NZ to sign up to government procurement pact

WELLINGTON - The New Zealand government Wednesday announced its intention to join the World Trade Organization's Government Procurement Agreement to enable the country's businesses to better compete for foreign government contracts.

The agreement covered an estimated $1.6 trillion worth of overseas government contracts in 2008, representing 2.64 percent of global GDP, said Development Minister Steven Joyce and Trade Minister Tim Groser in announcing the move.

"Member countries have agreed to revised coverage that will see this amount increased by $80 billion to $100 billion each year. The value will also go up as new countries, including China, come on board," Groser said in a statement.

Joining the GPA would create new opportunities for New Zealand businesses to export more products and services to more destinations, Joyce said in a statement.

The agreement prohibits member countries from discriminating against businesses from another country in their government procurement processes, and 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," Joyce said.

"We already follow the rules, but just don't get the benefit for our New Zealand exporters. Joining up to the GPA will improve all access and reduce costs for exporters."

The process for New Zealand to join the GPA was expected to take about two years to complete.

In order to join, New Zealand had to demonstrate to existing members that its own procurement rules complied with the agreement, but New Zealand was not required to include all government procurement in the agreement and could negotiate with existing members what was in scope, they said.

Forty-two countries, including the US, Canada, South Korea, Japan and 27 countries of the European Union, already belong to the agreement, which covers the purchase of a broad range of goods and services that government agencies buy from the private sector, including construction.