Taiwanese computer makers Acer Inc (宏碁) and Compal Electronics Inc (仁寶) will have a leg up over Chinese and Indian competitors in winning US economic stimulus contracts after Taiwan entered into a global purchasing agreement.
Taiwan began the WTO’s government procurement accord yesterday, giving its suppliers of notebook computers, energy equipment and telecommunications parts access to US projects, including US$787 billion in economic stimulus money. Without the accord, “Buy American” provisions of the package would have shut out Taiwanese firms.
“It opens up whole new opportunities to win government contracts,” said Ted Posner, a lawyer at Crowell & Moring in Washington who specializes in global trade cases.
China, Brazil and India are not part of the WTO procurement accord, limiting the involvement of companies in those countries from participating in US stimulus projects. Taiwan had to agree to open up its US$20 billion in annual government contracts to companies from the 40 other countries that are part of the WTO procurement accord, including the US.
“This is a change for our companies,” Chang Chun-fu (張俊福), director of the economics division of the Taipei Economic and Cultural Representative office in Washington, said in an interview. “We know that the US is the largest market.”
AU Optronics Corp (友達), Taiwan’s largest flat-panel display maker, could also benefit from the accord.
Taiwan agreed to negotiate terms for the government procurement accord when it joined the WTO in 2001. Those negotiations were completed last year, an add-on agreement to the WTO rules governing tariffs and subsidies.
Being part of the agreement grew in importance this year as the US Congress imposed a Buy American restriction on stimulus funding. Members of the procurement accord can supply projects under a compromise reached by lawmakers in February after companies in the US that rely on foreign suppliers complained.
Cisco Systems Inc, the biggest networking equipment maker, and Alcatel-Lucent, the world’s largest maker of fixed-line networks, petitioned for waivers from the Buy American provisions. The companies argued that the technology equipment they need to expand high-speed Internet access isn’t available in the US or the other 40 countries in the procurement accord.
In Taiwan yesterday, the Public Construction Commission (PCC) said that being the 41st member of the GPA would give the nation access to a global government procurement market totaling US$960 billion per year.
The market is 150 times the size of that opened by Taiwan to other GPA members, or 25 times the size of Taiwan’s total government procurement market, the PCC said in a statement.
Taiwan will open 16 percent of its government procurement opportunities, estimated to be worth US$6 billion a year, to GPA signatories, the PCC said.
Of the projects for which tender notices have been published, 37 projects worth NT$6.37 billion (US$193.2 million), equal to 1.14 percent of the total government procurement value for the first seven months of this year, are immediately open to GPA signatories, the PCC said.