POTENTIAL BENEFITS AND CHALLENGES OF GPA ACCESSION: PROCEDURAL AND STRATEGIC CONSIDERATIONS Anna Caroline Müller Legal Affairs Officer, WTO Secretariat EBRD Capacity Building Session for Azerbaijan, Kazakhstan and Tajikistan London, UK 9 December

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3 Who: Eligibility of any WTO Member to accede What: Terms to be agreed with existing Parties How: Deposit with the Director-General of an instrument of accession, including agreed terms When: Entry into force on 30th day afterwards Article XXII:2 “Any Member of the WTO may accede to this Agreement on terms to be agreed between that Member and the Parties, with such terms stated in a decision of the Committee. Accession shall take place by deposit with the Director-General of the WTO of an instrument of accession that states the terms so agreed. This Agreement shall enter into force for a Member acceding to it on the 30th day following the deposit of its instrument of accession. “

Accessions to the Agreement: Current Status o 10 observers are in the process of acceding Albania; China; Georgia; Jordan; Kyrgyz Republic; Moldova; Montenegro New Zealand; Oman; Ukraine. o 7 WTO Members have commitments to accede to the GPA the former Yugoslav Republic of Macedonia; Mongolia; Saudi Arabia; Russian Federation;Tajikistan. 4

GPA accession commitments by new WTO Members 5

The GPA: What are the benefits? Legally ensured market access to other Parties procurement markets Benefits of internal reform according to principles of integrity, transparency, and non-discrimination Double benefit: external and internal! 6

Internal benefits: “Locking in” reform Transparency Enhanced competition Better value for money Integrity/less corruption 7

8 Issues to be addressed Coverage offer (to be negotiated) National legislation (necessary changes) Flexibilities (developing countries only, and if agreeable) Institutional requirements (domestic review) Main topics

9 The accession process step by step initiation Communication of interest in accession to Director-General and Committee on Government Procurement. Submission of relevant information, including on: (i) proposed coverage (draft Appendices); and (ii) national legislation negotiation Consultations to be held by the Committee, as necessary (supplemented by bilateral discussions with individual Parties) conclusion Agreement on terms of accession, submission of Report on legislation and decision by the GPA Committee Deposit of accession instrument/terms and entry into force 30 days later

Legislative Compliance Replies to the Questionnaire Questions by Parties Answers to questions, Legislative changes if necessary Coverage Appendix I Offer Negotiations with Parties (bilateral meetings before GPA meetings) Revised Offer (several rounds of negotiation & offer) 10

Flexibilities 11 o Transition period o Offset o Price preference o Initially higher thresholds o Phasing-in entities

12 Key documents for reference GPA/1, Annex 2 (1996) Decision of the Committee on basic procedures for accession GPA/35 (2000) Checklist of issues for provision of information relating to accession GPA/W/109/Rev. 2 (2001) Indicative time-frame for accession and negotiations and reporting GPA/87 (2006) Modalities for accession to the Agreement

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Potential costs of accession* Direct costs of participating in relevant negotiations. Costs of necessary institutional adaptations (but note: may already have been incurred or may be independently desirable for domestic policy reasons). Adjustment costs for local firms/industry (but note: they may well benefit overall). __________ *It is recognized that each acceding WTO Member must ultimately asses these itself. 14

Accession process & negotiations o Offer/request process: what you get will be commensurate with what you offer o Negotiations o Second/subsequent revised offers o Negotiating issues: o extent of coverage: entities, goods, (construction) services o omissions, exclusions, exceptions o thresholds, claimed DC flexibilities, etc. o justification thereof o Goal: balance of mutually acceptable concessions o prioritize, link back to original accession strategic goal(s) 15

Planning / preparatory work o Preparation of initial accession offer o Identification of offensive and defensive interests o use of thresholds o exclusions, exceptions, other notes and derogations o use of DC flexibilities o domestic preferences/offsets o phase-in/transitional thresholds o implementation periods o Shadow 2nd/3rd/final offers o anticipate Parties' potential requests o redlines vis-à-vis GPA min standards/min expectations of Parties o Know/understand negotiating partners 16

Important feedback loops o Importance of ongoing consultative process with constituents/stakeholders o Alignment of results with original objectives o Implementation & operation o Challenges o If necessary, gradually phase in entities, reduce thresholds o Importance of complementary policies o Training (both public and private sectors; capacity and institution building) o Help to local industry – e.g. with accessing & assessing information on market access opportunities o Address supply-side constraints, competition bottlenecks o The competition policy interface 17

Concluding Remarks o Legal basis: any WTO Member; terms to be agreed; deposit of accession instrument; come in to force 30days afterwards. o Process: indicate interest; initial offer and replies to checklist issues; negotiations (revise offers, examination and modification of legislation); report to and decision by the GPA Committee; deposit accession instruments; come into force. o Strategic considerations. Plan ahead! 18