WORLD TRADE
ORGANIZATIONWT/DS88/3
9 September 1998
(98-3473)
Original:  English
UNITED STATES – MEASURE AFFECTING GOVERNMENT PROCUREMENT
Request for Establishment of a Panel by the European Communities
The following communication, dated 8 September 1998, from the Permanent Delegation of
the European Commission to the Chairman of the Di spute Settlement Body, is circulated pursuant to
Article 6.2 of the DSU.
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My authorities have instructed me to request the establishment of a panel pursuant to
Article 6 of the Understanding on Rules and Proce dures Governing the Settlement of Disputes, and
Article XXII of the Agreement on Government Procurement (GPA) with respect to the Massachusetts
Act of 25 June, 1996, chapter 130, §1, 1996 Mass. Acts 210, codified at Mass. Gen.Laws, ch.7, §§ 22G-22M ("the Law").
The Law forbids State agencies, State authorities and other State entities from procuring
goods and services from any person currently doing business with the Union of Myanmar (formerly
known as the Nation of Burma).  In practice, this is achieved by applying an automatic price penalty
of 10% on bids  from companies which are deemed to be doing business in or with the Union of
Myanmar (as set out in a restricted purchase list which contains the names of such companies,although companies which are not on the list but which are deemed to meet the criteria for inclusion
in the list are similarly affected).
In doing so, the Law attaches conditions for the participation of suppliers in tendering
procedures which violate the requirement set out in Article VIII(b) of the GPA.  Furthermore, byimposing a 10% price increase on the basis of whether or not a company does business in or with
Maynmar, the Law violates the basic GPA requirement embodied inter alia  in Article XIII.4(b).
The Law also does not provide to the suppliers of other Parties offering products or services
of the Parties immediate and unconditional treatment no less favourable than that accorded todomestic services and suppliers and that accorded to services and suppliers or any other Party.
Moreover, it applies to majoritiy-owned subsidiaries of companies that are listed, as well as majority-
owned subsidiaries of companies that themselves have other majority-owned subsidiaries which meet
the conditions for listing.  In doing so, it breaches the provisions of Article III, paragraphs 1 and 2 of
the GPA.
The Law also nullifies or impairs the benefits accruing to the European Communities ("EC")
under this Agreement, particularly as it limits the access of EC suppliers to procurement by a sub-
federal authority covered by the Government Procurem ent Agreement in such a way as to result in a
de facto reduction of the US sub-federal offer under the GPA.
./.WT/DS88/3
Page 2
In a communication dated 20 June 1997 the EC requested consultations with the United States
of America with a view to reaching a mutually satisfactory solution of the matter.  The request was
circulated in document WT/DS88/1 and GPA/D2/1 dated 26 June 1997.
The consultations were held on 22 July, 2 October and 17 December 1997 in  Geneva.  They
have allowed for a full exchange of views and a better understaning of the respective positions, and
included discussions about a possible amendment of the Law, but have not led to a satisfactory
resolution of the matter.
Therefore, the EC requests that the panel consider and find that this measure is in breach of
the US' obligations under the GPA, in particular, of Articles III, VIII(b) and XIII.4(b) and
Article XXII.2 of the GPA.
The EC requests that the panel be established with the terms of reference set out in
Article XXII.4 of the GPA.
The EC kindly requests that this issue be placed  on the agenda for the meeting of the Dispute
Settlement Body to be held on 22 September 1998.
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