	Background

The United States has made commitments related to its procurement  market under the WTO’s GPA, in its various forms, and through FTAs  negotiated with other countries. Almost all of the FTAs that the United States has in force include  provisions covering government procurement, and most contain a  separate government procurement chapter that, like the GPA, contains  market access commitments that include coverage schedules and  threshold amounts for procurement activities to which the agreement  applies. Selected International Government Procurement Agreements Generally Contain Similar Provisions

Our review of government procurement commitments in agreements  between the United States and selected trading partners found that, in  general, the text in these agreements contained similar provisions. We also found that some  differences exist, for example because later agreements have reflected  new technology. 1). For the GPAs, this reflects  another of the six fundamental WTO principles, “nondiscrimination.” The  text of each of these agreements contains versions of the following  provision, taken here from the 1994 GPA: “With respect to all laws,  regulations, procedures and practices regarding government procurement  covered by this Agreement, each Party shall provide immediately and  unconditionally to the products, services and suppliers of other Parties  offering products or services of the Parties, treatment no less favourable  than that accorded to domestic products, services and suppliers; and that  accorded to products, services and suppliers of any other Party.” While  there are some differences, this type of provision in each of the selected  agreements speaks to a party treating the suppliers and goods of another  party no less favorably than it treats domestic suppliers and goods. GPA and FTA parties do not  open their entire procurement markets to foreign competition. These  market access commitments identify the procuring entities covered by the  agreements at the central and subcentral government levels and, in some  agreements, by what is termed “other entities,” such as utilities. According to USTR officials, all parties in the agreements we  reviewed, including the United States, have certain procurements that  they deem sensitive and do not want to open to foreign suppliers,  including for social, policy, or national security reasons. These officials  stated that, for example, the United States specifies exclusions that  include set-asides for small or minority businesses, and trading partners  often exclude defense, agriculture, military support, and motor vehicles  from their market access commitments. As for central government entity coverage for the U.S.’s trading partners  in the agreements we reviewed, the top five GPA parties with the largest  procurement markets (the EU, South Korea, Canada, Norway, and  Japan) can cover executive, judicial, and legislative central government  entities in their coverage schedules for the revised GPA. (See fig. 2.) Other countries give U.S. suppliers access to their subcentral government  procurement as well. The United States covers the same 10 other government entities under  the 1994 GPA and in the revised GPA; while under the FTAs we  reviewed, the United States only covers some of these entities. Agency Comments

We provided a draft of this report to the USTR and the Department of  Commerce for comment. We  focused on the five largest procurement markets of parties to the World  Trade Organization’s (WTO) Agreement on Government Procurement  (GPA) and the five largest procurement markets among active U.S. free  trade agreement (FTA) partners since 1994. This scope encompasses  six agreements: the 1994 GPA, the revised GPA, and four U.S. FTAs (the  North American Free Trade Agreement , the South Korea-FTA,  the Colombia-FTA, and the Australia-FTA). We also identified market access commitments of  selected U.S. trading partners in these agreements.
Why GAO Did This Study

The United States and other countries have made commitments under the WTO's GPA and FTAs that open their government procurement to foreign suppliers. Under these commitments, parties agree to a procedural framework for government procurement with provisions on issues such as transparency and nondiscrimination. These commitments have potentially opened an estimated $4.4 trillion government procurement market to international firms, providing numerous new opportunities for American businesses in foreign markets and for foreign businesses to compete for U.S. government contracts.
As part of your larger request for information on U.S. participation in international procurement agreements, GAO reviewed commitments made by the United States and trading partners in selected international procurement agreements. This report provides information on (1) the provisions and (2) the market access schedules of the selected international procurement agreements. GAO reviewed the provisions and market access schedules across six agreements involving the largest government procurement markets to identify common features and variations. The agreements are the 1994 GPA and the 2014 revised GPA, NAFTA, the South Korea-FTA, the Colombia-FTA, and the Australia-FTA. GAO analyzed WTO and U.S. documents pertaining to the GPA and U.S. FTAs and interviewed USTR and the Department of Commerce agency officials in Washington, D.C.

What GAO Found

GAO found that the World Trade Organization's (WTO) Agreement on Government Procurement (GPA) and selected U.S. free trade agreements' (FTA) government procurement chapters that GAO reviewed generally have similarities in text, and commitments, potentially because parties negotiated multiple agreements concurrently (see fig.). Each of the agreements outlines the general method for conducting government procurement, including provisions relating to transparency, procurement procedures, and criteria for procurement decisions. However, differences exist, partially because later agreements reflect new technology.
The 2014 revised GPA generally provides more comprehensive market access than the selected FTAs GAO reviewed. Partners define the degree to which they will open their procurement markets to suppliers from other countries, known as their market access commitments. These commitments outline the entities covered by the agreements, for example, at the central and subcentral government levels (for the United States, these include agencies of the federal government and states), and for what some agreements term “other entities” (which, for the United States, includes utilities). The United States covers 85 central government entities under the revised GPA, but only 53 entities under the North American Free Trade Agreement (NAFTA). Similarly, the United States covers 37 states under its GPA commitments and from no states to 30 in the FTAs GAO reviewed. While all the top five GPA parties GAO reviewed cover some subcentral government entities, Canada, Mexico, and South Korea do not have a subcentral government entity coverage schedule in their FTA commitments. According to the Office of the United States Trade Representative (USTR), parties have certain procurements that they deem sensitive and do not want to open to foreign suppliers, including for social or policy reason. In the agreements GAO reviewed, the U.S.'s trading partners often exclude agriculture, military support, and motor vehicles from their market access commitments.

What GAO Recommends

GAO is not making recommendations in this report.