New Zealand exporters, looking to access offshore government procurement opportunities, now have a level playing ground with their international counterparts. New Zealand has just finalised its accession to the World Trade Organisation’s Agreement on Government Procurement (GPA) and it will come into effect next month.
New Zealand businesses will have guaranteed access to bid for an estimated US$1.7 trillion in annual overseas government contracts through joining the GPA, which creates new opportunities for Kiwi businesses to export more products and services to more destinations, according to Economic Development Minister Steven Joyce, who announced the news alongside Minister for Trade Tim Groser.
“Formal procedures in Geneva have now been completed which means that from mid-August, New Zealand companies will be able to do business freely across 43 WTO member countries, including the US, Canada, Japan and 28 countries of the EU.”
The GPA covers the purchase of a broad range of goods and services that government agencies buy from the private sector, including construction, and will help achieve the Business Growth Agenda goal of increasing exports to 40 percent of GDP by 2025, Joyce says.
“Selling to international governments without having to set up offshore branches or other ‘work arounds’ is a key area of opportunity for New Zealand exporters. Governments worldwide are looking for the types of products and services that New Zealand offers.”
New Zealand’s accession follows two years of negotiations. From next month, New Zealand exporters seeking to access the government procurement markets of the other GPA member countries will be able to compete on equal terms with their international counterparts, Groser says.
Member countries are not allowed to discriminate against businesses from another GPA member country in respect of government procurement opportunities covered by the agreement. They must also follow rules relating to competition and openness.
“Joining will not have a big impact on New Zealand government agencies because they already conduct their procurement in line with the agreement’s fundamental principles.
“We already follow the rules, but until now have not had the same opportunity for our New Zealand exporters. Joining up to the GPA will improve all access and reduce costs for exporters.
“This is a significant step in opening up large overseas markets to our Kiwi suppliers.”
In principle, it’s a good thing for New Zealand meat
In principle, New Zealand joining the WTO GPA is a good thing for the meat industry, says Meat Industry Association chief executive Tim Ritchie.
“It means that the lucrative government procurement market is now open to New Zealand firms. More specifically, it means that all signatories to the agreement compete for government procurement contracts under an internationally enforceable framework of open, fair and transparent competition rules.”
However, while signatories include the US, Canada, EU, Hong Kong, Chinese Taipei, Singapore, Korea, Japan, not all WTO members are signatories to the GPA, he notes. For example, Australia is still not a signatory although they have applied to join.
“The GPA is somewhat complicated in that it only applies to specific procurement activities (‘covered goods, services and construction’) carried out by specific entities (‘covered entities’ – mainly central/sub-central government bodies) to a specific threshold value,” says Ritchie.
“Based on our limited knowledge, the types of goods covered tend to be the likes of machinery, equipment, chemicals, minerals, hardware, pharmaceuticals and so on. We are not sure the GPA applies to meat and meat products, although skins and hides may be covered by some countries.”