The GATT Agreement on Government Procurement in Theory and Practice

Abstract

When the Uruguay Round GATT Agreement on Government Procurement (AGP) became effective January 1, 1997, it appeared that American state and local government had eliminated their preference barriers against foreign suppliers. Upon closer examination, the author contends, this impression becomes misleading. By examining Congress's failure to repeal the Buy America Act, states' preferences for in-state suppliers, and AGP's limited scope, the author demonstrates how, even under AGP, Congress's desire to favor domestic employment continued to emerge. In addition, the author discusses how the sparse legal resources AGP granted to aggrieved foreign suppliers further reflected a desire to protect states' rights. Despite these protectionist undertones, the author posits that limited AGP remedies serve valuable political purposes that provide flexibility in the political sphere. For the author, this decision to forgo rigid legal rules demonstrates the government's preference for federalism, which, despite its effects on economics, makes good political sense.

Keywords: Uruguay Round GATT, Agreement on Government Procurement (AGP), federalism, "Buy America" Act, in-state suppliers, "fast track" , NAFTA, NASPO, free trade, international relations, congressional intent, Commerce Clause, market participant, state sovereignty, dual sovereignty

JEL Classification: K19, K33, K49, H87, F29