WTO GOVERNMENT PROCUREMENT AGREEMENT MEETINGS

UNCLAS SECTION 01 OF 03 GENEVA 002617

SIPDIS

SENSITIVE

PASS USTR FOR GRIER

E.O. 12958: N/A
TAGS: ETRD ECON WTRO WTO
SUBJECT: WTO GOVERNMENT PROCUREMENT AGREEMENT MEETINGS
DURING THE WEEK OF OCTOBER 10, 2005

REFTEL: STATE 327601

SENSITIVE BUT UNCLASSIFIED NOT FOR INTERNET DISTRIBUTION


1. (U) SUMMARY AND BACKGROUND: DURING THE WEEK OF OCTOBER
10, 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. DESPITE SUBSTANTIAL PROGRESS ON THE REVISION DURING
THE WEEK, DIFFERENCES REMAIN (SOME OF WHICH ARE SIGNIFICANT)
ON A NUMBER OF PROVISIONS. IT APPEARS THE COMMITTEE WILL
NOT MEET ITS GOAL OF REACHING PROVISIONAL AGREEMENT ON THE
NON-MARKET-ACCESS RELATED PROVISIONS OF THE GPA BY THE HONG
KONG MINISTERIAL. AT THE FORMAL COMMITTEE MEETING, THE
GOVERNMENT OF ISRAEL INFORMED THE COMMITTEE THAT IT WILL
AGAIN SEEK AN EXTENSION OF ITS CURRENT LEVEL OF OFFSETS, AND
THE GOVERNMENT OF JORDAN REPORTED ON THE STATUS OF ITS
PREPARATION OF A REVISED MARKET ACCESS OFFER. THE U.S.
DELEGATION ALSO PARTICIPATED IN A QUAD MEETING ON OCTOBER 10
AND HELD SEVERAL BILATERAL MEETINGS. THE U.S. DELEGATION
MET WITH ISRAEL ON ITS OFFSETS REQUEST, CONSULTED WITH
JORDAN ON THE STATUS OF ITS ACCESSION TO THE GPA, CONFERRED
WITH THE EC ON POTENTIAL MEANS OF MOVING FORWARD ON TAIWAN'S
ACCESSION TO THE GPA, DISCUSSED CHINA'S ACCESSION TO THE GPA
WITH A CHINESE DELEGATE, AND FOLLOWED-UP WITH JAPAN ON A
PROCUREMENT ISSUE INVOLVING JAPAN RAILWAY KYUSHU. THE NEXT
SCHEDULED COMMITTEE MEETINGS ARE CURRENTLY SET FOR THE WEEK
OF FEBRUARY 6, 2006. THE U.S. DELEGATION ALSO HELD INITIAL
EXPLORATORY DISCUSSIONS WITH SWITZERLAND ON THE POTENTIAL
NEGOTIATIONS OF A U.S. - SWITZERLAND FREE TRADE AGREEMENT.
END SUMMARY.

QUAD MEETINGS


2. (SBU) THE U.S. DELEGATION PARTICIPATED IN A QUAD MEETING
ON OCTOBER 10, 2005, HOSTED BY THE EC. THE QUAD DISCUSSED
THE STATUS OF THE TEXT NEGOTIATIONS, SEPARATE US-EC AND
CANADIAN PROPOSALS FOR THE ARTICLE ON MODIFICATIONS AND
RECTIFICATIONS TO COVERAGE AND AN INFORMAL US SUBMISSION ON
A NUMBER OF THE REMAINING TEXT ISSUES. IN ADDITION, THE
QUAD DISCUSSED THE ISRAELI OFFSETS ISSUE, HOW TO ADVANCE
CHINA'S ACCESSION TO THE GPA, AND CHINESE TAIPEI'S
ACCESSION.

INFORMAL MEETINGS OF THE COMMITTEE ON GOVERNMENT PROCUREMENT


3. (SBU) REVISION OF THE TEXT: THE COMMITTEE HELD INFORMAL
DRAFTING SESSIONS FROM OCTOBER 10 THROUGH 14 ON THE REVISION
OF THE GPA TEXT, WITH THE GOAL OF REACHING PROVISIONAL
AGREEMENT ON THE NON- MARKET-ACCESS-RELATED PROVISIONS OF
THE TEXT BY THE HONG KONG MINISTERIAL. AN INFORMAL U.S.
SUBMISSION, WHICH INCLUDED THE RESULTS OF A SEPTEMBER 2005
BILATERAL WITH THE EC, PROVIDED THE BASIS FOR PROGRESS ON A
NUMBER OF PROVISIONS, INCLUDING COMMERCIAL GOODS AND
SERVICES, ELECTRONIC PROCUREMENT, TIME PERIODS, CONDITIONS
FOR PARTICIPATION, AND DISCLOSURE OF INFORMATION. THERE
WERE TWO OTHER SUBMISSIONS ON THE ARTICLE ON MODIFICATIONS
AND RECTIFICATIONS TO COVERAGE: A JOINT U.S.-EC NON-PAPER
AND A CANADIAN SUBMISSION.


4. (SBU) THE DISCUSSIONS HELPED NARROW DIFFERENCES AND
REMOVE BRACKETS, AND GOOD PROGRESS WAS MADE IN A NUMBER OF
AREAS. HOWEVER, FURTHER WORK AND MORE COMPROMISES WILL BE
NEEDED TO REACH PROVISIONAL AGREEMENT ON THE NON-MARKET-
ACCESS PROVISIONS. THE COMMITTEE DISCUSSED THE POSSIBILTY
OF HOLDING ANOTHER MEETING BEFORE THE END OF THE YEAR TO
FINALIZE THE TEXT; THE EC WAS THE STRONGEST ADVOCATE OF SUCH
A MEETING. THE CHAIR INDICATED HE WAS PREPARED TO CALL
ANOTHER MEETING THIS YEAR IF THE TEXT COULD BE FINALIZED;
HOWEVER, HE QUESTIONED WHETHER A SINGLE MEETING WOULD BE
SUFFICIENT TO RESOLVE ALL THE DIFFERENCES. THE ALTERNATIVE
WOULD BE TO ALLOW THE DRAFTING WORK TO CONTINUE INTO THE
NEXT YEAR. THE UNITED STATES INDICATED IT WOULD SUPPORT
ANOTHER MEETING THIS YEAR ONLY IF IT WERE CLEAR THAT
AGREEMENT COULD BE REACHED ON ALL THE OUTSTANDING ISSUES;
BUT LIKE THE CHAIR, IT WAS SKEPTICAL THAT COULD BE
ACCOMPLISHED IN ONE MEETING. THE CHAIR WILL CONSULT WITH
DELEGATIONS ON WHETHER TO CALL ANOTHER MEETING.

ISRAELI OFFSETS


5. (SBU) AT THE REQUEST OF ISRAEL, THE U.S. DELEGATION HELD
A BILATERAL DISCUSSION ON ISRAEL'S PLANS TO REQUEST ANOTHER
EXTENSION REGARDING ITS OBLIGATION TO REDUCE ITS LEVEL OF
OFFSETS. (NOTE: IN DECEMBER 2004, THE COMMITTEE AGREED TO A
ONE-YEAR EXTENSION OF ISRAEL'S OBLIGATION TO REDUCE ITS
LEVEL OF OFFSETS FROM 30 PERCENT TO 20 PERCENT ON JANUARY 1,
2005, AS CALLED FOR BY ISRAEL'S GPA COMMITMENTS.) ISRAEL
INFORMALLY CIRCULATED A DRAFT OFFER WITH NEW ISRAELI MARKET
ACCESS COMMITMENTS, INCLUDING A NEW TIME TABLE FOR REDUCING
ITS USE OF OFFSETS. UNDER THE DRAFT OFFER ISRAEL WOULD
REDUCE ITS OFFSETS TO 15 PERCENT IN 2015, AND THEN CONSULT
WITH THE PARTIES ON THE LEVEL OF OFFSETS. ISRAEL SAID IT
WAS PREPARED TO IMPLEMENT ITS NEW MARKET ACCESS COMMITMENTS
ON JANUARY 1, 2006 AS COMPENSATION FOR THE MODIFICATION OF
ITS OFFSET COMMITMENT. THE UNITED STATES POINTED OUT THAT
IT HAD REGARDED LAST YEAR'S EXTENSION AS A ONE-TIME EVENT
AND THAT IT HAD NOT HAD SUFFICIENT TIME TO REVIEW AND
CONSULT WITH REGARD TO ISRAEL'S DRAFT OFFER AND NEW OFFSET
TIME TABLE. THE UNITED STATES ALSO STRONGLY REITERATED ITS
POSITION THAT OFFSETS ARE A TRANSITIONAL MEASURE AND NOT A
PERMANENT ELEMENT OF ANY PARTY'S COVERAGE AND URGED ISRAEL
TO PROVIDE A PROPOSAL THAT PHASES THEM OUT. BASED ON
CONSULTATIONS WITH THE UNITED STATES AND OTHER QUAD
COUNTRIES, ISRAEL ELECTED TO NOT FORMALLY SUBMIT ITS DRAFT
OFFER. INSTEAD, ISRAEL INDICATED IT WOULD PREPARE A DRAFT
DECISION FOR THE COMMITTEE TO EXTEND ITS OFFSET OBLIGATION
UNTIL THE CONCLUSION OF THE MARKET ACCESS NEGOTIATONS UNDER
THE GPA OR A FIXED PERIOD. INFORMALLY, ISRAEL INDICATED IT
WOULD SEEK A CONSENSUS FROM THE PARTIES ON A NEW PROPOSAL
BEFORE SUBMITING IT TO THE COMMITTEE FOR ACTION BEFORE THE
END OF THE YEAR.

JORDAN ACCESSION


6. (SBU) THE KINGDOM OF JORDAN BRIEFED THE UNITED STATES
INFORMALLY ON THE STATUS OF ITS ACCESSION TO THE GPA.
JORDAN IS CURRENTLY ENGAGED IN DOMESTIC CONSULTATIONS TO
IMPROVE ITS MARKET ACCESS OFFER. OF PARTICULAR INTEREST TO
THE UNITED STATES, JORDAN IS WORKING TO INCLUDE ITS
MINISTRIES OF DEFENSE AND INTERIOR IN ITS GPA COVERAGE.
JORDAN IS AIMING TO MAKE AN IMPROVED MARKET ACCESS OFFER TO
THE COMMITTEE BEFORE THE END OF THE YEAR. HOWEVER, JORDAN
REPORTS INCREASING DOMESTIC RESISTANCE FROM CERTAIN
INDUSTRIES TO ITS ACCESSION TO THE GPA.

CHINESE TAIPEI ACCESSION


7. (SBU) THE UNITED STATES HELD AN INFORMAL MEETING WITH
THE EC TO DISCUSS POSSIBLE MEANS OF MOVING FORWARD THE
STALLED CHINESE TAIPEI ACCESSION TO THE GPA. THE UNITED
STATES AND THE EC PROPOSED A TWO-STEP PROCESS THAT WOULD
BEGIN WITH A COMMITTEE DECISION THAT GENERALLY ADDRESSES
NOMENCLATURE ISSUES IN THE SAME MANNER AS THE WTO "BLUE
BOOK" DIRECTORY OF MEMBERS. A SECOND COMMITTEE DECISION
WOULD SPECIFICALLY ADDRESS CHINESE TAIPEI'S ACCESSION. THE
US-EC PROPOSAL WAS GIVEN TO THE QUAD AND KOREA FOR THEIR
COMMENTS; IT WAS ALSO GIVEN TO THE GPA CHAIR, WHO HAS BEEN
ASKED TO FOLLOW UP WITH THE RELEVANT PARTIES.

INFORMAL BILATERAL WITH CHINA


8. (SBU) THE UNITED STATES HELD AN INFORMAL BILATERAL
MEETING WITH THE DELEGATE FROM THE PEOPLE'S REPUBLIC OF
CHINA TO DISCUSS THE ISSUE OF CHINA AND THE GPA. CHINA IS
STILL STUDYING THE GPA AND THE PROS AND CONS OF ACCESSION TO
IT. THE UNITED STATES OFFERED TO ASSIST CHINA'S EFFORTS AND
TOLD THE CHINESE DELEGATE THAT THE UNITED STATES WOULD SOON
SEND A LETTER TO BEIJING TO SET A DATE AND VENUE FOR THE
TECHNICAL CONSULTATIONS TO WHICH CHINA HAD COMMITTED IN JULY
2005 IN THE JOINT COMMISSION ON COMMERCE AND TRADE. THE
U.S. DELEGATION OFFERED TO PROVIDE ANY ASSISTANCE THAT MAY
BE NEEDED AS CHINA PREPARES TO COMMENCE ITS GPA ACCESSION.

INFORMAL BILATERAL WITH THE GOVERNMENT OF JAPAN


9. (SBU) THE U.S. DELEGATION HELD, AT ITS REQUEST, AN
INFORMAL BILATERAL DISCUSSION WITH JAPAN ON JAPAN RAILWAY -
KYUSHU'S USE OF A GPA EXCEPTION FOR OPERATIONAL SAFETY OF
TRANSPORTATION FOR CONSTRUCTION OF A RAILWAY STATION. THE
UNITED STATES AGAIN REITERATED ITS CONCERNS WITH THE
APPROPRIATENESS OF JR-KYUSHU'S USE OF THAT EXCEPTION AND
ASKED JAPAN WHEN IT WOULD PROVIDE A RESPONSE. THE GOJ
DELEGATION SAID JAPAN WAS STILL LOOKING INTO THE ISSUE, AND
UNDERTOOK TO PROVIDE A RESPONSE AS SOON AS POSSIBLE.

FORMAL COMMITTEE MEETING


10. (SBU) THE COMMITTEE HELD A FORMAL MEETING ON FRIDAY,
OCTOBER 14, DURING WHICH THE CHAIR SUMMARIZED PROGRESS MADE
DURING THE WEEK AND ENTERTAINED STATEMENTS BY ISRAEL
CONCERNING THE CONTINUED IMPORTANCE OF ITS USE OF OFFSETS,
JORDAN ON THE STATUS OF ITS PREPARATION OF A REVISED OFFER
IN ITS ACCESSION TO THE GPA, AND CHINA REGARDING ITS
INTEREST IN ACCEDING TO THE GPA, EVEN THOUGH IT MADE NO
COMMITMENT AS TO THE TIMETABLE FOR DOING SO. THE COMMITTEE
ALSO DISCUSSED ADOPTION OF THE ANNUAL REPORT, SETTING A
DEADLINE OF OCTOBER 30, 2005 FOR ANY EDITS OR ADDITIONS TO
THE REPORT.
INFORMAL EXPLORATORY TALKS WITH SWITZERLAND


11. (SBU) THE U.S. DELEGATION HELD INFORMAL EXPLORATORY
DISCUSSIONS ON THE POTENTIAL APPROACHES TO A GOVERNMENT
PROCURMENT CHAPTER IF NEGOTIATIONS ARE LAUNCHED ON A FREE
TRADE AGREEMENT (FTA) BETWEEN THE UNITED STATES AND
SWITZERLAND. THE SWISS DELEGATION INCLUDED ITS GOVERNMENT
PROCUREMENT NEGOTIATOR AND FTA COORDINATOR. AS BOTH
COUNTRIES ARE GPA MEMBERS, THEY AGREED THAT THE TEXT OF ANY
FTA CHAPTER ON GOVERNMENT PROCUREMENT SHOULD INCORPORATE THE
GPA'S PROVISIONS, INCLUDING THE CURRENT REVISION, AS WELL AS
THE RESULTS OF THE MARKET ACCESS NEGOTIATIONS TO BE
UNDERTAKEN IN 2006 UNDER THE GPA. THE ONLY MARKET ACCESS
ISSUE THAT THE SWISS NOTED WAS THEIR INTEREST IN EXPANDED
COVERAGE OF U.S. STATES, BUT THEY ALSO RECOGNIZED THE
DIFFICULTY OF ADDING STATES. BOTH SIDES ACKNOWLEDGED THAT
THEIR RESPECTIVE MARKET ACCESS COMMITMENTS WOULD NOT LIKELY
GO BEYOND THOSE IN THE GPA, OTHER THAN PERHAPS WITH REGARD
TO THRESHOLDS.

NEXT MEETING OF THE COMMITTEE


12. (SBU) THE NEXT COMMITTEE MEETING IS CURRENTLY SCHEDULED
FOR THE WEEK OF FEBRUARY 6, 2006, UNLESS THERE IS A
CONSENSUS TO HOLD ANOTHER MEETING BEFORE THE END OF THE YEAR
TO GIVE PROVISIONAL AGREEMENT TO THE REVISION OF THE GPA
TEXT. SHARK