|Government procurement is the term used for the purchasing activities of governmental authorities and covers purchases of everything from pencils and paper clips to computer systems and telecommunications equipment, ship building or consulting services.
Government procurement is specifically exempted from the most basic of WTO disciplines (GATT Articles III:8 and XIII:1), in particular that of national treatment. Since it accounts for up to 15% of GDP, this significantly distorts trade and reduces potential growth.
The only WTO régime on procurement now in existence is the plurilateral Agreement on Government Procurement (GPA), but apart from the Community, participation in this Agreement remains limited to a dozen or so Parties.
The Community's own procurement market is effectively open to foreign competition but, outside the GPA, EC companies are often either de facto or de jure excluded from foreign procurement markets.
In the WTO, the EC therefore attaches great importance to two other initiatives underway:
* Negotiations on procurement of services mandated by Article XIII.2 of the GATS;
* Transparency in Government Procurement.
In the meantime, the EU remains committed to the Government Procurement Agreement and has continued to play an active role in its Review, to persuade other countries of the advantages of GPA membership and take and active interest in resolution of GPA Disputes.
Outside the WTO framework, the Community has concluded a number of bilateral agreements on government procurement (South Korea, Mexico and the present agreement with Israel).
The Community and Israel were participants in the negotiations, which led to the WTO's new Government Procurement Agreement (GPA). However, Israel delayed ratification pending an expansion of coverage to include access to procurement tenders for telecommunications equipment in the EU.
As part of the EU-Israel Association Agreement negotiations, both parties reaffirmed their commitment to mutually open their respective procurement markets. Article 35 of the Euro-Mediterranean Association Agreement, signed in 1995, states that the parties shall take measures beyond the scope of what has been mutually and reciprocally covered under the Government Procurement Agreement concluded in the framework of the WTO.
The Agreement covers government procurement complementing and broadening the scope of commitments under the GPA. It represents real progress in the EU's goal to continue to open up public procurement markets beyond what has already been achieved in the GPA. Israel will be committed to further market opening in urban transport, services, medical equipment and sub-central government procurement, such as municipal and state agencies.
This agreement was adopted together with the agreement on procurement by telecommunications operators.