A longstanding objective of U.S. trade policy has been to open new opportunities for U.S. goods, services and suppliers to compete on a level playing field for foreign government procurement. Government procurement typically comprises 10 percent to 15 percent of a country’s GDP.
The first major government procurement agreement was the 1979 Government Procurement Agreement (GPA), which entered into force in 1981. It was revised and expanded tenfold during the Uruguay Round negotiations that led to the creation of the World Trade Organization (WTO). The new GPA entered into force in 1996.
The United States includes government procurement obligations in its free trade agreements (FTAs) with the aim of ensuring that U.S. goods, services and suppliers will be given fair and non-discriminatory opportunities to compete in the government procurement of U.S. trading partners.
To implement U.S. obligations under the international agreements that cover government procurement, the United States waives discriminatory purchasing requirements that would otherwise be inconsistent with the international agreement. The Trade Agreements Act of 1979 (TAA), as amended, authorizes the President to exercise this waiver with respect to countries that become parties to the WTO Agreement on Government Procurement (GPA) or another international agreement and will provide "appropriate reciprocal competitive government procurement opportunities to United States products and suppliers of such products." Executive Order 12260 delegates the authority to exercise this waiver to the U.S. Trade Representative.