GOVERNMENT PROCUREMENT CODE REVISED

Nov 27, 1986

GOVERNMENT PROCUREMENT CODE REVISED

GENEVA, NOVEMBER 24 (IFDA)--- The government procurement code, which opens up for bidding and competition from abroad procurement of goods by governments and their entities in countries parties to the code has been revised to throw more of this trade open to international competition, according to a GATT spokesman.

The code, one of the several concluded in 1979 as part of the Tokyo round negotiations, has been in force since 1981.

The revised agreement, concluded here last week, is to come into force with effect from January 1, 1988.

According to GATT, the value of government procurement in countries parties to the code is annually about 35 billion dollars, and of this about 25 billion is now covered.

The major previsions, the GATT spokesman said, would bring about greater transparency and enable better international competition.

The parties to the code have also agreed on a work programme aimed at increasing the sectors and entities in their countries, whose procurement would be brought under the code, including the very lucrative telecommunications entities.

Another part of the work programme would relate to the effects of privatisation under way in the major industrial countries, where the public entities (now subject to the code) are being sold to private hands, but with government still having a large say in their policies.

The possibility of opening up the code also to government procurement of services would be examined in the work programme.

At present only government procurement of services, to the extent they are incidental to the supply of products and cost less than the products themselves, are subject to the code.

All the signatories to the code, but for three (Hong Kong, Israel and South Korea), are from the industrial world.

Despite the provisions for special and differential treatment, none of the other third world Contracting Parties (CPS) have joined the code. India, Jamaica, and South Korea, which sought to join the code, were unable to do so.

Non-signatories say that they have found no particular benefit to them from the code, warranting their accession. Some of them say that they do not have the impression that the three who have acceded to the code have benefited very much in terms of increased export contracts.

Accession to the code, many third world countries with large internal, markets feel, might merely crib their ability to use their current monopsonic purchasing power to advance the best interests of their countries without being subject to international regulations.