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Benefits to New Zealand businesses
The Organisation for Economic Cooperation and Development estimates that this so-called government procurement typically represents 14–20% of GDP in most developed countries. As such, it is important that New Zealand businesses are able to access and compete on an even footing in government markets.
CPTPP will provide greater opportunities for New Zealand suppliers to bid for contracts in the eleven other markets - particularly those in Malaysia, Mexico, Peru and Viet Nam.
Rules ensuring open, fair and transparent conditions
CPTPP establishes rules ensuring open, fair and transparent conditions of competition in government procurement, which are consistent with New Zealand’s Government Rules of Sourcing. No changes to New Zealand’s government procurement regulatory framework will be required.
How does this work?
CPTPP will provide domestic mechanisms for New Zealand businesses bidding for government contracts to challenge a breach of the obligations set out in the chapter, or the measures Parties adopt and maintain to implement these obligations.
What about access to New Zealand government contracts?
In return, New Zealand has made no additional commitments in CPTPP beyond those already made in other agreements, in particular the World Trade Organization Agreement on Government Procurement (GPA). In other words, New Zealand will extend the commitments that are already in place for many other countries, to a number of CPTPP Parties.
Which government agencies are covered?
New Zealand’s commitments will be applied to all goods, all construction services, and all other services except for research and development, public health services, education services and welfare services above the specified thresholds to the following entities:
- 29 public service departments, New Zealand Police, New Zealand Defence Force and all entities subordinate to them.
- 10 Crown agents: New Zealand Antarctic Institute, Civil Aviation Authority of New Zealand, Energy Efficiency and Conservation Authority, Maritime New Zealand, New Zealand Fire Service Commission, New Zealand Trade and Enterprise, Tertiary Education Commission, Sport New Zealand, Careers New Zealand and Education New Zealand.
What are the specified thresholds?
Procurement for construction has to be above the level of approximately NZ$10 million to come under the agreement. For those central government agencies covered by the CPTPP, procurement for goods and services has to be above the level of approximately NZ$260,000. For the Crown agencies, procurement for goods and services has to be above the level of approximately NZ$800,000.
These thresholds can change over time due to currency fluctuations. Those applicable for the current year are as stated above and available here [PDF, 260 KB].
State-owned enterprises and local government are not disciplined
Procurement by KiwiRail, other state-owned enterprises, or by regional or local government is not covered by the Agreement. Other procurement activities - for public health, education and welfare services and for research and development services - are also excluded. In addition, some activities, such as commercial sponsorship arrangements and unsolicited unique proposals will not be covered by the chapter.
Parties will only consider expanding government procurement commitments, including possible commitments at the regional and local level of government, after five years which is at least two years longer than agreed in CPTPP. For New Zealand, any consideration would require consultation with regional and local government and other stakeholders in order to formulate a position.
Rules to protect health and labour
The chapter preserves the right to take measures for certain legitimate public policy purposes, such as public health, safety and protection of the environment. The right to take appropriate actions in respect of procurement indispensable for national security or for national defence purposes is also protected by CPTPP.
Procuring entities may also promote compliance with international labour rights as part of their procurement processes.