The
Agreement on Government Procurement (AGP) is a plurilateral agreement;
it has been formed among WTO member governments but is not part
of the WTO Agreements.
The
AGP contains rules on laws, regulations, procedures and practices
associated with government procurement. This includes purchases,
rentals, leases and lease-purchase agreements. Government procurement
is subject to the AGP only when the value of the product or service
purchased exceeds specified thresholds and the goods or services are
covered by the Agreement.
Procurement
of goods is fully covered unless otherwise notified: military
expenditure is the main exception. Procurement of services
is covered only for those services that are those explicitly listed
by each AGP signatory. Services commitments under the AGP generally
parallel those made under the GATS.
The
main disciplines contained in the AGP are
-
transparency,
- non-discrimination
-
competitive tendering.
The
Agreement contains provisions which allow developing countries
to negotiate mutually acceptable exclusions from the rules on national
treatment, for certain entities, products or services.
Hoekman
(1998) records that the value of government covered by the
AGP is significant.
-
In 1992, the total procurement of goods by entities with
AGP coverage was about $62 billion, based on WTO and IMF statistics.
-
In 1996, when the agreement was extended, about $2.1 trillion
worth of services procurement and another $1 trillion of procurement
by sub-national entities was added.
Likely
benefits from the AGP range from reductions in procurement costs
to positive ‘spillover effects’ resulting from transparency
and accountability.
Very
few developing countries have acceded to the AGP. Despite this,
government procurement has remained on the agenda in WTO and bilateral
discussions. At the Singapore Ministerial meeting, a working group
was set up to study transparency in government procurement practices
and develop elements for inclusion in an appropriate agreement.
