RESTRICTED
WORLD TRADE GPA/IC/M/2
26 January 1995
ORGANIZATION
(95-0143)
Interim Committee on Government Procurement
MINUTES OF THE MEETING HELD ON 15 NOVEMBER 1994
Chairman: Mr. Harald Ernst (Switzerland)
1. The following agenda was adopted:
A. Request for observer status by Panama (GPA/IC/W/5);
B. Modification of Appendix I to the Agreement prior to its entry into force;
C. Application for accession by Chinese Taipei;
D. Application for accession by the Kingdom of the Netherlands with respect to Aruba;
E. Adoption of a decision to administer modifications to the Appendices to the Agreement
onGovernment Procurement(1994)priortoitsentryintoforce, otherthanrectifications
of a purely formal nature or those resulting from negotiations aimed at expanding
coverage;
F. Completion of Appendices II, III and IV to the Agreement;
G. Progress in national ratification procedures;
H. Information technology;
I. Establishment of a practical guide;
J Other business.
2. On the request of the European Communities, the following point was added to the agenda
under "Other business":
- Note 4(a) to Annex 3 of Appendix I of Japan (procurement related to operational
safety of transportation).
3. As suggested by the Chairman, the following point was also added under "Other business":
- Notification by Norway under the procedures adopted by the Interim Committee on
the "Administration of rectifications of a purely formal nature to Appendices I to IV
of the Agreement on Government Procurement prior to its entry into force"
(GPA/IC/W/8).GPA/IC/M/2
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A. REQUEST FOR OBSERVER STATUS BYPANAMA
4. TheChairman recalled therequest from thedelegation ofPanama contained indocument
GPA/IC/W/5 tobecome anobserver intheInterim Committee, inwhich thatdelegation hadreferred
toitsimportance forPanama 'sprocess ofaccession totheUruguay Round multilateral andplurilateral
agreements. TheInterim Committee agreed togrant observer status totheGovernment ofPanama.
B. MODIFICATIONS OFAPPENDIX ITOTHEAGREEMENT PRIOR TOITSENTRY INTO
FORCE
5. TheChairman recalled that,atitsJunemeeting, theInterim Committee hadtaken upthematter
ofthebilateral agreement ongovernment procurement reached between thenegotiators oftheEuropean
Communities andoftheUnited States inApril ofthisyearanditspossible incorporation intothe
AgreementonGovernmentProcurement.TheGrouphadagreedtoreturntothisissueoncetheEuropean
Communities andtheUnited States would beinaposition tomake aformal notification under the
procedures adopted bytheInformal Working Group atitsmeeting inJanuary 1994on"Modifications
oftheAnnexes toAppendix ItotheAgreement onGovernment Procurement Before itsEntry into
Force" (GPA/IC/3). Inthemeantime, hehadinvited delegations toconsult witheachother bilaterally
andplurilaterally withaviewtopreparing theuseofthese procedures.
6. TherepresentativeoftheEuropeanCommunitiessaidthattheECwaspresentlyfollowinginternal
procedures tomake ratification oftheagreement possible. Heexplained thattheagreement needed
tobeapproved bytheCouncil oftheEuropean Communities andtheEuropean Parliament, instances
through which itwasnowmoving. Assoonastheratification procedure would havebeensuccessfully
completed onboth sides, theagreement would enter intoforce andtheconsequential proposed
modification could thenbeformally notified.
7. Therepresentative oftheUnited States explained thatthebilateral agreement waspartofthe
Uruguay Round package which hadbeensubmitted toCongress andonwhich Congress wasscheduled
tovoteon29November and1December 1994. Congress 'votewould complete thenecessary domestic
procedures onhisGovernment 'sside.Formal notification under theprocedures adopted bytheInformal
Working Group would takeplace oncebothsides would haveformally ratified theagreement.
8. TheInterim Committee tooknoteofthestatements made.
9. TheChairman alsorecalled thattheCanadian Schedule offered tocover entities inallten
Provinces onthebasisofcommitments tobereceived fromProvincial Governments, withafinallisting
tobeprovided within 18months aftertheconclusion ofthenewAgreement. AttheJunemeeting,
theCanadian delegate hadinformed theGroup thatintensive discussions between theProvincial and
Federal Governments weretaking place andhadexpressed thehopethat,attheInterim Committee 's
nextmeeting, hewould beinaposition toprovide further details onthese discussions.
10. Therepresentative ofCanada saidthat,since thelastmeeting ofthisCommittee, theCanadian
Provinces andtheFederal Government hadconcluded acomprehensive internal trade-liberalizing
agreement which inpartcovered enhanced procurement obligations among Provinces. Thisshould
facilitate discussions inthisforum. Inaddition, hisGovernment hadheldintensive consultations with
trade andprocurement officials ofeachProvincial Government inwhich ithadoutlined thecurrent
coverage oftheGovernment Procurement Agreement aswellastheresults oftheEC-US agreement.
Atthepolitical level, theCanadian Minister ofInternational Trade hadwritten toeachofhisProvincial
counterparts tofacilitate continuing discussions withtheProvinces onthisissue. Inthecoming months,
hisGovernment would continue consultations withindustry sector groups onelements oftheAgreement.GPA/IC/M/2
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Hisauthorities intended tocontinue these discussions overthenextfewmonths andtorespond onthis
issue totheInterim Committee, wellwithin thetimetable asprescribed intheCanadian offer.
11. TheInterim Committee tooknoteofthestatement made.
C. APPLICATION FOR ACCESSION BYCHINESE TAIPEI
12. TheChairmanrecalledthat,atitsJunemeeting,theInterimCommitteehadinvitedthedelegation
ofChinese Taipei tosubmit relevant information onitsprocurement system including anofferbyway
ofappropriate Appendices containing listsofentities andservices which would becovered bythe
Agreement,aswellaslistsofrelevantpublications.TheGovernmentofChineseTaipeihadsubsequently
submitted information onitscurrent procurement régime andonplanned future reforms indocument
GPA/IC/W/9.
13. Therepresentative ofChinese Taipei stated thathisdelegation hadundertaken agreat deal
ofpreparatory work, since ithadexpressed itsintention toaccede totheAgreement onGovernment
Procurement on30June1994. Hedescribed thedevelopments which hadtaken place sofarinterms
ofregulatory reforms andinpreparing theoffer, andconcluded thatthereform ofthegovernment
procurement régime associated withhisGovernment 'srequest foraccession totheAgreement on
Government Procurement represented anunprecedented challenge andhadalsotriggered unexpected
resistance. Nevertheless, hehoped tobeinaposition totable anoffer inearly 1995. Acopy of
thecomplete statement isreproduced inAnnex 1.
14. TheChairman encouraged thedelegation ofChinese Taipei andother delegations tocontinue
theprocessofintensivebilateralandplurilateralconsultationswithallmembersoftheInterimCommittee.
Healsoinvited delegations, whohadquestions concerning theinformation submitted bythedelegation
ofChinese Taipei onitsprocurement régime, tosubmit them inwriting totheSecretariat before
15December 1994 forcirculation totherepresentation ofChinese Taipei andtotheMembers ofthe
Interim Committee.
15. Therepresentative oftheEuropean Communities noted thathisdelegation hadrecently held
discussions withtheauthorities inTaipei andthathewasheartened bythedegree ofseriousness with
which theissue wasbeing addressed. Heurged theGovernment ofChinese Taipei tocontinue this
process andwould belooking forward totheoffer early nextyear. Hewasencouraged bytoday's
statement oftherepresentative ofChinese Taipei andbyhispersonal experiences inTaipei andhoped
thatthereforms described would beagoodbasisforatransparent andeffective government procurement
system inChinese Taipei.
16. Therepresentative oftheUnited States alsowelcomed thereforms Chinese Taipei was
undertaking, which essentially represented aradical reform ofitsprocurement régime. Hesympathized
withthedifficulties Chinese Taipei hadencountered indoing sobutnevertheless feltconfident that
itwould come forward withagoodfirstofferandencouraged theChinese Taipei authorities toattempt
tocover allareas ofprocurement which wereincluded intheAgreement onGovernment Procurement.
17. TheInterim Committee tooknoteofthestatements made andagreed torevert tothisissue
atitsnextmeeting.GPA/IC/M/2
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D. APPLICATION FORACCESSION BYTHEKINGDOM OFTHENETHERLANDS WITH
RESPECT TOARUBA
18. TheChairmanrecalledthat,atitsJunemeeting,theInterimCommitteehadinvitedthedelegation
oftheKingdom oftheNetherlands withrespect toAruba tosubmit relevant information onits
procurement system including anofferbywayofappropriate Appendices containing listsofentities
andservices which would becovered bytheAgreement, aswellaslistsofrelevant publications.
19. Therepresentative oftheKingdom oftheNetherlands withrespect toAruba stated thatshe
hoped tobeinaposition totabletheoffer inthenearfuture.
20. TheInterim Committee tooknoteofthestatement made.
E. ADOPTIONOFADECISIONTOADMINISTERMODIFICATIONSTOTHEAPPENDICES
TOTHE AGREEMENT ONGOVERNMENT PROCUREMENT (1994) PRIOR TOITS
ENTRY INTO FORCE, OTHER THAN RECTIFICATIONS OFAPURELY FORMAL
NATURE ORTHOSE RESULTING FROM NEGOTIATIONS AIMED ATEXPANDING
COVERAGE
21. TheChairmanrecalledthat,atitsJunemeeting,theInterimCommitteehadinvitedtheSecretariat
toprepareadraftdecisionontheadministrationofmodificationstotheAppendicesofthetypesenvisaged
inArticle XXIV:6 oftheAgreement, priortoitsentryintoforce, otherthanthosechanges toAppendices
already covered bythedecisions onrectifications ofapurely formal nature andonmodifications to
Appendix Iresulting from negotiations aimed atexpanding coverage.
22. TheInterim Committee adopted theDecision toAdminister Modifications totheAppendices
totheAgreement onGovernment Procurement (1994) Prior toItsEntry intoForce, Other than
Rectifications ofaPurely Formal Nature orThose Resulting fromNegotiations Aimed atExpanding
Coverage, ascontained inAnnex 2.
F. COMPLETION OFAPPENDICES II,IIIAND IVTOTHE AGREEMENT
23. TheChairman recalled that,atthemeeting oftheInformal Working Group inMarch ofthis
year, theGroup hadtaken noteofCanada 'sintention tocommunicate totheSecretariat assoonas
possible alistofpublications which itwould useforentities atthesub-federal level. AttheJunemeeting
oftheInterim Committee, therepresentative ofCanada hadexpressed thehope thathemight bein
aposition toprovide further information atthenextmeeting oftheInterim Committee.
24. Therepresentative ofCanada, referring tothediscussions between hisGovernment andthe
Provinces oncoverage ofsub-central levelentities which hehadmentioned earlier under itemBof
today'sagenda, noted thatthese would obviously haveanimpact onthisitem. Hehoped thatthefinal
outcome ofthose discussions would include anelement concerning publications. Hence, hewould
beinabetter position latertoprovide more details asrequired.
25. TheInterim Committee tooknoteofthestatement made.
26. TheChairman further recalled that,atthesame meeting oftheInformal Working Group in
March, theGroup hadtaken noteoftheintention ofthedelegation oftheUnited States toprovide a
comprehensive listofjournals usedforpublication ofnotices ofintended procurements atsub-federal
levelforinclusion inAppendix II.GPA/IC/M/2
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27. Therepresentative oftheUnited States explained thathisauthorities hadundertaken aprocess
ofcompiling acomprehensive listofStatepublications andhadbeenengaged inextensive consultations
withtheState procurement officials aspartofthisprocess. Asaresult, hisdelegation hadcome to
theconclusion that,asapractical matter, arectification totheUSHeading under Appendix IIwas
necessary withaviewtoproviding forStatepublications tobeessentially analternative totheCommerce
Business Daily forpurposes ofpublication inlightofthefactthatthemostcomprehensive information
onanindividualprocurementopportunityattheStatelevelwouldbecontainedintheseStatepublications.
Inthiscontext, herecalled thatcertain otherSignatories hadusedasimilar practice forlisting sub-central
publications inAppendix II.Asaresult, hisdelegation hadsubmitted adraftofaproposed rectification.
Inresponse toaquery from therepresentative ofCanada, heconfirmed thatitwastheintention of
hisGovernment tosubmit alistofupto37different Statepublications asanalternative totheCommerce
Business Daily, butadded thathisauthorities hadnevertheless strongly encouraged theStates totake
advantage oftheCommerce Business Daily, access towhich would beatnocharge tothem. Inresponse
toaquery from therepresentative oftheEuropean Communities, heclarified thatthere wasafirm
commitment onhisdelegation 'ssidetoprovide thelisting before theentry intoforce oftheAgreement
butthathisdelegation would endeavour todosoevensooner. Hewould circulate arevised textof
thedraftproposal ofarectification tomake thispointclearer (subsequently circulated asGPA/IC/W/10.)
28. TheChairman recalled thattherectification would bemade under theprocedures adopted by
theInterim Committee onAdministration ofRectifications ofaPurely Formal Nature toAppendices I
toIVoftheAgreement onGovernment Procurement (1994) Prior toitsEntry intoForce.
29. TheInterim Committee tooknoteofthestatements made.
G. PROGRESS INNATIONAL RATIFICATION PROCEDURES
30. Nocomments were made under thisagenda item.
H. INFORMATION TECHNOLOGY
31. TheChairman recalled that,atitsmeeting of29June1994, theInterim Committee hadinvited
theSecretariat toprepare, inconsultation withinterested delegations, acommon format forthe
presentation ofinformation oninformation technology. Thisformat, containing anumber ofquestions,
wasmade available todelegations on16September 1994, indocument GPA/IC/W/4/Rev.1, withthe
request thatinformation beprovided totheSecretariat inwriting by17October, fordistribution to
delegations. Asofthedateofthepresent meeting, replies hadbeenreceived from Sweden, Japan,
Switzerland, Finland, theEuropean Communities, theUnited States andNorway andhadbeencirculated
indocuments GPA/IC/W/7 andAddenda 1,2,3,4,5and6respectively. Further replies would be
circulated asadditional addenda. Heurged those delegations whohadnotyetdonesotosubmit their
information assoonaspossible.
32. Therepresentative oftheEuropean Communities saidthatitwasnotalways easytospotthe
fewprocurement opportunities ofinterest toaparticular supplier when onehadtogothrough
comprehensive official publications. Itwastherefore important tohavesystems inplace which had
increased search facilities, normally offered bymodern technologies intheelectronic area. Using
informationtechnologyintheareaofgovernmentprocurementwasthereforeextremelyimportantbecause
itheldthepromise ofamuch better procurement system. Inthisregard, hestressed afewpoints.
First, theissue ofcompatibility -anelement which theAgreement itself mentioned -notonlyinthe
sense oftechnical compatibility butalsointhesense ofcompatibility ofinformation covered bythe
databases. Another important question wastowhatextent thesystems were runbythegovernmentGPA/IC/M/2
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orbyprivate companies. TheUnited States, initsreplies totheSecretariat 'squestionnaire, hadreferred
toVANs, Value Added Networks. VANs werenormally organized onanational basis butthere was
perhaps apossibility toinclude information fromothercountries. Inthisrespect, theuseofinternational
standards,whichweredevelopedtoensuresuchcompatibility,washighlyrecommendable.Onestandard
inthisregard wastheUNEDIFACT standard, Electronic DataInterchange, developed intheUnited
Nations framework. Aspartoftheon-going process ofdeveloping theEC'ssystem, SIMAP (Système
d'Informations Marchés Publics) has,from thebeginning, employed theUNEDIFACT standard to
ensure thatdatainterchange willbecarried outinastructured, standardized manner. Sofar,his
authorities hadreceived information onfewsystems which usedthesame EDIFACT standard. He
noted thattheUnited States andJapan hadmade acommitment touseUNEDIFACT atsome point
inthefuture. Chinese Taipei wasintheprocess ofdeveloping itsowndatabase. There wasthusan
international standard available whose objective wastoensure compatibility ofnational systems but
which nevertheless didnotseem widely used. Thequestion hetherefore wanted toputtodelegations
was: totheextent thatinformation technology hadbeen, orwasbeing brought intouseinprocurement
systems, would appropriate usebemade oftheinternational standards; or,intheevent thatthiswas
notthecase, could delegations make acommitment tousethese standards infuture, withaprecise
time-table? Theideal situation would beonewhere anational database reflecting commercial
opportunities inthenational procurement markets opened uptosuppliers ofother Parties would equally
incorporate information onopportunities inother Parties 'procurement markets, without thishaving
tobetheresult ofcomplicated andsometimes evenimpossible translations from onesystem intothe
other. Secondly, hecautioned against using theVANs inawaytokeepinformation nationally. VANs
often obtained information from thegovernment atanominal fee.There wasarisk,however, that
theuseofsuchinformation fromthatdatabase bydatabases inother countries might besubject toheavy
fees,thuscreating obstacles tousing it.Thirdly, hesuggested thatdatabases towhich foreign suppliers
hadaccess should clarify whether thecommercial opportunities contained onthedatabase wereopen
onlytolocalsuppliers ortoforeign suppliers aswell. Fourthly, henoted thatinsome cases systems
werebeing developed forbelow-threshold contracts, forexample intheUnited States under thenew
Electronic Commerce Initiative. Heunderstood, however, thatitwastheintention oftheUnited States
Government tousethesystem above thethreshold aswellandhewould therefore appreciate information
onexact time-tables ifsuchinformation were available.
33. Therepresentative oftheUnited States stressed thatthequestionnaire wasnotanendinitself
butwasrather aninstrument forexamining these issues inthecontext ofthenewAgreement. High
technology would andshould influence procurement activities around theworld. Inorder toavoid
thenewAgreementbecomingobsolete,aconstantreviewoftheelementsoftheAgreementwasnecessary
toensure thatitwould takeintoaccount andaccommodate innovations intheprocurement sphere.
Hetoofound theissue ofcompatibility important anditshould beexamined aspartofthisexercise.
Heconfirmed thathisauthorities werereviewing theUNEDIFACT standard. Heremarked that,as
partofhisGovernment 'sdevelopment towards amore electronic procurement system, itwould be
contracting withalarge number ofVANs toprovide information onUnited States procurement
opportunities, some ofwhich would beentirely domestic, others possessing international capabilities.
Heexpected that,withthissystem developing, every supplier around theworld would eventually have
access toit.Heagreed thattheintroduction oftheElectronic Commerce system ingovernment
purchasing inhiscountry ought nottocreate obstacles toaccess forsuppliers from other countries.
34. Therepresentative ofCanada saidthattheissue oftheuseofinformation technology in
government procurement wasperhaps oneofthemostimportant issues ofmarket access. Hetoowas
oftheopinion thatthequestionnaire wasnotanendinitselfbutonlythestarting point. TheAgreement
should reflect modern ways inwhich suppliers could obtain access toprocurement contracts, remain
competitive andwhich should becapable ofproviding theappropriate response tocontract bids. He
waslooking forward toexamining theissues raised inmore detail aspartofacontinuing effort to
improve market access.GPA/IC/M/2
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35. Therepresentative oftheEuropean Communities agreed thatthisexercise should result insome
concrete conclusions. Hesuggested thattheissueofinformation technology become astandard point
ontheagenda ofthemeetings oftheInterim Committee.
36. Therepresentative oftheUnited States saidthathisdelegation would come forward shortly
withconcrete ideas onpossible results from thisexercise andhesuggested thatother delegations do
thesame. Oneidea, forexample, wastoexamine theAgreement inorder topreliminarily identify
specific provisions where some changes might bedesirable totakeaccount oftheGroup 'swork in
thisarea.
37. TherepresentativeoftheEuropeanCommunitiescommentedthattheideaofintroducingchanges
totheAgreement totakeaccount oftheCommittee 'swork inthisareawasinteresting andamatter
tobetaken upinthemedium term. Developments intheareaofinformation technology might warrant
suchchanges inthefuture. However, useful work could already beundertaken atthisstage, without
necessarily changing theprovisions oftheAgreement. Forexample, indeveloping domestic databases,
theelement ofcompatibility between databases could already bekeptinmind atthisstage. Secondly,
itwasimportant tocontinue theexchange ofinformation about domestic databases onthebasisofthe
questionnaire.
38. Inthelightofthediscussion, theChairman invited delegations toconsult withhimonpossible
issues forexamination atthenextmeeting. TheWorking Group tooknoteofthestatements made
andagreed torevert tothismatter atitsnextmeeting.
I. ESTABLISHMENT OFAPRACTICAL GUIDE TOTHE NEW AGREEMENT
39. TheChairman recalled that,attheJunemeeting oftheInterim Committee, theGroup had
concluded thattherewasagreement inprinciple ontheproduction ofapractical guide andhadagreed
torevert tothismatter atalaterstage, inparticular asregards thequestion ofthestructure and
presentation ofsuchaguide. TheSecretariat hadcirculated aninformal noteon7November onthe
structure ofthePractical Guide totheexisting Agreement, raising anumber ofissues inregard tothe
structure andcontent ofaguide tothenewAgreement.
40. TheGroup agreed tofirstreview thefourgeneral questions contained intheinformal note:
usefulness oftheloose-leaf format andofthethree-part structure; desirability ofseeking advice from
potential users about thestructure andpresentation ofafuture guide; andexistence ofequivalent types
ofguides, prepared bynational administrations orinaregional context.
41. Therepresentative ofJapan, while stressing theimportance ofapractical guide tothenew
Agreement, questioned theneedtoseekadvice frompotential usersabout itsstructure andpresentation,
since thenewguide would bebased onthecurrent Practical Guide, reflecting theprovisions ofthe
Agreement andassuchtherights andobligations ofSignatories.
42. Therepresentative oftheEuropean Communities reiterated theusefulness ofapractical guide
andstressed thatanysuchguide should beaspractical aspossible. Hewasinfavour ofseeking the
advice ofpotential users. While agreeing withtherepresentative ofJapan thatthisshould bedone
within theframework oftheAgreement, henevertheless cautioned against theguide becoming alegal
handbook.TheEuropeanCommunitiesthemselveshadestablishedaguideonprocurementcalled"Guide
toPublic Supply andWorks Contracts intheCommunity" which hewould behappy tosubmit tothe
Secretariat forinspection bytheMembers oftheInterim Committee.GPA/IC/M/2
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43. Therepresentative oftheUnited States suggested thatdelegations focus theirwork onthetype
ofinformation tobeincluded inPartIIofanewguide, which, ifthestructure ofthepresent guide
weretobemaintained, would contain adescription oftheapplication oftheAgreement bySignatories.
Inthatcontext, reproduction ofAppendices II,IIIandIVoftheAgreement inanewguide would
notbenecessary. Hewasinfavour ofseeking advice from potential users, which should bedone
bydelegations individually incapitals, rather thanbytheCommittee from aninternational body
representing business. Hementioned theexistence inhiscountry ofastatepublication, containing
information onpublications usedandthetypes ofproducts andservices procured byeachState, which
hewould behappy tosubmit totheSecretariat forinspection bytheMembers oftheInterim Committee.
Hefurther observed thattheinclusion ofstatistics inanewguide would neither berelevant norpractical,
given theprobable considerable sizeofanewguide.
44. Therepresentative ofCanada, while agreeing inprinciple toathree-part structure, supported
theviewthatworkshould focus onpractical information ontheapplication oftheAgreement, contained
inaPartIIofaguide. Reproduction ofAppendix IoftheAgreement inanewpractical guide would
notnecessarily beuseful. Hewould behappy toconsult withpotential users inhiscountry about their
preferences onthestructure andthepresentation ofanewguide. IntheNAFTA context, anoutline
wascurrently being drawn upofawork intended toassist suppliers inmaking useofthecommercial
opportunities inprocurement markets opened upbyNAFTA. Hewould behappy toprovide acopy
onceitwaspublished.
45. Therepresentative ofKorea stated thathewasinfavour ofseeking theadvice ofpotential users
ofapractical guide.
46. Insumming upthediscussion, theChairman concluded thatalldelegations whospoke supported
theideaofretaining aloose-leaf format andathree-part structure forthenewguide, although theview
hadalsobeenexpressed thatreproduction ofAppendices I,II,IIIandIVoftheAgreement inPartIII
ofaguide would notnecessarily beuseful, given theprobable considerable sizeofanewguide and
thegeneral availability ofthisinformation intheAgreement itself. Those delegations whowere in
favour ofseeking advice from potential users inthepreparation ofanewguide hadexpressed a
preference fordoing soindividually incapitals, rather thanconsulting asuitable international body
representing business.
47. Delegationsthenheldafirstpreliminarydiscussionofthespecificquestionsraisedintheinformal
Secretariat noteonapractical guide. Therepresentative ofJapan didnotseetheneedtoinclude
information onthepriceofapublication nortoinclude statistics, sincethisinformation wasephemeral.
Healsohadstrong doubts about thefeasibility ofpresenting information onprocuring entities andtheir
procurements inagiven period inasynoptic format, similar tothematrix contained inthecurrent
Practical Guide, given thegreatly expanded coverage under thenewAgreement. Asregards thecontents
ofaPartIIIofanewguide, hewasoftheopinion that,iflistsofentities should beincluded inanew
guide, Appendix Ishould bereproduced telquel,since itdescribed therights andobligations of
Signatories. Ontheother hand, hedidnotseetheneedtoinclude Appendices II,IIIandIVinPartIII
oftheguide ifrelevant information contained intheseAppendices would already beincluded inPartII
oftheguide.
48. Therepresentative oftheEuropean Communities wasinfavour ofproviding anyinformation
which waspractical, suchastheaddress ofthepublication. Inaddition, information concerning appeal
procedures available tosuppliers should beincluded. Moreover, hefeltthatasynoptic presentation
ofprocuring entities andtheirprocurements inagiven period would beuseful. Interms ofinformation
technology, henoted that,inaddition todescribing thevarious databases available, itwasequally
important toprovide information ontheways inwhich toaccess them. Asregards thecontents of
PartIIIofanewguide, hewondered why-ifonewanted toinclude anything atall-itwould notbeGPA/IC/M/2
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more sensible toinclude onlythetextofthenewAgreement, rather thanAppendix I,since suppliers
should normally already havetheinformation described inAppendix Ithrough thepublications used
byentities publishing procurement opportunities. Inrelation tothequestion ofhowtopresent the
derogations intheAgreement, hesuggested thatthisperhaps bedone inamatrix, indicating the
derogations foreachParty. Finally hecautioned against theguide becoming toothick. Ifever
delegations wanted topublish a"version banalisée" oftheAgreement inaddition toapractical guide,
hesuggested thatthiscould perhaps bedoneusing software, withincreased search facilities andavailable
onawidescale.
49. Therepresentative oftheUnited States reserved hisposition onthequestion whether Appendix I
should beincluded inanewpractical guide. Hereiterated thatreproduction ofAppendices II,IIIand
IVwasnotnecessary. These Appendices were notveryuser-friendly tosuppliers, since theywere
notstructured onacountry-by-country basis intheAgreement and,moreover, relevant information
contained inthese Appendices would beproduced andelaborated inPartIIoftheguide. Hewasalso
concerned thattheguide notbecome toothick. Asregards thederogations intheAgreement, hewas
notsurewhether theguide should contain anindication ofsuchderogations. Hecautioned against
describing anyimpact ofthederogations atthisstage since theguide should nothaveanylegalstatus
interms ofdefining derogations.
50. Therepresentative ofCanada stated thathewould consult withsuppliers inhiscountry onthe
desirability ofincluding Appendices I,II,IIIandIVinapractical guide, given thatthese Appendices
were included inthepublication containing thenewAgreement. Furthermore, hewasopen toany
suggestions ontheappropriateness ofincluding thederogations totheAgreement intheguide.
51. TheInterim Committee tooknoteofthestatements made andagreed torevert tothismatter
atitsnextmeeting.
J. OTHER BUSINESS
(i) Note4(a)toAnnex 3ofAppendix IofJapan (procurement related tooperational safety
oftransportation)
52. Therepresentative oftheEuropean Communities stated thattheJapanese entity listinAnnex 3
contained seven railways which were allsubject totheprovisions ofafootnote stipulating that
procurement related tooperational safety oftransportation wasnotincluded. Itwashisunderstanding
thattheJapanese authorities interpreted thisverybroadly, which meant thatthenumber ofpotential
procurement contracts issued bytheJapanese railways would beverylimited. Herequested thatthis
point beputontheagenda fortheInterim Committee 'snextmeeting.
53. Therepresentative ofJapan commented thattheseven Japanese railway companies hadmade
purchases inECcountries foratotalofUS$16 million inthepastyears. Theconditions under which
trains inJapan hadtooperate were verydifficult, which warranted special safety provisions. This
wasthereason whyhisauthorities hadexcluded procurement related tooperational safety fromcoverage
under theAgreement. Hewaslooking forward toreceiving some examples from thedelegation of
theEuropean Communities inthecontext ofbilateral discussions. Henoted thathewasnotaware
ofanycomplaint from foreign suppliers.
54. Therepresentative oftheUnited States, recognizing thatthiswasanissue inthecontext of
bilateral discussions between theECandJapan oncoverage inAnnexes 2and3,saidthathisdelegation
hadalsounderstood thatthefootnote wasinterpreted verybroadly, andthatif,insubsequent discussionsGPA/IC/M/2
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between hisauthorities andJapan, concessions were sought byJapan fortheinclusion ofthis
procurement, hedoubted thatmuch credit could begiven byhisdelegation.
55. Therepresentative ofJapan expressed hissurprise thatthisissue hadbeenraised today. He
observed thatthefootnote wasnotnew; itwasalready included intheJapanese entity listunder the
current Agreement andhadagain beenintroduced inthenewAgreement, which hadbeenadopted.
56. Therepresentative ofCanada indicated that,although thiswasraised inthecontext ofabilateral
issuebetween theEuropean Communities andJapan, thequestion oftheinterpretation oftheJapanese
exception wasanissue clearly affecting allSignatories. Herequested thatanyinformation provided
inthecourse ofthese discussions alsobeshared withallother Signatories sothatgreater clarification
could beprovided astotheexact coverage bytheJapanese railways.
57. TheChairman proposed thattheInterim Committee takenoteofthestatements made andrevert
tothisissueatthenextmeeting, ifsorequested byanydelegation. TheInterim Committee soagreed.
(ii) Notification byNorway under theprocedures adopted bytheInterim Committee on
the"Administration ofrectifications ofapurely formal nature toAppendices ItoIV
oftheAgreement onGovernment Procurement prior toitsentry intoforce"
58. TheChairman noted thatNorway hadnotified (GPA/IC/W/8, dated 15November 1994) a
change initsentity listunder theprocedures adopted bytheInterim Committee onthe"Administration
ofRectifications ofaPurely Formal Nature toAppendices ItoIVoftheAgreement onGovernment
Procurement Prior toItsEntry intoForce". These procedures stipulated thatifnoobjections were
received within thirty daysafternotification, therectification would enter intoforce.
59. Therepresentative ofNorway explained thatthenames oftwoentities hadbeenchanged and
thattheinclusion ofoneentity inNorway 'sAppendix Ihadbeenmade explicit, assetoutinher
delegation 'snotification contained indocument GPA/IC/W/8.
60. TheInterim Committee tooknoteofthestatement made.
DATE OFTHE NEXT MEETING OFTHE COMMITTEE
61. Itwasagreed thattheChairman would setadateinconsultation withdelegations atalater
stage.GPA/IC/M/2
Page11
ANNEX 1
STATEMENT OFTHE SEPARATE CUSTOMS TERRITORY OFTAIWAN, PENGHU,
KINMEN AND MATSU ATTHE SECOND MEETING OFTHE INTERIM COMMITTEE
ONGOVERNMENT PROCUREMENT, 15NOVEMBER 1994
On30June1994, theSeparate Customs Territory ofTaiwan, Penghu, Kinmen andMatsu
expressed theintent tothisCommittee ofacceding tothenewAgreement onGovernment Procurement
(AGP). Since then, wehavebeenundertaking tremendous works toprepare ourselves toenter into
negotiations withAGPsignatories. Thefollowing isabriefsummary ofourendeavours foraccession
totheAGP.
I. REGULATORY REFORMS
MyGovernment isnowundertaking awide range ofregulatory reforms intherégime of
government procurement inorder tofulfil ourobligations asasignatory oftheAGP. Thereforms
include:
1. Draft anewbasic lawofgovernment procurement
Ourexisting regulations governing government procurement areembodied intheaudit
lawsandregulations, which arenotfullyconsistent withtherules oftheAGP, especially in
suchareas asnotice oftenders, tendering procedures, technical specification, qualification of
suppliers, time-limit fortendering andbidchallenge procedures. MyGovernment isdrafting
anewbasiclaw,the"Statute forGovernment Procurement", inaccordance withtheprinciples
setforthintheAGP. ThedraftoftheStatute isexpected tobecompleted bytheendofnext
January.
2. Remove discriminatory measures ofgovernment procurement
There aresome discriminatory measures inthepractising ofgovernment procurement.
Examples aredistinguishing between localbidsandforeign bidsinsome procurement cases,
firstpriority toRet-ser Engineering Agency ofnegotiation with government entities on
construction works, andarearestrictions ongovernment procurement. Such discriminatory
measures willbelargely reduced andeventually removed inourregulatory reforms.
3. Strengthen thestructure ofgovernment procurement organization
Wewillestablish a"Government Procurement Committee" responsible forreviewing
procurementpolicy,draftinglawsanddecreeingregulationsrelatedtogovernmentprocurement.
Wewillalsoestablish acentralized procurement system bywhich theresponsible agencies
willbeauthorized toimplement procurement ofproducts andservices, construction works
andmilitary supplies, respectively.GPA/IC/M/2
Page12
II. PREPARATION OFOUR OFFER
1. MyGovernment hasalready opened thegovernment procurement market toforeign
suppliers. Although wehavenotyetcompleted formal statistics forgovernment procurement
awarded toforeign suppliers, thefollowing figures canbeimportant information forthe
concerned signatories ofAGP.
(a) According tothesurvey conducted by"Chung-Hua Institution ForEconomic
Research"1,thelump sumofprocurement bygovernment entities atalllevels
in1993 isestimated to:
(i) US$10.2 billion forprocurement ofproducts (thevalue ofcontracts
above SDR 400,000 accounts for86percentofthetotalvalue of
contracts awarded);
(ii) US$270 million forprocurement ofservices, excluding construction
(thevalue ofcontracts above SDR 400,000 accounts for80percent
ofthetotalvalue ofcontracts awarded); and
(iii) US$7.9 billion forconstruction works (thevalue ofcontracts above
SDR 400,000 accounts for60percentofthetotalvalue ofcontracts
awarded).
Asforthegovernment procurement contracts awarded toforeign suppliers,
there areabout US$6.6 billion forprocurement ofgoods, US$30 million for
services excluding construction, andUS$1.4 billion forconstruction works.
(b) According totherecords ofourSix-Year National Development Plan(1991-
1996), uptoJune1993, theamounts ofcontracts awarded toforeign suppliers
hadexceeded US$7.3 billion.
2. Inorder tomake thegovernment procurement market more accessible toallinterested
suppliers, weareearnestly prepared toprovide theinitial offerasrequested atthefirstmeeting
oftheInterim Committee. Theinitial offershould beusedasabasisinournegotiations with
AGPsignatories.Duetothecomplexityofgovernmentagenciesinvolvedincurrentgovernment
procurementstructure,theCouncilforEconomicPlanningandDevelopmentundertheExecutive
Yuan ismaking thebestefforts tocoordinate among different agencies, andexpects toprovide
ourinitial offer inearly 1995.
III. OUR DETERMINATION
Thereform ofthegovernment procurement régime associated withouraccession totheAGP
isanunprecedented challenge tomyGovernment. There aretremendous works andunexpected
resistance. However, myGovernment hasdetermined toovercome those hurdles andtoaccede to
thenewAGPassoonaspossible. Hope withthefullsupport ofyourdelegations, wecould officially
become aparty oftheAGP inthenearfuture.
1Thestatistics mentioned below areunofficially compiled andproduced bytheprivate institute. Innocircumstances
willthestatistics beusedandtreated astheofficial production oftheSeparate Customs Territory ofTaiwan, Penghu, Kinmen
andMatsu (Chinese Taipei).GPA/IC/M/2
Page13
ANNEX 2
ADMINISTRATION OFMODIFICATIONS TOTHE APPENDICES TOTHE AGREEMENT
ONGOVERNMENT PROCUREMENT (1994) PRIOR TOITSENTRY INTO FORCE, OTHER
THAN RECTIFICATIONS OFAPURELY FORMAL NATURE ORTHOSE RESULTING
FROM NEGOTIATIONS AIMED ATEXPANDING COVERAGE
Decision oftheInterim Committee onGovernment Procurement of15November 1994
1. ModificationsrelatingtoAppendicesIthroughIVoftheAgreementonGovernmentProcurement
(1994), other thanrectifications ofapurely formal nature andother thanthose agreed andresulting
from negotiations aimed atexpanding coverage prior toitsentry intoforce, shallbenotified tothe
Interim Committee onGovernment Procurement, along withinformation astothelikely consequences
ofthechange forthemutually agreed coverage provided intheAgreement.
2. TheChairman oftheInterim Committee shall promptly convene ameeting oftheInterim
Committee. TheInterim Committee shall consider theproposal andanyclaim forcompensatory
adjustments, withaviewtomaintaining abalance ofrights andobligations andacomparable level
ofmutually agreed coverage provided intheAgreement prior tosuchnotification. Intheevent of
agreement notbeing reached, thematter maybepursued under theprovisions ofArticle XXII ofthe
Agreement, afteritsentry intoforce.
3. Where aMember totheInterim Committee wishes, inexercise ofitsrights, towithdraw an
entity fromAppendix Ionthegrounds thatgovernment control orinfluence overithasbeeneffectively
eliminated, thatMember shallnotify theInterim Committee. Suchmodification shallbecome effective
thedayaftertheendofthefollowing meeting oftheInterim Committee, provided thatthemeeting
isnosooner thanthirty daysfrom thedateofnotification andnoobjection hasbeenmade. Inthe
event ofanobjection, thematter maybepursued under theprovisions ofArticle XXIIoftheAgreement,
afteritsentry intoforce. Inconsidering theproposed modification toAppendix Iandanyconsequential
compensatory adjustment, allowance shallbemade forthemarket-opening effects oftheremoval of
government control orinfluence.
4. Until theentry intoforce oftheAgreement Establishing theWorld Trade Organization, each
modification, onceeffective, shallbedeposited withtheDirector-General totheCONTRACTING
PARTIES totheGATT 1947, whoshallpromptly furnish toeachMember acertified copyofit.Upon
entry intoforce oftheAgreement Establishing theWorld Trade Organization, eachmodification, once
effective, shallbedeposited withtheDirector-General ofthatAgreement whoshallpromptly furnish
toeachMember acertified truecopyofit.
5. Theprocedure inparagraphs 2and4shallalsoapply toanymodifications toAppendices I
through IVnotified asrectifications ofapurely formal nature under theInterim Committee 'sdecision
of29June1994 buttowhich objections havebeenmade.