SCHEDULE OF GOVERNMENT PROCUREMENT RULES IN INTEGRATION AGREEMENTS IN THE
CHAPTER I: GENERAL
Entry into Force/ Future
- The WTO Government Procurement Agreement (GPA) is one of the so called
Plurilateral Agreements, since it applies to only those members who have
signed it. Twelve countries have signed the Agreement, mostly developed
countries, including the European Community that counts as one. The United
States and Canada are the only two Western Hemisphere countries that are
signatories to the WTO GPA.
- The Government Procurement Agreement entered into force on January 1,
1996. It provides coverage for most central and sub-central levels of
government and sets out a bid challenge mechanism for private firms pertaining
to the signatory countries.
- The Agreement provides for further negotiations with the object of
improving the GPA and to achieve the greatest possible extension of its
coverage. Negotiations shall be undertaken no later than the third year from
the date of its entry into force. However, the General Agreement on Trade and
Services (GATS), contains a provision calling for negotiations on government
procurement of services to be initiated before January 1, 1997.
- The IDB´s Basic Procurement Policies and Procedures apply to the
procurement of goods, works, and related services in tenders derived from the
execution of projects that are financed by the Bank. Prospective bidders from
the Bank?s member countries have the opportunity to participate under
equitable, fair and open procedures in the provision of goods, works and
- The following countries are members of the Bank: Argentina, Austria,
Bahamas, Barbados, Belgium, Belize, Bolivia, Brazil, Canada, Colombia, Costa
Rica, Chile, Croatia, Denmark, Dominican Republic, Ecuador, El Salvador,
Finland, France, Germany, Guatemala, Guyana, Haiti, Honduras, Israel, Italy,
Jamaica, Japan, Mexico, The Netherlands, Nicaragua, Norway, Panama, Paraguay,
Peru, Portugal, Slovenia, Spain, Suriname, Sweden, Switzerland, Trinidad &
Tobago, United Kingdom, United States, Uruguay, Venezuela. The Bank should be
consulted regarding eligibility for procurement of the other successor
republics of the former Socialist Federal Republic of Yugoslavia.
- There are also certain eligible territories and dependencies: Netherlands
Antilles (Aruba, Curção, Bonaire, St. Maarten, Saba and St. Eustatius) -
participate as departments of the Netherlands; Guadeloupe, French Guyana,
Martinique and Reunion - participate as departments of France; and Puerto Rico
- participates as an Associated State or one forming part of the United
- The legal relationship between the Bank and its Borrowers is governed by
loan contracts. These contracts also regulate important aspects of the
procurement process. Since the legal relationship between the Borrowers and
suppliers of works, goods and related services is governed by the bidding
documents and the provisions of the respective contracts between those
parties, no supplier or entity that is not a party to the Bank?s loan
contracts can derive rights or demand payments on the basis of these loan
- The responsibility for execution and administration of projects rests with
the Borrowers, including the entire procurement process, from the preparation
of the bidding documents to the awarding and management of contracts. The bank
oversees the procurement process to ensure that its rules and procedures are
followed (paragraph 2.3 of the BPPP).
- The Agreement does not provide for any provisions on government
procurement. However, there is no special exception to the general principle
of national treatment and nondiscrimination for goods and services.
- In December 1994 the Common Market Council instructed MERCOSUR?s Trade
Commission, through Decision No. 2094, to create a Technical Committee No. 4
on "Public Policies which Distort Competitiveness". The Committee was to
identify policies which may affect competitiveness within MERCOSUR. Among
other topics, the Committee will treat the major themes regarding procurement
practices. To this date, the Committee has met in seven opportunities but has
only proceeded to the exchange of national legislation on the subject.
- Finally, government procurement is under analysis in the Ad Hoc
"Services" Working Group which is in the process of elaborating a Framework
Agreement for MERCOSUR.
- The agreement expands upon the obligations of the WTO by adopting lower
thresholds and a negative list approach to the coverage of services procured
by the listed entities. Consequently, all services are covered unless
- Parties have undertaken to commence further negotiations to expand the
agreement by December 31, 1998. Consultations to obtain commitments, on a
voluntary and reciprocal basis from provincial and state governments will take
place prior to those negotiations.
- The Agreement entered into force in January 1994.
- The Agreement does not cover Government Procurement. However, the "New
Strategic Design of the Andean Group", approved by the Commission on August
31, 1995, establishes some guidelines on the subject. The document stresses
the necessity of adopting legislation in the area of government procurement
based on the parameters and taking as a reference the Government Procurement
Agreement of WTO.
CENTRAL AMERICAN COMMON MARKET
- The Agreement does not cover Government Procurement. However, the
countries pertaining to the Common Market are studying the possibility of
negotiating a future Agreement on Services where the subject could be
- However, the Central American Agreement on Fiscal Incentives to Industrial
Production (Law No. 3142 of July 26, 1963) in its Chapter XI, Article 42
states that: The Governments, autonomous or decentralized government
institutions, municipalities and all public entities of the Contracting
Parties will give preference in their procurement to products of the Central
American industry, provided that the price of these products is equal or
inferior to those imported and their quality is comparable. To the effect of
price comparison, the price of the imported product (not Central American)
will be composed of 50% of the import tariffs, related duties and other import
costs, even when the procuring entity is exempted from their payment.
- In February 1994 the Council approved the "Promotional Program for
Increasing Procurement of Regional Goods and Services by Member States from
within the Community" and an action plan is being developed. The aim is to
make national tendering procedures and notices known by creating a central
regional information coordinating agency.
GROUP OF THREE ACCORD
- Coverage and thresholds are similar to the NAFTA Chapter on Government
Procurement. However, obligations under the Agreement for Colombia and
Venezuela are less than Mexico?s. For example, tendering procedures only apply
for Colombia and Venezuela provided that they are consistent with their
respective national legislation. Consequently, most of the tendering
procedures provisions do not apply for those countries. Bid challenge
procedures are not applicable for Colombia and Venezuela either.
- The Agreement contains a stipulation for further negotiations, but it does
not provide a specific date as to their commencement.
BILATERAL AGREEMENTS WITH MEXICO
- Mexico has signed three bilateral trade agreements with countries
belonging to the Western Hemisphere--Bolivia, Costa Rica and Chile. The
Mexico-Bolivia and Mexico Costa Rica Agreements are similar in form and
substance. Nevertheless, they contain some differences regarding their
transition mechanisms that are less stringent in the Mexico-Bolivia Agreement
than in the Mexico-Costa Rica Agreement. For Mexico, transition mechanism
rules remain the same in both agreements. Regarding the Agreement with Chile,
it is related to other agreements signed by that country. Consequently, for
purposes of this study, the Mexico-Chile Agreement is classified as a Chile
bilateral agreement. Both Agreements entered into force on January 1, 1995.
BILATERAL AGREEMENTS WITH CHILE
- Chile has signed five similar ?commercial complementation? agreements with
countries belonging to the Western Hemisphere-- Bolivia, Colombia, Ecuador,
Venezuela and Mexico. All agreements, except for the one with Bolivia, contain
the same provision. It states that an administrative commission will, within
the first year subsequent to the agreement?s entry into force, define the
scope and terms that will regulate government procurement purchases among the
signatory countries. For that effect, it will consider the criteria
established in the GATT procurement code.
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