• Preference programs for small businesses, distressed areas,
minorities and women are excluded from the agreements.
• Moreover, the procurement
agreements set very high thresholds for coverage of state government procurement. For goods and services, only contracts
above $477,000, and for construction services, only contracts above $6.7 million would be
subject to the agreements.
Myth: USTR is seeking blanket authority to cover state procurement
under trade agreements.
• In its letter to state governments,
USTR listed several agreements that were then under negotiation for which state participation was sought (bilateral
free trade agreements with Australia, Central America, and Morocco). Several agreements still
under negotiation were also listed (the Free Trade Area of the Americas and a free trade
agreement with the Southern African Customs Union). It is up to each state to
o Whether to
o Which agreements to participate
o The level of its specific
Myth: FTAs would undermine green procurement policies of state
• False. The trade agreements
ensure that state officials can make purchases that protect the environment. The agreements explicitly permit states to make
purchases in accordance with their own state environmental policies.
Myth: The WTO Government Procurement Agreement’s "track record
includes the demise of states' procurement policies aimed at avoiding business with
the Burmese dictatorship."
• Wrong. In June 2000, the U.S.
Supreme Court unanimously struck down under the Supremacy Clause of the US Constitution a Massachusetts state law
that effectively barred companies doing business with Myanmar (formerly Burma) from doing
any business with the state. The WTO never ruled on the Massachusetts Burma
Myth: FTAs would put "at risk" preference programs and other local
• False. When states sign on to the
FTAs, they may exclude sensitive local programs, as many states have (as noted above).
• Also, the thresholds for the
application of the FTAs to state procurement are very high: $477,000 for purchases of goods and services and $6.7 million for
Myth: States would not receive any benefits by participating in
the trade agreements.
• False. Including state procurement
in FTAs allows U.S. businesses comparable access in the state or other sub-central procurement markets of trading
partners. Moreover, opening state procurement to a wider list of potential bidders can result
in lower prices and more choices for state government agencies, thus saving taxpayer
• By voluntarily covering their
procurement, states strengthen USTR’s leverage to persuade foreign countries to open their state or other sub-central
procurement markets to U.S. suppliers. For example, in the negotiations for an FTA, Australia
had been unwilling to cover its states and territories unless the United States covers a
significant number of states. Nondiscriminatory access to the procurement of Australian states and territories is
a high priority for U.S. suppliers of goods and services.