Beijing still facing obstacles to joining GPA countries

Members of the World Trade Organization's (WTO) Government Procurement Agreement (GPA) should set a good example by strictly adhering to commitments made under the agreement before having high demands for China, a WTO expert said Wednesday.

"The barrier that blocks China from entering the GPA deal is not China itself but developed countries which seek to impose double-standards. Whether and when China could join the GPA depends on whether China is given equal and fair treatment," Zhou Shijian, an executive member of the China Society for World Trade Organization Studies, told the Global Times Wednesday.

His response came after the EU revived its call yesterday for China to join a WTO procurement deal to allow EU firms the same access to public procurement projects as that enjoyed by their Chinese counterparts.

"We hope that China will further open up government procurement by adhering to a new agreement by WTO members," Michel Barnier, EU Internal Markets Commissioner, told a press conference in Beijing.

Europe wants to make sure that Beijing's GPA agreement will extend to purchases by local governments, he noted.

Not every WTO member is required to join the GPA agreement but GPA status entitles members to the same treatment as local firms and to a lack of discrimination when conducting business with other members.

According to WTO estimates, the total value of new market access opportunities is expected to be between US$80 and US$100 billion, rising to US$450 billion once new WTO members gain accession to the GPA.

China submitted bids to join the agreement in 2007 and 2010 but was rejected by the US and other WTO members who demanded that China make more concessions and lower its requirement threshold.

In the latest bid lodged in December, China allowed foreign firms access to contracts in five major regions of the country's 31 provinces and regions including Zhejiang, Jiangsu and Beijing, but no State-owned enterprises (SOEs) were included in the offer.

WTO members expected China to provide foreign companies with enough access to procurement contracts for local governments and SOEs.

"The government procurement market in Europe is strictly speaking an integrated market. But even so, cross-border procurement only takes a very small portion of the market, between 3 and 4 percent. More often European enterprises set up a factory in a foreign country and seek to participate in public procurement through the factory," said Tu Xinquan, associate director of the China National Institute of the WTO.

The EU's call also came after Standard & Poor's cut the sovereign debt ratings of nine eurozone countries Friday.

"The eurozone economic crisis has given EU countries new drive to pressure China into opening up its government procurement. China's massive investment in infrastructure also naturally became a target of EU firms who want to grab a share of the lucrative procurement market in China," Yang Hua, a member of the Shanghai Municipal Government Procurement Evaluation Panel, told the Global Times.

The public procurement market in China is worth US$1.02 trillion a year, accounting for 20 percent of the country's GDP, according to the EU Chamber of Commerce in China.

"Joining the GPA is only a question of time and a matter of compromises," Yang said.