Policy Brief

13/07/2016

Public procurement has long been an offensive interest in EU Trade Policy and is given a strong profile in the Commission’s Trade for All strategy which states that ‘public procurement spending … accounts for 15% to 20% of GDP worldwide. The DG Trade website states that the objectives of negotiations in EU trade agreements are:

  • to set modern and international standard procurement principles which seek to ensure that public money is spent in a transparent, efficient and non-discriminatory way.
  • provide a level playing field for EU suppliers when tendering abroad.

The relationship between the EU and the US in the area of procurement goes back to the post-GATT years when the US, having previously not requested the support for the setting of procurement rules from the EU, started to work more closely with them to shape procurement in the WTO’s General Procurement Agreement (GPA). The US and the EU thus jointly developed rules in OECD that were applied in the GPA and in free trade agreements of the parties with third countries. In the 1980s the EU created the single market agreement and worked with the USA in OECD leading up to the 1994 Uruguay round which created the 1994 GPA. Revised in 2014 mainly to update the agreement to include electronic procurement tools, the basis of the agreement is to ensure ‘guarantees of national treatment and non-discrimination for the suppliers of parties to the Agreement with respect to procurement of covered goods, services and construction services as set out in each party’s schedules. The GPA negotiations concluded with the US only offering partial access to sub-federal level procurement in 37 States and some bilateral agreements with States and cities. The EU responded by withholding binding commitments on coverage of some EU procurement from suppliers in the US.

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