1. Government Procurement Negotiations
NORBERTO IANELLI
LAURA ROJAS
Trade, Integration and Hemispheric Issues Division
BID

2. Agenda DEVELOPMENT OF INTERNATIONAL DISCIPLINES
FUNDAMENTAL DISCIPLINES
MARKET ACCESS / SCOPE AND APLICATION

3. Development of International Disciplines

4. Development of International Disciplines
Gatt 1947 excluded Disciplines on GP
Art. III:8(a) allows favoring nationals if procurement is for government own use, not for inputs or `commercial resale
Art. XVII requires state trading enterprises to buy competitively and to import without discriminating among foreign suppliers
Plurilateral was signed in the Tokyo Round in 1979
New plurilateral was signed in the Ronda Uruguay in countries are members.
History

5. Agreements and Negotiations
CANADA – United States Free Trade Agreement 1993
Bilateral Agreements
Mexico – Bolivia
1995
Mexico – Costa Rica
Mexico – Nicaragua
2001
. Chile – Central America
2002
Panama – Central America 2002
. Dominican Republic – Central America 1998
Chile - USA 2003
Subregional
Agreements
Norte America (NAFTA) 1994
Mexico – Colombia – Venezuela (G-3 ) 1995
Andean C. (services) 2002
Negotiations
CAFTA
Free Trade Area of the Americas (FTAA)
WTO

6. Fundamental Disciplines in GP Agreements

7. Fundamental Disciplines
Disciplines wich impact on laws and regulaciones related to GP as well procurement practices and procedures for public entities covered by the agreement.
Non-discrimination
National Treatment (NT)
Most Favored Nation (MFN)
Transparency
Due Process
Se concreta así un elemento que ha sido repetido en todas las charlas sobre la globalización; todos los markets son globales and la tendencia es a hacerlos a operar bajo las mismas reglas de juego. Las Negotiations, Specialemnte las complejas, establecen ese marco común de reglas o los mecanismos para limitar la forma en que se manejan las laws nationales

8. Principles/Treatment
Special and Differential Treatment
Special and Differential Treatment
Recognition of the differences in the level of size and development of the economies.
Transitory Measures. Examples
Global reserve for Mexico: procurement will no be over $1 billion until 31/12/2003.
Progresive coverage: 10 years for energy firms and for construction services in the non-energy sector. In NAFTA, G-3, Mexico-Bolivia.
Permanent Measures. Examples
Mexico may apply offsets to encourage domestic content in “turn-key”contracts.
40% to labor-intensive projects
25% to capital-intensive projects

9. Principles/Treatment
Transparency
Provisions on Transparency
Publication of laws and regulations
Publicity of invitation for tender participation
Tender Requirements/Specifications
Time limits for tender participation
Limited use of non-open tendering procedures
Evaluation Criteria and Award of the Contracts. Contratcs shall be awarded according to the evaluation criteria set forth in the tender documentation.

10. Transparency Entities Obligations : NAFTA vs. Centra America Model
detailed procedures for all phases of the tendering process or
flexibility: application of national laws.

11. Transparency Party Obligations. Publication of laws and regulations.
Supervision of entities in the application of principles.
Information Requirements on specific procurement process (Nafta, G-3 and bilaterals with Mexico)
Time limits for maintaining documentation (Nafta, G-3 and bilaterals with Mexico)
Statistical Information Requirements (Nafta, G-3 and bilaterals with Mexico)

12. Principles/Treatment
Due Proccess
Review and Challenge Mechanisms
To establish bid protest or challenge procedures under and independent authority or application of national laws.
Complemented by the WTO’s multilateral dispute settlement process.

13. Market Access
Scope and Coverage

14. What to Include in A Market Access Offer
Entities at distinct levels of government that purchase with an obligation not to discriminate against suppliers, goods, and services.
Goods, services, construction services/public works that will not be discriminated against

15. What to Include in A Market Access Offer
The value of purchases from which there will not be discrimination: thresholds
Exceptions to the obligation of non-discrimination
Treatment of the differences in the levels of development and size of the economies.

16. Formats Positive Lists, Negative Lists Positive Lists:
Countries offer what is specified in their lists.
Only those entities-goods-services listed will be subject to the provisions of the agreement.
Negative Lists:
Countries offer everything.
Only those entities-goods-services listed remain exempt from the obligation of non-discrimination

17. Scope and Coverage Purchasing Modalities
Entities – Level of Government
Products (goods/services/construction
Thresholds
General Exceptions
Exclusions/Reservations/qualifications to
coverage

18. Levels of Government
Coverage shows concessions reached by each Party to the agreement
Central government entities are included in all Agreements
Independent entities, utilities and state enterprises:
Excluded in Chile-CA, except for El Salvador.
Costa Rica, Bolivia and Nicaragua include them with Mexico but do not do it in other agreements.
USA and Mexico include them but not for Canada.
Panama excludes the procurement of the Panama Canal Authority in regional agreements.

19. Niveles de government
coverage shows concessions reached by each Party to the agreement
Sub-Central entities including Departaments or State Governments, Municipalities and other forms of local government.
Excluded from Chile-CA. Included in Chile - USA
Bolivia, Costa Rica and Nicaragua include them in Mexico bilaterals, but Mexico does not.
Excluded in G-3.
NAFTA has a provision for future negotiations. It is a conditionality to grant Canada NT in American and Mexican electric utilities.

20. Thresholds 000 $ through March 2002 Enterprises Central Government
GPA
NAFTA
G-3
Mexico
Bilaterals
Central America
Central Government
goods
177
50(1) 50
National
Legislation
services
50 (1)
construction
6800
6500
Enterprises
545 (2)
250
545
8500

21. Thresholds Sub-central 000 $ through March 2002 50 (3) 6500 (3) GPA
NAFTA
G-3
Mexico
bilaterals
CentralAmerica
Sub-central
goods
483
50 (3)
National
Legislation
services
construction
6800
6500 (3)
US and Canada have a $25,000 threshold
EEUU applies a $250,000 thresholld
Applied to Nicaragua and Bolivia, not for Mexico

22. Principles/Treatment
National Treatment
General Exceptions to the Chapter .
National defense (buying of arms, ammunitions or war material), protection of public morals, human, animal or plant life or intellectual property.
Chile and Central America refer to the FTA general exceptions.
Partial application of NT in GP Agreements :
General Exclusions to Coverage (entities, goods, services, levels of government, thresholds).
Negotiated Exclusions to Market Access Commitments: what discriminatory measures are countries allowed to apply and to whom they are applied are found in the national lists.

23. Exclusions/Reservations
Programs for Small and Medium Firms (NAFTA, G-3 and bilaterals with Mexico. USA also excluded programs for minority business.
Social Programs (Venezuela)
Farm Support and Food programs (NAFTA, G-3 and bilaterals with Mexico)
Gobal Reservations: % of total purchases (Mexico, Colombia, Venezuela, Nicaragua, Bolivia)
Excluded goods (Examples)
Ship building and manteinance, railroad and urban transportation (NAFTA)

24. Exclusions/Reservations
Services (Examples)
Utilities except electricity; telecomunications, research and development, professionals; architecture. (NAFTA)
Financial (Chile – CA, NAFTA and bilaterals with Mexico).
Transportation, linked to the purchase of goods (NAFTA, G-3 and bilaterals with Mexico)