China to Open More of Government Market to Foreign Firms

China to Open More of Government Market to Foreign Firms

Wants to Join Global Pact on Government Purchases

BOB DAVIS

Updated Dec. 20, 2013 10:33 a.m. ET

BEIJING—China said it would agree to open more of its vast government market to foreign firms as part of a decadelong bid to join a global pact on government purchases, which could ultimately benefit Chinese companies too.As part of the annual U.S.-China Joint Commission on Commerce and Trade, China’s vice minister of Commerce, Wang Chao said that Beijing sought to “accelerate negotiations” on what is formally called the Government Procurement Agreement. Beijing would agree to terms that are “basically the same of other participating nations,” Mr. Wang said in a press conference at the end of the two-day session.

He didn’t provide further details of the offer which he said would be made next year. U.S. Trade Representative Michael Froman said that “we look forward to seeing that offer and seeing if there is a basis on which to consider accession to the GPA.”

A USTR report, citing the Chinese Ministry of Finance, estimates government procurement for 2011 was at least $180 billion.

China has said for years it will join the World Trade Organization’s GPA, which assures that nations don’t discriminate against foreign companies in government bids. Unlike other WTO deals, the GPA doesn’t set rules that all WTO members need to follow. Instead, the 15 members of the GPA make commitments of various kinds to open their government bidding processes and those commitments apply to other GPA members.

Countries that want to join the pact make offers and the GPA members judge whether the offer is sufficient to join.

Since 2001, China has made offers that have been judged by the U.S. and European Union as inadequate. They want Beijing to include purchases by local governments and state-owned enterprises. It wasn’t clear from Mr. Wang’s statement how broad China’s offer would be.

In the JCCT talks, China pushed for greater exports of high-tech goods from the U.S. and sought to clear the way for Chinese investment, Chinese and U.S. officials said. If China were a GPA member, its companies could have an easier time bidding for U.S. and state government contracts.

The JCCT focuses on a variety of technical issues, including intellectual property protection, export rules and specific trade disputes. On Friday, for instance, China announced that it had blocked the import of 545,000 metric tons of U.S. corn so far in cargoes that contained MIR162, an insect-resistant strain of the grain that is permitted in the U.S., Japan and Europe but not approved by China’s agriculture ministry. That issue became a subject of discussion at the talks.

Chinese Vice Agriculture Minister Niu Dun said the corn was rejected “because safety assessment procedures for export of GMO corn weren’t completed,” using the term for genetically modified organisms. Mr. Froman called the matter an “area of continuing work,” but didn’t say whether any progress had been made.

U.S. Commerce Secretary Penny Pritzker said in an interview that one of the most important aspects of the session was for U.S. cabinet officials to get to better know Vice Premier Wang Yang, who headed the talks for the Chinese, so they can defuse trade and investment problems when they arise.

The meeting comes a month after a Communist Party policy conference, known as the Third Plenum, that issued a broad agenda for economic reform. The U.S. officials cited the document regularly in their arguments that China ought to make policy changes sought by Washington.

Mr. Wang “was joking with us that maybe we knew the Third Plenum better than he did,” said Ms. Pritzker. “We were quoting from it.”