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I. Preamble back to top
A. Text of the Preamble
Parties
to this Agreement (hereinafter referred to as “Parties”),
Recognizing
the need for an effective multilateral framework of rights and
obligations with respect to laws, regulations, procedures and practices
regarding government procurement with a view to achieving greater
liberalization and expansion of world trade and improving the
international framework for the conduct of world trade;
Recognizing
that laws, regulations, procedures and practices regarding government
procurement should not be prepared, adopted or applied to foreign or
domestic products and services and to foreign or domestic suppliers so
as to afford protection to domestic products or services or domestic
suppliers and should not discriminate among foreign products or services
or among foreign suppliers;
Recognizing
that it is desirable to provide transparency of laws, regulations,
procedures and practices regarding government procurement;
Recognizing
the need to establish international procedures on notification,
consultation, surveillance and dispute settlement with a view to
ensuring a fair, prompt and effective enforcement of the international
provisions on government procurement and to maintain the balance of
rights and obligations at the highest possible level;
Recognizing
the need to take into account the development, financial and trade needs
of developing countries, in particular the least-developed countries;
Desiring,
in accordance with paragraph 6(b) of Article IX of the Agreement on
Government Procurement done on 12 April 1979, as amended on 2 February
1987, to broaden and improve the Agreement on the basis of mutual
reciprocity and to expand the coverage of the Agreement to include
service contracts;
Desiring
to encourage acceptance of and accession to this Agreement by
governments not party to it;
Having
undertaken further negotiations in pursuance of these objectives;
Hereby
agree as follows:
B. Interpretation and Application of the
Preamble
No jurisprudence or decision of a competent WTO
body.
II. Article I
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A. Text of Article I
Article I: Scope and Coverage
1. This
Agreement applies to any law, regulation, procedure or practice
regarding any procurement by entities covered by this Agreement, as
specified in Appendix I.(1)
(footnote original)
1 For each Party, Appendix I
is divided into five Annexes:
- Annex 1 contains central government entities.
- Annex 2 contains sub-central government
entities.
- Annex 3 contains all other entities that
procure in accordance with the provisions of this Agreement.
- Annex 4 specifies services, whether listed
positively or negatively, covered by this Agreement.
- Annex 5 specifies covered construction
services.
Relevant thresholds are specified in each
Party’s Annexes.
2. This Agreement applies to procurement by
any contractual means, including through such methods as purchase or as
lease, rental or hire purchase, with or without an option to buy,
including any combination of products and services.
3. Where entities, in the context of
procurement covered under this Agreement, require enterprises not
included in Appendix I to award contracts in accordance with particular
requirements, Article III shall apply mutatis mutandis to such
requirements.
4. This Agreement applies to any procurement
contract of a value of not less than the relevant threshold specified in
Appendix I.
B. Interpretation and Application of Article I
1. Article I:1
(a) Loose-leaf system for updating appendices
1. At its meeting of 4 June 1996, the
Committee on Government Procurement decided to establish a loose-leaf
system with legal effect to periodically update the Appendices to the
Agreement on Government Procurement.(1) At its meeting on 24 February
1997, the Committee on Government Procurement agreed on the procedures
for subsequent modifications to the loose-leaf system.(2) In addition to
being made available in hard-copy form, the loose-leaf system and future
new or replacement pages are circulated to parties and other WTO Members
in electronic form through the WTO Document Dissemination Facility. An
up-to-date copy of the loose-leaf system is also available to the
general public through the government procurement site on the WTO Home
Page on the Internet.(3)
2. Appendix 1
2. With respect to the interpretation of the
Korean Annex 1 in the Panel on Korea — Procurement, see paragraphs
27-33 below.
3. Article I:4
3. At its meeting of 27 February 1996, the
Committee on Government Procurement decided on the “Modalities for
Notifying Threshold Figures in National Currencies”.(4)
III. Article II
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A. Text of Article II
Article II: Valuation of Contracts
1. The following provisions shall apply in
determining the value of contracts(2) for purposes of implementing this
Agreement.
(footnote original)
2 This Agreement shall
apply to any procurement contract for which the contract value is
estimated to equal or exceed the threshold at the time of publication of
the notice in accordance with Article
IX.
2. Valuation shall take into account all forms
of remuneration, including any premiums, fees, commissions and interest
receivable.
3. The selection of the valuation method by
the entity shall not be used, nor shall any procurement requirement be
divided, with the intention of avoiding the application of this
Agreement.
4. If an individual requirement for a
procurement results in the award of more than one contract, or in
contracts being awarded in separate parts, the basis for valuation shall
be either:
(a) the actual value of similar recurring
contracts concluded over the previous fiscal year or 12 months adjusted,
where possible, for anticipated changes in quantity and value over the
subsequent 12 months; or
(b) the estimated value of recurring contracts
in the fiscal year or 12 months subsequent to the initial contract.
5. In cases of contracts for the lease, rental
or hire purchase of products or services, or in the case of contracts
which do not specify a total price, the basis for valuation shall be:
(a) in the case of fixed-term contracts, where
their term is 12 months or less, the total contract value for their
duration, or, where their term exceeds 12 months, their total value
including the estimated residual value;
(b) in the case of contracts for an indefinite
period, the monthly instalment multiplied by 48.
If there is any doubt, the second basis for
valuation, namely (b), is to be used.
6. In cases where an intended procurement
specifies the need for option clauses, the basis for valuation shall be
the total value of the maximum permissible procurement, inclusive of
optional purchases.
B. Interpretation and Application of Article II
No jurisprudence or decision of a competent
WTO body.
IV. Article III
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A. Text of Article III
Article III: National Treatment and Non-discrimination
1. With respect to all laws, regulations,
procedures and practices regarding government procurement covered by
this Agreement, each Party shall provide immediately and unconditionally
to the products, services and suppliers of other Parties offering
products or services of the Parties, treatment no less favourable than:
(a) that accorded to domestic products,
services and suppliers; and
(b) that accorded to products, services and
suppliers of any other Party.
2. With respect to all laws, regulations,
procedures and practices regarding government procurement covered by
this Agreement, each Party shall ensure:
(a) that its entities shall not treat a
locally-established supplier less favourably than another
locally-established supplier on the basis of degree of foreign
affiliation or ownership; and
(b) that its entities shall not discriminate
against locally-established suppliers on the basis of the country of
production of the good or service being supplied, provided that the
country of production is a Party to the Agreement in accordance with the
provisions of Article IV.
3. The provisions of
paragraphs 1 and 2 shall
not apply to customs duties and charges of any kind imposed on or in
connection with importation, the method of levying such duties and
charges, other import regulations and formalities, and measures
affecting trade in services other than laws, regulations, procedures and
practices regarding government procurement covered by this Agreement.
B. Interpretation and Application of Article III
No jurisprudence or decision of a competent
WTO body.
V. Article IV
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A. Text of Article IV
Article IV: Rules of Origin
1. A Party shall not apply rules of origin to
products or services imported or supplied for purposes of government
procurement covered by this Agreement from other Parties, which are
different from the rules of origin applied in the normal course of trade
and at the time of the transaction in question to imports or supplies of
the same products or services from the same Parties.
2. Following the conclusion of the work
programme for the harmonization of rules of origin for goods to be
undertaken under the Agreement on Rules of Origin in Annex 1A of the
Agreement Establishing the World Trade Organization (hereinafter
referred to as “WTO Agreement”) and negotiations regarding trade in
services, Parties shall take the results of that work programme and
those negotiations into account in amending paragraph 1 as appropriate.
B. Interpretation and Application of Article IV
No jurisprudence or decision of a competent
WTO body.
VI. Article V
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A. Text of Article V
Article V: Special and Differential Treatment for
Developing Countries
Objectives
1. Parties shall, in the implementation and
administration of this Agreement, through the provisions set out in this
Article, duly take into account the development, financial and trade
needs of developing countries, in particular least-developed countries,
in their need to:
(a) safeguard their balance-of-payments
position and ensure a level of reserves adequate for the implementation
of programmes of economic development;
(b) promote the establishment or development
of domestic industries including the development of small-scale and
cottage industries in rural or backward areas; and economic development
of other sectors of the economy;
(c) support industrial units so long as they
are wholly or substantially dependent on government procurement; and
(d) encourage their economic development
through regional or global arrangements among developing countries
presented to the Ministerial Conference of the World Trade Organization
(hereinafter referred to as the “WTO”) and not disapproved by it.
2. Consistently with the provisions of this
Agreement, each Party shall, in the preparation and application of laws,
regulations and procedures affecting government procurement, facilitate
increased imports from developing countries, bearing in mind the special
problems of least-developed countries and of those countries at low
stages of economic development.
Coverage
3. With a view to ensuring that developing
countries are able to adhere to this Agreement on terms consistent with
their development, financial and trade needs, the objectives listed in
paragraph 1 shall be duly taken into account in the course of
negotiations with respect to the procurement of developing countries to
be covered by the provisions of this Agreement. Developed countries, in
the preparation of their coverage lists under the provisions of this
Agreement, shall endeavour to include entities procuring products and
services of export interest to developing countries.
Agreed Exclusions
4. A developing country may negotiate with
other participants in negotiations under this Agreement mutually
acceptable exclusions from the rules on national treatment with respect
to certain entities, products or services that are included in its
coverage lists, having regard to the particular circumstances of each
case. In such negotiations, the considerations mentioned in subparagraphs 1(a) through
1(c) shall be duly taken into account. A
developing country participating in regional or global arrangements
among developing countries referred to in subparagraph 1(d) may also
negotiate exclusions to its lists, having regard to the particular
circumstances of each case, taking into account, inter alia, the
provisions on government procurement provided for in the regional or
global arrangements concerned and, in particular, products or services
which may be subject to common industrial development programmes.
5. After entry into force of this Agreement, a
developing country Party may modify its coverage lists in accordance
with the provisions for modification of such lists contained in
paragraph 6 of Article XXIV, having regard to its development, financial
and trade needs, or may request the Committee on Government Procurement
(hereinafter referred to as “the Committee”) to grant exclusions
from the rules on national treatment for certain entities, products or
services that are included in its coverage lists, having regard to the
particular circumstances of each case and taking duly into account the
provisions of subparagraphs 1(a) through 1(c). After entry into force of
this Agreement, a developing country Party may also request the
Committee to grant exclusions for certain entities, products or services
that are included in its coverage lists in the light of its
participation in regional or global arrangements among developing
countries, having regard to the particular circumstances of each case
and taking duly into account the provisions of subparagraph
1(d). Each
request to the Committee by a developing country Party relating to
modification of a list shall be accompanied by documentation relevant to
the request or by such information as may be necessary for consideration
of the matter.
6. Paragraphs 4 and
5 shall apply
mutatis
mutandis to developing countries acceding to this Agreement after its
entry into force.
7. Such agreed exclusions as mentioned in
paragraphs 4, 5 and 6 shall be subject to review in accordance with the
provisions of paragraph 14 below.
Technical Assistance for Developing Country
Parties
8. Each developed country Party shall, upon
request, provide all technical assistance which it may deem appropriate
to developing country Parties in resolving their problems in the field
of government procurement.
9. This assistance, which shall be provided on
the basis of non-discrimination among developing country Parties, shall
relate, inter alia, to:
-
the solution of particular technical
problems relating to the award of a specific contract; and
-
any other problem which the Party making the
request and another Party agree to deal with in the context of this
assistance.
10. Technical assistance referred to in
paragraphs 8 and 9 would include translation of qualification
documentation and tenders made by suppliers of developing country
Parties into an official language of the WTO designated by the entity,
unless developed country Parties deem translation to be burdensome, and
in that case explanation shall be given to developing country Parties
upon their request addressed either to the developed country Parties or
to their entities.
Information Centres
11. Developed country Parties shall establish,
individually or jointly, information centres to respond to reasonable
requests from developing country Parties for information relating to,
inter alia, laws, regulations, procedures and practices regarding
government procurement, notices about intended procurements which have
been published, addresses of the entities covered by this Agreement, and
the nature and volume of products or services procured or to be
procured, including available information about future tenders. The
Committee may also set up an information centre.
Special Treatment for Least-Developed
Countries
12. Having regard to paragraph 6 of the
Decision of the CONTRACTING PARTIES to GATT 1947 of 28 November 1979 on
Differential and More Favourable Treatment, Reciprocity and Fuller
Participation of Developing Countries (BISD 26S/203-205), special
treatment shall be granted to least-developed country Parties and to the
suppliers in those Parties with respect to products or services
originating in those Parties, in the context of any general or specific
measures in favour of developing country Parties. A Party may also grant
the benefits of this Agreement to suppliers in least-developed countries
which are not Parties, with respect to products or services originating
in those countries.
13. Each developed country Party shall, upon
request, provide assistance which it may deem appropriate to potential
tenderers in least-developed countries in submitting their tenders and
selecting the products or services which are likely to be of interest to
its entities as well as to suppliers in least-developed countries, and
likewise assist them to comply with technical regulations and standards
relating to products or services which are the subject of the intended
procurement.
Review
14. The Committee shall review annually the
operation and effectiveness of this Article and, after each three years
of its operation on the basis of reports to be submitted by Parties,
shall carry out a major review in order to evaluate its effects. As part
of the three-yearly reviews and with a view to achieving the maximum
implementation of the provisions of this Agreement, including in
particular Article III, and having regard to the development, financial
and trade situation of the developing countries concerned, the Committee
shall examine whether exclusions provided for in accordance with the
provisions of paragraphs 4 through 6 of this Article shall be modified
or extended.
15. In the course of further rounds of
negotiations in accordance with the provisions of paragraph
7 of Article XXIV, each developing country Party shall give consideration to the
possibility of enlarging its coverage lists, having regard to its
economic, financial and trade situation.
B. Interpretation and Application of Article V
No jurisprudence or decision of a competent
WTO body.
Footnotes:
1.
GPA/M/2, Section E. back to text
2. GPA/M/5, Section D.
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3. GPA/19, para. 7.
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4. GPA/M/1, Section B. The text of the
decision can be found in GPA/1, Annex 3.
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