III report from the Commission concerning negotiations regarding access to third country public procurement markets in the fields covered by Directive 93/38 (the Utilities Directive)
Date: 1998-04-23
Institutions: European Commission
Subjects: World Trade Organisation, international negotiations, market access, public contract, third country

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 23.04.1998 
COM(1998) 203  final 

III REPORT FROM THE COMMISSION 

:* 

>r 

CONCERNING NEGOTIATIONS REGARDING 

&: 

ACCESS TO THIRD CtMTRYPUBUC  K l d C Ù R l^ 

I M HE  FIELDS COVERËDBY 

DIRECTIVE 93/38 (THE UTILITIES DIRECTIVE). 

t?  .4. 

. 

' 

-

«AW***^" •**<*' 

TABLE  OF CONTENTS 

TABLE OF CONTENTS 

INTRODUCTION 

A.  SUMMARY OF THE NEGOTIATIONS 

B.  AGREEMENTS  IN FORCE (AS OF 31  DECEMBER  1997): BY INSTRUMENT 

1.  The WTO Agreement on Government  Procurement. 

1.1.  Introduction. 

1.2.  Procedural Rules 

2 

4 

6 

8 

8 

8 

9 

1.3.  The coverage of the G PA:  contracting entities contained in the national offers. 

10 

1.4.  The Coverage of the  G PA:  supplies, services  and construction services  contracts. 14 

1.5.  Consequence of the  entry into force of the  G PA with respect to Article 36 of Directive 
15 

93/38. 

2.  The Agreement on the European  Economic Area: EFTA Countries. 

3.  Association Agreements: Central and Eastern European Countries (CEECs). 

4. 

Procurement  in the telecommunications  sector. 

4.1. 

Introduction. 

- 

15 

16 

17 

17 

4.2.  Israel, the bilateral agreement on procurement  by telecommunications  operators.  17 

4.3.  Korea, the bilateral agreement on procurement  by telecommunications  operators.  18 

C.  AGREEMENTS  IN FORCE (AS OF 31 DECEMBER  1997): BY SECTOR 

D.  NEGOTIATIONS  CONCLUDED  BUT AGREEMENTS  NOT YET IN FORCE AS OF 31 
DECEMBER  1997 

1.  Negotiations within the GPA framework: accession of new members. 

2.  Association Agreements: Central and Eastern European Countries (CEECs). 

3.  OECD: Convention on combating  bribery. 

INFORMATION  ON BARRIERS  IN THE FIELD OF PUBLIC  PROCUREMENT AND 

E. 
PROPOSED  LINES OF ACTION. 

F. 

FURTHER  NEGOTIATIONS 

1.  WTO framework 

1.1.  The GPA: implementation  and review. 

1.2.  The General Agreement  on Trade and Services (GATS) 

1.3.  The Singapore Ministerial  Conference: mandate on transparency  rules related to 

government procurement. 

-2-

20 

32 

32 

32 

33 

34 

36 

36 

36 

37 

37 

2.  Bilateral negotiations. 

2.1.  Customs  Union Agreements:  Turkey,  Andorra  and San Marino. 

2.2.  Trade Agreements:  Switzerland 

2.3.  Association  Agreements:  Cyprus and Malta. 

2.4.  Euro-Mediterranean  Association Agreements:  Israel, Jordan, Morocco, the 

Palestinian Authority,  Tunisia and other Mediterranean  Countries. 

2.5.  Co-operation agreements providing  for future negotiations. 

2.6.  Co-operation agreements providing  for simple co-operation. 

3.  The telecommunications  sector. 

G.  HOW TO FIND OPPORTUNITIES ABROAD AND  ENFORCE ONE'S  RIGHTS. 

1. 

Information on opportunities  in public procurement. 

2.  The rights of European suppliers abroad. 

LIST OF AGREEMENTS  CONCLUDED  IN THE  FIELD OF PUBLIC  PROCUREMENT 

H. 
WHICH ARE  IN FORCE AS OF 31 DECEMBER  1997 

1. 

List of Agreements 

38 

38 

39 

40 

40 

42 

43 

44 

45 

45 

46 

48 

48 

2.  Consequences  of the entry  into force of these agreements with respect to Article 36 of 
Directive 93/38/EEC. 

50 

LIST OF AGREEMENT CONCLUDED  IN THE FIELD OF PUBLIC  PROCUREMENT 

I. 
WHICH ARE NOT YET IN FORCE AS OF 31 DECEMBER  1997. 

INDEX OF COUNTRIES 

52 

53 

INTRODUCTION 

This  report  describes  the  state  of  play  as  of  31  December  1997  regarding 
access  for  Community  suppliers  and  service  providers  to  third  country 
markets  in the  fields  covered  by  Directive  93/38/EEC  of  14  June  1993,  on 
the  procurement  procedures  of  entities  operating  in  the  water,  energy, 
transport  and  telecommunications  sectors  ("the  Utilities  Directive")1.  It  is 
presented  in  accordance  with  Article  36  (6)  and  Article  37  (2)  of  that 
Directive. 

On  3  March  1993,  the  Commission  presented  a  first  progress  report2  on 
negotiations  in the fields  covered  by Directive  90/531/EEC of  17  September 
19903.  This  Directive  has  in  the  meantime  been  replaced  by  Directive 
93/38/EEC  of  14 June  1993  covering  supplies  and works  contracts  as  well 
as  services  contracts.  A  second  progress  report4  was  presented  by  the 
Commission  on 7 September  1994. Since then,  no other  reports  have  been 
presented  by  the  Commission  due  to  the  fact  that  no  further  multi-  nor 
immediately 
bilateral  agreements  were  concluded  during 
following the conclusion of the Uruguay Round. 

the  period 

3. 

In  1996  and  1997  some  progress  has  been  made.  Hence,  the  results 
obtained  are  presented  in  this  report.  However,  in  order  to  assess  all  the 
new  (and  prospective) 
implications  of  the  negotiation  processes,  the 
Commission  has  preferred  to  present  in  this  report  not  only  the  progress 
made,  but  also  the  general  state  of  play  in  this  field.  This  report  therefore 
gives and, where  necessary,  up-dates  information  on the agreements  which 
the  Community  has  already  signed  with  third  countries  and  which  cover 
procurement  in  the  fields  covered  by  the  Directive,  including  the  WTO 
Agreement  on Government  Procurement. 

After  a  summary  of  the  negotiations  in  section  A  of  the  report,  section  B 
deals  with  the  agreements  in force,  presented  by  legal  instrument.  Section 
C then  presents the  results  by sector.  Negotiation  processes  concluded  but 
not  yet  in  force  are  described  in  part  D.  Part  E  provides  information  on 
barriers  in the field  of  public  procurement  and  proposed  lines  of action. The 
current  bilateral  or  multilateral  negotiations 
is 
conducting  or  could  conduct  with  third  countries  in  the  same  fields  are 
described  in  part  F.  Information  is  given  in  section  G  on  how  to  find 

the  Commission 

that 

1 
2 
3 
4 

OJ L 199/84, of 9 August  1993. 
COM (93) 80 final, of 3 March  1993. 
OJ L 297/1, of 29 October  1990. 
COM (94) 342 final, of 7 September  1994. 

-4 

opportunities  abroad,  as  well  as  on  the  rights  from  which  European 
suppliers  and  service  providers  benefit.  Finally,  lists  of  all  the  relevant 
agreements  and publication  references are included in sections  H and I. 

A. 

SUMMARY  OF THE  NEGOTIATIONS 

5.  At  multilateral  level,  the  GPA  entered  into  force  on  1  January  1996.  The 
Commission  has  started  to  monitor  the  implementation  by  other  parties  of 
the  obligations  set  out  in  the  Agreement.  Negotiations  with  third  countries 
for  accession  to  the  GPA  have  been  completed  for  Aruba;  Hong  Kong, 
China5;  Liechtenstein  and  Singapore  which  are  now  full  GPA  members. 
Discussions  continue  with  Chinese  Taipei6  and  Panama  on  their  offers. 
However,  for  Chinese  Taipei  GPA  membership  must  await  completion  of 
the WTO accession procedure (see sections  B.1  and D.1.1). 

6.  However  the  most  important  results  obtained  by the  Union  in this  period  in 
terms  of  market  access  agreements  in  the  field  of  public  procurement  are 
the  conclusion  of  bilateral  agreements  with  Israel  and  Korea,  and  the 
negotiations with Switzerland. 

7.  Two  agreements  were  reached  with  Israel.  The  first  one  deals  with  the 
bilateral  broadening  of  the  scope  of  the  GPA  for  both  parties.  New 
commitments  particularly  concern the  urban transport sector, which will  now 
be  open to  EC suppliers. The  second  agreement  concerns  procurement  by 
telecommunications  operators. This bilateral agreement  remains outside the 
scope of the GPA (see sections  B.1 and  B.4). 

8.  A  similar  agreement  has  also  been  negotiated  with  Korea.  It  opens  the 
Korean  telecommunications  equipment  (and  related  services)  market  to 
European  suppliers.  The  agreement  only  concerns  the  Korean  public 
operator.  However,  in a separate  memorandum,  Korea  is committed  not  to 
privately-owned 
the 
interfere 
telecommunications  service providers  (see section  B.4): 

procurement 

policy 

the 

of 

in 

9.  With 

respect 

to  Switzerland, 

the  Commission  services  have  been 
negotiating  with  the  Swiss  authorities  on  a  comprehensive  agreement  on 
public procurement. Agreement  has been reached on virtually all issues,  but 
can  only  be  formalised  as  part  of  the  wider  negotiations  package  with 
Switzerland.  It is expected  that this  agreement  would  open  to  EC  suppliers 
all sectors  covered  by  Directive  93/38,  including  procurement  by  public  and 
private entities  having exclusive and special rights (see section  E.2.2). 

10.  Further  negotiations  are  envisaged  with  a  number  of  countries  pursuant  in 
particular  to  those  bilateral  agreements  already  signed  by  the  EC  which 
provide  for  future  negotiations.  Also  at  multilateral  level,  three  parallel 

Hong  Kong, China  is now the official  name of this territory, this  is therefore  the  name  that 
will  be  used  in this  report.  However,  it  must  be  noted  that  only  Hong  Kong  is  party  to  the 
WTO (and the GPA), while the rest of China is not. 
Separate  Customs Territory  of Taiwan,  Penghu,  Kinmen and  Matsu, hereinafter  referred  to 
as Chinese Taipei. 

- 6-

processes  have started  in  1997 within the WTO framework:  an early  review 
of  the  GPA,  the  negotiations  on  procurement  rules  on  services  and 
discussions on transparency  in government  procurement  (see section F). 

- 7-

B. 

AGREEMENTS IN FORCE (AS OF 31 DECEMBER  1997): BY  INSTRUMENT 

11.  Several  agreements  concluded  between  the  Community  and  other  third 
countries  in the fields  covered  by the  directive  have entered  into force.  The 
most  important  one  is the Agreement  on  Government  Procurement  (GPA), 
a  plurilateral agreement  concluded within the framework  of the World  Trade 
Organisation  (WTO)  (see  section  1). This  agreement,  however,  does  not  in 
practice cover all the sectors covered by the Utilities directive. 

12.  The  framework  established  by the  GPA  is  completed  by  other  agreements 
which  apply  independently,  such  as  the  Agreement  on  the  European 
Economic  Area  (see  section  2  infra)  or  the  bilateral  agreements  with  the 
Central  and  Eastern  European  Countries  (see  section  3  infra).  Finally,  the 
telecommunications  sector  is dealt  with  in  a  separate  section  of this  report 
(see section 4 infra). 

1. 

THE WTO  AGREEMENT ON GOVERNMENT PROCUREMENT. 

1.1. 

Introduction. 

13. 

its  coverage  to  entities  at  sub-central 

In  pursuance  of  Article  IX:6(b)  of  the  GATT  Government  Procurement 
Agreement  (Tokyo  Round),  negotiations  were  undertaken  with  a  view  to 
level  and  entities 
broadening 
operating  in  utility  sectors  and  extending  it  to  cover  works  and  other 
services  contracts.  The  negotiations  were  conducted  in  the  framework  of 
the  Uruguay  Round and were concluded  on  15 December  1993  in Geneva. 
The  new  Government  Procurement  Agreement  ("the  GPA")  was  signed  on 
15  April  1994,  subject 
the  Marrakesh  Ministerial 
to  ratification,  at 
Conference.  It entered  into force on  1 January  19967. 

14.  At  Community  level,  the  GPA,  as  one  of  the  plurilateral  agreements  in 
annex  4  to  the  Agreement  establishing  the  WTO  was  concluded  on  behalf 
of the  EC by a Council  Decision8. The decision was  adopted  by the  Council 
following  the  ratification  procedure  established  in  article  228  (3)  second 
subparagraph, which  requires the assent  of the  European  Parliament.  Such 
assent was delivered on  14 December  1994. 

7 
8 

As for Korea; Aruba; Hong Kong, China; Liechtenstein and Singapore, see infra. 
Council  Decision  94/800/EC  of  22  December  1994,  OJ  L  336/1,  of  23  December  1994. 
Moreover,  the text of the GPA was  published  in all the official  languages  of the  EC  later  in 
1996 (OJ C 256/1, of 3 September  1996). 

-8 

15.  The  following  countries  are  parties  to  the  Agreement:  Canada, 

the 
European  Communities  and fifteen  Member  States,  Hong  Kong,  China,  9, 
Israel,  Japan,  Korea10,  Liechtenstein11,  the  Kingdom  of  the  Netherlands 
with  respect  to  Aruba12,  Norway,  Singapore13,  Switzerland  and  the 
United States. 

16.  Seven WTO  Members  have  observer  status: Argentina, Australia,  Bulgaria, 
Chile,  Colombia,  Iceland,  Panama,  Poland  and  Turkey.  Two  non-WTO 
members  have  also  observer  status:  Chinese  Taipei  and  Latvia.  Observer 
status  has  been  granted  to  the  International  Monetary  Fund  (IMF)  and  to 
the  Organisation  for  Economic  Co-operation  and  Development  (OECD). 
The  European  Free  Trade  Association  (EFTA)  and  the  Inter-American 
Development  Bank  (IABD)  have  also  requested  observer  status.  Some  of 
the  countries  having  observer  status  have  applied  for  accession  to  the 
agreement (see infra, section  D.1). 

17.  The  GPA  can  be  seen  as  consisting  of  two  separate  parts.  The  first  part 
deals  with  procedural  rules  which  covered  entities  must  apply  when 
awarding contracts  (see point  1.2  infra), while the second  part  is made up of 
annexes  detailing  coverage  for  each  of  the  Parties.  Coverage  depends  on 
the  contracting  entity  on  the  one  hand  (see  point  1.3  infra)  and  on  the 
supply, work or service concerned  (v. point 1.4 infra). 

1.2. 

Procedural Rules 

18.  The  procedural  rules  lay  down  requirements  regarding  publicity  for  entities' 
intended  procurement,  qualification  systems,  calls  for  tender  and  contract 
awards; specification  of goods, works  and services  in a manner  intended  to 
ensure  that  the  market  is  open  to  a  wide  range  of  bidders;  transparent 
procedures  for  the  selection  of  candidates  and  the  evaluation, of  bids; 
objective  criteria  for  the  award  of  contracts  announced  in  advance;  and 
challenge  procedures  to  ensure  that  bidders  who  find  that  their  rights  are 
not being respected can obtain timely redress. 

9 

10 
11 

12 

13 

As  regards  Hong  Kong, China, the instrument of accession was deposited  on 20  May  1997 
and the agreement entered into force on 19 June 1997. 
As regards  Korea, the agreement entered into force on 1 January  1997. 
As  regards  Liechtenstein,  the  instrument  of  accession  was  deposited  on  19 August  1997 
and the agreement entered  into force on 18 September  1997. 
As  regards  Aruba, the  instrument  of  accession  was  deposited  on 25  September  1996  and 
the agreement entered into force on 25 October  1996. 
As  regards  Singapore,  the  instrument  of  accession  was  deposited  on.20  September  1997 
and the agreement entered into force on 20 October  1997. 

- 9-

19.  The  procedures  laid  down  in  the  GPA  are  essentially  identical  to  those  of 
the  Community's  procurement  Directives.  Thus  amendments  to  the  latter 
were  not  really  necessary.  However,  it  has  been  considered  appropriate  to 
nevertheless  slightly  amend  the  EC  directives  on  some  points  so  as  to 
simplify  and  clarify  the  application  in practice  of  both  the  Directives  and  the 
GPA.  A  directive  has  been  adopted  modifying 
the  classical  sector 
directives14,  the  other  directive  modifying  the  utilities  directive  will  be  soon 
adopted. 

1.3.  The coverage of the GPA: contracting entities contained in the national offers. 

20.  The  second  part  of  the  Agreement  contains  the  specific  national  annexes 
which  list the central  and sub-central government  entities15  and  other  public 
bodies  and  utilities  which  must  carry  out  their  procurement  in  line  with  the 
rules  of  the  Agreement16.  These  rules  only  apply  above  predetermined 
thresholds,  which  may  vary  from  one  country  to  another  (see  section  C, 
table  2  infra). The  rights  of the  suppliers,  contractors  and  service  providers 
from each country  party to the agreement vary according to the scope of the 
the 
respective  national  offers  under 
obligations  of contracting  entities  are  not the same within  a particular  sector 
with  respect  to  the  treatment  to  be  accorded  to  suppliers,  contractors  and 
service  providers  from  the  other  countries  which  are  parties 
to  the 
agreement.  In  addition,  those  obligations  are  not  identical  as  regards  the 
different  sectors within one country. 

the  Agreement.  Consequently, 

21.  Coverage  at  central  government  level  was  reached  on  a  Most  Favoured 
Nation  treatment  basis,  only  for  the  countries  party  to  the  Agreement.  At 
sub-central  government  level,  agreement  was  reached  on  a  reciprocal 
basis. 

22.  Coverage  in  the  utilities  sector  was  also  agreed  on  a  reciprocal  basis, 
strictly  in  line  with  the  provisions  of Article  36  of  the  EC  Utilities  Directive. 
The  Community's  reciprocal  approach  is  reflected  in the  general  notes  and 
derogations from the principle  of Most  Favoured  Nation treatment which  are 
contained  in its offer. 

14 

15 
16 

See  European  Parliament  and  Council  Directive  97/52/EC  of  13  October  1997  amending 
Directives  92/50/EEC,  93/36/EEC  and  93/37/EEC  concerning 
the  coordination  of 
procedures  for  the  award  of  public  service  contracts,  public  supply  contracts  and  public 
works contracts  respectively; OJ L 328/1, of 28 November  1997. 
Annexes  1 and 2 of Appendix  I of the GPA. 
Annex  3 of Appendix  I of the GPA. 

-  1 0-

23.  A  detailed  analysis  of  the  opportunities  of  access  for  EC  suppliers  to  the 
markets  of  other  Parties  was  given  in a former  Report17  with  respect  to  the 
following  parties:  Canada,  Israel,  Japan,  Korea,  Norway,  Switzerland  and 
the  United  States.  Since then,  no changes  have  been  produced, except  for 
Israel  with  which  the  EC  concluded  a  bilateral  agreement  expanding  the 
scope  of  their  GPA  commitments.  Details  are  given  below.  In  addition, 
details  are  also  given  on  the  offers  made  by  Aruba;  Hong  Kong, China; 
Liechtenstein  and  Singapore,  as  these  are  the  countries  that  have  joined 
the GPA since then.  Interpretative tables  by sector  are provided  in part  C of 
this  report. 

24. 

- Broadening the scope of the GPA with respect to existing contracting parties: Israel. 
Israel  made  no  offer  on  urban  transport;  however,  except  for  the  bus 
services, it has been included  in a bilateral agreement18. Article  36 therefore 
only  applies  to  Israeli  suppliers  and  service  providers  as  regards  bus 
services.  This  bilateral  agreement  also  broadens  the  GPA  bilaterally 
concerning  certain services and procurement  carried out by hospitals. 

25. 

In addition, the agreement goes beyond the GPA obligations, and  Israel has 
also  committed  itself  to  applying  the  national  treatment  principle  to  EC 
suppliers,  products  and  services  with  respect  to  procurement  by  the 
municipalities  not covered by the list of sub-central entities  in the  GPA. 

17 
18 

COM (94) 342 final, of 7 September  1994. 
Negotiation  of  this  bilateral  agreement  has  been  pursued  in  parallel  with  another  bilateral 
agreements  on  procurement  by  telecommunications  operators  (see  infra).  See  Council 
Decision of 24 February  concerning the conclusion of two Agreements  between the  EC and 
the State of Israel on procurement  by government  and telecommunications  operators,  OJ L 
202/72, in particular  pages  85 and seq., of 30 July  1997. The Agreement was  signed on  10 
July  1997 and entered into force on  1st August  1997. 

11 

- The Aruban Offer. 

26. 

Aruba  has  made  a comprehensive  offer,  including  all sectors  covered  by 
the  EC's final offer19,  which  includes  publicly  owned entities  operating  in the 
electrical, water,  urban transport,  port and airport sectors20. Aruba  has gone 
even  further  by  including  in  its  list  of  commitments  procurement  by  its 
telecommunications  operator. 

- The Hong Kong, China  offer. 

27.  The  Hong  Kong,  China  offer  includes  the  water,  urban  transport,  port  and 
airport  sectors.  The  Water  Supplies  Department, 
the  Environmental 
Protection  Department  and  the  Drainage  Services  Department  are  among 
the  Central  Government  entities  that  procure  in  accordance  with  the 
provisions  of  the  GPA.  The  thresholds  above  which  the  access  to  EC 
suppliers  is  guaranteed  are  130 000  SDR  for  goods  and  services,  and 
5 000 000 SDR for construction  services. 

28.  The two  public  contracting  authorities  in the field  of  urban transport  are  the 
Mass  Transit  Railway  Corporation  and  the  Kowloon  Canton  Railway 
Corporation.  They  operate  the  mass  transit  system,  the  suburban  railway 
and the  light railway.  Moreover, the  Mass Transit  Railway  Corp. will  operate 
the  new  railway  system for  Hong  Kong, China's  second  airport  at Chek  Lap 
Kok.  Both  corporations  are  included  in  the  annex  3  of  the  Hong  Kong, 
China  offer.  The  thresholds  that  apply  are  400 000  SDR  for  supplies  and 
services  and  5 000 000  SDR  for  construction  services.  Only  the  Peak 
funicular  railway  and  the  traditional  street  tramway  fall  outside  the  scope  of 
GPA  commitments.  However,  these  two  rail  systems  are  owned  by  private 
operators. 

29.  As  regards  airports,  the Airport  Authority  is  also  included  in  annex  3 of  the 
offer.  Therefore,  the  same  thresholds  apply  to  those  used  in  the  urban 
transport  sector.  The  Airport  Authority  is  the  main  contracting  authority  for 
works  projects  in the  airport  sector,  in particular  for the  new  airport  at  Chek 
Lap  Kok,  already  under  construction.  Equipment  is  procured  through  the 
New Airport  Buying  Group  of  the  Procurement  Division  of  the  Government 
Supplies  Department,  which  is  included  in  the  annex  1  list  (Central 
Government).  As  a  result,  the  thresholds  are  lower:  130 000  SDR  for 
supplies. The Civil Aviation Authority  is also included  in the annex  1 list. 

19 

20 

Although  as  regards  Aruba,  there  are  some  differences  in  the  list  of  services  and 
construction  services committed. 
The  other  sectors  covered  by  the  Utilities  Directive  are  not  therefore  included  in  the  GPA, 
i.e.:  energy  other 
transport  and 
telecommunications.  Award  of  services  contracts  by  utilities  in Spain  is only  subject  to  the 
GPA from  1 January  1997.  In  Portugal and Greece, award  of any  contract  by  utilities  is  not 
subject to the GPA prior to  1 January  1998. 

than  electricity, 

transport  other 

than  urban 

- 1 2-

30.  The  main  procurement  authority  in  the  port  sector  is  the  Civil  Engineering 
Department  the Works  Branch  of the  Government.  The  Marine  Department 
and  the  Planning  Department  are  advisory  authorities  which  are  also 
subject  to the  rules  of the  GPA.  It  has to  be stressed  that  the  port  of  Hong 
Kong,  China  and  related  industries  account  for  approximately  15% of  Hong 
Kong,  China's  GDP.  It  is  the  busiest  container  port  in  the  world  and  its 
position  on  the  South  China  Coast  is  of  strategic  importance,  both  as  an 
entrepot for China as well as a hub port for Asian and World trade. 

31.  Hong  Kong,  China  has  not  offered  its  electricity  sector  in  its  list  of 
commitments  because  of the  private  nature  of the  operators.  However,  the 
Hong  Kong,  China  Government  has  made  a  commitment  to  self-denial, 
ensuring  that  it  does  not  hold  any  interest  in  the  electricity  companies  nor 
seeks  to  influence  their  procurement  policy.  The  regulatory  authority, 
Electrical  and  Mechanical  Services  Department,  is  itself  included.  Even 
though  it  does  not  operate  the  electricity  network  and  does  not  supply 
services to the  public,  it procures  electronic  and electrical equipment for the 
needs  of  other  public  departments  or  projects,  such  as  hospitals  and 
government 
is 
guaranteed,  the  EC  discriminatory  provision  will  also  be  removed  in  this 
sector. 

laboratories.  Therefore,  given 

that  market  access 

32.  However,  challenge  procedures  will  only  be  in  place  one  year  following  the 

entry  into force of the  agreement. 

- The Liechtenstein offer. 

33.  Liechtenstein 

is  part  of  the  European  Economic  Area.  EC  suppliers 
therefore  benefit  from  a  wider  coverage  under  this  Agreement  than  under 
the GPA (see infra section  B.2). As a result, it is unnecessary  to give details 
on its GPA  offer. 

- The Singapore offer. 

34.  The  Singapore  offer  includes  contracting  authorities  in the  urban  transport, 
port  and  airport  sectors.  As  regards  water  supply,  Singapore  relies  to  a 
great extent on water supplies from Malaysia and  Indonesia. As a result, the 
Singapore  Government  was  unable  to  offer  a  commitment  in  this  sector. 
Only  procurement  through  the  Ministry  of  Environment  or  through  the 
Ministry  of  Trade  and  Industry  would  be  subject  to  the  GPA.  In  particular, 
sewerage  and  pollution  control  are  the  responsibility  of  the  Ministry  of  the 
Environment.  The  threshold  values  for  the  Central  Government  authorities 
are  130 000  SDR  for  supplies  and  services,  and  5 000 000  SDR  for 
construction  services. 

- 13 

35.  With  respect  to  electricity,  the  Singapore  Government  is  in  the  process  of 
privatising  Singapore  Power,  the  public  operator,  which  is  not  bound  by  the 
Agreement. As a result, only procurement  done by the Ministry of Trade and 
Industry will be subject to the GPA.  In this regard, the  European  Community 
will  mirror  Singapore's  offer  by  including  a  reference  in  the  EC  General 
Notes to the Agreement. As a result article 36 Community  preference  of the 
Utilities  Directive  will  not  be  waived  in  the  electricity  sector  vis-à-vis 
products originating  in Singapore. 

36.  The  Maritime  and  Port Authority  of Singapore, the  Land Transport  Authority 
of  Singapore  and  the  Civil  Aviation  Authority  of  Singapore  are  the  main 
contracting  authorities for the port, urban transport  and airport sectors. All of 
them  are  included  in  the  list  of  commitments.  The  threshold  values  are 
400 000  SDR  for  goods  and  services  and  5 000 000  SDR  for  construction 
services.  As  a  result,  article  36  discriminatory  provisions  will  be  removed 
with  respect to these three sectors. 

1.4.  The Coverage of the GPA: supplies, services and construction services 

contracts. 

37.  The  contracts  concerned  by 

the  GPA  are  supplies,  services  and 
construction  services. As  regards  supply  of goods, all products  are  covered 
by the Agreement  (if the  contracting  entity  is covered). The  only  exceptions 
apply to defence and a very limited number of other products. 

38.  As  regards services and construction services contracts, only the  categories 
listed  by each country  in annexes 4 and  5 of Appendix  I are  covered  by the 
GPA.  Moreover,  some  countries  apply  the  principle  of  reciprocity  for  each 
category  of  service.  This  entails  that  a  contracting  entity  of  one  of  the 
parties  to  the  agreement  is  obliged  to  ensure  equal  treatment  of  requests 
for  participation  and  tenders  from  the  European  Union  only  where  the  EU 
has  accepted  to  open  its  markets  for  the  service  in  question  to  service 
providers from that particular country  (see tables in part C infra)21. 

39. 

In addition, GPA  commitments  in the  services  sectors  are  only  binding  with 
reference  to  their  respective  schedule  of  commitments  in  the  General 
Agreement  of  Trade  and  Services  (GATS).  In other  words,  procurement  in 
sectors  specified  is  only  opened  to  GPA  members  to  the  extent  that  the 
services  sector  in  question  has  been  covered  in  the  GATS  schedule  of 
commitments  of the offeror  country. 

21 

However,  it  must  be  recalled  that  with  respect  to  the  United  States,  EU  service  providers 
have access to the US contracts  at sub-federal  level, although  EC service contracts  at sub-
federal  level are closed to the  US service  providers. This  situation derives from the  bilateral 
agreement  and  is  linked  to  the  limited  number  of  entities  committed  by  the  US  at  sub-
federal level. 

14 

1.5. 

Consequence of the entry into force  of the GPA with respect to Article 36 of 
Directive 93/38. 

40.  Article  36  of  the  Utilities  Directive  allows  for  a  Community  preference,  but 
provides that this shall apply only to tenders  comprising  products  originating 
in 
the  Community  has  not  concluded, 
multilaterally  or bilaterally, an agreement ensuring  comparable  and  effective 
access for Community  undertakings to the markets of those countries. 

third  countries  with  which 

41.  Following  the  conclusion  of  the  GPA  and  the  bilateral  agreement  with  the 
US  expanding  its  coverage, Article  36  of  Directive  93/38  no  longer  applies 
in  the  fields  covered  by  these  agreements  to  tenders  comprising  products 
originating  in the countries  signatories to the GPA, depending  on their  offer. 
To  make  clear  this  consequence  of  the  GPA,  an  explanatory  declaration 
was  published  in  the  Official  Journal22.  See  section  G.2  infra,  for  more 
information. 

2. 

THE AGREEMENT ON THÉ EUROPEAN ECONOMIC AREA: EFTA  COUNTRIES. 

42.  The  Agreement  on  the  European  Economic  Area  ("the  EEA  Agreement") 
signed  on 2 May  1992 by the Community,  its Member  States  and the  EFTA 
Countries, provides  in its Article 65 and Annex XVI that the provisions  of the 
Utilities  Directive  be  applied  in the  EFTA  Countries23.  The  EEA  Agreement 
entered  info  force  on  January  1994  for  the  following  EFTA  Countries: 
Austria,  Finland,  Iceland,  Norway  and  Sweden;  and  on  January  1996  for 
Liechtenstein.  As  regards  Norway,  complete  reciprocal  opening  was 
(31  December 
achieved  by 
1994).Following  enlargement  of  the  European  Union  on  January  1,  1995 
with  Austria,  Finland  and  Sweden,  the  three  remaining  EFTA  countries 
bound  by  the  public  procurement  provisions  of  the  EEA  Agreement  are 
Iceland  (since 01.01.1994),  Liechtenstein  (since  01.01.1996)  and  Norway 
(since 01.01.1995). 

the  derogation  period 

the  end  of 

22 

23 

See  OJ  C  322/9,  of  9  December  1995,  Entry  into  force  of  the  WTO  Agreement  on 
Government  Procurement in the light of Article 36 of Directive 93/38/EEC. 
See OJ L 1/3, of 3 January  1994. 

15 

3. 

ASSOCIATION  AGREEMENTS:  CENTRAL AND EASTERN  EUROPEAN  COUNTRIES  (CEECS). 

43.  The  Community  has  signed  a  number  of  bilateral  agreements  with  most  of 
the  CEECs.  Most  of these  agreements,  the  so-called  "Europe  Agreements" 
are  association  agreements  which  provides  for  the  preparation  of  the 
signatory  countries  for  future  accession  to  the  EU. The  European  Council 
meeting  in  Copenhagen  in June  1993  established  that  those  countries  that 
had  signed  "Europe  Agreements"  with  the  EU  could  be  eligible  for 
membership.  Currently,  only  six  out  of  the  ten  Europe  Agreements 
negotiated  are  in  force:  Bulgaria24,  the  Czech  Republic25,  Hungary26, 
Poland27,  Romania28 and the Slovak  Republic29. 

44.  The  "Europe  Agreements",  contain  a  public  procurement  clause.  This 
clause,  almost  identical  in  all  of  these  six  agreements,  establishes  that 
companies  of the  CEEC  concerned  enjoy  full  access  to  the  contract  award 
procedures  in  the  Community  under  conditions  no  less  favourable  than 
those applied to Community  companies. 

45.  National  treatment  has  also  been  granted  to  Community  companies 
established  under specific forms  in the countries  concerned. These  must  be 
joint-ventures  and  subsidiaries.  Branches  or  agencies  are  excluded. This  is 
clearly  indicated  in the  agreements  with  Romania  and  Bulgaria.  As  for  the 
other  four  agreements,  there  is  a  complementary  exchange  of  letters  with 
the same intention30. 

46.  By the end  of the transitional  periods, which for these  6 countries  are of ten 
years from the entry  into force of the  agreements,  national treatment will  be 
granted to  all Community  companies  and full access  to  procurement  will  be 
established on a reciprocal basis31. Until such time, article 36 still applies. 

24  OJ L 358, of 31  December  1994, in force from  1 February  1995. See Art. 68. 
25 
OJ L 360, of 31  December  1994, in force from  1 February  1995. See Art. 68. 
26 
OJ  L 347, of 31  December  1993, in force from  1 February  1994. See Art. 66. 
27  OJ L 348, of 31  December  1993, in force from 1 February  1994. See Art. 67. 
28 
OJ L 357, of 31  December  1994, in force from  1 February  1995. See Art. 68. 
29  OJ  L 359, of 31  December  1994, in force from  1 February  1995. See Art. 68. 
30 

See  OJ  L 347/267  of  31  December  1993; OJ  L 348/182  of  31  December  1993  for  Poland; 
OJ  L  359/212  of  31  December  1994  for  the  Slovak  Republic  and  OJ  L  360/212  of  31 
December  1994 for the Czech  Republic. 
The end of the transitional  periods for these  countries will  be: 31 January  2004 for  Hungary 
and  Poland;  and  31  January  2005  for  Bulgaria,  the  Czech  Republic,  Romania  and  the 
Slovak  Republic. 

31 

16-

PROCUREMENT IN THE TELECOMMUNICATIONS  SECTOR. 

4.1. 

Introduction. 

47. 

Parties  signatories  to  the  EEA  must  apply  the  EC  rules  on  public 
procurement,  which  include  procurement  in  the  telecommunication  sector. 
EC  suppliers 
Iceland, 
Liechtenstein and  Norway. 

therefore  have  access 

the  markets  of 

to 

48.  The  telecommunications  sector  was  not  included  in  the  GPA,  and  the  EC 
withdrew  its  offer  on  telecommunications  in  the  closing  stages  of  the 
negotiations  in the  absence  of  any  credible  counter  offer  from  other  major 
Parties.  As  a  result,  most  parties  to  the  GPA  decided  not  to  bind  the 
procurement  of  their  telecommunications  operators  under  the  agreement. 
Only  Aruba  has  completely  bound  its  telecommunications  operator  (Setar) 
to 
its  national 
communications  company  on  a  reciprocal  basis,  Korea  also  included  its 
public 
of 
telecommunications  equipment. 

the  agreement.  While 

(Korea  Telecom), 

Israel  offered 

procurement 

rules  of 

operator 

except 

the 

for 

49.  Hence,  negotiations  with  Israel  were  pursued  outside  the  GPA  framework 
leading  to  the  conclusion  of  a  bilateral  agreement.  Following  the  entry  into 
force  of  the  Korea-US  telecommunications  agreement  which  discriminates 
against  European  suppliers,  the  EC  also  negotiated  an  agreement  with 
Korea  outside  the  GPA  framework  on  the  access  to  the  Korean  market  of 
telecommunications  equipment. 

50.  As  a  result,  Article  36  of  the  Utilities  Directive  is  only  waived  in  this  sector 
with respect to  Iceland, Liechtenstein, Norway, Aruba, Israel and Korea. 

4.2. 

Israel, the bilateral agreement on procurement by telecommunications 
operators. 

51.  The  first  bilateral  agreement  concluded  in this  sector  is the  one  negotiated 
with  Israel.  During  the  negotiations  of  the  GPA,  Israel  offered  its  national 
communications  company,  Bezeq, on  a reciprocal  basis  (with the  exception 
of the procurement  of cables). As the Community finally withdrew  its offer  in 
this  sector,  bilateral  negotiations  started  between 
Israel  and  the  EC 
covering  telecommunications  and  other  sectors  (mainly  urban  transport,  v. 

17-

supra  section  1.3)  which  have  led  to  the  conclusion  of  the  bilateral 
agreement  on procurement  by telecommunications  operators32. 

52.  As  regards  Israel,  the  agreement  covers  procurement  by  Bezeq,  mobile 
they  provide 
telecommunication  operators,  cable  operators  when 
telecommunication  services,  and 
international  operators.  The  EC 
telecommunications  operators  are those which  must already follow the  rules 
set  out  in  Directive  93/38. Standard  procurement  and  challenge  procedures 
apply  to  contracts  above  certain  thresholds:  SDR  355 000  as  regards 
supplies  and services, and SDR  8 500 000 as regards  construction  services 
in the case of  Israel. Thresholds  in the case of the  EC are equal to those  in 
the directives  (ECU 600 000 and ECU 5 000 000 respectively). With  respect 
to services,  including  construction  services, this Agreement  applies  to  those 
listed  in  Annex  II  of  the  Agreement.  In  any  case,  the  principle  of  non 
discrimination  applies  to  all  procurement  contracts  by  telecommunications 
operators, regardless  of their value. 

53.  The agreement takes  into account the  particular  provision  of the  EC  Utilities 
Directive  which  establishes  that  procurement  rules  shall  not  apply  to 
contracts  awarded  by  telecommunications  operators  that  are  operating 
under full and effective  competition  in accordance with  relevant  legislation33. 
It  also  foresees  that  the  entry  into  force  of  the  agreement  as  regards 
Portugal and Greece shall not be before  1 January  1998. 

4.3.  Korea, the bilateral agreement on procurement by telecommunications 

operators. 

54.  Following 

intense  negotiations  with  Korea,  the  EC  has  reached  an 
agreement  with  Korea  to  open  its  telecommunications  equipment  (and 
related  services)  market  to  European  suppliers34.  The  value  of  the  Korean 
annual  market  is around  US$ 6 billion.  It has to  be  remembered  that  Korea 
Telecom  is  already  included  in Annex  3  of the  Korean  offer  in  the  GPA  for 
procurement  other than telecommunications  equipment. 

32 

33 
34 

Negotiations  of  this  bilateral  agreement  have  been  carried  out  in  parallel  with  another 
bilateral  agreement  on  procurement  by  telecommunications  operators  (v.  supra).  See 
Council  Decision of 24 February  concerning  the conclusion  of two Agreements  between  the 
EC  and  the  State  of  Israel  on  procurement  by  government  and  telecommunications 
operators,  OJ  L 202/72,  in  particular  pages  74  and  seq., of  30  July  1997.  The  Agreement 
was signed on  10 July  1997 and entered into force on  1st August  1997. 
See article 8.1 of the Utilities  Directive (loc.cit), and art.  1.6  of the Agreement. 
See  Council  Decision  of  22  April  1997  concerning  the  conclusion  of  an  Agreement  on 
telecommunications  procurement  and  an  Agreement  in  the  form  of  a  memorandum 
concerning 
the 
European  Community  and the  Republic  of  Korea, OJ  L 321/30, of 22 November  1997.  The 
Agreement was signed on 29 October  1997 and entered into force on  1st November  1997. 

telecommunications  operators  between 

the  procurement  of  private 

-  18-

55.  The  agreement  only  binds the  network  of  Korea  Telecom, the  government-
owned  operator,  which  accounts  for  some  80%  of  the  Korean  market.  In 
addition,  private  operators  tender  for  contracts  in an  independent  and  non 
discriminatory  way.  As  a  result  of  the  agreement,  Korea  will  remove 
discriminatory  procurement  legislation  and  practices,  and the  EC will  cease 
to apply Article 36 of the Utilities directive. 

56.  Standard  procurement  and  challenge  procedures  apply  to  contracts  above 
certain  thresholds:  SDR  450 000  in  the  case  of  Korea.  Thresholds  in  the 
case  of the  EC  are  equal  to those  in the  directives  (ECU  600 000).  In  any 
case,  the  principle  of  national  treatment  applies  to  contracts  above  SDR 
130 000. 

57.  The agreement takes  into account the  particular provision  of the  EC  Utilities 
Directive  which  establishes  that  procurement  rules  shall  not  apply  to 
contracts  awarded  by  telecommunications  operators  that  are  operating 
under full and effective  competition  in accordance with  relevant  legislation35. 
It  also  provides  that  the  entry  into  force  of  the  agreement  as  regards 
Portugal and Greece shall not be before  1 January  1998. 

58.  Although  the  Agreement  only  entered  into  force  on  1st November  1997, 
Korea  Telecom  accepted  preliminary  proposals 
for  qualification  by 
European  suppliers from the date of initialisation  (22  November  1996). As a 
result,  a  European firm was  able to win  a contract  valued  at  US$ 30  million 
in early December  1996. 

35 

See article 8.1 of the Utilities  Directive (loc.cit), and art.  1.5.2 of the Agreement. 

19-

C. 

AGREEMENTS  IN FORCE (AS  OF 31  DECEMBER  1997): BY SECTOR 

59.  Tables  1.1  and  1.2  below  describe  the  rights  of  suppliers,  contractors  and 
service  providers  of  the  EU  in  third  countries  as  regards  access  to 
procurement  markets  in the various  utility  sectors. Access  is granted  above 
the threshold values  indicated  in this table. 

60.  However,  it  should  be  noted  that  only  the  EEA  countries  and  Switzerland 
follow  the  sectoral  approach  which  is  used  in  the  EU,  that  is,  opening  or 
closing a complete sector to suppliers  of a particular country. As  regards  the 
other  countries, they  bind certain  contracting  entities which  operate  in these 
fields36.  In  some  cases,  access  can  be  rather  reduced  because  of  the 
limited  number  of  entities  covered.  In  those  circumstances,  due  to  the 
absence  of comparable  access, the  EU  has  not  given  national  treatment  in 
the  sector  in  question.  Nevertheless,  EU  companies  may  benefit  from 
national  treatment  in  this  particular  sector  with  respect  to  that  limited 
number of entities offered  by the third  country37. 

61.  Table  2  contains  the  exchange  values 

in  national  currencies  of  the 

thresholds established  by the GPA  in Special  Drawing  Rights. 

62.  As  regards  services  and  construction  services,  the  list  of  services  or 
construction  services  covered  by  each  country  in  those  sectors  may  be 
different.  Details are given in tables  3.1 to 3.10  and tables 4.1 to 4.10. 

36 

37 

However,  these  contracting  entities  could  be  government  departments  or  local  authorities, 
covered  as  such  under  Annexes  1 and  2  of  the  GPA.  They  are  not  therefore  necessarily 
contained  in Annex  3 of the GPA. 
This  is particularly  the case as  regards  the  United  States, given  the  balance  reached  in the 
bilateral  agreement.  For  instance,  EU  companies  have  access  to  contracts  awarded  by 
some  airports  in  the  US.  However,  given  their  limited  number,  the  EU  has  not  opened  its 
airport sector to US suppliers. 

- 2 0-

-Table  1.1:  Rights of suppliers, contractors and service providers of the EU in third 
countries. 

Access  is  granted  above  the  threshold  values  indicated  in this  table  (a).  Please 
note that the sectors are only  indicative. The full list of contracting  entities for the 
country  in question should be consulted (b). 

Countries 

Sectors 
WATER 

EEA countries: 
Iceland,  Norway 
&  Liechtenstein. 

ARUBA 

CANADA 

HONG KONG, 
CHINA 

ISRAEL 

Supplies 

Works 

Services 

EC directives 

400 000 SDR 

'•-%  ' 

130 000 SDR 

355 000 SDR 

EC directives 

5 000 000 SDR 

* 

*

•• 

" 

*

'

". 

^ 

5 000 000 SDR 

8 500 000 SDR 

EC directives 

400 000 SDR 

130 000 SDR 

355 000 SDR 

^»  »  '  '" 

-»  S. 

ELECTRICITY 

Supplies 

EC directives 

400 000 SDR 

Works 

Services 

EC directives 

5 000 000 SDR 

EC directives 

400 000 SDR 

r  '>%'-4%^  •  »r 

k 

EC directives 

3t^>,.>-^  .- 

ftp 

EC directives 

»• 

* 

j 

,{•.'5, 

EC directives 

EC directives 

EC directives 

•t~f&  s?$$?"h*' 

EC directives 

4% «*^v"^CC#s? 

*£r***^S\*f*."  %** t 

^ '.  ~':^|«-*3f;f' 

'  ; 

Privatised 
(no barriers) 
Privatised 
(no barriers) 
Privatised 
(no barriers) 
k  ;lflfK-"-'•'." 

355 000 SDR 

8 500 000 SDR 

355 000 SDR 

I* 

'•":•'^'•-"•-'.' 

• 

I'-,'  "^''  •.',  ^  "/I 

'  •-  ' 

''• 

:"  -  £':§K;~k':'.':•.' 

.^'^P^tvArS 

§-S.::^:p:-r^ 

V 

' 

. ^ i ' * ' i ; ^ ':: ;:' - ,v  .. 

',v-I.&tf } Ji:^?fc.'t^S 

130 000 SDR 

355 000 SDR 

ENERGY 
NETWORKS 
OTHER 
ELECTRICITY 

THAN 

ENERGY 
(exploitation of 
geographical 
area) 

PORTS 

Supplies 

EC directives 

400 000 SDR 

Works 

Services 

EC directives 

5 000 000 SDR 

5 000 000 SDR 

8 500 000 SDR 

EC directives 

400 000 SDR 

130 000 SDR 

355 000 SDR 

AIRPORTS 

Supplies 

EC directives 

400 000 SDR 

4 000 000 SDR 

355 000 SDR 

Works 

Services 

Supplies 

Works 

Services 

Supplies 

Works 

Services 

URBAN 
TRANSPORT 
NETWORKS 

TRANSPORT 
NETWORKS 
OTHER THAN 
URBAN 
TRANSPORT 

EC directives 

5 000 000 SDR 

5 000 000 SDR 

8 500 000 SDR 

EC directives 

400 000 SDR 

EC directives 

400 000 SDR 

EC directives 

5 000 000 SDR 

EC directives 

400 000 SDR 

&eilifsfri 
«\*;i^?^Sff 

EC directives 

EC directives 

EC directives 

> / * ' .,  »„~x- 

• 

•' 

:ft#t  H*;;^% 

400 000 SDR 

355 000 SDR 

4 000 000 SDR 

5 000 000 SDR 

400 000 SDR 

355 000 SDR 
( c) 
8 500 000 SDR 
( c) 
355 000 SDR 
( c) 

*  '•'•'. 

• *; 

~ 

*. 

• 

" 

' 

* 

.* 

TELECOMS 

Supplies 

EC directives 

400 000 SDR 

Works 

Services 

EC directives 

5 000 000 SDR 

EC directives 

400 000 SDR 

*S 
, 

'"/»•'"  > 
"•,-.  *• 

* . ., 

• 

-*1 

* 

*  < 

.."  • 

,•*. 

355 000 SDR 

8 500 000 SDR 

355 000 SDR 

Sectors 

Countries 

EEA countries: 
Iceland, Norway & 
Liechtenstein 

ARUBA 

CANADA 

HONGKONG, 
CHINA 

ISRAEL 

21 

- Table 1.2: Rights of suppliers, contractors and service providers of the EU in third 
countries. 

Access  is granted  above  the threshold  values  indicated  in this  table  (a). Please 
note that the sectors are only  indicative. The full list of contracting  entities for the 
country  in question  should be consulted (b). 

Countries 

JAPAN 

KOREA 

SINGAPORE 

SWITZERLAND 

U SA 

Sectors 

WATER 

Supplies 

Works 

Services 

130 000 SDR 

450 000 SDR 

400 000 SDR 

Mostly  excluded 

15  000 000 SDR 

15 000 000 SDR 

5 000 000 SDR 

Mostly excluded 

130 000 SDR  (d) 

450 000 SDR 

400 000 SDR 

Mostly excluded 

ELECTRICITY 

Supplies 

Works 

Services 

ENERGY 
NETWORKS 
OTHER 
ELECTRICITY 

THAN 

ENERGY 

(exploitation of 
geographical 
area) 

450 000 SDR 

In the process of 
privatisation 

400 000 SDR 

400 000  SDR 

15 000 000 SDR 

5 000 000 SDR 

5 000 000 SDR 

450 000 SDR 

400 000 SDR 

400 000 SDR 
Certain  services 
excluded 

'-

EC directives 

EC directives 

EC directives 

EC directives 

EC directives 

EC directives 

450 000 SDR 
some entities 
15  000 000 SDR 
some entities 
450 000 SDR 
some entities 

450 000 SDR 
some entities 
15 000 000 SDR 
some entities 
450 000 SDR 
some entities 

,

•. 

. 

, 

' •' 

. 

PORTS 

Supplies 

130 000 SDR 

130 000 SDR 

400 000 SDR 

400 000 SDR 

400 000 SDR (e) 

Works 

15 000 000 SDR 

5 000 000 SDR 

5 000 000 SDR 

5 000 000 SDR 

5 000 000 SDR 

Services 

130 0.00  SDR  (d) 

130 000 SDR 

400 000 SDR 

400 000 SDR 

400 000 SDR (f) 
Certain  service: 
excludec 

AIRPORTS 

Supplies 

130 000 SDR 

Excluded for EU 

400 000 SDR 

400 000 SDR 

Mostly  excluded 

Works 

15  000 000 SDR 

Excluded for EU 

5 000 000 SDR 

5 000 000 SDR 

Mostly excluded 

Services 

130 000 SDR  (d) 

Excluded for EU 

400 000 SDR 

400 000 SDR 

Mostly excluded 

URBAN 
TRANSPORT 
NETWORKS 

Supplies 

Works 

Services 

TRANSPORT 
NETWORKS 
OTHER 
URBAN 
TRANSPORT 

THAN 

Supplies 

Works 

Services 

TELECOMS 

Supplies 

Works 

Services 

Sectors 

Countries 

130 000 SDR 
some rail entities 
15 000 000 SDR 
some  rail entities 
130 000 SDR 
only some rail 
entities (d) 

130 000 SDR 
some rail entities 
15  000 000 SDR 
some rail entities 
130 000 SDR 
only  some rail 
entities (d) 

Excluded for EU 

400 000 SDR 

400 000 SDR 

Mostly excluded 

Excluded for EU 

5 000 000 SDR 

5 000 000 SDR 

Mostly  excluded 

Excluded for EU 

400 000 SDR 

400 000 SDR 

Mostly  excluded 

Excluded for EU 

Excluded for EU 

Excluded for EU 

450 000 SDR 
(g) 
15  000 000 SDR 

450 000 SDR 

JAPAN 

KOREA 

SINGAPORE 

SWITZERLAND 

U.S.A. 

22 

( a ) Thresholds indicated here correspond to the thresholds indicated in the different Annexes 3, which generally  include entities operating in 
those  sectors.  However,  contrary  to  the  EU  annexes,  it  might  be  possible  to  find  a  contracting  entity  operating  in  these  sectors  which  is 
included in annex  1 (e.g. national port authority)  or 2 (e.g. municipal  utility). In those cases, the thresholds  applicable  are the ones  indicated 
in those annexes. Table 2 below contains all the thresholds with the equivalent of SDRs in national currencies. 
( b ) See the relevant agreement.  In most cases it will be the GPA. 
( c ) Except entities operating bus services 
( d ) The threshold  for  architectural, engineering  and other  technical  services  covered  by the Agreement  (i.e. CPC  reference  n"  867  except 
86712-13, 22, 24 and 86727) in Japan is 450 000 SDR. 
( e ) For certain contracting entities in the USA, the threshold for supplies and services  is the equivalent in SDR of US $ 250 000. 
( f ) Contracts regarding naval construction excluded. 
( g )  Procurement  by  Korea Telecom  is included  in the  GPA,  except  for  telecommunications  equipment,  which  is  the  subject  of  a  separate 
bilateral agreement. 

(*)  AS REGARDS SERVICES AND WORKS, SEE TABLES 3.1  TO 3.10  AND 4.1  TO 4.10. 

- Table 2: Equivalence of SDR (Special Drawing Rights) in national currencies 

COUNTRY 

TYPE OF CONTRACT 

EEA COUNTRIES: ICELAND, 
LIECHTENSTEIN AND NORWAY 

Supplies, services and works. 

THRESHOLD 
VALUE - SDR 

THRESHOLD VALUE IN 
NATIONAL  CURRENCY 

Thresholds 
established in 
Directive 93/38 

Thresholds 

established in Directive 93/38 

ARUBA 

CANADA* 

HONG KONG, CHINA 

ISRAEL 

JAPAN 

1 

130 000 

400 000 

5 000 000 

130 000 

-

355 000 

5 000 000 

130 000 

200 000 

400 000 

HK $ 1  433 000 

HK $ 2 204 000 

HK $ 4 409 000 

5 000 000 

HKS55  109 000 

130 000 

250 000 

355 000 

US$  190 000 

US $ 366 000 

US$519  000 

8 500 000 

US$  12 430 000 

130 000 

200 000 

450 000 

Yen 18 000 000 

Yen 28 000 000 

Yen 65 000 000 

1 500 000 

Yen 210 000 000 

4 500 000 

Yen 650 000 000 

15 000 000 

Yen 2 160 000 000 

Supplies and services 
GPA, Annex 1 
Supplies and services 
GPA, Annex 3 
Construction  services 

Supplies and services 
GPA Annex 1 
Supplies and services 
GPA Annex 2 
Supplies and services 
GPA Annex 3 
Construction  services 

Supplies and services 
GPA Annex 1 
Supplies and services 
GPA Annex 2 
Supplies and services 
GPA Annex 3 
Construction  services 

Supplies and services 
GPA Annex 1 
Supplies and services 
GPA Annex 2 
Supplies and services 
GPA Annex 3 
Construction  services 

Supplies and certain services 
GPA Annex  1 &3 
Supplies and certain services 
GPA Annex 2 
Architectural, engineering and other 
technical services -
GPA Annex  1 &3 
Architectural, engineering and other 
technical services -
GPA Annex 2 
Construction  services 
GPA Annex 1 
Construction  services 
GPA Annex 2 & 3 

- 2 3-

KOREA 

SINGAPORE 

SWITZERLAND 

Supplies and services 
GPA Annex 1 
Supplies and services 
GPA Annex 2 
Supplies and services 
GPA Annex 3 
Construction  services 
GPA Annex 1 
Construction  services 
GPA Annex 2 & 3 

Supplies and services 
GPA Annex 1 
Supplies and services 
GPA Annex 3 
Construction services 

Supplies and services 
GPA Annex 1 
Supplies and services 
GPA Annex 2 
Supplies and services 
GPA Annex 3 
Construction  services 

UNITED STATES OF AMERICA 

• 

Supplies and services 
GPA Annex 1 
Supplies and services 
GPA Annex 2 
Certain supplies and services 
GPA Annex 3 
Certain supplies and services 
GPA Annex 3 
Construction  services 

130 000 

200 000 

450 000 

Won  151  000 000 

Won 233 000 000 

Won 524 000 000 

5 000 000 

Won 5 830 000 000 

15  000 000 

Won  17 490 000 000 

130 000 

400 000 

5 000 000 

130 000 

200 000 

400 000 

SFR 248  950 

SFR 383 000 

SFR 766 000 

5 000 000 

SFR 9 575 000 

130 000 

355 000 

400 000 

-

US$  190 000 

US$519  000 

US $ 585 000 

US $ 250 000 

5 000 000 

U S $ 7 3 11  000 

*  Canada  has  made  no  commitments  as  yet  in  the  fields  of  water,  energy, 
transport and telecommunications. 

-24 

Tables 3.1 to 3.10: List of services covered with respect to EU service providers 

Table  3.1. 

EEA countries: Iceland, Liechtenstein  and  Norway 

SERVICE 

TPCH^"*"1""''^'**"* 

All services listed in annex XVIA and XVIB of Directive 93/38/EEC 

Table 3.2. 

Aruba 

SERVICE ~ ~ " ~™ 

« - ^ ^— 

-  •  ••••-.' 

' 

Legal services 
Accountancy 
Taxation services 
Engineering services 
Computer services 
Management consulting services 
Franchising 
Insurance 
Banking and securities trade 
Hotel lodging services 
Entertainment services 
Recreation park and beach services 
Sporting services 
Shipping (freight and passenger transport) 
Maritime auxiliary services: cargo handling 
Freight transport agency services/freight forwarding 
Maritime auxiliary services: storage/warehousing 
- 
Road transport 

. 

. 

.. 
-  •  . . 

,- 

-:•'.  •• •. 

• 

-.. 

•-• 

- 

; 

• 

_ __ 

. 

,- 

c pc  NO 

~861 
862 
863 
8672 

-  ' 

. 

841 
865 
8929 
812,814 
811,813 
6411 
9619 
96491 
9641 
72 
74_ 
74 
74  • 
71231,71234,71239 

Table 3.3. 

Canada 

SERVICE 

CPCN0 

Canada has made no commitments as yet in the fields of water, energy, transport and 
telecommunications. 

Table 3.4.  Hong  Kong, China 

TERVIC^E,"",", , , , , ,^ 

; 

. 

.  - 

Computer and related services 
Rental/Leasing services without operators 
Maintenance and repair of equipment 
Market research & public opinion polling services 
Security services 
Building cleaning services 
Advertising services 
Courier services 
Telecommunications  services (Provisions of certain types of service may require licensing 
under the Telecommunications ordinance). 
Environmental services (sewage, refuse disposal) 
Financial services (there Is a list of exceptions: 81402, 81339, 8119, 81323, 81339, 81319, 
8131, 8133, 81339. 81333, 81321) 
Air transportation services (excluding transportation of mail) 
Road transport services 

•  • 

. 

• 

; 

; 

; 

CPCN" 

v 

843, 844, 845, 849 
83101 to 83106, 83109 
633| 8861. 8866 
864 
87304 
874 
871 

• 

7523, 843, 7521. 7529, 
754 
9401, 9402 
Ex 81 

731,732, 734 
712,6112,8867 

- 2 5-

Table 3.5. 

Israel 

SERVICE 

Architectural services 
Engineering services 
Urban planning 
Computer and related services 
Advertising services 
Market research and public opinion 
Management consulting 
Environmental services 

Table 3.6. 

Japan 

SERVICE 

Maintenance and repair services of motor vehicles 
Maintenance and repair services of motorcycles and snowmobiles 
Other land transport services (except 71235 Mail transportation by land) 
Rental services of seagoing vessels with operator 
Rental services of non-sea-going vessels with operator 
Air transport services (except 73210 Mail transportation by air) 
Freight transport agency services 
Courier services 
Telecommunications services 

•: . 

; 

. 

; 

; 

- Electronic mail 
- Voice mail 
' 
- On-line information and data base retrieval 
- Electronic data interchange (EDI) 
- Enhanced facsimile services 
- Code and protocol conversion 
- On-line information and/or data processing (including transaction processing) 
; 

Computer and related services 
Market research and public opinion polling services 
Architectural, engineering and other technical services . 
Advertising services 
Armoured car services 
Building-cleaning services 
Publishing and printing services 
Repair services incidental to metal products, machinery and equipment 
Sewage and refuse disposal, sanitation and other environmental protection services 

• 
.••.----• 
•  -,- 

:.' 

- 

- 

. 

. 

CPCN" 

8672-3 
8671 
8674 
841-3 
871 
864 
865-6 
9401-5 

CPCN0 

6112 
6122 
712 
7213 
7223 
73 
748 
7512 

7523 
7521 
7523 
7523 
7529 
7523 
7523 
84 
864 
867 
871 
87304 
874 
88442 
886 
94 

" 

' 

Notes: 
6112 

7512 
867 

Maintenance  and  repair  services  are  not  included with  respect  to  those  motor  vehicles,  motorcycles  and  snowmobiles 
which are specifically modified and inspected to meet regulations of the entities. 
Courier services are not included with respect to letters. 
Architectural, engineering and other technical services related to construction services, with the exception of the following 
services when procured independently, are included: 

Final design services of CPC 86712 Architectural design services; 
CPC 86713 Contract administration services; 
Design  services  consisting  of  one or a  combination  of final  plans, specifications  and cost  estimates  of 
either  CPC  86722  Engineering  design  services  for  the  construction  of  foundations  and  building 
structures,  or  CPC  86723  Engineering  design  services  for  mechanical  and  electrical  installations  for 
buildings, or CPC 86724 Engineering design services for the construction of civil engineering works;  and 
CPC 86727 Other engineering services during the construction and installation phase. 

88442 

Publishing and printing services are not included with respect to materials containing confidential information. 

Table 3.7. 

Korea 

In the  Korean  General  Notes  it is specified  that  a service  listed  in Annex  4 
is  covered  with  respect  to  a  particular  Party  only  to  the  extent  that  such 
Party  has  included  that  service  in its Annex  4.  In practice, this  means  that 
only  the  following  list  of  services  is  covered  with  respect  to  EL)  service 
providers: 

26 

SERV\CE'mmmmm~mm~mmm~m^~m°mmmm~mm 

j  CPCN" 

Maintenance and repair of equipment 

~" 

Maintenance and repair of vessels 
Land transport services: only transportation of containerized freight, excluding cabotabe 
Telecommunications  services: electronic mail, voice mail, on-line information and dta-base 
retrieval, electronic data interchange, enhance/value-added  facsimile services including store 
and forward, store and retrieve 
Computer and related services: 

- Consultancy services related to the installation of computer hardware 
- software implementation services 
- data processing services 
; 
- data base services 
- maintenance and repair services of office machinery and equipment  (including 

computers) 

Accounting, auditing and bookkeeping services 
Market research and public opinion polling services 
Management consulting services and projet management services 
Architectural services 
Engineering services 
Integrated engineering services 
Urban planning and landscape architectural services; related scientific and technical 
consulting services; technical testing and analysis services 
Related scientific and technical consulting services 
Composition and purity testing and analysis services (only inspection, testing and analysis 
services of air, water, noise level and vibration level) 
Technical inspection services 
Advertising Agency  services 

; 

Publishing and printing services on a fee or contract basis 
Sewage and refuse disposal; sanitation and similar services: 

633, 8861,  8862, 8863. 
8864, 8865, 
8866 
71233 
7523 

841_ 
842 
843 
844 
845 

.  862 
864 
865, 36601 
8671 
8672 
8673 
8674 

86751, 86752 
86761, 

86764 
8711, 8719 

88442 

- Refuse water disposal services  (only collection and treatment services of industrial waste 

9401 

water) 

\ 

- Industrial refuse disposal services (only collection, transport and disposal services of 

9402 

industrial refuse) 

' 

. 

- Cleaning services of exhaust gases and noise abatement services (services other than 

- Environmental testing and assessment services (only environmental impact assessment 

. 

I construction work services) 

services) 

I 
I 

| 

, 

9404, 9405 
. 
9406, 9409 

CPC N° 

862 
8671 
865 
874 
641-643 
74710 
7472 
843 
844 
932 
84100 
84210 
87905 
7523 
7523 
7523 
7523 
96112 
96113 
96121 
96122 
96311 
8672 
7512 

Table 3.8. 

Singapore 

SERVICE 

\ 

. 

. 

. 

Accounting, Auditing and Book-keeping services 
Architectural services 
Management and consulting services 
Building-cleaning services 
Hotels and restaurants find. Catering) 
Travel Agencies and Tour operators 
Tourist guide services 
Data Processing Services 
Database Services 
Veterinary Services 
; 
Consultancy services related to the installation of computer hardware 
Systems and Software consulting services 
Translation and interpretation services 
Eledronic Mail 
Voice Mail 
On-line information and database retrieval 
Electronic Data Interchange 
Motion picture or videotape production services 
Motion picture or videotape distribution services 
Motion picture projection services 
Videotape projection services 
Library services 
Engineering services 
Courier services 
Biotechnology  services 
Exhibition services 
Commercial market research 
Interior design services, excluding architedure 
Professional, advisory and consulting services relating to agriculture, forestry, fishing and 

• 

• 

; 

~ 

2 7-

I  mining, induding oilfield services 

Table 3.9. 

Switzerland 

SERVICE 

Maintenance and repair services 
Land transport services, induding armoured car services, and courier services, except transport 
Of mail 
Air transport services of passengers and freight, except transport of mail 
Transport of mail by (and, except rail, and by air 
Telecommunications services 

; 

, 

. 

' 

• 

Insurance services 
Banking and investments services** 

Financial services 
(a) 
(b) 
Computer and related services 
Accounting, auditing and bookkeeping services 
Market research and public opinion polling services 
Management consulting services and related services 
Architectural services; engineering services and integrated engineering services, urban planning 
and landscape architectural services; related sdentific and technical consulting services; 
technical testing and analysts services 
Advertising services 
Building-deaning services and property management services 
Publishing and printing services on a fee or contrad basis 
Sewage and refuse disposal; sanitation and similar services 

. 

-

CPC  N" 

~ 

6112,6122,633,886 
712 (except 71235), 
7512,87304 
73 (except 7321) 

>  71235, 7321 

• 

752* (except 7524, 7525, 
7526) 
ex 81 
812,814 

84 
862 
864 
865, 866"* 
867 

871 
874, 82201 - 82206 
88442 
94 

except voice telephony, telex, radiotelephony, paging and satellite services. 
except  contrads  for  financial  services  in  connection  with  the  issue,  sale,  purchase  or  transfer  of  securities  or  other 
finandal  instruments,  and central  bank  services.  In  Finland  payments  from  governmental  entities  (expenses)  shall  be 
transacted  through a certain credit  institution  (Postipankki  Ltd)  or through  the  Finnish  Postal  Giro  System.  In Sweden, 
payments to and from governmental agencies shall be transacted through the Swedish Postal Giro System (Postgiro). 
except arbitration and condliation services. 

Table 3.10.  United States of America 

In  principle,  all  services  listed  in the  Universal  List  of  Services  (document 
MTN.GNS/W/120)  are  covered, except  the  following  categories, which  are 
excluded: 

1 

All  transportation  services,  including  Launching  Services  (CPC 
Categories  71,  72, 73, 74, 8859, 8868). 
Note: Transportation  services, where  incidental  to  a  contract  for  the 
procurement of supplies, are not subject to this Agreement. 
Dredging. 
All services purchased in support of military forces located overseas. 
Management  and  operation  contracts  of  certain  government  or 
privately-owned  facilities  used  for  government  purposes,  including 
federally-funded  research and development centers (FFRDCs). 
Public  utilities  services,  including  telecommunications  and  ADP-
related  telecommunications  services  except  enhanced  (i.e.,  value-
added) telecommunications services. 
Research and  Development. 
Printing Services (for Annex 2 -subfederal- entities only) 

28 

However,  in the  General  Notes  it is specified that  a service listed  in Annex 
4  is  covered  with  respect  to  a  particular  Party  only  to  the  extent  that  such 
Party  has  included  that  service  in  its Annex  4.  In  practice,  this  means  that 
only  the  following  list  of  services  is  covered  with  respect  to  EU  service 
providers: 

SERVICE 

Maintenance and repair services 
Land transport services, 
Telecommunications  services* 
. 

* 

services'* 

Insurance services 
Banking and investments 

Finandal services 
(a) 
(b) 
Computer and related services 
Accounting,, auditing and bookkeeping services 
Market research and public opinion polling services 
Management consulting services and related services 
Architectural services; engineering services and integrated engineering services, urban 
planning and landscape architectural services; related sdentific and technical consulting 
services; technical testing and analysis services 
Advertising services 
Building-deariing services and property management services 
Publishing and printing services on a fee or contrad basis 
Sewage and refuse disposal; sanitation and similar services 

• 

• 

• 

; 

CPCN" 

6112,6122,633,886 
Only 7512, 87304 
752* (except 7524,7525, 
7526) 
ex 81 
812,814 

84 
862 
864 
865, 866*** 
867 

• 

871 
874, 82201 -82206 
88442 
94 

except voice telephony, telex, radiotelephony, paging and satellite services. 
except  contracts  for  financial  services  in  connection  with  the  issue,  sale,  purchase  or  transfer  of  securities  or  other 
financial  instruments,  and  central  bank  services.  In  Finland  payments  from  governmental  entities  (expenses)  shall  be 
transacted  through  a certain  credit  institution  (Postipankki  Ltd)  or through  the  Finnish  Postal  Giro  System.  In Sweden, 
payments to and from governmental agencies shall be transacted through the Swedish  Postal Giro System (Postgiro). 
except arbitration and condliation services. 

- 2 9-

- Tables 4.1 to 4.10: List of construction services covered with respect to EU service 
providers 

Table 4.1. 

EEA countries: Iceland, Liechtenstein  and  Norway 

CONSTRUCTION  SERVICES 

, 

CPC N° 

All activities listed in annex XI of Directive 93/38/EEC 

: 

Table 4.2. 

Aruba 

CONSTRUCTION  SERVICES 

Construction work for buildings 

Table 4.3.  Canada 

" c P C ^0^ " " " ™ " ™ "™ 

512 

CONSTRUCTION  SERVICES 

CPC N° 

Canada has made no commitments  as yet in the fields of water, energy, transport and 
telecommunications. 

Table 4.4.  Hong  Kong, China 

CONSTRUCTION SERVICES 

T p c 7 r ~ ~," ™—" " " " "" 

All construction services listed in division 51 of CPC 

51 

Table 4.5. 

Israel 

CONSTRUCTION SERVICES 

; 

Pre-erection work at construdion sites 
Construdion work for buildings  . 
Construction work for civil engineering 
Assembly and erection of prefabricated construction 
Special trade construdion work 
Installation work 
Building completion and finishing work 
Renting services related to equipment for construdion 

CPCN* 

511 
512 
513 
514 
515 
516 
517 
518 

. 

t_ 

30 

Table 4.6. 

Japan 

CONSTRUCTION  SERVICES 

T p c T r " ™ ™ ™ " ™ ™ ^ ™ ^" 

All construction services listed in division 51 of CPC 

51 

Table 4.7. 

Korea 

CONSTRUCTION SERVICES 

Pre-eredion work at construdion sites 
Construction work for buildings 
Construdion work for civil engineering 
Assembly and erection of prefabricated construction 
Special trade construction work 
Installation work 
Building completion and finishing work 

Table 4.8. 

Singapore 

CONSTRUCTION SERVICES 

Pre-eredion work at construction sites 
Construdion work for buildings 
Construdion work fordvil engineering 
Assembly and eredion of prefabricated construction 
Special trade construction work 
Installation work  '. 
Building completion and finishing work 
Renting services related to equipment for construction 

- 

. 

.' • 

Table 4.9. 

Switzerland 

CONSTRUCTION  SERVICES 

Pre-erection work at construction sites 
Construction work for buildings. 
Construdion work for dvil engineering 
Assembly and erection of prefabricated construction 
Special trade construction work 
Installation work  ••• 
Building completion and finishing work 
Renting services related to equipment for construction 

•. 

. 

. 

• 

• 

CPCN" 

511 
512 
513 
514 
515 
516 
517 

; 

. 

• 

.' 

_ 

__ 

. 

. 

__ 

-

CPC N° 

511 
512 
513 
514 
515 
516 
517 
518 

: 

•  • 

\ 

; 

CPCN" 

511 
512 
513 
514 
515 
516 
517 
518 

• 
/ 

-. 
' 

. . 

• 

Table 4.10.  United States of America 

C O N S T R U C T O ^ E R V I C E S ™—~ ^ ^ ~,™, , , ,™~ 

" " ~ ™ " ™"  CPCN0 

All construction services listed in division 51 of CPC 

51 

31 

D. 

NEGOTIATIONS  CONCLUDED BUT AGREEMENTS  NOT  YET  IN  FORCE  AS  OF 
31  DECEMBER  1997 

1. 

NEGOTIATIONS WITHIN THE GPA  FRAMEWORK:  ACCESSION OF NEW MEMBERS. 

63.  Negotiations  within the  GPA framework  have sought  to  enlarge  the  number 
of signatories  to the  agreement.  After  the  entry  into force  of the  Agreement 
in  January  1996,  other  countries,  such  as  Panama,  have  formally  applied 
for  membership.  Some  have  already  become  members  (v.  supra  section 
B.1). 

64.  Chinese  Taipei38,  which  is  not  as  yet  a  member  of  the  WTO,  has  also 

formally  requested  accession to the  agreement. 

2. 

ASSOCIATION AGREEMENTS:  CENTRAL AND EASTERN  EUROPEAN  COUNTRIES  (CEECS). 

65.  Europe  Agreements  have  also  been  negotiated  with  Estonia39,  Latvia40, 
Lithuania41  and  Slovenia42;they  have  not  yet  however  entered  into  force  as 
of  31  December  1997. 

66.  The  provisions  concerning  public  procurement  in  these  agreements  are 
similar  to  those  included  in  the  other  six  already  described.  There  is 
however  an  important  difference  with  respect  to  the  transitional  periods 
envisaged. 

67. 

In the  case  of  Estonia  there  is no transitional  period  and  access  to  all  kinds 
of  Community  companies  should  be  accorded  as  of the  entry  into  force  of 
the Agreement.  In the  case  of  Latvia  and  Lithuania, the transitional  periods 
end at the latest on 31  December  1999. Transitional  periods do  not apply to 
subsidiaries  and joint-ventures  created  by Community  companies. 

38 
39 

40 

41 

42 

See document GPA/IC/5, of June  1994. 
Signed  on  12  June  1995,  see  art.  67,  doc.  COM  (95)  207fmal.  It will  enter  into  force  on  1 
February  1998. 
Signed  on  12 June  1995,  see  art.  68,  doc.  COM  (95)  207final.  It will  enter  into  force  on  1 
February  1998. 
Signed  on  12  June  1995,  see  art.  68,  doc.  COM  (95)  207final.  It will  enter  into  force  on  1 
February  1998. 
Signed  on  10 June  1996,  see  art.  69,  doc.  COM  (95)  341final.  The  Interim  Agreement  on 
trade  and  trade-related  matters  entered  into  force  on  1  July  1997  although  it  had  been 
applied  provisionally  since  1 January  1997 (see OJ L 344/1 of 31  December  1996 and OJ L 
151/38  of  10  June  1997).  However,  the  Interim  Agreement  does  not  contain  any  public 
procurement clause. 

- 3 2-

68.  As for Slovenia, the transitional period lasts 6 years after the entry  into force 
of the Agreement.  It does  not apply to Community  companies  established  in 
Slovenia  in the forms  provided for in the  agreement. 

3. 

OECD:  CONVENTION  ON COMBATING  BRIBERY. 

69.  On  20  November  1997,  OECD  Member  Countries  with  the  exception  of 
Australia  and  five  non-member  countries  (Argentina,  Brazil,  Bulgaria,  Chile 
and  the  Slovak  Republic)  adopted  a  convention  on  combating  bribery  of 
foreign  public  officials  in  international  business  transactions.  [Signature 
subsequently  took  place  on  17  December  1997.]  This  convention  is  the 
culmination  of  two  years  of  work  in  the  OECD  on  the  problem  of  making 
bribery  of  foreign  officials  a  crime43.  This  convention 
should  facilitate 
access to  public  procurement  contracts  in third countries which  have  signed 
the  convention,  since  in  most  cases  international  business  transactions 
involving  public officials will include public procurement  contracts. 

43 

See http://www.oecd.org  for more information. 

33 

E. 

INFORMATION  ON  BARRIERS  IN THE  FIELD  OF PUBLIC  PROCUREMENT 
AND PROPOSED  LINES  OF ACTION. 

70.  Although 

the  Community  has  negotiated  a  number  of 

international 
agreements  aiming  at  opening  up  procurement  markets,  not  all  barriers  at 
the  international  level  have  been  removed.  The  Commission  is  concerned 
by the effective difficulties that the  EC industry  is facing  in major markets. 

71. 

the  help  of  Member  States  and  European 

In  this  regard,  an  important  initiative  was  launched  in  1996:  the  Market 
Access  Strategy44,  with  the  objective  to  identify  obstacles  and  to  choose 
priorities  for  appropriate  action.  In  order  to  implement  this  Strategy,  the 
trade 
Commission,  with 
associations  and businesses,  began the  laborious  process  of assembling  all 
the  information  available  on  the  barriers  affecting  European  exports.  The 
objective  was  to  establish  a  comprehensive  data  base  which  is  constantly 
up-dated  and which  should  help  to  identify  priorities  in  market  access.  The 
Market  Access  Database  is  accessible  on-line  via  the  INTERNET  at  the 
following  URL  address:  http://mkaccdb.eu.int/  or  at  the  EUROPA  web-site 
(http://europa.eu.int). 

72.  Public procurement  is one of the sectors covered by the data base. So far, it 
contains 
following 
information  concerning  public  procurement  on  the 
countries:  Australia;  Bangladesh,  Belarus;  Brazil;  Bulgaria;  Canada;  Chile; 
India; 
China;  Czech  Republic;  Egypt;  Hong  Kong, China;  Hungary; 
Indonesia;  Japan;  Korea;  Malaysia;  Mexico;  Morocco;  New  Zealand; 
Pakistan;  Philippines;  Poland;  Russia;  Singapore;  Slovenia;  South  Africa; 
Chinese  Taipei  (Taiwan); Thailand  and the  United  States. The  Commission 
is  aware  that  the  information  on  barriers  regarding  public  procurement 
contained  in the  data  base  can  be  improved. To this  end,  it welcomes  any 
contributions,  in  particular  from  suppliers  who  have  concrete  experiences 
with  certain  barriers.  On  this  basis,  the  Commission  has  the  intention  to 
complete  the  information  contained  and  to  continuously  up-date  the  data 
base  in  this  field.  A  study  has  been  completed  during  1996  on  public 
third 
procurement  market  opportunities  and  obstacles 
countries45.  The  aim  of  this  study  is to  assist  the  Commission  in  setting  its 
priorities  and to provide the necessary  background data for  negotiations. 

in  specified 

44 

45 

Communication  on  the  Global  Challenge  of  International  Trade: A  Market  Access  Strategy 
for the  European  Union; COM (96) 53, of  14 February  1996. 
See OJ C 158/10, of 24 June 95. 

34-

73.  In the field of public procurement,  most of the barriers  identified relate to the 
discriminatory  legislation  still  existing  in  most  of  our  trading  partners  for 
procurement  outside  the  scope  of  the  agreements  (e.g.  "Buy  American" 
provisions  in  the  United  States;  set  asides  for  SMEs  in  Korea  and  other 
countries);  to  the  lack  of  appropriate  information  on  procurement  (e.g. 
multiplicity  of  publications,  absence  of  contact  or  information  points  etc.)  or 
to  the  absence  of  appropriate  enforcement  mechanisms  (e.g.  lack  of 
available  remedies etc) among others. 

74.  As  regards  the  dismantling  of  barriers,  the  Commission  proposes  some 
lines  of  action.  Further  negotiations,  both  at  the  multilateral  and  bilateral 
levels,  are envisaged  in order  to  eliminate  discriminatory  legislation  in  third 
countries  (see  section  F below).  In addition,  it  has the  intention  to  facilitate 
access  to  public  procurement  information  in  third  countries  and  to  help 
European suppliers to enforce their rights abroad (see section  G below). 

75. 

In this context,  it is to be noted that on 27  November  1996, the  Commission 
adopted  a  Green  Paper  on  public  procurement  in  the  European  Union46. 
Chapter 6 of this Green  Paper is devoted to procurement  outside the Union. 
After  a  reflection  and  debate  period,  it  is  the  Commission's  intention  to 
adopt  at  an  early  date  a  Communication  setting  out  the  lines  of  its  future 
policy  in this field46bis. 

46 
46bis 

See document COM (96) 583 final, of 27 November  1996. 
jne  Commission  Communication  on  public  procurement  in  the  European  Union  has  been 
adopted on 11 March  1998, see document COM (98)  143 final. 

35 

F. 

FURTHER  NEGOTIATIONS 

1. 

W TO FRAMEWORK 

76.  At  present,  there  are  three  parallel  processes  of  negotiations  on  public 
procurement  within  the  framework  of  the  WTO: the  review  of the  GPA,  the 
negotiations  on  GATS  rules  and  the  discussions  on  transparency  rules 
pursuant to the mandate of the Singapore  Ministerial  Conference. 

1.1.  The GPA:  implementation and review. 

- Implementation. 

77.  Parties to the  GPA  are currently  completing  a  procedure  for the  notification 
of  national  implementing  legislation,  so  as  to  ensure"that  the  commitments 
made  are  effectively  enforced.  In  this  context,  the  Commission  has  also 
launched  a  study  in  order  to  monitor  the  application  of  the  GPA  by  some 
signatories  and 
the  public 
to 
procurement  markets of these countries47. 

remaining  obstacles 

identify 

the 

in 

-  Review. 

78.  The  GPA  requires  countries  to  adhere  to  relatively  detailed  rules  and  does 
'  not  always  guarantee  effective  non-discrimination  between  domestic  and 
imported  goods  and  services  in  government  procurement.  As  a  result, 
coverage  is  rather  reduced  in  a  number  of  countries  (v.  supra  subsection 
B.1.1). 

79.  Negotiations  with  a  view  to  improving  the  Agreement  and  achieving  the 
greatest  possible  extension  of 
its  coverage  among  all  Parties  and 
eliminating  any  remaining  discriminatory  measures  and  practices  are 
foreseen  in  its  Article  XXIV §7(b)  and  (c),  which  calls  on  the  Parties  to 
undertake  further  negotiations  not  later  than  the  end  of the  third  year  from 
the  date  of  its  entry  into force. With  these  considerations  in  mind, the  GPA 
Committee  decided  at  its meeting  of 4 June  1996 to  commence  a review  of 
the  GPA,  with  a  view  to  making  the  agreement  more  accessible  and 
attractive  to  non-members  and  to  adjusting  the  Agreement  to  newly-
emerging technologies. 

47 

See OJ C 192/16, of 3 July 96. 

-36 

80.  Such  negotiations  have  been  initiated  in  1997  and  include,  among  others, 
the  following  main  elements:  (i)  expansion  of  the  coverage  of  the 
Agreement,  notably  by  extending  it  to  sectors  not  presently  covered;  (ii) 
elimination  of  discriminatory  measures  and  practices;  and  (iii)  simplification 
including,  where  appropriate, 
and 
adaptation  to  advances  in  the  area  of  information  technology.  The  aim  of 
these  negotiations  is  the  expansion  of  membership  of  the  Agreement  by 
making it more accessible to non-Parties. 

improvement  of 

the  Agreement, 

1.2.  The General Agreement on Trade and Services (GATS) 

81.  The  General  Agreement  on  Trade  in  Services  (GATS)  applies  to  all 
measures  affecting 
the  supply  of  services  in  all  sectors  covered  by  the 
For  the  time  being,  procurement  rules  are  exempted  from  the 
GATS. 
Article  II  (Most  Favoured  Nation)  and  Article  XVII  (National  Treatment) 
obligations  but  there  is  a  mandate  to  start  multilateral  negotiations  on 
government  procurement  in services  (GATS Article Xlll§2).  This mandate is 
a  recognition  of  the  fact  that  effective  liberalisation  of  trade  in  services  is 
also dependent  on multilateral rules on  procurement. 

82.  This  mandate  was  taken  up  by WTO  Members  upon  entry  into  force  of  the 
GATS  in  1995,  with  substantive  work  commencing  in  1997.  Work  is 
progressing  on  the  basis  of  discussions  on  a  number  of  key  concepts,  in 
particular  what  constitutes  a  services'  transaction  (definition)  and  on 
transparency.  The  result  of the  negotiations  should  lead  to  the  creation  of 
specific rules for procurement  of services  in addition to the application  of the 
existing  GATS  rules  and  in  particular  the  National  Treatment  and  Most 
Favoured  Nation obligations. 

1.3.  The Singapore Ministerial Conference: mandate on transparency rules related 

to government procurement. 

83.  During  the  Singapore  Ministerial  Conference  in  Early  December  1996,  the 
Ministers  agreed  to  launch  discussions  on  transparency  rules  related  to 
the  European 
government  procurement.  The  original  proposition  of 
interim 
Community  was  to 
agreement  on  procurement  of  goods  based  on 
the  principles  of 
transparency  and  due  process,  bearing  in  mind  that  the  Community's  final 
objective  was  to  achieve  National  Treatment  and  Most  Favoured  Nation 
effectively for all government  procurement  in all WTO member  countries. 

launch  a  process  of  negotiations  on  an 

- 3 7-

84.  The  mandate  finally  decided  in  the  Singapore  Ministerial  Conference  in 
early  December  1996  provides  for  the  establishment  of  a working  group  to 
conduct  a  study  on  transparency  in  government  procurement  practices, 
taking  into  account  national  policies  and,  based  on  this  study,  to  develop 
elements for inclusion  in an appropriate  agreement. 

85.  Work  on  this  basis  is  already  underway  in  a  newly  created  WTO  Working 

Group  on Transparency  in Government  Procurement  Practices. 

2. 

BILATERAL NEGOTIATIONS. 

2.1. 

Customs Union Agreements: Turkey, Andorra and San Marino. 

- Turkey 

86.  The  decision  of  6  March  1995  by  the  EC-Turkey  Association  Council  to 
move to the final phase  of the customs  union received  Parliamentary  assent 
on  13  December  1995,  enabling  it  to  come  into  force  on  31  December 
199548. 

87.  The  decision  on  customs  union  sets  out  in  detail the  actions  to  be taken  in 
the final  phase, following  the  pattern  set out  in the  1960 Ankara  Agreement 
and  the  additional  Protocol  of  1970, which,  among  others,  provide  for  the 
following  measures:  the  immediate  reciprocal  abolition  of  customs  duties 
and  equivalent  levies  on  manufactured  goods,  the  immediate  reciprocal 
abolition  of  quantitative  restrictions  or  equivalent  measures  of  imports  and 
exports  on  industrial  goods,  and  immediate  adoption  by  Turkey  of  the 
common  customs  tariff  and  of  the  common  commercial  policy  (there  are 
some exceptions). 

88.  EC  industrial  products  are  therefore  granted  access  to  the  Turkish  market. 
Discrimination  against  such  industrial  products  in  Turkey  (or  viceversa) 
could  be  considered  contrary  to  the  prohibition  of  measures  equivalent  to 
quantitative  restrictions. 

89.  However,  as  regards  access  of  European  suppliers  to  Turkish  tender 
procedures,  the  Decision  on  Customs  Union  only  provides  for  the  possible 
initiation  of  negotiations  aiming  at  the  mutual  opening  of  the  Parties' 
respective  government  procurement  markets  after  the  date  of  its  entry  into 
force. To this  end, the Association  Council will set a date for the  initiation  of 
In  its 
negotiations  and  will  review  progress 

in  this  area  annually49. 

48 

49 

Decision  n°  1/95  of  the  EC-Turkey  Association  Council  of  22  December  1995  on 
implementing the final phase of the Customs Union; OJ L 35, of 13 February  1996. 
See article 48 of the Decision, loc.cit. 

- 3 8-

Communication  of  15 July  1997 on the future  of relations  with Turkey50,  the 
Commission  identified progress  in this area as a priority objective. 

- Andorra and San Marino. 

90.  The  customs  union  agreement  with  the  Principality  of  Andorra  does  not 
contain  any  specific  provision  on  public  procurement51.  As  regards  free 
movement  of  goods,  the  agreement  provides  for  the  reciprocal  abolition  of 
customs  duties  and  equivalent  import  levies,  the  reciprocal  abolition  of 
quantitative  restrictions or equivalent  measures  on imports  and the  adoption 
by  Andorra  of  the  common  customs  tariff  and  of  the  common  commercial 
policy. 

91.  EC  products  are 

therefore  granted  access 

to  Andorra's  market. 
Discrimination  against  such  products  in  Andorra  (or  viceversa)  could  be 
considered contrary to the prohibition  of measures  equivalent to  quantitative 
restrictions52. 

92.  As  regards  San  Marino,  the  customs  union  agreement  signed  on  16 
December  1991  does  not  contain  any  specific  provision  on  public 
procurement53.  This  agreement,  however,  has  not  yet  been  ratified. 
Pending  its  entry  into  force,  an  Interim  Agreement  was  approved54,  which 
does  not refer to public procurement  either. 

2.2. 

Trade Agreements: Switzerland 

93.  -Switzerland  is  also  in  EFTA  but  on  6  December  1992, decided  not  to join 
the  European  Economic Area.  In January  1993, it requested  the  opening  of 
bilateral  negotiations  on  a  wide 
including  public 
procurement,  with  the  view  to  replacing  the  trade  agreement  of  1972  (in 
which there were  no rules on public procurement). 

range  of 

topics, 

50 

51 

52 

53 

54 

Communication  from  the  Commission  to  the  Council  and  the  European  Parliament  on  the 
further  development  of  relations  with  Turkey,  see  document  COM  (97)  394final,  of  15 July 
1997. 
See Council  Decision of 26  November  1990 on the conclusion of the Agreement  in the form 
of an exchange  of letters  between  the  European  Economic  Community  and the  Principality 
of Andorra, OJ L374/13, 31 December  1990. 
In a joint statement, the parties agreed that the Joint Committee will interpret the  provisions 
governing  measures  having equivalent  effect to quantitative  restrictions  in the same way  as 
they  are  interpreted  in  trade  within  the  European  Community.  See  OJ  L  374/22,  of  31 
December  1990. 
See draft Agreement  on customs  union and co-operation  between the  European  Economic 
Community  and the Republic of San Marino, OJ C302/10, of 22 November 1991. 
See  Council  Decision  of 27  November  1992 on  the conclusion  of an  interim  Agreement  on 
trade  and customs  union  between  the  European  Economic  Community  and the  Republic  of 
San Marino, OJ L359/13, of 9 December 1992. 

3 9-

94.  The  negotiating  objective  of  the  European  Community  is  the  bilateral 
expansion  of  the  coverage  beyond  the  commitments  of  the  GPA,  to  which 
Switzerland  is  a signatory  party.  In that  sense,  the  intention  is to  obtain  an 
opening  of the  Swiss  procurement  market  equivalent  to  that  existing  in  the 
Community,  covering  therefore  all  the  utilities  sectors  for  both  public  and 
private  (operating  under special or exclusive  rights)  entities. As  a result,  the 
scope of this agreement would be similar to the  EEA. 

95.  Negotiations  began  on  12  December  1994  and  they  are  at  the  closing 

stage. 

2.3.  Association Agreements: Cyprus and Malta. 

96. 

In  the  Association  Agreements  with  Cyprus55  and  Malta56  there  are  no 
relevant provisions on public  procurement. 

2.4.  Euro-Mediterranean Association Agreements: Israel, Jordan, Morocco, the 
Palestinian Authority, Tunisia and other Mediterranean Countries. 

- Israel. 

97.  The  Euro-Mediterranean  Agreement  establishing  an  association  with  Israel 
provides  in its Article  35 that the  parties  shall take  measures  with  a view  to 
a  mutual  opening  of their  respective  government  procurement  markets  and 
the  procurement  markets  of  undertakings  operating  in  the  utilities  sectors 
for  the  purchase  of  goods,  works  and  services,  beyond  the  scope  of  what 
has  been  mutually  and  reciprocally  covered  under 
the  Government 
Procurement  Agreement  concluded  in  the  framework  of  the  WTO57.  This 
article was  completed  by a joint declaration  on public  procurement  whereby 
the  parties  committed  themselves  to open formal  negotiations  with the  view 
to  reaching an agreement. 

55 

56 

57 

Agreement  establishing  an  Association  between  the  European  Economic  Community  and 
the Republic of Cyprus, OJ L133, of 21 May  1973, as amended. 
Agreement  establishing  an  Association  between  the  European  Economic  Community  and 
Malta, OJ L 61,  14 March  1971, as amended. 
See  Proposal  for  a  Decision  of  the  Council  and  the  Commission  on  the  conclusion  of  a 
Euro-Mediterranean  Agreement  establishing  an  association  between 
the  European 
Communities  and their  Member  States, of the one  part  and the  State of  Israel, of the  other 
part. Document SEC(95)  1719final, page 17. 

- 4 0-

98.  The  Euro-Mediterranean  agreement  was  initialled  on  28  September  1995, 
but  it has  not been ratified yet58.  Nonetheless, the parties  gave effect  to this 
joint  declaration,  and  two  agreements  on  government  procurement  were 
reached and sighed on 22.12.1995 (v. supra). 

99. 

In any  case, Article  35 of the  Euro-Mediterranean  Agreement  is still  a  basis 
for further  negotiations, if needed. 

- Jordan, Morocco, the Palestinian Authority and Tunisia. 

100. Four  other  Euro-Mediterranean  Agreements  (Jordan59,  Morocco60,  the  PLO 
for  the  benefit  of the  Palestinian  Authority  of  the  West  Bank  and  the  Gaza 
strip  and  Tunisia61)  have  been  signed  of  which  so  far  only  the  Interim 
Association  Agreement  with  the  PLO  has  entered  into  force62.  The 
Agreement  with  Tunisia  is  likely  to  enter  into  force  shortly.  The  public 
procurement  provisions  of  these  agreements  are  more  limited  than  in  the 
case  of  the  Israeli  agreement,  as  it  is  simply  state  that  the  objective  is  a 
reciprocal  and gradual  liberalisation  of the  public  procurement  contracts. To 
that  end,  the  Association  Council  shall  take  the  necessary  steps.  Public 
procurement  could therefore  be the object of negotiations  in the future. 

58 

59 

60 

61 

62 

In the meantime, an interim agreement  on trade was approved. See Decision  of the  Council 
and the Commission  of 22  December  1995 on the conclusion  by the  European  Community 
of  an  Interim  Agreement  on  trade  and  trade-related  matters  between  the  European 
Community  and the  European  Coal and Steel Community,  on the one part  and the  State  of 
Israel on the other part, OJ L 71/1, of 20 March  1996. 
See  Proposal  for  a  Council  and  Commission  Decision  on  the  signature  and  on  the 
conclusion  of a  Euro-Mediterranean  Agreement  with  Jordan.  See document  COM  (97)  554 
final. 
See  Proposal  for  a  Decision  of  the  Council  and  the  Commission  on  the  conclusion  of  a 
the  European 
Euro-Mediterranean  Agreement  establishing  an  association  between 
Communities  and their Member States on the one part and the  Kingdom of Morocco, on the 
other  part.  This  agreement  was  initialled  on  10  November  1995.  See  document  COM(95) 
740final. 
See  Proposal  for  a  Decision  of  the  Council  and  the  Commission  on  the  conclusion  of  a 
Euro-Mediterranean  Agreement  establishing  an  association  between 
the  European 
Communities  and their  Member  States  on the  one  part  and the  Republic  of Tunisia,  on  the 
other  part. This agreement was  signed on  17 July  1995, and  it was  the first of the  so-called 
Euro-Mediterranean  Agreements. See document COM(95) 235final. 
See Council  Decision  of 2 June  1997 concerning  the conclusion  of the  Euro-Mediterranean 
Interim  Association  Agreement  on 
the  European 
Community,  of the one  part, and the Palestine  Liberation  Organization  (PLO)  for the  benefit 
of the Palestinian Authority  of the West Bank and the Gaza  Strip, OJ L 187, of 16 July  1997. 

trade  and  cooperation  between 

41 

- Other Mediterranean Countries. 

101. At  present,  the  Commission  is  negotiating  as  well  the  conclusion  of  Euro-
Mediterranean  Agreements  with  Algeria,  Egypt  and  Lebanon,  while 
negotiations  with  Syria  will  commence  shortly.  Moreover,  the  Barcelona 
Declaration  of  28  November  1995  has  set  2010  as  the  target  date  for  the 
gradual establishment  of a free-trade  area within a new  Euro-Mediterranean 
Partnership.  The  participants  in  the  Euro-Mediterranean  Conference  of 
Barcelona  on  27/28  November  1997  were,  in  addition  to  the  European 
Community  and  its  Member  States: Algeria,  Cyprus,  Egypt,  Israel, Jordan, 
Lebanon,  Malta,  Morocco,  Syria,  Tunisia,  Turkey  and  the  Palestinian 
Authority. 

2.5.  Cooperation agreements providing for future negotiations. 

102. The  co-operation  agreement  with  Mexico  provides  for  the  gradual  and 
mutual opening  of agreed government  procurement  markets  on a  reciprocal 
basis  A  decision  of  the  Joint  Council  established  by the Agreement  will  be 
adopted  in  the  future  deciding  on  the  appropriate  arrangements  and 
timetables63. 

103. The  EC  has  concluded  a  bilateral  agreement  with  Chile  in  which  a  public 
procurement  co-operation  clause  has  been  included64.  Under  such  clause, 
parties  agree  to  co-operate  to  ensure,  on  a  reciprocal  basis,  open,  non 
discriminatory  and  transparent  procedures  for  procurement  by  government 
agencies  and  entities  having  special  and  exclusive  rights  at  a  central, 
federal,  regional,  provincial  and  local  level.  In order  to  attain  this  objective, 
the  parties  agree  to  consider  the  possibility  of concluding  an  agreement  on 
access 
these  sectors  of  procurement,  generating 
transparent,  fair  conditions  in  the  award  of  contracts,  subject  to  clear 
complaint  procedures. 

to  contracts 

in 

63 

64 

See  the  Economic  Partnership,  Political  Co-ordination  and  Co-operation  Agreement 
between  the  European  Community  and  its  Member  States  of  the  one  part,  and  the  United 
Mexican  States  of  the  other  part,  in  particular  art  10.  The  Agreement  is  not  yet  in  force.  It 
was  initialised  on  23  July  1997  and  has  been  signed  on  8  December  1997.  The 
Commission's  proposal for  a Council  Decision  has  been  published  in the  OJ C 350/6  of  19 
November  1997. An  Interim Agreement  on Trade  and Trade-related  matters  has  also  been 
signed  (see  Commission's  proposal,  OJ  C 356/28,  of  22  November  1997,  in  particular  art. 
4). 
See  the  Framework  Co-operation  Agreement  leading  ultimately  to  the  establishment  of  a 
political  and  economic  association  between  the  European  Community  and  its  Member 
States, on the one  part, and the  Republic  of Chile, on the other  part,  in particular  article  11; 
OJ  L 209, of  19 August  1996. This Agreement  is not yet  in force, as ratification  procedures 
have not been finalised. 

42 

104. Similar  clauses  are  likely  to  be  found  as  well  in  future  trade  agreements 
modelled  under  the  Mexican  or  Chilean  one.  At  present,  the  Commission 
has  initiated  negotiations  with  South  Africa65  with  the  view  to  conclude  a 
trade  agreement. 

2.6.  Co-operation agreements providing for simple co-operation. 

105. A similar  clause, although  more  reduced  in scope, can  be found  in the  draft 
Partnership  and  Co-operation  Agreements  with  the  New 
Independent 
States.  These  agreements  provide  for  co-operation  between  the  Parties  to 
develop  conditions  for  open  and  competitive  award  of  contracts  for  goods 
and  services  in  particular  through  calls  for  tenders.  However,  the  question 
for  future  negotiations  is  not  addressed.  Partnership  and  Co-operation 
Agreements  have  been  negotiated  with  the  following  countries:  Ukraine66, 
Russia67,  Kazakhstan68,  Kyrgyz  Republic69,  Moldova70,  Belarus71, 
Georgia72,  Armenia73,  Azerbaijan74  and  Uzbekistan75.  However,  only  the 
agreement  with  Russia  is  in  force.76.  Therefore,  in  the  future,  public 
procurement  could  be  the  subject  of  specific  agreements,  although  this  is 
not necessarily aimed by the above-mentioned  clauses. 

106. Similarly, the Co-operation Agreement with the Former  Yugoslav  Republic 
of  Macedonia  establishes  that  the  parties  will  encourage  and  promote  co 
operation  in the field of public  procurement77. 

65 
66 
67 

68 
69 
70 
71 
72 
73 
74 
75 
76 

77 

See Commission  Press Release IP/96/258. 
See document COM (94) 226final, in particular article 47. 
See  Council  and  Commission  Decision  of  30  October  1997  on  the  conclusion  of  the 
Partnership  and  Cooperation  Agreement  between  the  European  Communities  and  their 
Member  States, of the one  part,  and the  Russian  Federation,  of the  other  part,  OJ  L327  of 
28 November  1997. This agreement entered into force on  1 December  1997. 
See document COM (94) 411 final, in particular article 48. 
See document COM (94) 412final, in particular article 48. 
See document COM (94) 477final, in particular article 44. 
See document COM (95) 44final, in particular article 39. 
See document COM (96)  135final, in particular article 48. 
See document COM (96)  136final, in particular article 48. 
See document COM (96)  137final, in particular article 48. 
See document COM (96) 254final, in particular article 47. 
In  the  Interim  Agreements  with  the  rest  of  the  New  Independent  States,  there  are  no 
provisions on public  procurement. 
See  Council  Decision  of  27  November  1997  concerning  the  conclusion  of  a  co-operation 
agreement  between  the  European  Community  and  the  Former  Yugoslav  Republic  of 
Macedonia,  OJ  L  348,  of  18  December  1997.  This  agreement  will  enter  into  force  on  1 
January  1998. 

- 4 3-

107.  In the  Agreement  with  Mercosur,  no  such  a  clause  on  public  procurement 
exists.  However,  in  accordance  with  articles  4  and  5  of  the  Agreement, 
Parties  agree  to  co-operate  in trade  matters,  without  excluding  any  sector. 
Under  the  provisions  of  these  articles,  public  procurement  could  therefore 
ultimately  be  the  subject  of  negotiations  in  the  future78.  The  trade  and  co 
operation  agreement  with  Albania  does  not  provide  for  specific  co 
operation  in the field of public procurement  outside the general  co-operation 
in trade and commercial issues79. 

3. 

THE  TELECOMMUNICATIONS SECTOR. 

108.  During 

the  negotiations  of  the  GPA, 

the  Community  held  bilateral 
negotiations  on telecommunications  procurement with the  US with a view to 
obtaining  appropriate  guarantees  of  access  for  its  suppliers.  In  these 
negotiations,  it  emphasised  the  importance  of  the  application  of  certain 
disciplines  with  a  view  to  ensuring  transparent  and  open  tendering,  in 
particular,  by  privately-owned  US  telecommunications  operators.  The  US 
was,  however,  not able to make firm commitments  in this regard. 

109.  In  this  context,  it  has  to  be  remembered  that  in  May  1993,  following  the 
absence  of an agreement  covering this sector, the  United  States  decided  to 
impose  sanctions  on  Community  bidders  participating  in  certain  Federal 
Government  tender  competitions,  particularly  those  for  contracts  below  the 
threshold. These included sub-threshold  contracts  awarded by the federally-
owned  electrical  utilities.  The  Community  responded  in  a  measured  and 
imposing  counter-sanctions  against  US  bidders80. 
controlled  way  by 
However,  the  US  has  expressed  its  intention  to  try  to  reach  an  agreement 
with the EU in this area in the future. 

110. In any  case, there  has  been  no fundamental  progress  on this  issue, so  the 
US sanctions against  European suppliers  and the  EC counter-measures  still 
apply. 

78 

79 

80 

See  Interregional  Framework  Cooperation  Agreement  between  the  European  Community 
and  its  Member  States,  of  the  one  part,  and  the  Southern  Common  Market  and  its  Party 
States, of the other part; OJ L 69, of 19 March  1996. 
See  Council  Decision  of 26  October  1992 on the  conclusion  of an Agreement  between  the 
European  Economic  Community  and the  Republic  of Albania  on trade  and commercial  and 
economic  co-operation, OJ  L 343 of 25  November  1992. This agreement  entered  into force 
on  1 December  1992. 
Council  Regulation  n°  1461/93  of  8  June  1993  concerning  access  to  public  contracts  for 
tenderers  from  the  United  States  of  America,  OJ  L  146/1,  of  17  June  1993;  and  Council 
Regulation  n°1836/95  of  24  July  1995  completing  the  Annex  to  Regulation  n°  1461/93 
concerning access to public contracts for tenderers  from the United States of America, OJ L 
183/4, of 2 August  1995. 

-44 

G. 

HOW TO FIND  OPPORTUNITIES ABROAD AND ENFORCE  ONE'S RIGHTS. 

1. 

INFORMATION  ON OPPORTUNITIES  IN PUBLIC PROCUREMENT. 

111. Contracting  entities  from  the  countries  parties  to  the  EEA  publish  their 
procurement  notices  in  the  EC  Official  Journal,  S  series  and  the  TED 
database81. 

112. Central  and  Eastern  European  Countries'  contracting  authorities  publish 

their procurement  notices according to their relevant legislation. 

113. GPA  members  publish  their  notices  in the  media  listed  in Appendix  II to  IV 

oftheGPA: 

-Aruba: Landscourant  (Aruba's Official Journal)  and local press. 
-Canada:  Government  Business  Opportunities  (GBO)  and  MERX 
(http://www.merx.cebra.com 
-Hong  Kong  China:  The  Government  of  Hong  Kong  Special 
Administrative  Region  Gazette,  daily  press,  Kowloon-Canton 
Railway  Corporation web page  (http://www.kcrc.com). 
-Israel: The Jerusalem  Post. 
-Japan:  Kanpô  (Annex  1),  Kenpô,  Shihô  or  their  equivalents 
(Annex 2), and  Kanpô (Annex 3). 
-Korea:  Kwanbo  (The  Korean  Government's  Official  Gazette)  and 
The Seoul Shinmun. 
-Liechtenstein: member of the  EEA, see above. 
-Norway:  member of the EEA, see above. 
-Singapore: the  Republic of Singapore Government  Gazette. 
-Switzerland:  Swiss  Official  Trade  Gazette/Feuille  officielle  suisse 
du commerce  (Annex  1 and Annex  3), Official  publications  of  every 
Swiss Canton  (26) (Annex 2 and Annex 3). 
-United 
Daily 
Commerce 
(http://cbdnet.access.gpo.gov).  Additional  information  for  entities 
listed  in Annex 2  of Appendix  I may  be  available  in  state  journals, 
such as the New York Contract  Reporter. 

Business 

States: 

The 

81 

See the Agreement  on the  European  Economic Area as amended, in particular  annex XVI, 
and the Arrangement  regarding the publication of EFTA notices on procurement  annexed  to 
the  Final  Act  of  the  EEA  Agreement;  OJ  L  1,  of  3  January  1994,  pages  461  and  552 
respectively. 

-45 

114. As  regards  information  technology  applied  to  public  procurement,  the 
Commission services  have found a number of internet sites giving  access to 
official  and  unofficial  databases  in  third  countries.  The  location  of  these 
databases  can  be obtained through  a visit to the SIMAP www  homepage at 
the following  URL address: http://simap.eu.int/. 

115. With  the  aim  to  facilitating  access  to  the  markets  covered  by  the  GPA, 
Directorate  General  XV  has  commissioned  a  study  to  provide  information 
setting  out  opportunities  for  EU  companies  arising  from  the  GPA82.  This 
study  should  provide  explanatory  information  on  the  GPA  that  will  help  EU 
companies  to  learn  about  and  benefit  from  new  export  opportunities.  The 
results  of  this  study  will  be  made  publicly  available  in  a  user-friendly  and 
practical  format.  The  study  has  been  completed  in  late  1997.  Publication  is 
expected  for  1998,  inter  alia  electronically  on  the  SIMAP  homepage 
(http://simap.eu.int). 

THE  RIGHTS  OF EUROPEAN  SUPPLIERS  ABROAD. 

116. European  suppliers  and  service  providers  willing  to  enter  the  procurement 
markets  in  the  EEA  enjoy  full  rights  and  they  benefit  from  challenge 
procedures  identical to those within the EC. 

117. As  regards  the  GPA,  this  agreement  also  contains  detailed  rules  on 
challenge  procedures 
for  aggrieved  suppliers.  Although  amicable 
consultation  is  encouraged,  Article  XX  obliges  each  party  to  put  in  place 
non-discriminatory,  timely,  transparent  and  effective  procedures  enabling 
suppliers  to  challenge  contract  awards.  Challenges  must  be  heard  by  a 
court,  or  an  impartial  and  independent  review  body  with  no  interest  in  the 
outcome  of  the  procurement  (which  must  meet  a  minimum  of  procedural 
requirements).  Challenge  procedures  shall  provide  for  at  least'  interim 
measures,  and  correction  of the  breach  of the Agreement  or  compensation 
for the  loss or damages  suffered  (which may be limited to the cost of tender 
preparation or action). 

118. An action  can be  brought to the WTO  Dispute  Settlement  Body  by the  EU if 
it considers  that  a party to the  GPA  has failed to  comply  with  its  obligations 
under  this  article  XX83.  In this  context,  an  action  by  the  EU  would  strongly 
rely  on 
information  provided  by  EU  aggrieved  suppliers.  The 
Commission therefore  encourages  suppliers  and service  providers to  inform 
the  Commission's  services  on  public  procurement  related  issues  arising 
abroad. 

the 

82 
83 

See OJ C 192/14, of 3 July 96. 
See article XXII of the GPA.  Obviously,  Dispute  Settlement  rules cover the whole  GPA,  not 
only article XX. 

-46 

119. In  two  individual  cases  the  Community  has  made  use  of  the  possibility  to 
request formal consultations  under the  Dispute  Settlement  Mechanism. The 
first concerned  a procurement tender  published  by the  Ministry  of  Transport 
of  Japan 
to  purchase  MTSAT  Satellite-based  Augmentation  System 
(MSAS)84.  After  a  period  of  consultations,  a  mutually  agreed  solution  was 
found  and  the  dispute  was  settled85.  The  second  case  concerns  the 
application  of the GPA  by US sub-federal entities, and more particularly,  the 
Act  Regulating  State  Contracts  with  Companies  doing  Business  with  or  in 
Burma  (Myanmar)  enacted  by  the  Commonwealth  of  Massachusetts  on  25 
June  1996  (Chapter  130 of the Acts  of  1996)86.  In essence,  the  contested' 
provision  establishes  a  10%  price  preference  in favour  of those  companies 
not doing  business  in  Burma. The Japanese  also asked for consultations  in 
this case87. Consultations  are still pending  by the time of writing this  report. 

120. The  Israeli  and  Korean  agreements  on  telecommunications  procurement 
also  provide  for  the  establishment  of  challenge  procedures.  Requirements 
are  similar  to  those  of  the  GPA,  to  which  Israel,  Korea  and  the  EC  are 
signatories. 

84 
85 
86 
87 

See Request of consultations  of 26 March  1997, document GPA/D1/1 of  1 April  1997. 
See Notification of 31 July  1997, document GPA/D1/2/Rev.1 of 14 August  1997. 
See Request of consultations  of 20 June  1997, document GPA/D2/1 of 26 June  1997. 
See Request of consultations  of  18 July  1997, document GPA/D3/1 of 21 July  1997. 

- 4 7-

H. 

LIST  OF  AGREEMENTS  CONCLUDED  IN  THE  FIELD  OF  PUBLIC 
PROCUREMENT  WHICH ARE IN FORCE AS  OF 31  DECEMBER  1997 

1. 

LIST  OF AGREEMENTS 

MULTILATERAL  AGREEMENTS 

SIGNATURE 

PUBLICATION 
REFERENCES 

ENTRY  INTO 
FORCE 
(end of transi 
tional period) 

WTO Agreement  on government  procurement 
(GPA). 

15.04.1994 

OJL336.23.12.1994 
OJC332,  09.12.1995 
OJC256.03.09.1996 

- As for Canada, EC, Israel, Japan, Norway, 
Switzerland and the US 

OJL134,  20.06.1995 
(US  bilateral) 

01.01.1996 

- As for Aruba 

- As for  Korea 

- As for  Hong Kong, China 

- As for  Liechtenstein 

- As for  Singapore 

Agreement  on the  European Economic Area 
(EEA). 

02.05.1992 

O J L 1,  03.01.1994 

- As for  Iceland 

- As for  Norway 

- As for  Liechtenstein 

OJ L86/58, 
20.04.1995 

25.10.1996 

01.01.1997 

19.06.1997 

18.09.1997 

20.10.1997 

01.01.1994 

01.01.1994 
(31.12.1994) 
01.01.1996 

-48 

BILATERAL  AGREEMENTS 

SIGNATURE 

PUBLICATION 
REFERENCES 

Association Agreements with the Countries of 
Central and Eastern  Europe. 

-  Bulgaria 

08.03.1993 

OJL358,  31.12.1994 

- Czech  Republic 

04.10.1993 

OJL360,  31.12.1994 

-  Hungary 

-  Poland 

-  Romania 

16.12.1991 

OJL347,  31.12.1993 

16.12.1991 

OJL348,  31.12.1993 

01.02.1994 

OJL357,  31.12.1994 

- Slovak  Republic 

04.10.1993 

OJL359,  31.12.1994 

ENTRY  INTO 
FORCE 
(end  of  transi 
tional period) 

01.02.1995 
(31.01.2005) 
01.02.1995 
(31.01.2005) 
01.02.1994 
(31.01.2004) 
01.02.1994 
(31.01.2004) 
01.02.1995 
(31.01.2005) 
01.02.1995 
(31.01.2005) 

Agreement  in the form of exchange of letters 
between the European Community  and the 
United States of America on  government 
procurement. 
Agreement  between the European  Community 
and the State of Israel on procurement  by 
government 

30.05.1995 

OJL134,  20.06.1995 

01.01.1996 

10.07.1997 

OJL202,  30.07.1997 

01.08.1997 

SECTORAL  AGREEMENTS 
(TELECOMMUNICATIONS) 

SIGNATURE 

PUBLICATION 
REFERENCES 

ENTRY  INTO 
FORCE 

Agreement  between the  European  Community 
and the State of Israel on procurement  by 
telecommunications  operators 
Agreement  on telecommunications  procurement 
between  the  European  Community  and  the 
Republic of Korea 

10.07.1997 

OJL202,  30.07.1997 

01.08.1997 

29.10.1997 

OJL321,  22.11.1997 

01.11.1997 

- 49 

2. 

CONSEQUENCES OF THE ENTRY INTO FORCE OF THESE AGREEMENTS WITH RESPECT TO ARTICLE 36  OF 

DIRECTIVE 93/38/EEC. 

121. Article  36  of  Directive  93/38/EEC  of  14 June  1993  allows  for  a  Community 
preference.  But  it  provides  that  this  shall  apply  only  to  tenders  comprising 
products  originating  in  third  countries  with  which  the  Community  has  not 
concluded,  multilaterally  or  bilaterally,  an  agreement  ensuring  comparable 
and  effective  access  for  Community  undertakings  to  the  markets  of  those 
third countries. 

the  agreement 

122. Under  Council  Decision  94/800/EC  of  22  December  1994  concerning  the 
conclusion  on behalf of the  European  Community  as  regards  matters  within 
the  Uruguay  Round 
its  competence,  of 
multilateral  negotiations  (1986-1994)88;  and  Council  Decision  95/215/EC  of 
29  May  1995  concerning  the  conclusion  of an Agreement  in the  form  of  an 
exchange  of  letters  between  the  European  Community  and  the  United 
States  of  America  on  government  procurement89,  Article  36  of  Directive 
93/38/EEC  no  longer  applies,  in  the  fields 
tenders 
comprising  products originating  in the countries indicated: 

listed  below,  to 

reached 

in 

-  production,  transport  or  distribution  of  drinking  water  -  products 
originating  in  Aruba;  Hong  Kong,  China;  Israel;  Japan;  Korea; 
Singapore and Switzerland; 

-  urban  railway,  automatic  systems,  tramway,  trolleybus,  bus  or 
cable  services  -  products  originating  in  Aruba;  Hong  Kong, 
China; Israel (except bus services), Singapore  and Switzerland; 
-  airport  facilities  and  other  air  transport  terminal  facilities  -
products  originating  in Aruba;  Hong  Kong, China;  Israel; Japan; 
Singapore  and Switzerland; 

-  maritime  or  inland  port  or  other  terminal  facilities  -  tenders 
originating  in  Aruba;  Hong  Kong,  China;  Israel;  Japan;  Korea; 
Singapore; Switzerland and the United States of America; 

-  production,  transport  or  distribution  of  electricity  -  products 
Israel;  Korea; 
in  Aruba;  Hong  Kong,  China; 

originating 
Switzerland  and the United States of America; 

-  telecommunications  -  products  originating  in  Aruba;  Israel  and 

Korea. 

123.lt  should  also  be  noted  that,  because  Iceland,  Liechtenstein  and  Norway 
have  acceded  to  the  Agreement  on  the  European  Economic  Area90, 

88 
89 
90 

See OJ L 336/273, of 23 December  1994. 
See OJ L 134/25, of 20 May  1995. 
See  Council  and  Commission  Decision  94/1/ECSC.EC  of  13  December  1993  on  the 
conclusion  of  the  Agreement  on  the  European  Economic  Area  between  the  European 
Communities,  their  Member  States  and  the  Republic  of  Iceland,  the  Principality  of 
Liechtenstein  and  the  Kingdom  of  Norway,  OJ  L1/1, 03.01.1994.  This  Decision  has  been 
amended,  in  particular,  by  Council  and  Commission  Decision  94/2/ECSC,  EC  of  13 
December  on  the  conclusion  of  the  Protocol  adjusting  the  Agreement  on  the  European 

- 5 0-

independently  of  the  accession  of  Norway  and  of  Liechtenstein  to  the 
Agreement  on  Government  Procurement, Article  36 of  Directive  93/38/EEC 
is  no  longer  applicable  to  tenders  in  any  of  the  areas  covered  by  the 
Directive  comprising  products  originating  in  Iceland,  Liechtenstein  and 
Norway. 

Economic  Area,  OJ  L1/571,  03.01.1994  and  by  the  Treaty  concerning  the  accession  of 
Austria,  Finland  and  Sweden,  OJ  C241/9,  29.08.1994.  See  also  EEA  Council  Decision  n° 
1/95  of  10  March  1995  on  the  entry  into  force  of  the  Agreement  on  the  EEA  for  the 
Principality of Liechtenstein, OJ L86/58, 20.04.1995. 

-51  -

L 

LIST  OF  AGREEMENT  CONCLUDED 
IN  THE  FIELD  OF  PUBLIC 
PROCUREMENT  WHICH  ARE  NOT  YET  IN  FORCE  AS OF 31  DECEMBER 
1997. 

BILATERAL  AGREEMENTS 

SIGNATURE 

PUBLICATION 
REFERENCE 

ENTRY  INTO 
FORCE 

Association Agreements with the Countries of 
Central and Eastern Europe. 

-  Estonia 

-  Latvia 

-  Lithuania 

-  Slovenia 

-

12.06.1995 

prop., COM(95)207 

01.02.1998 

12.06.1995 

prop., COM(95)207 

01.02.1998 

12.06.1995 

prop., COM(95)207 

01.02.1998 

10.06.1996 

prop., COM(95)341 

unknown 

. 5^ 

INDEX OF COUNTRIES 

Albania, 44 

Algeria. 42 

Andorra,  3, 38. 39 

Argentina,  9, 33 

Armenia,  43 

Aruba, 6, 8. 9.  12, 17, 23, 25, 30, 45, 48, 50. 51 

Australia, 9, 33, 34 

Azerbaijan, 43 

Bangladesh,  34 

Belarus, 34, 43 

Brazil, 33, 34 

Bulgaria, 9,  16, 33,34,49 

Burma, 47 

Kyrgyz Republic, 43 

Latvia, 9, 32, 52 

Lebanon, 42 

Liechtenstein, 9, 15, 17, 25, 30, 45, 48, 51 

Lithuania, 32, 52 

Malaysia,  13, 34 

Malta, 3, 40, 42 

Mercosur, 44 

Mexico,  34 

Moldova, 43 

Morocco, 3,  34,40,41,42 

New Zealand, 34 

Norway, 9,  11,  15, 17, 25, 30, 45, 48, 51 

Canada,  9,11,  23, 24, 25, 30, 34, 45, 48 

Pakistan, 34 

Chile, 9. 33, 34, 42 

China, 34 

Chinese Taipei, 6, 9, 32, 34 

Colombia, 9 

Cyprus, 3, 40, 42 

Czech Republic, 16, 34, 49 

Egypt, 34, 42 

Estonia, 32, 52 

Palestinian Authority, 3, 40, 41,  42 

Palestinian Authority., 42 

Panama, 6, 9, 32 

Philippines,  34 

Poland, 9,  16, 34, 49 

Romania,  16, 49 

Russia, 34, 43 

San Marino, 3, 38, 39 

Former Yugoslav  Republic of Macedonia,  43 

Singapore,  3, 6, 8, 9,  11, 13. 14, 24, 27, 31,  34, 

Georgia, 43 

Hong Kong, China, 6, 8, 9, 11, 12, 13, 25. 30, 34, 

48,50 

Hungary,  16, 34.49 

36, 37, 38, 45, 48, 50 

Slovak Republic,  16,49 

Slovenia, 32, 33, 34, 52 

South Africa, 34, 43 

Iceland. 9,  15, 17, 25, 30, 48, 51 

Switzerland,  3, 6, 9,  11, 20, 24, 28, 31, 39, 40, 

India, 34 

Indonesia,  13, 34 

Israel, 2, 3, 6, 9.  11,  17, 18, 23, 26, 30, 40, 41. 

42, 45, 47. 48, 49, 50, 51 

Japan. 9 . 1 1,  23, 26, 31,  34. 45, 47, 48, 50 

Jordan, 3, 40,  41,42 

Kazakhstan, 43 

45. 48. 50 

Syria, 42 

Thailand, 34 

Tunisia,  3,40,41,42 

Turkey, 3, 9, 38. 39, 42 

Ukraine, 43 

United States, 9,  11, 14, 20, 24, 28, 31, 34, 35, 

Korea, 2, 6, 8, 9,  11,  17. 18. 19, 23, 24, 26,  31, 

34, 35. 45. 47. 48, 49, 50, 51 

44, 45, 49, 50 

Uzbekistan, 43 

- 5 3-

ISSN 0254-1475 

COM(98) 203 final 

DOCUMENTS 

EN 

11  10  08  12 

Catalogue  number  :  CB-CO-98-257-EN-C 

ISBN 92-78-35196-2 

Office  for  Official  Publications  of the European  Communities 

L-2985  Luxembourg