U.S. Trade Representative Michael Froman said Tuesday that implementation of a World Trade Organization protocol amending the 1994 Government Procurement Agreement expands business opportunities for American firms to supply goods and services to foreign governments estimated to be worth $80 billion to $100 billion annually in addition to the $1 trillion already covered under the GPA.
Froman said the revised agreement opens the door to these opportunities in a fair and transparent process. It significantly adds to the GPA by making changes that reflect advances in procurement practices and further clarifies the obligations of the parties involved. In addition, it establishes work programs that facilitate participation by small- and medium-sized businesses in government procurement and fosters best practices in sustainable procurement.
“The revised agreement provides U.S. firms with new and expanded opportunities to sell their goods and services to foreign governments, which unlocks opportunities for American workers and supports American jobs,” Froman said. “This is a plurilateral success story in the WTO, and we should continue to build on it by expanding participation of developed and developing economies.”
The revised agreement will enter into force 30 days following the formal adoption and notification to the WTO by two-thirds, or 10, of the participants in the GPA. The revised agreement will include the U.S., Canada, Chinese Taipei, Hong Kong, Iceland, Israel, Liechtenstein, Norway, the European Union and Singapore. The five other members of the GPA — Armenia, Japan, the Republic of Korea, Aruba and Switzerland — will occur 30 days after each party formally adopts the amended agreement.
A longstanding objective of U.S. trade policy has been to unlock new opportunities for U.S. goods, services and suppliers to compete on a level playing field for foreign government procurement. Government procurement typically comprises 10 to 15 percent of a country’s gross domestic product. The first major government procurement agreement was the 1979 GPA, which entered into force in 1981. It was modified and expanded tenfold during the Uruguay Round negotiations that concluded in 1994 and led to the creation of the WTO. In exchange for access to sub-central procurements in GPA countries, 37 U.S. states agreed to participate in the agreement, which was not modified under the revised agreement.