Government Procurement Agreement (GPA)

General Information

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What is it about?

After the Uruguay Round there remained four agreements, originally negotiated in the Tokyo Round, which had a narrower group of signatories and are known as “plurilateral agreements”. These plurilateral agreements are not binding upon all members of the WTO, but rather just those that agree to ratify it. The Government Procurement Agreement (GPA) is one of these agreements. Its purpose is to open up as much procurement as possible to international competition. It is designed to make laws, regulations, procedures and practices regarding government procurement more transparent and to ensure they do not protect domestic products or suppliers, or discriminate against foreign products or suppliers. It also reinforces rules guaranteeing fair and non-discriminatory conditions of international competition. The agreement has two elements — general rules and obligations, and schedules of national entities in each member country whose procurement is subject to the agreement. A large part of the general rules and obligations concern tendering procedures. The Agreement applies to contracts worth more than specified threshold values. For central government purchases of goods and services, the threshold is SDR 130,000 (some $185,000 in June 2003). For purchases of goods and services by sub-central government entities the threshold varies but is generally in the region of SDR 200,000. For utilities, thresholds for goods and services is generally in the area of SDR 400,000 and for construction contracts, in general the threshold value is SDR 5,000,000. Developing countries and least developed countries benefit from special procedures related to their needs.

Why is it relevant?

By opening national procurement to international competition, the Agreement permits State parties to receive the best value for their money and to pay true market prices. Its provisions also lead to increased transparency and work against corruption. The agreement imposes several binding obligations that may be perceived as burdensome. As of 2004 no non OECD country had ratified the agreement.

Additional Information

Only member States of the WTO can become a party to this Agreement. Disputes between State parties regarding the agreement may be submitted under the procedures of the Memorandum of Understanding on Rules and Procedures Governing the Settlement of Disputes of the WTO.

Related treaties

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