U.S.-Korea Free Trade Agreement: Potential Economy-wide ... - USITC

Both the United States and Korea are signatories to the WTO Agreement on Government
Procurement (GPA), and the FTA chapter on government procurement reaffirms both
parties’ rights and obligations under the GPA. 70 The chapter would also affirm both parties’
determination to apply the Asia-Pacific Economic Cooperation (APEC) Non-Binding
Principles on Government Procurement for government procurement that falls outside the
scope of the GPA and FTA chapter 17. 71 As a consequence, the FTA would follow the GPA
provisions concerning most government procurement matters, including national treatment
and market access for goods, cross-border trade in services, and financial services and
investment. 72 For all government procurement covered in the FTA, chapter 17 would apply
the GPA provisions concerning unlisted entities, contract valuation, national treatment and
nondiscrimination, rules of origin, technical specifications, and many tendering procedures
such as supplier qualification, participation, documentation, awards, limited tendering,
offsets, and challenge procedures. 73 The FTA would incorporate the GPA articles covering
such subjects, as well as the GPA notes and appendices, including GPA rules governing
technical specifications to promote the conservation of natural resources or to protect the
environment. 74
Chapter 17 would further address the use of electronic means for conducting government
procurement covered under the FTA, and clarify the GPA provisions on contract valuation
to include the estimated maximum total value of the procurement over its entire duration,
including all forms of fees, commissions, premiums, or other revenue streams that the
procurement may generate. 75 The chapter provisions also aim to ensure that suppliers may
qualify and participate in a procurement tender less on narrowly drawn criteria—such as
previously awarded procurement contracts or previous work undertaken in Korea—and more
on principles aimed at allowing broader participation. 76
The chapter provisions would require notice of intended procurement in the appropriate
electronic medium, and would require that sufficient, common periods be provided, taking
into account issues such as the complexity of the procurement, the likely extent of
subcontracting required, and time to transmit tenders from foreign locations when electronic
means are not used. 77 A number of minimum tender periods are set out in the chapter that
depend on various factors such as procurement in urgent situations or selective procurement,
but in no case can the period for tendering be less than 10 days from published notice of an
intended procurement to final date for tender submission, with periods usually ranging from
35 to 40 days. 78
The agreement would provide for consultations and possible compensatory adjustments if
modifications are made to the coverage under the chapter’s annex. 79 The chapter also
70 USTR, “Final - United States - Korea FTA Texts,” 2007, Article 17.1.
71 Ibid., Article 17.1.
72 Ibid., Article 17.2.
73 Ibid., Article 17.3.
74 Ibid., Article 17.3 and Article 17.7.
75 Ibid., Article 17.4.
76 Ibid., Article 17.5.
77 Ibid., Article 17.6.
78 Ibid., Article 17.8.
79 Ibid., Article 17.9.
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