China unlikely to join WTO's GPA this year

Updated: 2011-12-10 08:18

By Ding Qingfen (China Daily)

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China unlikely to join WTO's GPA this year

Stalled talks mean the country will still have to wait for membership

BEIJING - China and key member nations of the World Trade Organization's (WTO) Government Procurement Agreement (GPA) have been unable to reach agreement on China's proposal to join the pact this year.

The impasse came after the United States and European Union sought greater concessions than those provided by China in its latest offer, a source told China Daily on Friday.

"Despite the nation's efforts to revise the offer during the past year, some developed nations are still not satisfied with what China has promised. Negotiations will not be easy and it will take time before any agreement can be reached," said the source.

"We have no timetable for signing deals this year. We expect that the talks will go on in the coming year."

China joined the WTO in 2001, but didn't immediately join the GPA. In 2007, it submitted a bid to join, but it was rejected by the US and other WTO members.

In July 2010, China submitted a new offer to join the GPA, but despite praise for the revamped proposal from a number of nations including the US, they demanded that China made more concessions and lowered its requirement threshold.

Since then, China has twice revised its offer, but the new version still doesn't meet with the approval of a number of developed economies, said the source. "The negotiations will be tough and time-consuming," he added.

A major concern for some member nations is that China's offer does not provide foreign companies with enough access to procurement contracts for local governments and State-owned enterprises (SOEs).

It is reported that China's latest offer only allowed access to contracts in five of the country's 31 provinces and regions and that no SOEs were included in the offer.

The regions are five of China's most developed coastal areas - the provinces of Zhejiang and Jiangsu as well as the municipalities of Beijing, Tianjin and Shanghai.

The European Chamber of Commerce in China estimated that China's government procurement budget is about $1 trillion.

The GPA member nations are committed to broadening the pact's horizons, and so the requirements for China to join will be stricter and negotiations will be more difficult, said Sun Zhenyu, the country's former ambassador to the WTO.

GPA member nations have been trying to broaden and reform the pact in a bid to open up an estimated $80 to $100 billion of contracts globally, and also to increase the number of countries included in the agreement.

On Friday, the 42 member nations gathered in Geneva to discuss the details and to see whether they could reach a deal to start a new round of negotiations. WTO trade ministers are also expected to meet in the Swiss city next week.

A new pact would allow member nations, or those aspiring to join the GPA - including China - to open their government procurement markets more fully, said analysts.

China Daily