Working Paper: NBER ID: w17365
Authors: Hejing Chen; John Whalley
Abstract: This paper assesses the impacts of the WTO Government Procurement Agreement (GPA) on trade in both goods and services among members using a gravity model applied to a panel dataset covering 20 OECD countries over the period 1996-2008 for trade in goods and 1999-2008 for trade in services. The agreement dates from 1996 and covers 41 (mainly OECD) countries (/areas). China is now negotiating possible membership. Little has been written on the GPA which is a plurilateral agreement covering both goods and services. It mutually extends commitments only to signatories, but has commitments going beyond those in the earlier GATT procurement code. Government service markets are large, and trade in these also has spillover effects on trade in services and goods. \n \nResults suggest that GPA membership has a positive impact on trade in both goods and services between parties as well as on outward foreign affiliate service sales. The number of GPA parties has a small marginal negative effect on trade in goods. Service exports also increase slightly with more parties participating in the GPA. The growth of government procurement contracts above the threshold under the GPA also fosters service imports, exports and outward foreign affiliate sales.
Keywords: WTO; Government Procurement Agreement; Trade; Gravity Model; OECD
JEL Codes: F0; F1; F13
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| GPA membership (F53) | increased bilateral trade in goods and services (F10) |
| number of GPA parties (D79) | marginal decrease in trade in goods (F19) |
| government procurement contracts above GPA threshold (H57) | increased service imports and exports (F10) |