TWN Info Service on WTO and Trade Issues (Oct19/23)
25 October 2019
Third World Network

Major ICs cautiously welcome China's latest offer for acceding to GPA
Published in SUNS #9005 dated 25 October 2019

Geneva, 24 Oct (D. Ravi Kanth) - Major developed countries on Wednesday (23 October) welcomed China's sixth revised market access offer for acceding to the World Trade Organization's plurilateral Agreement on Government Procurement (GPA), setting the stage for Beijing's much-delayed accession next year, a trade envoy told the SUNS.

China's latest offer provides enhanced thresholds for foreign bidders in sub-central government entities and in other entities that include universities. Until now, China has provided modest access in sub-central government entities that cover various municipalities and departments, and universities and technical institutions, the envoy said.

In a 43-page restricted offer circulated to GPA members on 21 October (GPA/ACC/CHN/51), China has proposed varying thresholds for supplies to the central government entities.

They include from 200,000 SDRs (Special Drawing Rights) or $274,000 (1 SDR equals $1.37 on average) for the first year after implementation and 130,000 SDRs or $178,100 from the second year for supplies; 200,000 SDRs or $274,000 for the first year after implementation and 130,000 SDRs or $178,100 from the second year for services; and 7,500,000 SDRs or $10,275,000 for the first year after implementation and 5,000,000 SDRs or $6,850,000 from the second year for construction services.

China has included more than 50 central government entities that would be open for access to foreign suppliers as per the thresholds set out in the sixth revised offer.

For sub-central government entities, China has qualitatively enhanced the thresholds for access to foreign suppliers, as compared to its earlier offers.

The thresholds for the sub-central government entities include 500,000 SDRs or $685,000 for the first year after implementation and 200,000 SDRs or $274,000 from the second year for supplies; 500,000 SDRs or $685,000 for the first year after implementation and 200,000 SDRs or $274,000 from the second year for services; and 7,500,000 SDRs or $10,275,000 for the first year after implementation and 5,000,000 SDRs or $6,850,000 from the second year for construction services.

As regards other entities including universities and technical institutions, China has set thresholds ranging from 600,000 SDRs or $822,000 for the first year after implementation and 400,000 SDRs or $548,000 from the second year for supplies; 600,000 SDRs or $822,000 for the first year after implementation and 400,000 SDRs or $548,000 from the second year for services; and 10,000,000 SDRs or $13,700,000 for the first year after implementation and 5,000,000 SDRs or $6,850,000 from the second year for construction services.

China has also listed various conditions that will not apply to its latest offer. For example, China has said that "this Agreement (GPA) shall not apply to:

* procurement with the aim of supporting small and medium-sized enterprises and promoting development in minority and poverty-stricken areas in accordance with the laws and regulations;

* contracts for the acquisition, development, production or co-production of programme material by broadcasters and television and contracts for broadcasting time;

* procurement made by a covered entity on behalf of a non-covered entity;

* procurement made by one entity or enterprise from another entity or enterprise."

China has also made it clear that "the Chinese Government may require the incorporation of domestic contents, offset procurement or transfer of technology", as per Article V of the GPA.

More importantly, China has insisted that it would seek "reciprocal access for Chinese goods, suppliers and service providers" to other markets.

"Until such time as China has accepted that the Parties concerned provide satisfactory reciprocal access for Chinese goods, suppliers and service providers to their own markets, China will not extend the benefits of this Agreement to the goods, suppliers and service providers of the Parties concerned," China has maintained.

China said its market access offer will be implemented two years after its accession to the GPA.

It has also included a condition that "for the protection of its national security interests, China reserves its right to apply this Agreement to particular suppliers in a given procurement."

Major developed countries - the United States, the European Union, Japan, Canada, Australia, Norway, and Switzerland among others - cautiously welcomed China's latest offer.

They maintained that they will closely study the latest offer.

CU