VZCZCXRO2015
RR RUEHAG RUEHBZ RUEHGI RUEHMR RUEHPA RUEHPB RUEHPOD RUEHSL
DE RUEHGV #1262/01 3551604
ZNR UUUUU ZZH
R 211604Z DEC 09
FM USMISSION GENEVA
TO RUEHC/SECSTATE WASHDC 1134
INFO RUCNWTO/WORLD TRADE ORGANIZATION COLLECTIVE
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUEHBJ/AMEMBASSY BEIJING 5902
RUEHAM/AMEMBASSY AMMAN 1096
RUEHYE/AMEMBASSY YEREVAN 0137
RUEHBS/USEU BRUSSELS
RUEHNY/AMEMBASSY OSLO 2075
RUEHGP/AMEMBASSY SINGAPORE 0967
RUEHSW/AMEMBASSY BERN 8558
RUEHCH/AMEMBASSY CHISINAU 0173
RUCPDOC/USDOC WASHDC

UNCLAS SECTION 01 OF 03 GENEVA 001262 
 
PASS USTR FOR JGRIER, AWINTER AND MPAGAN 
PASS USDOC/4110 FOR BWOODWARD, KKELLY, JPRUITT 
PASS TREASURY FOR GEARP 
 
SENSITIVE BUT UNCLASSIFIED 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ETRD WTRO USTR ECON
SUBJECT: EU, CHINESE AND ARMENIAN NEGOTIATIONS HIGHLIGHT DECEMBER 
2009 GOVERNMENT PROCUREMENT SESSIONS 
 
Ref: A) Geneva 973 B) State 124680 
 
¶1. (SBU) SUMMARY: Parties to the WTO Agreement on Government 
Procurement (GPA) expressed renewed interest during meetings 
December 7-9 in Geneva in concluding renegotiation of the GPA in 
¶2010.  In bilateral negotiations with the EU delegation, the United 
States and the EU agreed to work jointly to try to resolve the 
outstanding issues, both text and market access related, beginning 
at the next GPA meeting in February, with the goal of completing the 
renegotiation  before the end of 2010.  On accessions, Armenia's 
delegation responded favorably to U.S. requests for modifications of 
its initial offer and appears that it may be possible to conclude 
its accession by mid-2010.  After little progress on its accession 
in 2009, Jordan promised to submit a revised market access offer 
during the first half of 2010.  During a bilateral meeting with 
China, the U.S. delegation raised industry complaints on the 
issuance of a recent circular on indigenous innovation, which 
appears to place foreign firms at a significant disadvantage 
relative to Chinese domestic firms when competing for certain types 
of government procurement.  The circular appears inconsistent with 
China's commitment made during the July Strategic and Economic 
Dialogue that it would treat products produced in China by foreign 
invested firms the same as products produced in China by Chinese 
firms for purposes of government procurement.  The U.S. delegation 
held bilateral meetings December 7-8 with Armenia, China, Jordan, 
the EU, Japan, Singapore, Switzerland and Norway.  The WTO Committee 
on Government Procurement formal meeting took place December 9.  The 
next committee meetings will take place the week of February 8, 
¶2010.  End summary. 
 
PRODUCTIVE MEETING WITH EU BOOTS HOPE FOR REVISED GPA IN 2010 
 
¶2. (SBU) A bilateral meeting with the EU focused on identifying 
common interests in moving forward in GPA negotiations.  While the 
EU did not provide specific new offers, they indicated they had a 
mandate, and wanted to work with the United States, to conclude the 
renegotiation of the GPA in 2010.  Both sides went over a list of 
text and market access issues that would need to be resolved or 
addressed in order to reach an agreement. 
 
¶3.  (SBU) The EU presented a wish list for expanded market access to 
the U.S. procurement market.  The U.S. delegation made no 
commitments, but indicated it would consider potential expansion of 
U.S. coverage'.  The U.S. delegation reiterated that the EU's 
revised market access offer is unacceptable as it withdraws current 
market access coverage and could not accept any agreement with such 
an outcome.  The EU did not respond to the comment.  The United 
States emphasized the need to resolve the failure of the EU to 
properly notify more than 500 modifications to its covered entity 
list.  Finally, the United States would need to see what increased 
coverage the EU could offer.  The two sides also discussed ways to 
work together on other GPA issues. 
 
ADDITIONAL BILATERAL MEETINGS WITH GPA MEMBERS 
 
¶4.  (SBU) JAPAN:  In a bilateral meeting, Japan's delegation said it 
would try to find ways to make offers of additional market access by 
February.  Japan indicated it had "informal information" on 
implementation of the American Recovery and Reinvestment Act to 
exclude Japanese firms in contravention of the GPA.   The U.S. 
delegation expressed its willingness to engage, but noted that it 
could not respond substantively absent information regarding the 
entities involved. 
 
¶5.  (SBU) SINGAPORE:  Singapore offered to drop its proposed 
revisions to Article XXII (Final Provisions), which have been 
delaying completion of that Article.  [Note: However, in the 
plurilateral session the EU requested to retain Singapore's proposal 
as an EU proposal and promised to circulate to the Committee amended 
language at the February meeting.  End note.]  Singapore also 
offered to amend a small business set-aside program it put forward 
in its revised market access offer in July, and which had met 
significant amount of resistance from the United States and most 
other GPA parties.  Singapore is offering to open these small 
business set-aside procurements to all GPA members.  The United 
States will examine this amended offer before formally replying. 
 
GENEVA 00001262  002.2 OF 003 
 
 
 
¶6.  (SBU) NORWAY:  The Norwegians said they fully shared the view to 
move forward quickly on completing the revision, and said success 
could give a positive signal to Doha negotiators.  They said they 
would need to consult in Oslo on concluding the renegotiations as an 
amendment to the existing GPA, as they had originally understood 
efforts as creating a new agreement. 
 
¶7.  (SBU) SWITZERLAND:  The Swiss negotiator supported aggressive 
efforts to conclude negotiations on the revised GPA during the first 
half of 2010.  He proposed putting matters that could not be 
resolved in 2010 into a work program for future discussions.  For 
Switzerland, providing for non-discriminatory treatment of small- 
and medium-enterprises is vital.  The Swiss would appreciate U.S. 
support for such a statement, and would be interested in access to 
even one more U.S. state. 
 
ARMENIAN ACCESSION MOVING QUICKLY 
 
¶8.  (SBU) Armenia sent a delegation from Yerevan as requested by GPA 
members at the previous session (ref A).  The delegation presented a 
timetable that would put Yerevan on course for accession as soon as 
July 2010.  Armenian delegation leader Varos Simonyan, Head of the 
EU and International Economic Affairs in the Ministry of Economics, 
came prepared with oral answers to all questions submitted by the 
United States after the October bilateral.  He agreed to remove 
Armenia's note that would reserve the right to apply offsets on 
procurement contracts, as well as to leave out a note potentially 
limiting coverage of some services.  Simonyan reported that a draft 
law on government procurement to comply with the GPA was under 
discussion within the government and would be sent to parliament by 
February.  At the Government Procurement Committee Session it was 
agreed that all parties should submit requests to Armenia no later 
than the next meeting in February to avoid further delay. 
 
CHINESE DELEGATION ON INDIGENOUS INNOVATION, NEXT OFFER 
 
¶9. (SBU)  The U.S. delegation used a bilateral meeting with the 
Chinese to discuss new regulations on indigenous innovation with 
their Chinese counterparts, raising the same points included in a 
demarche recently presented by Embassy Beijing (ref B).  The 
Ministry of Finance-led Chinese delegation, which included members 
from the Ministry of Commerce and the Legal Office of the State 
Council, claimed that it had fewer details on the circular than the 
U.S. delegation.  The Chinese explained that although the Ministry 
of Finance (MOF) was one of three agencies issuing the circular on 
indigenous innovation, the Ministry of Science and Technology was 
the lead.  The head MOF official present did not refute U.S. 
concerns that the process could de facto bar foreign-owned 
manufacturers in China from some procurement.  He said he would look 
into the circular.  [Comment:  the United States raised its concerns 
with this measure with the other key GPA parties.  Somewhat 
surprisingly, most other delegations did not seem to be familiar 
with it or appreciate how it could affect procurement market 
opportunities.]  In response to a U.S. question, he noted that MOF 
was working on revisions of its implementing regulations for the 
Government Procurement Law, and thought they could be submitted soon 
to the State Council. 
 
JORDAN EXPECTS TO SUBMIT REVISED ACCESSION OFFER IN APRIL 
 
¶10. (SBU) The Jordanian delegation, led by their capital-based 
negotiator, explained in another bilateral meeting that Amman hopes 
to finish an assessment of the impact of GPA accession, being 
conducted by a private consultant, in the first quarter of 2010.  It 
will use the assessment to formulate a revised accession offer in 
April, in which it indicated it would respond to U.S. requests from 
August to improve its offer.  Jordan also expressed interest in 
attending any informational session on the GPA held in its region. 
Jordanian businesses would benefit from learning about possibilities 
to compete for USG procurement, according to the delegation. 
 
FORMAL MEETING 
 
¶11. (U) At the formal meeting of the Committee, the Committee 
reviewed the status of accessions and implementation of the GPA with 
 
GENEVA 00001262  003 OF 003 
 
 
respect to notifications of thresholds, statistical reporting and 
review of national implementing legislation.  It also reviewed the 
status of modifications to the appendices to the GPA.  Both Japan 
and the U.S. delegation noted concerns with long-standing unresolved 
objections to modifications, and asked the Chair's assistance in 
resolving. 
 
U.S. DELEGATION 
 
¶12. (U) The United States delegation was led by Jean Heilman Grier, 
USTR senior procurement negotiator, and included Robert Kasper from 
USTR/Geneva, Katrice Kelly and Brian Woodward of the Department of 
Commerce, and Nathan Lane of the Department of State.  This cable 
has been cleared by all members of the delegation. 
 
SHARK