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India joins WTO procurement scheme as observer

(Agencies)
Updated: 2010-02-11 03:00

GENEVA: India has joined the WTO's government procurement agreement as an observer, a first step to membership in the scheme regulating trade in goods bought by governments, a WTO spokesman said on Wednesday.

The agreement, which 41 of the WTO's 153 members have signed up to, has been in the spotlight since US president Barack Obama included controversial "Buy American" provisions in a stimulus package early last year, preventing many countries from bidding for public contracts under the program.

India joins 22 WTO members with observer status. A further nine countries, including China, are already negotiating full membership.

China, like many other states, promised to become part of the agreement when it joined the WTO.

But the process is dragging on, and at a meeting on Wednesday of the WTO's committee on government procurement, members called on China to submit a revised offer as soon as possible, according to a participant in the meeting.

The United States, European Union and others told China at the meeting that some of its draft legislation did not comply with the agreement, although China did not speak.

The meeting also heard from the United States and Canada about their deal to resolve differences over the "Buy American" rules.

Under the agreement, Canada granted US firms access to long-closed public works contracts in 10 provinces and three territories in exchange for the United States giving Canadian companies access to public works projects linked to Obama's stimulus package.

Canada said it would eventually grant the same access to other members of the agreement, and the United States said it would offer other members access to stimulus-related projects if it got acceptable market access offers in return.

WTO members agree not to discriminate against each other or favour domestic producers over foreign competitors.

But rules covering government procurement are subject to a separate voluntary agreement, in which countries agree with other signatories what parts of their state procurement they will open up in return for access to contracts with the others.

Obama agreed to the Buy American provisions on condition they were in line with US international trade commitments, meaning effectively that they did not affect procurement arrangements with the WTO or North American Free Trade Agreement NAFTA.