India will not be join WTO’s the plurilateral Agreement on Government Procurement (GPA)
Recently, India has said that it has no plans to join the Government Purchase Agreement (GPA) of the World Trade Organization (WTO).
Agreement on Government Procurement (GPA) allows WTO members to mutually open their markets to sell goods and services to governments. Governments often include regional and local governments.
- There are 21 parties to the Agreement on Government Procurement (GPA 2012). It counts the European Union and its 27 member states as a party, including the 48 members of the WTO.
- The GPA is a plurilateral agreement. This includes some WTO members but not all members.
- Government agencies are often required to purchase goods and services with public resources and for public purposes. Such purchases are generally referred to as ‘public purchases’.
- On average, government procurement accounts for 10-15% of an economy’s GDP. It forms an important market and is an important aspect of international trade.
- Prior to this, India has never included a government purchase agreement in bilateral or multilateral trade agreements to protect domestic companies.
- However, recently India has said that it is ready to hold talks on government procurement as part of bilateral deals.
- Recently, government procurement has been included in a free trade agreement with the United Arab Emirates for the first time.
- Even under the India-UAE trade agreement, government procurement is limited to only a few central ministries. It excludes key sectors such as manufacturing, infrastructure projects and health care.
Joining the The Agreement on Government Procurement (GPA) 2012, provides the following significant benefits:
- Potential trading benefits are derived based on legally assured access to foreign procurement markets covered in the agreement.
- It keeps markets open in times of crisis (when protectionism is on the rise).
- Public procurement system enhances the confidence of the public, suppliers and investors. This encourages foreign direct investment inflows.
- Competition for agreements increases. This gives a better value for the money spent.
Source – The Hindu