《Buying National Preferential Trade Agreements and Public Procurement》.pdf

Buying National: Preferential Trade Agreements and Public Procurement Daniel Yuichi Kono University of California, Davis dykono@ and Stephanie J. Rickard London School of Economics S.Rickard@lse.ac.uk Paper prepared for the Workshop on The Politics of Preferential Trade Agreements: Theory, Measurement, and Empirical Applications. Niehaus Center for Globalization and Governance, Princeton University, April 30-May 1, 2010. Abstract This study presents a new technique for estimating the extent of government discrimination against foreign suppliers in procurement practices. Using this technique, we examine the effects of procurement rules in preferential trade agreements (PTA) on governments’ procurement behaviour. We find little evidence that these rules reduce discriminatory procurement practices. Bilateral agreements do not significantly modify the elasticity of imports to spending; multilateral agreements appear to reduce the elasticity of imports to spending. 1 As global, regional and bilateral initiatives have successfully reduced trade barriers, such as quantitative restrictions and tariffs, greater attention is now being focused on the remaining barriers, including discriminatory government procurement practices. Discriminatory procurement practices involve systematic attempts to discriminate against foreign suppliers and in favour of domestic producers of similar goods and services (Lowinger 1976). A recent prominent example is the “Buy