will the EC provide for this withdrawal of its existing coverage? 
 
3. With regard to bullet 5 of Note 1 to Annex 2 of the Revised Offer, what compensation will the EC provide for this withdrawal of its existing coverage?  4. With regard to bullet 14 of Note 6 to Anne x 3 of the Revised Offer, what compensation 
will the EC provide for this withdrawal of its existing coverage? 
 
5. With regard to bullet 2 of Note 6 to Annex 4 of the Revised Offer, what compensation will the EC provide for this withdrawal of its existing coverage? 
 
 Please refer to the statements made by the EC during the plurilateral session on coverage 
issues held on 20 February and 28 May 2008 as well as to the non-paper circulated by the EC to the 
Committee on Government Procurement on 28 May 2008. 
 
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