NZ to join WTO's Govt Procurement Agreement

New Zealand Businesses will get better access to an estimated US$1.6 trillion worth of overseas government contracts, after New Zealand agreed to join the World Trade Organisation’s Government Procurement Agreement (GPA), Economic Development Minister Steven Joyce and Trade Minister Tim Groser announced today.

“Joining the GPA creates new opportunities for New Zealand businesses to export more products and services to more destinations,” Mr Joyce says.

The total value of worldwide procurement covered by the Government Procurement Agreement was estimated at US$1.6 trillion in 2008 – representing 2.64 per cent of the world’s gross domestic product.

“Member countries have agreed to revised coverage that will see this amount increased by US$80 – 100 billion each year. The value will also go up as new countries, including China, come on board.” Mr Groser says.

Under the agreement member countries are not allowed to discriminate against businesses from another country in their government procurement processes. They must also follow rules relating to competition and openness.

“Joining will not have a big impact on New Zealand government agencies because they already conduct their procurement in line with the agreement’s fundamental principles,” Mr Joyce says.

“We already follow the rules, but just don’t get the benefit for our New Zealand exporters. Joining up to the GPA will improve all access and reduce costs for exporters.”

The process for New Zealand to join the Government Procurement Agreement is expected to take about two years to complete.

Forty-two countries, including the US, Canada, Korea, Japan and the 27 countries of the European Union, currently belong to the agreement. It covers the purchase of a broad range of goods and services that government agencies buy from the private sector, including construction.

In order to join, New Zealand must demonstrate to existing members that its own procurement rules comply with the agreement. New Zealand is not required to include all government procurement in the agreement; it can negotiate with existing members what is in scope.