Stakeholder Intervention at 19th RCEP negotiations round- Ranja Sengupta, The Third World Network

IMG_20170725_162632I am Ranja Sengupta from TWN India. I want to express some concerns about the Government Procurement (GP) chapter, which we hear is being negotiated in RCEP, though it was not on the table earlier.

This is surprising because GP was one of the Singapore Issues at the WTO, found sensitive from developing and LDC perspective. Of the RCEP members only Japan, NZ, South Korea and Singapore are members of the Government Procurement Agreement (GPA) at the WTO which points to the critical importance of the issue for developing and least developing countries but even Australia and so on.  

Since the texts are not available to us, it is difficult to comment on the exact content. But first of all if there is market access i.e. opening government purchase to foreign companies is included, this is an extremely sensitive issue. Most developing countries including India use GP market as a development policy tool. India gives preferences to SMEs, women’s self help groups, to socially marginalized groups, and to village enterprises. Malaysia uses it to address social inequities. Many other examples are there from the region.

So market access will mean giving up that policy tool. And the market sizes are very different. The GP market ranges between 12-20% of GDP in developing countries. In India it is worth 140 billion USD or 12-14% of GDP. Compared to that, Japan’s market is less than 25 billion USD and only 5% of that is imported. So developing and least developed countries cannot hope to get market access into developed country GP markets.

If transparency and cooperation is on the table, caution must be exercised so that it does not then lead to MA discussions in the next stage as we have seen in many cases.

Even transparency and cooperation can be problematic for developing and least developed countries if it imposes extra compliance burdens on them. It may require them to undertake logistical and infrastructural arrangements, which will be very difficult. There can be other provisions. Sometimes comments are made mandatory if any new law or regulation has to be passed related to GP. Not only can compliance be burdensome, it may also mean the process can be dominated by large foreign companies and small stakeholders, for example our own SMEs do not get access. For example in the UK, the government initiated comments on the issue of plain packaging on cigarette packs and Philip Morris alone put in 18000 comments.

If any reform is to be done, it can be done unilaterally, especially since the impact of GP rules is not yet clear. Transparency under a trade pact will only apply to foreign companies and not domestic ones creating an uneven playing field.

It is also important to remember SDG 12.7, which says “promote public procurement policies that are sustainable in accordance with national policies and priorities” and recognises the primacy of national policymaking and national contexts, and that policy space must be kept intact for meeting national development objectives.

 

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