US, EU, Japan clear way for WTO procurement deal

Dec 15 (Reuters) - The World Trade Organization is expected to agree a landmark reform of its Government Procurement Agreement on Thursday after the European Union, Japan and the United States agreed terms for opening up government contracts to foreign competition.

U.S. Trade Representative Ron Kirk, asked if the WTO was about to reach a deal, told Reuters: "I think we are. I think we're in good shape."

EU spokesman Tomas Baert said all major obstacles had been cleared after last minute negotiations on the agreement, which WTO officials expect to open procurement contracts worth $80-100 billion in the 42 countries that are members of the pact.

Members of the pact, which dates from 1994, have been trying for a decade to modernise and broaden it, but faced a deadline on Thursday after the chairman of the negotiations gave them a "now or never" ultimatum, saying the available deal was the best they could expect in the current economic climate.

Although a deal would bring immediate dividends from existing members, a much more important effect will be to attract new members such as China, India and Russia, whose eventual participation could multiply the benefits.

Several diplomats said South Korea had presented some issues that still needed to be resolved, but they were not expected to stand in the way of a deal at a meeting on Thursday, the first day of the WTO's biennial ministerial conference in Geneva.

One diplomat involved in the talks said that the European Union had removed a major stumbling block by backing down on a demand to get access to procurement by Japan Railways.

Japan had insisted on taking the railway spending out of the agreement after privatisation took it out of government hands, and that question will now be handled by a separate negotiation.

Source: Reuters