In the News

President to sign GPA accord

Taiwan June 8 signed the WTO’s Government Procurement Agreement, which will allow local construction and other firms to bid on government projects in foreign countries. (CNA)

• Publication Date：06/08/2009
• Source： Economic Daily News

President Ma Ying-jeou will sign the instrument of accession to the World Trade Organization’s Government Procurement Agreement at the Taipei Guest House June 8 at 10 a.m. Taiwan looks to become the 41st signatory to formally become a party to the GPA on or about July 9, 30 days after the signing. Domestic firms will, as a result, be able to compete for an estimated US$960 billion (NT$31 trillion) per year in global government procurement opportunities.

The Ministry of Economic Affairs predicts that local firms could pick up about one percent, or US$9.6 billion, of the business represented by this market. An Executive Yuan official remarked that Taiwan boasts global competitiveness in the manufacture of computers, machinery and hand tools, areas that should see new orders as a result of the nation’s accession to the GPA.

Premier Liu Chao-shiuan, Legislative Yuan President Wang Jin-pyng, Foreign Minister Francisco Ou, Economics Minister Yiin Chii-ming and Public Construction Commission Minister Fan Liang-shiow will be present at the signing. The WTO will be notified immediately after Ma signs the document.

The PCC plans to work to help affected industries improve their competitiveness by, for example, aiding large construction firms in enhancing engineering techniques and management. This will help them not only compete with foreign firms for local projects, but also expand the international market for their products and services.

In exchange, Taiwan will be required to open up its own government procurement market to foreign bidders. However, an official revealed, Taiwan has already opened up its bidding process to foreign firms, and that, over the past two years, an average of 26 percent of contracts have been awarded to foreign bidders. As this market has already been opened, the official shared a belief that Taiwan’s accession would not greatly affect domestic firms in the short term.

To offer a measure of protection to local businesses, a threshold will be set on government contracts open to foreign enterprises, below which foreign bids will not be accepted. For procurement of goods and services by the central government, the threshold will be NT$6.52 million, while for purchases by Taiwan Province, Taipei City or Kaohsiung City, the minimum will be NT$10.03 million. State-run enterprises will have a threshold of NT$20.07 million.

Foreign firms will not be allowed to bid on certain projects involving the electrical grid, while some rail projects will only be opened conditionally. Defense procurement is not within the scope of items covered in the GPA.