26 de Marzo de 2019
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Colección: Trends for a common future
Autor: Sidney Weintraub
Título: Technical Cooperation Needs for Hemispheric trade Negotiations

4. Government Procurement

The resources devoted by governments to procure goods and services are extensive. Practices vary among countries with respect to the extent of preferences granted to nationals and the degree of transparency involved in granting contracts. Yet, it is evident that restricting foreign competition in government procurement is as much a restraint on trade as restricting imports to protect national private firms. Favoritism of this type is a common political feature of government procurement practice across the world, in developed as well as developing countries. On an efficiency basis, this favoritism means that governments are not optimizing their expenditures.

Discussion with trade-negotiation veterans from both developed and developing countries in the hemisphere makes it clear that many of them are edgy about how much progress can be made in the negotiating group on government procurement (NGGP). There are a number of reasons for this: uncertainty about the extent of government procurement in the different countries; ambiguity about national procedures; the built-in incentives for bribery by bidders and self-enrichment of decision-makers; and the power of entrenched interests accustomed to national favoritism in letting out government contracts. The most common outcome in past negotiations been to open the bidding process for foreigners for some government-owned entities, but not for others. Negotiators, therefore, must have substantial knowledge about the practices not just of governments, but of particular government-owned operations. In other words, the informational needs go beyond global numbers in order to include meaningful breakdowns by entities.

The NGGP participants are aware of these problems. They are seeking help from the Tripartite Committee agencies for comprehensive documentation about the extent of government procurement, areas of commonality and divergence in the various country programs, and the nature of classification systems in reporting on government procurement by LAC countries and their compatibility with international systems for such classification.

The TC needs are thus initially informational. They then go beyond this and require assistance on how to go about identifying the relevant laws and regulations—and operating practices—regarding government procurement. What conditions exist for transparency, how much advance notification is given potential suppliers, are there conditions forcing multiple bidding, what is the ability of decision-makers to bypass these requirements in making awards, how extensive is public information when awards are granted—these are among the issues that need to be examined. How extensively are electronic systems used in the process, a question that once again brings up the need for updating computer and informational systems if the LAC countries are to take maximum advantage of the FTAA process.

TC will not eliminate the political character of government procurement, but it can help make this more transparent to foreigners and nationals alike. Successful negotiation to liberalize these activities requires transparency and this is where TC can play an important role.