WTO—New agreement provides opportunities for Australian businesses
World Risk Developments April 2019
Australia is set to become the newest member of the World Trade Organization Agreement on Government Procurement (GPA). According to the WTO, the GPA improves Australian business access to procurement activities worth an estimated US$ 1.7 trillion annually. Current members of the GPA include the European Union, the US, Canada, Japan, South Korea, and New Zealand. China and Russia are among a group of nine countries currently in the process of joining. China’s procurement market alone is estimated to be worth up to US$2.5 trillion.
GPA membership will grant Australian businesses fairer and more transparent conditions when tendering for government procurement involving the supply of covered goods and services. As a member of the GPA, Australian businesses will have legally bound access to markets where Australia does not have a current free trade agreement (FTA) (including the EU) and benefit from more favourable access in countries where there are existing FTAs, such as the US.
Infrastructure is particularly lucrative for Australian businesses. A report from the McKinsey group suggests the globe will need to spend US$3.7 trillion annually until 2035 in order to meet the demands of rising populations, economic development, and to replace existing ailing infrastructure. China accounts for 34% of the global total, with infrastructure needs in Europe, the US, Canada, Japan and South Korea accounting for an additional 40%.