Protection Through Government Procurement

Abstract

Recognition of the importance of government procurement as an instrument of protection led to the 1979 Agreement on Government Procurement under the General Agreement on Tariffs and Trade. This agreement, which came into effect at the beginning of 1981, aims to limit the degree to which government purchasing practices are used to discriminate in favour of domestic suppliers relative to foreign suppliers.¹ The agreement makes an exception in the case of procurements which are essential for national security. By 1982 roughly twenty countries had signed the GATT agreement, including the United States, Japan, Canada, the UK, France and several other northern European countries. Australia has not signed.

Helpful discussions with W. M. Corden, Rodney Falvey and Christopher Findlay, and the research assistance of Mark Horridge, are gratefully acknowledged.