Government Procurment in the EPAs

The trade relationship between the EU and the ACP countries are currently being renegotiated under the framework of European Partnership Agreements. These EPAs are not only concerned with traditional market access commitments but are also targeting the ‘Singapore issues’ and especially the area of government procurement. The reason for this is found in the economics of trade theory that illustrate the trade restrictive effect that home biased government procurement can have on international trade flows, where such procurement regimes make up a non-tariff trade barrier. This disrupts the best allocation of resources and do thereby cause inefficiencies in regards to public spending, consumer prices and international specialisation. The remedies for such inefficiencies are increased transparency and non-discriminatory practises that could result in increased market access for foreign suppliers. These practises are believed to give ACP countries governments’ better value for money, while in the same time opening up a prosperous export market for European producers, a potential largely connected with the fact that government procurement makes up an important portion of most countries government expenditure. There are however, concerns that liberalization would lead to one-sided gains on behalf of the EU and not benefit the ACP countries to a large enough extent. This is also the reason why most ACP countries have objected to the inclusion of procurement regulations in the EPAs. In order to make the opening up of procurement markets more appealing for ACP countries there might then be a need to allow for divergence for an absolute unbiased procurement regime. These exceptions could then be used to address factors of special interest for the situation of ACP countries, such as the pursuance of secondary policies, the existence of tied aid and the lack of institutional quality