23 - Developing multilateral rules on government procurement: the value of soft law

Summary

Introduction

Discriminatory government procurement practices in many countries present a significant barrier to international trade. However, to a large extent they still remain unaddressed by multilateral market-access rules. Further, the WTO's initiatives to develop multilateral disciplines on procurement have now effectively been put on hold mainly due to the strong opposition against multilateral rules on procurement from many WTO Members, especially developing country Members.

States appear to have a number of major concerns about a multilateral procurement agreement. First, many countries oppose the very idea of getting involved in a procurement agreement for what might be termed ‘legitimate’ and ‘illegitimate’ reasons. Regarding the former, they may fear the restricted discretion in pursuing value for money and other legitimate national objectives and the possibly high negotiating and implementing costs of a multilateral procurement agreement, as well as the potential disruption and political costs of opening up markets to foreign competition. So far as the latter are concerned, states may desire to continue using procurement as a policy tool to favour domestic industries; and their corrupt officials who derive illegitimate personal or political gains from corrupt procurement practice may think that the transparency rules of a procurement agreement will make corruption more difficult.