European Commission Directorate-General for Trade

Public procurement

Public procurement is about how public authorities spend public money. It covers purchases of everything from papers clips to computer systems, waste water plants, ship building or consulting services.

Public Procurement is considered as a key driver of public policies, regional integration and an important component of development (e.g. fight against corruption). Opaque and discriminatory procurement procedures and practices therefore significantly distort trade and reduce potential growth.

Public procurement is today arguably the largest trade sector sheltered from multilateral trade rules. It is not covered by any multilateral WTO discipline and it is, for example, specifically exempted from the WTO obligation to treat foreign and domestic companies in the same way.

Many of the EU's major trading partners operate restrictive public procurement practices. EU suppliers are either disqualified outright from tendering, or can only tender on less favourable terms than their local competitors. In contrast, EU procurement markets are among the most open in the world, ensuring that European taxpayers get the best possible value for their money.

In addition to its continuous work on procurement at the internal Community level, the Community negotiates both bilateral and multilateral international agreements with a twofold objective. Firstly, to contribute to setting modern and international standard procurement principles which seek to ensure that public money is spent in a transparent, efficient and non-discriminatory way. Secondly, to provide a level playing field for EU suppliers when tendering abroad.

The most important international agreement related to public procurement is the WTO Agreement on Public Procurement (GPA) . The GPA establishes a set of rules which govern the procurement activities of its parties. It also provides for market access opportunities. Each Party to the GPA has made market access offers which are set out in Appendices to the Agreement. Membership in the GPA is voluntary, and there are currently 12 GPA Members in addition to the European Union. The GPA is currently being reviewed and the EU is both playing an active part in this review and encouraging other countries to join the agreement.

The EU now includes public procurement in all its bilateral trade agreements. So far, there are such agreements with Mexico, Chile and Cariforum. The EU also ensures that new bilateral trade agreements under negotiation contain a substantial procurement chapter, tailored to each country's size, level of development and priorities. While with our major developed trade partners, the EU is set to ask for a substantial liberalisation of public procurement markets as part of these negotiations, with regard especially to weaker developing countries, the main emphasis during the negotiations is on encouraging transparency and the creation/strengthening of regional procurement markets.