WTO GOVERNMENT PROCUREMENT MEETING DURING THE WEEK

UNCLAS SECTION 01 OF 02 GENEVA 001884

SIPDIS

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E.O. 12958: N/A
TAGS: ETRD ECON WTRO WTO
SUBJECT: WTO GOVERNMENT PROCUREMENT MEETING DURING THE WEEK
OF JULY 18, 2005


REFTEL: STATE 327601

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1. (U) Summary and Background: During the week of July 18,
2005, the U.S. delegation, led by Jean Heilman Grier, Senior
Procurement Negotiator, USTR, and including John Liuzzi,
Department of Commerce, and Robert Kasper, U.S. Mission to
the WTO, participated in formal and informal meetings of the
WTO Government Procurement Committee (Committee). The focus
of the Committee's work was the revision of the 1994
Government Procurement Agreement (GPA) text. While there
was progress in a number of areas, there remains
disagreement (in places significant) on certain issues in
the text. However, informal USG bilateral discussions with
a number of GPA parties indicated a general consensus that
the Committee reach provisional agreement on the revision of
the GPA text before the Hong Kong Ministerial. At the
formal committee meeting, the government of Israel informed
the Committee that it will again seek continuation of its
current level of offsets. The U.S. also participated in
Quad meetings on July 18 and 19 and bilateral meetings with
delegates from Israel on its offsets request and Japan
concerning a government procurement issue involving Japan
Railway Kyushu. The next committee meetings are scheduled
for the week of October 10, 2005. END SUMMARY.

QUAD MEETINGS


2. (SBU) The U.S. delegation participated in a Quad meeting
on July 18, 2005, hosted by Canada. The Quad discussed US
proposed revisions of the Committee decisions relating to
the Indicative Criteria and Arbitration Procedures related
to the implementation of the Article on Modifications of
Coverage. The Quad also discussed a Japanese non-paper on
Article VIII (conditions for participation) and joint Canada-
EU work on the Electronic Procurement Provisions in the
text. In addition, the quad discussed a Japanese submission
on horizontal coverage issues, the organization of the
Committee's work, and the Israeli offsets issue. On July
19, the quad met again, at Japan's request, to further
discuss the relationship of Japan's procurement procedures
to the revision.

INFORMAL MEETINGS OF THE COMMITTEE ON GOVERNMENT PROCUREMENT


3. (SBU) Horizontal coverage issues: on July 18, the
committee held an informal session on the so-called
"horizontal coverage issues". The discussion focused on a
Japanese submission on the need for balance in market access
commitments, a may 2005 U.S. proposal relating to the
structure and content of Appendix I, and various issues in
the text that relate to coverage.


4. (SBU) Revision of the text: the Committee held informal
drafting sessions from July 19 through 21 on the revision of
the text of the GPA. The only new submission was the U.S.
proposed revisions of two draft Committee decisions relating
to implementation of the Article of the Agreement on
Modifications of Coverage. Canada and the EC also offered
improvements in the electronic procurement provisions of the
text. The discussions helped narrow the differences and
remove brackets, as well as highlight areas where parties
have flexibility and that could be a basis for compromises.
The parties generally share the aim of reaching provisional
agreement on the non-market-access-related provisions in the
revised text before the Hong Kong Ministerial.

INFORMAL BILATERALS WITH GPA MEMBERS ON THE TEXT
NEGOTIATIONS


5. (SBU) The U.S. delegation held informal bilateral
consultations with delegations from Canada, the EC, Hong
Kong China, and Switzerland relating to the status of the
negotiations on text revision and means for resolving
various issues. The conversations indicated there is
widespread support for completing the negotiations on the
non-market-access issues before the Hong Kong Ministerial.

INFORMAL BILATERAL WITH THE GOVERNMENT OF JAPAN


6. (SBU) At the request of the United States, the U.S. and
Japanese delegations held an informal bilateral discussion
on Japan railway - Kyushu's use of a GPA exception for
operational safety of transportation. The United States
raised concerns with the appropriateness of JR-Kyushu's use
of that exception in the construction of a railway station.
The GOJ delegation promised to look into the matter and
report back to the USG.

ISRAELI OFFSETS


7. (SBU) At the request of Israel, the U.S. delegation held
a bilateral discussion on Israel's plans to request another
extension of its obligation to reduce its level of offsets.
(NOTE: In December 2004, the committee agreed to allow
Israel to extend its level of offsets at 30 percent through
2005, rather than reduce it to 20 percent as called for in
Israel's appendix.) Israel provided a summary of a study
that it had conducted on its use of offsets. In the
bilateral, and later in the formal meeting of the committee,
Israel contended that the business opportunities for its
industry resulting from the offset provisions constitute the
main benefit of its membership in the GPA. The United
States said that it could not comment until Israel made a
concrete proposal, which Israel said would be forthcoming.
However, the United States reiterated its position that it
regards offsets as a transitional measure and not a
permanent element of any party's coverage; and the USG
stated that Israel should present a plan for phasing out its
offsets.

FORMAL COMMITTEE MEETING


8. (SBU) The committee held a formal meeting on Thursday,
July 21 in which it reviewed the status of modifications to
the GPA appendices and the status of accessions and
entertained a presentation by Israel concerning its
continued use of offsets in government procurement. The
Committee also adopted a new schedule for market access
negotiations since no offers were submitted by the May 2005
deadline indicated in the Committee's decision on modalities
for negotiation on extension of coverage and elimination of
discriminatory measures and practices (GPA/79). The new
schedule calls for the submission of market access offers
prior to the October 2005 meeting of the Committee, but not
later than the Hong Kong Ministerial. The Committee also
agreed to aim to conclude the negotiations by the end of

2006. In reviewing the work on the revision of the text, the
chair emphasized the importance of parties coming to the
next meeting with sufficient flexibility and authority to
resolve the remaining text issues.

Next meetings of the Committee


9. (SBU) The Committee will convene again the week of
October 10, 2005 with the goal of finalizing the revision of
the non-market-access-related provisions of the text. The
Chair has recommended that the Committee spend a full four
days that week on the text issues. Shark