US welcomes China's GPA offer

08:27, July 20, 2010      

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The US welcomes the improvement that China has made in its first revised offer to the WTO Government Procurement Committee, a senior trade official at the US embassy in Beijing said Monday.

  However, a Chineseexpert warned that China should pay attention to protect its vulnerable but promising companies while they are exposed to a larger and more competitive market.

  "The revised offer submitted by China this time is focused on the definition of government procurement entities," Christopher Adams, minister counselor for trade affairs at the US embassy in China, told a seminar in Beijing Monday.

  He declined to give further comments because Washington is studying the first revised offer presented by China on July 9 to advance the accession negotiation to the Government Procurement Agreement (GPA). Accession negotiations with the current 41 GPA parties began at the end of 2007 when China presented its initial offer.

  Washington is not asking China to cover all of its State-owned enterprises (SOEs) but does expect the coverage of SOEs that carry out government activities and provide public services, such as electric power companies, Adams said, urging China to include more sub-central government entities and SOEs in accession to the GPA.

  "We don't expect companies that engage in purely commercial businesses like automak-ers, because other WTO rules apply to SOEs commercial activity," Adams said.

  The GPA is one of the four plurilateral agreements under the WTO framework, and it doesn't require all the WTO members but only GPA parties to abide by the treaty, which aims to improve efficiency and transparency in government procurements.

  "Chinese firms will gain access to a much larger government procurement market after China accedes to the GPA and remain highly competitive in China's domestic government procurement market," Adams claimed.

  Jiang Yong, director of the Economic Security Studies Center at the China Institutes of Contemporary International Relations, said that China should be prudent in the GPA accession negotiations.

  "The actual government procurement scale in China is much bigger than the announced figure, and, by the Chinese gauge, the government purchases scale in Western countries is not as huge as they boast," Jiang told the Global Times Monday.

  The global government procurement market was estimated at $1.6 trillion in 2008. The Chinese government procurement market stands at around $100 billion, only 2 percent of its GDP. However, it doesn't cover most government-funded infrastructure projects.

  "Given the strict limits imposed by Western countries on technology exports to China, it seems unworthy using the appreciating yuan currency to buy depreciating US commodities," Jiang said, noting that most Chinese government procurement entities do not have access to the huge Chinese forex reserve.

  The US will not discuss the relaxing of technology export limits to China on the same table of China's GAP accession negotiation. "It's two totally different things," Adams said.

Source: Global Times


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