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Published : August 29, 2013 | Author : suchi_11
Category : International Law | Total Views : 1937 | Rating :


Government Procurement under GATT

Government procurement is the purchase of goods, construction services and other services required by government bodies that accounts for a substantial proportion of GDP. The discrimination in this area creates significant barrier to trade. The initial effort to bring government procurement under internationally agreed trade rules was made at the Tokyo Round of Trade Negotiations, which lead to the signing, in 1979, of the first Agreement on government procurement.

In this project, the first chapter would give a brief about the historical background about the involvement of GATT in government procurement. The researcher would elaborately deal with the government procurement under provisions of Article III of General Agreement on Tariff and Trade that provides for the principle of national treatment. Light is thrown upon the various provisions of WTO provisions and the Government Procurement Act. The project would revolve around government procurement as its exception to the national treatment provisions. Under the national treatment rule, members must not accord discriminatory appropriate treatment between imports and like domestic products (with the exception of the imposition of tariffs, which is a border measure). Most countries enforce some level of control over government procurement practices that discriminates against foreign suppliers in favour of domestic entities. Government procurement was expressly excluded from the General Agreement on Tariffs and Trade (GATT) under Article III: 8(a), which states that “the provisions regarding national treatment for imported products shall not apply to laws, regulations or requirements governing the procurement by government agencies of products purchased for government purposes.”

Article XVII. 1 of the GATT 1947 provided for the national treatment and non-discrimination principle with respect to state-trading by providing that contracting parties must undertake that state-trading by providing that contracting parties must undertake that state-trading enterprises which it establishes comply with this principle. Para 2 of this Article states that the principle enunciated in paragraph 1 shall not apply to imports of products for immediate or ultimate consumption in governmental use and not otherwise for resale or use in the production of goods for sale.

While the GATT made government procurement an exception to the national treatment rule, the Agreement on Government Procurement resulting from the Uruguay Round mandates signatories to offer national treatment in their government procurement. However, WTO Members are under no obligation to join the Agreement on Government Procurement. The government procurement has come to play a big role in the economy; the open trading system is not complete without a set of international rules on government.

Finally, disputes within GATT and WTO and disputes arising under the Government Procurement Act are separately taken into study.

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