Taiwan’s Accession to the Agreement on Government Procurement Jen-Ni Yang Deputy Chief Representative Office of Trade Negotiations.

December 12, 2008 1

Taiwan’s Accession to the Agreement on Government Procurement

Jen-Ni YangDeputy Chief RepresentativeOffice of Trade Negotiations

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Presentation OutlineAccession to the GPADomestic Procedures for Approving our AccessionElements of the GPATaiwan’s SchedulePros and Cons of AccessionConclusions

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Accession to the GPACurrently, there are 40 signatories to the GPA.

Asia: Japan, Korea, Singapore, Hong Kong, IsraelEurope: European Communities and its 27 member States, Norway, Switzerland, Aruba, Liechtenstein, and IcelandAmerica: Canada and the United States

9 Dec. 2008: The GP Committee adopted a decision that invited Taiwan to accede to the GPA as the 41st signatory.

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Press Coverage“Accession to the GPA is an historic and path-breaking step of which Taiwan should be very proud.” (Chair of the GP Committee)

“Good for Taiwan and good for the Agreement.” (WTO Director General)

“Will provide new opportunities in public procurement for businesses in both European Union and Taiwan.” (European Commissioner)Taiwan’s accession is “a culmination of many years of hard work” and “an important step for the committee” (USTR)

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Domestic Procedures for Approval of our Accession

Adopted by WTO GP committee

MOEA & MOFA Submit the decision of our Accession to

Executive Yuan

Executive Yuan transmits to Legislative Yuan for Review

and Approval

Ratified by the President

Approval by Legislative Yuan

Within 30 days

Minister of MOEA informs WTO Director-General

Taiwan formally becomes the 41st signatory of the

GPA

30 days

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Elements of the GPAGPA

tendering procedures

Appendices and Annexes related to market access

(Appendix I, II, III & IV)

Scope and coverage

National Treatment and Non-discrimination

Technical Specifications

Qualification of Suppliers

Tendering Procedures

Information and Review

Bid Challenge Procedures

Consultations and Dispute Settlement

Appendix I (schedule)

government and other entities which procure in accordance with the GPA

minimum thresholds

Designated goals and services which the GPA is applicable

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Government Procurement Act and the GPAThe “Government Procurement Act” has come into force at May 27, 1998.Relevant articles contained in the Government Procure Act are in compliance with the GPA.Article 17 of the Government Procurement Act stipulates that “The participation of foreign suppliers in the procurement by each entity shall be governed by the requirements set forth in the treaties or agreements to which this nation is a party.”

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Taiwan’s Schedule – Annex 1 (GPA/96)Thresholds:

Goods: 130,000 SDRs (approx. 6.52 million NTD)

Services: 130,000 SDRs

Construction: 5,000,000 SDRs (approx. 250.9 million NTD)

List of entities:

Office of the President, Executive Yuan, Ministry of Interior, Ministry of Finance, Ministry of Economic Affairs, etc. ( 1. Principally all central administrative entities are included. 2. Legislative Yuan, Judicial Yuan, Examination Yuan, and Control Yuan are not included.)

Notes to Annex 1

1. Exemptions from the agreement, such as military procurement concerning national security and procurement by the MOFA's overseas embassies, representative offices, and missions.2. Positive list of procurement by the Ministry of National Defense which the GPA is applicable.3. Five-year grace period for the procurement by the National Space Organization of the National Science Council.

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Construction:

(1st year) 15,000,000 SDRs (approx. 752.7 million NTD)(2nd year) 10,000,000 SDRs (approx. 501.8 million NTD) (3rd year) 5,000,000 SDRs (approx. 250.9 million NTD)

List of entities:

Taiwan Provincial Government, Taipei City Government, and Kaohsiung City Government.( 1. Sub-central government entities are included. 2. After re-organization, functional entities of Taiwan Provincial Government only include Secretariat, Legal affairs Committee, and Committee of Appeal. )

Notes to Annex 2

No specific exemptions.

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Construction:

(1st year) 15,000,000 SDRs (approx. 752.7 million NTD)(2nd year) 10,000,000 SDRs (approx. 501.8 million NTD) (3rd year) 5,000,000 SDRs (approx. 250.9 million NTD)

List of entities:

Part of the state-owned enterprises and national schools, colleges, and universities.( 1. Refinement of petroleum, sugar manufacturing, power supply, water supply, circulation coins minting, banknotes printing, railroad, harbor bureaus, part of national schools, colleges and universities, part of hospitals, and telecommunications. 2. Some signatories to the agreement also include educational institutions in this annex. )

Notes to Annex 3

The procurement by Central Engraving & Printing Works of banknote printing press is exempted from this agreement.

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Taiwan’s Schedule – Annex 4 (GPA/96)Services covered by the agreement

1. Positive list covered by the agreement according to the UN Central Product Classification (CPC).2. Including legal services, accounting, auditing and bookkeeping services, architectural services, engineering services, integrated engineering services, urban planning and landscape architectural services, etc.3. The coverage of the market access will not be beyond our WTO services commitment.

Notes to Annex 4

Exemptions such as research and development, coin minting, and all services with reference to those goods purchased by the Ministry of National Defense which are not identified as subject to coverage by this Agreement.

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Taiwan’s Schedule – Annex 5 (GPA/96)Construction services covered by the agreement:

Definition:A construction services contract has as its objective the realization by whatever means of civil or building works, in the sense of Division 51 of the Central Product Classification.Taiwan, as well as other signatories to the agreement, listed all services covered in CPC 51.

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Exclusions regarding Electricity (goods)Items Apply to the procurement for the

goods and suppliers of the United States; the European Communities; Japan; Switzerland; Canada; Norway; Iceland; Hong Kong, China; Singapore; and Israel.

Apply to the procurement for the goods and suppliers of South Korea.

HS 8402 Steam or other vapour generating boilers

HS 8404Auxiliary plant for use with boilers

HS 8410 Hydraulic turbines, water wheels, and regulators

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Exclusions regarding Electricity (goods)HS 8501Electric motors and generators

(Only for Electric motors with capacity of 22 megawatts or greater, electric generators with capacity of 50 megawatts or greater of HS 8501 and items of HS850164)

(Only for items of HS850164)

HS 8502Electric generating sets

HS 8504Electrical transformers and converters

(Only for electrical transformers and static converters, with capacity of 1 to 600 megawatts)

GPA not applicable

HS 8532Power capacitors

GPA not applicable GPA not applicable

HS 8535Electrical switches, breakers, switch-gears (for a voltage exceeding 1,000 volts)


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Exclusions regarding Electricity (goods)HS 8536Electrical switches, breakers, switch-gears (for a voltage not exceeding 1,000 volts)


HS 8537switch boards, controller panels


HS 8544Power cables (including optical fiber cables)

(Only for cable related to telecommunications applications)

GPA not applicable

HS 9028Electricity supply meter


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Exclusions regarding Electricity (services and constructions)

Items Apply to the procurement for the service and constructions providers of Korea; the European Communities; Japan; the United States; Switzerland; Canada; Norway; Iceland; Hong Kong, China; Singapore; and Israel.

CPC 51340 Power transmission line construction work

CPC 51360 Power plant and substation construction work

CPC 51649 Power transmission and distribution automation system construction work

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CPC 52262 Power plant construction engineering work

(Japan is not included)

CPC 86724 Power transmission, distribution and substation engineering design services

CPC 86725 Power plant engineering design services)

CPC 86726 Power transmission and distribution automation system engineering design services

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CPC 86739 Integrated engineering services for power transmission and distribution turnkey projects

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Exclusions regarding TransportItems Apply for the

procurement of the goods and suppliers of the United States; Switzerland

Apply to the procurement for the goods and suppliers of Canada; the European Communities; Japan; Norway; Iceland; Hong Kong, China; Singapore; and Israel.

HS 8601 Rail locomotives, powered from an external source of electricity or by electric accumulators

GPA not applicable

(For a period of 10years from the date of TPKM’s accession to the WTO, up to 50 percent of the procurement amount can be used for offset purposes)

HS 8603Self-propelled railway or trainway, coaches, vans and trucks, other than those of heading.

GPA not applicable

(For a period of 10years from the date of TPKM’s accession to the WTO, up to 50 percent of the procurement amount can be used for offset purposes)

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Exclusions regarding TransportHS 8605Railway or trainway passenger coaches, not self-propelled, luggage van, post office coaches and other special purpose railway or trainway coaches, not self-propelled

GPA not applicable (For a period of 10years from the date of TPKM’s accession to the WTO, up to 50 percent of the procurement amount can be used for offset purposes)

HS 8607Parts of railway or trainway locomotives or rolling stock

GPA not applicable (For a period of 10years from the date of TPKM’s accession to the WTO, up to 50 percent of the procurement amount can be used for offset purposes)

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Exclusions regarding TransportHS 8608 Railway or trainway track fixtures and fittings, mechanical (including electro-mechanical) signaling, safety or traffic control equipment for railways, roads, inland waterways, parking facilities, port installations or airfields, and parts of the aforementioned.

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Pros and cons of accession to the GPAThe GPA is based on transparency, efficiency and value-for-money principles. As a result, Taiwan will benefit from:

Soundness of the systemTransparency of information and proceduresConsistent with international normsAccess to foreign government procurement markets.

• more than USD $300 billion in the U.S.• more than USD $120 billion in the EU

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Pros and Cons of accession to the GPAOn domestic industries:

Increased competition from abroadLess protection for domestic enterprises

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Pros and Cons of accession to the GPAOn foreign suppliers:

More access to our government procurement market.• USD $18 billion in 2006• USD $21 billion in 2007

Greater cooperation with Taiwanese enterprises in bids for government procurement in GPA signatories

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Taiwan’s Government Procurement market before accession to the GPA

Cases and Total Amount of the Government Procurement in Taiwan(2007)

Number of cases above GPA threshold

Total amount above GPA threshold

4,041 (5.75% of all government

procurement cases)

NTD 624.3 billion(78% of total amount of all

government procurement cases)Government Procurement Cases won by foreign bidders in Taiwan(2007)

Goods Services Construction

38.98% (Procurement in military

purpose)

12.04% 7.9%

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ConclusionsTaiwan’s accession to the GPA will likely expand market opportunities for foreign suppliers as explained in this presentation.For more information and government contact, please visit the PCC websites:http://www.pcc.gov.tw/

Taiwan’s Accession to the Agreement on Government Procurement Jen-Ni Yang Deputy Chief Representative Office of Trade Negotiations.

Documents

gpa domestic procedures

executive yuan executive

legislative yuan

government procurement

accession elements

gpa taiwans schedule

examination yuan

judicial yuan