Updated June 1, 2022
WTO Agreement on Government Procurement (GPA)
During the past 50 years, the United States has played a
negotiations to expand the GPA’s membership and
prominent role in developing international trade rules on
coverage three years after the agreement entered into force.
government procurement. Most U.S. free trade agreements
Figure 1. Parties and Observers to the WTO GPA
include government procurement obligations. The most
notable international procurement agreement to which the
United States is a party is the World Trade Organization
(WTO)’s Agreement on Government Procurement (GPA).
The GPA has opened procurement opportunities around the
world to foreign competition, worth trillions of U.S. dollars
annually. It also requires parties to establish transparent and
nondiscriminatory rules for covered procurement. In
particular, the agreement enables U.S. businesses to bid for
certain government contracts in the markets of other GPA
parties. Likewise, it allows foreign businesses to bid for
contracts tendered by U.S. procuring entities in areas where
federal and state governments have agreed to open up their
procurement markets. The WTO estimates the size of the
procurement market covered by the GPA at $1.7 trillion;

Source: CRS with information from the WTO.
data limitations make it difficult to quantify accurately the
extent to which governments acquire goods and services
In 2012, after more than a decade of negotiations, GPA
from suppliers of other GPA parties.
parties adopted a revision to the 1996 agreement, which
entered into force in 2014. It reflected new procurement
The Coronavirus Disease 2019 (COVID-19) pandemic has
practices, clarified obligations, and expanded the scope of
increased Congress’ interest in better understanding the role
procurement activity covered by the 1996 GPA.
of international trade in U.S. government procurement. In
General Obligations under the GPA
particular, some Members and the Trump and Biden
Administrations have sought ways to incentivize U.S.-based
The GPA governs procurement by any contractual means
production by prioritizing the procurement of domestic
and applies to laws, regulations, and practices regarding any
goods and services by the federal government and limiting
covered procurement. It may thus cover procurement by
waivers to statutory domestic preference provisions such as
central and sub-central government entities, as well as
the Buy American Act (BAA). Within this context, some
utilities and other government enterprises that a party
Members have raised questions about the GPA, including
designates. The GPA does not cover every country or
how U.S. commitments under the agreement affect federal
sector. The parties bound by the GPA negotiate market
agency acquisitions of goods and services.
access commitments on a reciprocal basis. In its schedule of
Background
commitments (i.e., Appendix), each party specifies
government entities, as well as categories of goods and
In recognition of the economic and political benefits of
services—subject to limitations and monetary thresholds—
open, transparent, and nondiscriminatory trade, the United
that are open to procurement bids by companies from other
States and other major trading partners established the
GPA parties. For example, the U.S. Appendix covers 85
General Agreement on Tariffs and Trade (GATT) in the
federal entities and voluntary commitments by 37 states.
aftermath of World War II. The first six rounds of GATT
trade negotiations dealt primarily with tariff measures. The
Consistent with the overall framework of the WTO, the
seventh round—the Tokyo Round (1973-1979)—took a
agreement requires nondiscrimination and transparency in
significant step in addressing nontariff barriers, such as
contracting—the GPA’s two cornerstone principles. In
government procurement policies. Negotiators addressed
addition, the GPA contains obligations regarding tendering,
many of these barriers in a series of codes, including the
selection, and awarding requirements, qualification of
Government Procurement Code, which went into effect in
suppliers, offsets, and challenge procedures. It also contains
1981. The Code imposed a set of rules that signatories had
general exceptions from GPA obligations. For example,
to apply in their procurement procedures and practices.
countries typically exclude certain defense and national
security-related purchases, and in the case of the United
Later, as part of the GATT’s Uruguay Round—which
States, set-asides for small and minority-owned businesses.
resulted in the creation of the WTO in 1995—Code-
signatories negotiated a new agreement, the WTO GPA. It
In negotiating reciprocal GPA procurement commitments,
entered into force in 1996. The GPA extended the scope of
the United States has not required that other parties open all
the 1981 Code to include additional entities and thresholds,
of their markets to foreign competition in the same nominal
as well as applicability to procurements of services and
amounts, or offered to open all U.S. markets to foreign
construction services. Signatories agreed to enter into
suppliers. Rather, its general aim has been to gain access to
comparable opportunities in other parties’ markets.
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WTO Agreement on Government Procurement (GPA)
WTO GPA Cornerstone Principles
1995 committed to seek GPA membership as part of their
terms for accession, including China and Russia—both of
Nondiscrimination. The GPA requires parties to accord to the
which continue to be engaged in GPA accession
goods, services and suppliers of other GPA parties treatment “no less
negotiations. In May 2020, Brazil became the latest country
favorable” than that given to their domestic goods, services and
to submit an application to join the GPA.
suppliers throughout the procurement process for covered entities. In
other words, parties cannot favor domestic goods, services, or
Security and General Exceptions. The GPA contains a
suppliers, nor can they treat the goods, services or suppliers of one
national security exception, broadly in line with GATT
GPA party more favorably those of another GPA party.
1994’s Article XXI. The exception states that a party is
allowed to take “any action or not [disclose] any
Transparency. Each party is required to publish information on its
information that it considers necessary for the protection of
procurement system, including applicable laws, regulations, and judicial
its essential security interests relating to the procurement of
decisions, in an official y designated medium that is widely disseminated
arms, ammunition or war materials, or to procurement
and accessible to the public. Parties are also required to collect and
indispensable for national security or for national defense
report statistics on the contracts covered by the agreement. On
purposes.” In addition, the GPA also contains general
request of any other party, a party must provide any information
exceptions modeled after GATT’s Article XX. These
necessary to determine whether a procurement was conducted fairly
include—but are not limited to—safety, human, animal, or
and in accordance with the agreement.
plant life or health, and philanthropic institutions.
Procurement Practices.
Issues for Congress
A procuring entity must
conduct procurement in a transparent manner consistent
As the 117th Congress contemplates amending legislation
with the GPA, avoid conflict of interest, and prevent
and the Biden Administration updates processes and
corrupt practices. Additionally, parties are to ensure that
regulations on U.S. government procurement, Members
their procedures do not preclude competition or create
may consider the implications of such measures for the U.S.
unnecessary obstacles to international trade. The GPA also
economy and their consistency with U.S. commitments
establishes general rules regarding the systems through
under the GPA. For example, Members may engage with
which suppliers engage in competitive bidding for contracts
the Administration to assess the extent to which domestic
(i.e., open, selective, and limited tendering procedures).
producers are able to meet U.S. government demand and
satisfy various essential national needs with inputs and
Offsets. Government entities may not impose, seek, or
products exclusively sourced from the United States.
consider offsets either in qualifying and selecting suppliers,
The Trump Administration reviewed the benefits of the
goods, or services, or in evaluating tenders and awarding
GPA, and according to one news report, considered
contracts. An offset is defined as any condition “that
withdrawal from the agreement. While some Members
encourages local development or improves a party’s
reportedly contend that the GPA is “imbalanced” and
balance-of-payments accounts, such as the use of domestic
support U.S. withdrawal from it, others have called for
content, the licensing of technology, investment,
counter‑trade
modifying U.S. commitments under the agreement and
, and similar action or requirement.”
modernizing rules regarding government procurement.
Dispute Settlement (DS). The WTO Dispute
Others argue that participation in the GPA not only
Settlement Understanding applies—with certain
maintains U.S. companies’ ability to compete for foreign
exceptions—to consultations and disputes involving the
government contracts, but it also gives the United States
GPA. For example, only GPA parties may participate in
leverage to negotiate greater market access and better terms
decisions or actions by the DS Body in GPA disputes. In
with WTO members in accession negotiations (e.g., China).
the event of lack of compliance in a dispute, cross-
U.S. government contractors often rely on global supply
retaliation is not allowed with respect to the GPA. As such,
chains to support their U.S. government contracts, including
parties may not suspend GPA benefits as a countermeasure
networks of suppliers and manufacturing facilities in the
in disputes brought under a different WTO agreement.
territories of other GPA parties. Even when manufactured
Modifications. A GPA party generally cannot modify the
in the United States, many of the products that U.S.
procurement that it covers without the consent of—or
suppliers deliver to federal and state entities may have
absence of objections from—the other parties. To make
inputs from other GPA parties. Therefore, U.S. withdrawal
changes, a party must notify the WTO Committee on
from the GPA, or modifications to U.S. commitments under
Government Procurement and explain the likely
it, could potentially require U.S. businesses to restructure
consequences for the mutually agreed coverage of the
their supply chains—including, for example, by changing
agreement. If parties are unable to reach an agreement over
suppliers or relocating facilities—to comply with domestic
the proposed changes, they may pursue DS procedures.
sourcing laws. Moreover, as countries compete to set global
Accession Negotiations.
standards (e.g., 5G technology), U.S. firms unable to bid for
Any WTO member may
government contracts in GPA parties’ markets may find
accede to the GPA on terms agreed between that member
themselves at a disadvantage, ceding opportunities to
and all GPA parties. Since the GPA entered into force in
competitors from other countries.
1996, its membership has grown from 23 to 48 parties
(counting EU members separately). The GPA accession
Andres B. Schwarzenberg, Analyst in International Trade
process is based on negotiations with the acceding member
and Finance
on the procurement that it will cover and a determination by
the GPA parties that its procurement system complies with
IF11651
the GPA. Many members that have joined the WTO since
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WTO Agreement on Government Procurement (GPA)


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https://crsreports.congress.gov | IF11651 · VERSION 7 · UPDATED

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