# EUR-Lex - 52014PC0574 - EN

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# 52014PC0574

**Proposal for a COUNCIL DECISION establishing the position to be taken on behalf of the European Union within the Committee on Government Procurement on the accession of New Zealand to the Agreement on Government Procurement /* COM/2014/0574 final - 2014/0264 (NLE) */**

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EXPLANATORY MEMORANDUM

1.           Introduction

On 28 September 2012, New Zealand applied to accede to the WTO Agreement on Government Procurement (“GPA”). New Zealand indicated its intention to complete its accession with reference to the amended
text of the GPA (the text was adopted by the Parties on 30 March 2012 and
concluded by the EU via a Council decision of 3.12.2013[1]). The GPA, as amended, has
entered into force for the Union, on 6 April 2014.

The Commission, on behalf of the Union,
negotiated a series of market opening commitments as presented by New Zealand both in a bilateral format and within the WTO Committee
on Government Procurement ("GPA Committee").

New Zealand subsequently
submitted a final offer on 21 July 2014. A summary of New Zealand's final offer and the Commission's assessment thereof are set out below.

2.           Summary of the terms of New Zealand's accession to the GPA

New Zealand's
final offer

Market access commitments (covered
entities, goods, services and construction services)

Entities

New Zealand’s
government entities; at the level of central government there is a continuum of
entities exercising different degrees of public authority. These are the
standard departments, overseen by Ministers, as well as various forms of “Crown
entities”, a category which indicates different types of entities operating as
instruments of the Crown for the Government and carrying out various public
functions, for example in the fields of health, education, tourism, social
housing. At the other end of the spectrum are State Owned Undertakings (“SOEs”),
that are limited liability companies or corporations which operate as
commercial businesses.

In Annex 1 (“Central entities”) New Zealand’s offer includes the core government ministries and departments. In a note New Zealand agreed to specify that the entities subordinated to the ones laid down in Annex
1 are also covered.

In Annex 2 (“subcentral entities”) New Zealand includes most District Health Boards, which are Crown entities responsible for
providing or funding the provision of health services in their territorial districts
and the entities that procure for them. In addition, New Zealand agreed to
offer coverage of the biggest city councils, Auckland Council, Wellington City
Council and Christchurch City Council as well as those regional councils that exceed
250 000 inhabitants. Coverage is provided for “flown down grants” (this refers
to the fact that central agencies when awarding grants might require the
awardees to follow “flow down” procurement requirements). Coverage of city
councils and regional councils is foreseen in relation to the procurement of
goods, services and construction services relating to transport projects funded
in whole or in part by the New Zealand Transport Agency where the total value
of the project exceeds the relevant applicable thresholds for good, services
and construction services.

In Annex 3 (“other entities”), New Zealand includes 14 Crown entities that operate in various fields including tourism,
aviation, education and transport. In addition, New Zealand agreed to also offer
four SOEs operating in the utilities sectors of airways, meteorological
services, railways, and electricity (Airways Corporation of New Zealand
Limited, Meteorological Service of New Zealand Limited, KiwiRail Holdings
Limited and Transpower New Zealand Limited). These are the SOEs that have been
identified as operating in a monopolistic situation.

Goods

New Zealand commits
to cover procurement of all goods by the covered entities.

Services

New Zealand offers
a very comprehensive coverage of services, meaning all services by covered
entities, with some very specific exclusions (for research and development,
public health services, education services and welfare services).

Construction services

New Zealand offers
all the construction services in Division 51 of the Central Product
Classification, as it is commonly offered by all GPA Parties.

Thresholds

New Zealand applies
thresholds that are commonly applied by GPA Parties for goods, services and
construction services.

New Zealand's Legislation

New Zealand's
Government Procurement Framework is non-discriminatory.  There are no
provisions granting domestic supplies and suppliers more favourable treatment than
that accorded to foreign suppliers or supplies. New Zealand’s legislation on
public procurement appears to be open, transparent and non-discriminatory in
line with GPA requirements.

Commission's Assessment of New Zealand's Offer

New Zealand widely opens
its procurement market to all GPA Parties as it has a very comprehensive offer
in terms of entities, goods and services, and construction services and
non-discriminatory legislation. In addition, New Zealand does not maintain any
particular restriction against any GPA Party. However, considering that New Zealand's coverage, although significant, is not complete, it would be appropriate to introduce
certain specific restrictions or carve-outs from the access to the Union
procurement market (with respect to New Zealand) as the EU has done in the past
for GPA Parties which offer only partial coverage.

The specific restrictions, which would be
part of the terms of accession to the GPA for New Zealand to be adopted by the
GPA Committee, are the following:

· 
Annex 1, section 2 (The Central Government
contracting authorities of the EU Member States), point 3:

New Zealand will be added to the list of GPA Parties which have access to
procurement of fewer central government level contracting authorities than the
rest of the GPA membership.

· 
Annex 2, Notes to Annex 2, note 1:

The EU will not
offer to New Zealand the procurement by local contracting authorities
(administrative units under NUTS 3 in Regulation (EC) No 1059/2003)[2] --as amended-- and
smaller administrative units). Administrative units under NUTS 1 and NUTS 2 in Regulation
1059/2003, procurement by the contracting authorities of administrative units
under NUTS 1 and 2 will not be offered to New Zealand, unless their procurement
for urban transport projects is covered under Annex 3 of the EU GPA Schedule. Only
the procurement of administrative units listed under NUTS 1 and NUTS 2 operating
in the field of  urban transport will be offered to New Zealand, in Annex 3 (in
particular the activity “the provision or operation of networks providing a
service to the public in the field of transport by urban railway, automated
systems, tramway, trolley bus, bus or cable” referred to under point e) of
Annex 3 of the EU GPA Schedule).

· 
Annex 3, Notes to Annex 3, note 6:

A more limited
coverage will be offered  to New Zealand for subcentral entities; only the
procurement of administrative units listed under NUTS 1 and NUTS 2 in relation
to urban transport (in particular the activity referred to under point e) of Annex
3 of the EU GPA schedule) will be offered to New Zealand. In addition, the EU will
not offer to New Zealand procurement by entities operating in the sectors of:
drinking water; in the field of maritime or inland port or other terminal
facilities; and  in the field of provisions of airports or other terminal facilities
to air carriers.

In case any other GPA Party would include
specific carve outs to their coverage with respect to New Zealand, this would also be reflected in the GPA Committee on New Zealand's terms of accession.
It should be noted, however, that any such restrictions or carve-outs from
coverage by a GPA Party which are specific to New Zealand would not affect New Zealand's final offer as outlined above, nor the proposed EU's specific reservations,
or the mutually agreed coverage between current GPA Parties.

3. LEGAL ELEMENTS OF THE PROPOSAL

The revised GPA includes a provision on accession. Article XXII(2)
of the GPA provides that any Member of the WTO may accede to the GPA on terms
to be agreed between that Member and the Parties, with such terms stated in a
decision of the GPA Committee.

The terms of New Zealand’s accession will
be set out in a decision of the GPA Committee which is expected to be adopted
in the second half of 2014. This decision will include New Zealand's final
offer for access to its public procurement market (which will become part of
Appendix I to the GPA upon New Zealand's accession), as well as any specific
terms of accession requested by other GPA Parties. The Decision will be adopted
by consensus within the GPA Committee.

Article 218(9) of the Treaty on the Functioning
of the European Union (TFEU) provides that, when a decision having legal effect
needs to be taken in a body set up by an international agreement, the Council,
on a proposal from the Commission, should adopt a Decision establishing the
position to be adopted on the Union’s behalf. The decision of the GPA Committee
that will set out the terms of New Zealand’s accession falls under Article
218(9) TFEU as the decision is taken in a body set up by an international
agreement and it will have legal effects.

4. RECOMMENDATION

New Zealand's
accession to the GPA is expected to make a very positive contribution to
further international opening of public procurement markets, by enlarging the
number of parties to the GPA and thus encouraging other countries to accede to the
GPA. The Commission recommends that the offer by New Zealand is accepted subject
to the above mentioned restrictions to the Union's coverage with respect to New Zealand.

Accordingly, it is proposed that the Commission be authorised to
express within the Committee on Government Procurement the position of the Union
in favour of New Zealand’s accession subject to the abovementioned restrictions,
to be reflected in the GPA Committee Decision on New Zealand's accession.

2014/0264 (NLE)

Proposal for a

COUNCIL DECISION

establishing the position to be taken on
behalf of the European Union within the Committee on Government Procurement on
the accession of New Zealand to the Agreement on Government Procurement

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty on the
Functioning of the European Union, and in particular the first subparagraph of
Article 207(4), in conjunction with Article 218(9) thereof,

Having regard to the proposal from the
European Commission,

Whereas:

(1)       On 28 September 2012, New Zealand applied for accession to the Agreement on Government Procurement (the “GPA”).

(2)       New Zealand’s commitments on
coverage are laid down in its final offer, as submitted to the GPA Parties on 21
July 2014.

(3)       Although comprehensive, the
offer by New Zealand does not provide full coverage. It is thus appropriate to
introduce certain carve-outs specific to New Zealand to the Union coverage. These
specific carve-outs, as reflected in the Annex to this Decision, will become
part of the terms of accession to the GPA for New Zealand and will be reflected
in the decision adopted by the Committee on Government Procurement (“the GPA
Committee”) on New Zealand's accession.

(4)       New Zealand's accession to
the GPA is expected to make a positive contribution to further international
opening of public procurement markets.

(5)       Article XXII(2) of the GPA
provides that any Member of the WTO may accede to the Agreement on terms to be
agreed between that Member and the Parties, with such terms stated in a
decision of the GPA Committee.

(6)       Accordingly, it is neccessary
to establish the position to be taken on the Union's behalf within the GPA Committee
in relation to the accession of New Zealand,

HAS ADOPTED THIS DECISION:

Article 1

The position to be taken on behalf of the
European Union within the Committee on Government Procurement shall be to
approve the accession of New Zealand  to the Agreement on Government
Procurement, subject to specific terms of accession set out in the Annex to
this Decision.

Article 2

This Decision shall enter into force on the
day of its adoption.

Done at Brussels,

For
the Council

The
President

[1]               Council Decision of 2 December 2013 on the conclusion
of the Protocol Amending the Agreement on Government Procurement , OJ L 68,
7.3.2014, p. 1.

[2]               Regulation (EC) No 1059/2003 of the European
Parliament and of the Council on the establishment of a common classification
of territorial units for statistics (NUTS) (OJ L 342, 18.12.2013, p. 1) .

ANNEX

EU TERMS OF NEW ZEALAND’s ACCESSION TO THE GPA

Upon New Zealand's accession to the Agreement
on Government Procurement point
3 of section 2 (“The Central Government contracting authorities of the EU
Member States”) of Annex 1 to Appendix I to the European Union shall read as
follows:

‘ 3.         For the goods, services,
suppliers and service providers of the United States; Canada; Japan; Hong Kong,
China; Singapore; Korea; Armenia; the Separate Customs Territory of Taiwan,
Penghu, Kinmen and Matsu and New Zealand, procurement by the following central
government contracting authorities, provided they are not marked by an
asterisk.'

Upon New Zealand's accession to the Agreement
on Government Procurement Note
1 of the Notes to Annex 2 of Appendix I of the European Union shall include the
following points after the point e):

' (f)         procurement by local contracting authorities (contracting
authorities of administrative units listed under NUTS 3 and smaller
administrative units, as referred to in Regulation 1059/2003 (as amended)) in
regard of goods, services, suppliers and service providers from New Zealand;

(g)         procurement by contracting
authorities of administrative units listed under NUTS 1 and 2 as referred to in
Regulation 1059/2003 (as amended)), in regard of goods, services, suppliers and
service providers from New Zealand, unless their procurement is covered under
the EU Annex 3. '

Upon New Zealand's accession to the Agreement
on Government Procurement Note
6 of the Notes to Annex 3 to Appendix I to the European Union shall include the
following points after the point n):

'(o)         procurement by procuring entities operating in the field of
production, transport or distribution of drinking water covered under this
Annex in regard of supplies, services and service providers from New Zealand;

(p)          procurement by procuring
entities operating in the field of airport facilities covered under this Annex
in regard of supplies, services, and service providers from New Zealand;

(q)          procurement by procuring
entities operating in the field of the provision of maritime or inland port or
other terminal facilities covered under this Annex in regard of supplies,
services, and service providers from New Zealand;

(r)           procurement by regional
or local contracting authorities operating in the fields covered by this Annex,
in regard of supplies, services, and service providers from New Zealand, with
the exception of procurement by contracting authorities of administrative units
listed under NUTS 1 and 2 (as referred to in Regulation 1059/2003, as amended)
operating in the field of transport by urban railway, automatic systems,
tramway, trolley bus, bus and cable. '