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114<br />
The agreement on government procurement within the WTO has been in effect<br />
since January 1, 1996 as a plurilateral agreement, i.e., it is only binding for the states<br />
that have signed the agreement. It comprises all areas of public procurement, which<br />
have been previously defined by means of a positive-list by each state, so that the<br />
mentioned sectors are subjected to the rules of international trade like NT, MFN,<br />
market access and overall transparency. Any possibility of regulatory intervention is<br />
prohibited to the respective state, which has signed the agreement. The parties to<br />
the agreement are:<br />
“Austria, Belgium, Canada, Denmark, European Community, Finland, France,<br />
Germany, Greece, Hong Kong China, Iceland, Ireland, Israel, Italy, Japan,<br />
Korea, Liechtenstein, Luxembourg, Netherlands, Netherlands with respect<br />
to Aruba, Norway, Portugal, Singapore, Spain, Sweden, Switzerland, United<br />
Kingdom, United States.” 323<br />
Argentina is currently the only MERCOSUR country with the status of an “observer<br />
government”. If this sector of public procurement is subjected to the principle<br />
of NT, as repeatedly demanded by the European Commission in the EU-MERCOSUR<br />
free trade negotiations, then large increases in sales in the then completely liberalized<br />
markets of MERCOSUR would become possible for European corporations:<br />
“Government procurement is the term used for the purchasing activities of<br />
governmental authorities and covers purchases of everything from pencils<br />
and paper clips to computer systems and telecommunications equipment,<br />
ship building or consulting services. Government procurement is specifically<br />
exempted from the most basic of WTO disciplines (GATT Articles III:8 and XIII:<br />
1), in particular that of national treatment. Since it accounts for up to 15% of<br />
GDP, this significantly distorts trade and reduces potential growth. The only<br />
WTO regime on procurement now in existence is the plurilateral Agreement on<br />
Government Procurement (GPA), but apart from the Community, participation<br />
in this Agreement remains limited to a dozen or so Parties. The Community<br />
believes that this situation must be redressed. The Community’s own procurement<br />
market is effectively open to foreign competition but, outside the GPA,<br />
EC companies are often either de facto or de jure excluded from foreign procurement<br />
markets.” 324<br />
The European side of the negotiations has presented their offer for public procurement<br />
within the framework of the EU-MERCOSUR free trade negotiations on<br />
July 14, 2003, and has shown itself “highly disappointed”, that MERCOSUR has not<br />
presented any counter-offer:<br />
323 http://www.wto.org/english/tratop_e/gproc_e/memobs_e.htm.<br />
324 http://europa.eu.int/comm/trade/issues/sectoral/gov_proc/index_en.htm.