Government procurement is government purchases of goods and services—everything from office supplies to jet fighters to consultants. Government expenditures typically make up a large portion of GDP—10 to 25 per cent in OECD countries—and what governments decide to buy or not buy can have an enormous influence on the economy and environment. This fact has led many governments to begin thinking about how to green their procurement, making it a force for environmental protection, or at least reduced environmental damage.

Most such schemes to date have involved either a price preference for goods that meet certain criteria (for example, recycled paper can be up to 10 per cent more costly and will still be bought), or a specification of the product's attributes (for example, all government fleet automobiles must have a certain fuel efficiency). Because they are administratively simple (though not for the purchasing agents), they can make a real difference, and because they portray the government favourably in the public eye, such schemes will undoubtedly be increasingly popular.

The greening of government procurement may have trade implications. Many of the issues are the same as those posed by labelling and certification schemes (see section 5.4). The purchasing requirements may be based on process and production method standards—for example, governments may give preference to goods made that release little carbon into the atmosphere. Or they may simply require a domestic-level ecolabel or environmental management certification, saving purchasing officers the trouble of verification and auditing. But, as with labelling, the PPM criteria set in one country may not always be relevant in another. And the specifications may be, intentionally or unintentionally, set up in ways that favour domestic producers. Labelling and certification dealt with voluntary standards, and so there was some debate over whether they were in fact covered by the existing trade rules. But if a government requires that all the paper it buys be certified by a domestic ecolabel, we enter the grey area between voluntary standards and mandatory technical regulations.

The WTO's Government Procurement Agreement is different from most of the WTO agreements, in that it is plurilateral. This means that countries do not automatically subscribe by being WTO members, and in fact only a few currently do. The GPA currently has some 30 signatories, mostly from OECD countries. The focus of the Agreement is to force governments to tender bids for their purchases transparently and fairly.

Unlike GATT, the GPA does not prohibit discrimination among like products, but rather focuses on discrimination between foreign and domestic suppliers. It does demand, though, that any requirements should not be "prepared, adopted or applied with a view to, or with the effect of, creating unnecessary obstacles to international trade"—a requirement that has yet to be interpreted. It also mandates that technical specifications should be "based on international standards, where such exist; otherwise, on national technical regulations, recognized national standards, or building codes." A national technical regulation, according to the footnote that modifies this text, is any standard set by a recognized body. ISO 14001 presumably fits this bill, and, arguably, so would most national-level ecolabelling programs.

For now these issues are on the horizon. The greening of government procurement is a recent phenomenon. And the GPA is in an uncertain state; WTO members may strengthen it through further negotiations, but no consensus has been reached on the need to do so any time soon. And the Agreement has yet to be interpreted by a dispute settlement body in a way that would clarify how it might treat PPM-based discrimination.

5.10 MEAs and the WTO