Picture a child’s birthday party. We’ll call him Sam. There are 11 other kids there: the next-door neighbors, some kids from down the street, and even some kids from across the street. Sam has received a bunch of new toys that everyone wants to play with. Sam says sure, go ahead! Play with the toys — except this one, this one, this one, this one, this one, and this one… Leaving only a few of the less desirable toys for the others to play with. Well, now envision that scenario taking place between the National Trade Representatives of twelve countries representing 40% of the world’s GDP.
The long-awaited final language of the Trans-Pacific Partnership Agreement (“TPP”) was recently approved and released to the public. At first glance, Chapter 15 of the agreement seems to radically alter the U.S. government procurement landscape. It broadly proclaims that each TPP member country is required to extend to all bidders the same treatment (i.e. preferences) it extends to its own bidders. That provision caused quite an uproar, with critics noting that the U.S. procurement market is substantially larger than all the other member countries’ combined.
The reality is somewhat less of a revolution and more of an incremental change. The U.S. already has trade agreements that cover government procurement with eight of the eleven TPP countries. So, in truth, there are only three new kids at the procurement birthday party (Vietnam, Malaysia, and Brunei). Additionally, none of the TPP countries have agreed to fully open their government procurement opportunities. Rather, it’s been a piecemeal approach: I’ll open up this piece if you open up that piece. So, while TPP has expanded the market for international procurement to some extent, it’s been more of a sea change than a tidal wave.
Moreover, every country, including the United States, has programs that the TPP government procurement chapter will not cover. Those restrictions include clauses like the “Buy American” requirements attached to federal funds for state and local highway and water projects; small and minority owned business preferences and other set-asides; food programs; safeguarding of nuclear materials, and sensitive elements of Department of Defense procurement. Additionally, TPP makes no commitment to cover state or local government procurement.
TPP has already faced significant bipartisan opposition in Congress, so it remains to be seen if the agreement will pass. One thing is for sure, if it does pass, much like our hypothetical birthday boy Sam, the U.S. will not be making all its toys available. Or, as U.S. Rep. Bill Pascrell (D-NJ) succinctly put it: the TPP has “exclusions up the wazoo.”