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UNESCAP Hackathon Report and Proposed Model Provision

Starting on 8th of June 2020, UNESCAP organized a Policy Hackathon on Model Provisions for Trade in Times of Crisis and Pandemic in Regional and Other Trade Agreements as part of a United Nations Initiative, in collaboration with ARTNeT, WTO, CUTS and other organizations from civil society, academia and the private sector. This Policy Hackathon aimed to gather relevant inputs from all interested stakeholders from government, academia, civil society and private sector to support the “building back better” after COVID-19 initiatives and development of provisions that could be included in trade and economic partnership agreements. Provisions which might guide national trade policies during and after a crisis such as the one brought by the COVID-19 pandemic. 

 

The Hackathon was brought to the attention of one of the first Networked Communities of Practice spearheaded by the Future Law Institute, known under the name GCPR – a Global COVID-19 Policy Research Initiative, which has arguably composed what is today the largest repositories of all the policies issued by the governments around the world. As the group gathered over 180 legal practitioners and activists from around the world, actively contributing to the database, Future Law Institute decided to apply to the UNESCAP hackathon and use 45 days to contribute an overview of policy state-of-the-art and offer an innovative solution towards ensuring that the collective benefits of trade arrangements are least compromised in a situation of crisis and pandemic. 

 

This Policy Hackathon concluded in September 2020, all submissions are collected in an Online Repository, made available on the following link. The organizing and evaluating team has reviewed numerous valuable contributions and has created a unique Online Repository, which will be used as one of the resources for the development of a Handbook on RTA Provisions for Trade in Times of Crisis and Pandemic, jointly produced by participating UN and other international organizations, coordinated by ESCAP with the support of the Core Group of Experts and collaborating institutions. 

 

The Handbook will be published this year (2021) and will provide guidance and insights for trade negotiators on how to ensure a continuation of trade and supply chains operations in times of crisis. UNESCAP Expert Group has identified some of UNESCAP Contributions as standing out in terms of quality, relevance, comprehensiveness and/or originality. The contribution provided by a group of legal professionals coming together under the umbrella of the Future Law has been one of those. 

 

In the effort of making sense of the rapid changes taking place, the submission provided with recommendations to fill the transnational legal gap to address global challenges. The paper submitted on behalf of Future Law Institute has been entitled: ‘Measures to Improve Transparency and Cooperation in Government Procurement & Trade in Times of Crisis’. This is bottom-up non-state-centred legal system intervention. Every single member of that volunteer team received a Certificate of Excellent Contribution for providing their insights and learnings. 

 

What did we find out? As this global pandemic knows no borders, we have investigated if international collaboration was strengthened and existing trade barriers reduced. To protect their nationals and mitigate economic and public health-related impacts of COVID-19, state practice suggested rather the opposite and showed how countries have adopted a protectionist approach. By July 2020, ninety-four (94) countries had put in place export curbs and restrictions as a result of the pandemic.

 

Government procurement activities during COVID-19 were notably more opaque and difficult to source and track, in large part due to the lack of international and domestic regulation of emergency procurement. This combined with the general paucity of reliable statistics and a lack of an internationally agreed methodology for the collection and recording of public procurement data produces a huge procurement data-gap which stymies rigorous policy assessment. 

 

Despite the amplified need for the negotiation of equitable access to essential medical goods during the global pandemic, there has been evidence of hoarding, stockpiling and government intervention to disrupt the free flow of medical goods. The pressure for governments to acquire essential medical goods under extreme and urgent circumstances makes the process even more vulnerable to corruption, impacts the buyers’ ability to effectively monitor the quality of the products and services, and also diverts supplies away from those who may need it the most. The lethal combination of the implementation of export curbs along with government stockpiling of local supplies in countries where essential medical goods are produced has disrupted cross-border trade and equitable access during the pandemic. These types of measures threaten the lives of billions of people dependent on international trade for access to essential medical goods.

The lethal combination of the implementation of export curbs along with government stockpiling of local supplies in countries where essential medical goods are produced has disrupted cross-border trade and equitable access during the pandemic.

That said, our paper does not confront a herculean challenge of ineffective global governance through international institutions such as the World Trade Organisation (“WTO”) directly. Plurilateral agreement is not crucial for the implementation of our proposed solution, instead, we proposed to identify a less direct measure which can be implemented incrementally in a bottom-up way through the government to government negotiation of Preferential Trade Agreements (“PTAs”) combined with the leveraging of technological solutions. 

 

The Part 1 of our research paper, focuses on some measures that may be described as controversies, and points out how necessary it is to take into account “different levels of actual or projected COVID-19 outbreaks with varying population sizes, domestic medical equipment/drug manufacturing capacities, public health infrastructure and population demographics” and other indicators which may have influenced the introduction of these measures. 

 

To make our case, we examined government trade and procurement policy responses and actions collected in the Global COVID-19 Policy Response initiative, spearheaded by the FLI from March 11th 2020 to July 24th 2020. To date, the GCPR database contains about 400 entries of international trade measures taken by various nations and international organizations. Upon the completion of the extensive task that is the collection of trade measures, as well as the preliminary classification of such measures, the GCPR Database will undergo a more refined process that places trade measures and policies into suitable subcategories. Our research collected data from Australia, Brazil, Canada, EU, Latin America, Kenya, Uganda, OECS & CARICOM and the United States, the said reports are attached and marked Appendices at the end of the paper. 

 

In Part 2 we provided an overview of the literature outlining the checkered history relating to the inclusion of government procurement provisions in trade agreements. Given the average size of public procurement markets, its economic significance to international trade should not be under emphasised. On the other hand, the variety of size indicates how inextricably linked public procurement markets are with the nature and structure of domestic economies, developmental stage and political objectives along with the size of governments and levels of accountability.

 

Inclusion of Government Procurement in trade agreements has always been a complex challenge. In bilateral agreements, post-colonial states have been cautious about entering into agreements with former colonizing states aimed at liberalising domestic procurement markets because of asymmetrical supplier capacities and levels of industrialization. In addition, the WTO plurilateral Agreement on Government Procurement (“WTO-­ GPA”) was revised in 2014, however, out of 164 WTO member states only 48 have signed the WTO-GPA. Moreover, to date, there are no African, Caribbean and/or Pacific (ACP) signatories, while, as of February 2020, the post-Brexit, United Kingdom, is recorded as having Observer status only.

 

Driven by the lack of uptake at the plurilateral level, in the last two decades, there has been a rapid proliferation of PTAs worldwide. Since 2000, the European Union (EU) has pursued negotiation of procurement policy with trade partners and has spurred the bottom-up growth of transnational public procurement rules in PTAs in Regional Trade Agreements which include prominent public procurement chapters. In 2007 the CARIFORUM EU EPA was signed representing the first trade agreement between former colonizers and post-colonial states which included public procurement provisions. This landmark case was afterwards followed by many African countries signing similar EPAs containing public procurement provisions.

 

In 2020, the tables have turned and the majority of PTAs notified to the WTO contain public procurement provisions albeit with varying levels of coverage and substantive content. This bottom-up and horizontal convergence of common norms in public procurement in PTAs therefore provide a unique field of study for transnational cooperation on commercial matters. Countries have been more effective at negotiating shared supra-national public procurement norms on a bilateral basis than through the plurilateral WTO-GPA.

 

Procurement volatilities experienced across multiple jurisdictions combined with evidence of a rich transnational network of PTAs where states universally agree to transparency in cross-border procurement, present an opportunity to leverage this moment to introduce Model “Crisis” Procurement Provisions. 

 

In Part 3 of the paper, we argue for the development of Model ‘Crisis’ Procurement Provisions (Appendix XI) to be included in the menu of possible provisions to be used by governments in negotiating or renegotiating PTAs. 

 

Notably, we proposed Model “Crisis” Procurement provisions and not Model “Emergency” Procurement provisions. This has been deliberately done as we are taking a broader conceptual approach to cover procurement in times of crisis, of which, emergency procurement is but a subset. Thus, our sample Model provisions are submitted either for inclusion and revision of existing PTAs or to be included in future trade-related agreements and will cover the periods of (1) extreme urgency – Immediate Response Stage (2) stabilizing period – Relief and Reconstruction Stage and (3) future-facing preparedness – Crisis-resiliency Stage. The Model Provisions are set out as draft provisions to be refined during negotiations and as a menu of options. Parties may agree to certain minimum standards or deeper cooperation based on the assessment of mutual interests. 

We recognised the following objectives of the Model Crisis Procurement provisions: 

  1. To ensure the free flow and equitable access to essential goods in times of crisis,
  2. to strengthen existing relations and trade cooperation between the Parties on the basis of solidarity and mutual interest,
  3. to create shared systems for effective preparedness in times of crisis to mitigate extreme damage and harm.

In Tackling Coronavirus Together, Evernett (2020) has surveyed the trade in medical goods early on in the COVID-19 pandemic. In his recommendations, Evernett advocates for a proactive approach to adjusting trade policies now rather than waiting till after the pandemic and advances five (5) key guiding principles to govern the trade in medical goods. We endorse and build on his approach and to this end, we have adapted his principles to govern crisis procurement of medical goods and we have included a sixth principle. We posit that this is the starting point in developing Model “Crisis” Procurement Provisions to be included in trade agreements. Our aim is to ensure that Model provisions present procurement policy as an enabler rather than a nuisance to the effective acquisition of medical goods in times of crisis. 

Notably, we proposed Model “Crisis” Procurement provisions and not Model “Emergency” Procurement provisions. This has been deliberately done as we are taking a broader conceptual approach to cover procurement in times of crisis, of which, emergency procurement is but a subset.

In Part 4 we explore the leveraging of technological solutions like the Global COVID-19 Policy Response (GCPR) Research initiative as mechanisms for addressing the procurement data-gap and improving government transparency and cooperation in times of crisis. We have also reviewed a handful of digital platforms such as Trade Intelligence and Negotiation Adviser (“TINA”), which provides insights into the negotiation of trade agreements of UNESCAP member states through the process of gathering trade data, which allows questions such as who to negotiate with, what commodities to negotiate over, and what the benefits of entering into certain negotiations are. Governments must be willing to move quickly to digitize their interactions with the public, as advancements in technology accelerate at great speed. The incorporation of digital tools and technologies from Natural Language Processing, recently released Generative Pretrained Transformer 3, distributed ledger technologies as well as high-level automation that Artificial Intelligence brings to digital tools will allow for predictive maintenance, unit readiness, and may even be useful for tools that serve to improve humanitarian aid and disaster relief.

 

We acknowledge that our proposed Model Crisis Procurement Provisions contradict the dominant emerging narrative that in times of crisis, procurement processes present a stumbling block rather than an enabler of the free flow of essential goods. Nonetheless, we believe that the plethora of country procurement systems which engage best practice emergency procurement systems provide a basis for our recommendations. For these reasons, our paper conceded that the data to support recommendations is inadequate. Whilst real-time trade policy and commercial data are readily accessible, procurement policy and commercial data are not due to the lack of harmonized standards and common protocols for the categorization of procurement data. This substantial procurement data-gap demands paramount financial support for practical solutions and courageous experimentation and exploration of new models without a rigorous evidence-basis. 

For more information and in-depth learning about these issues, you can read more in our submitted paper on ‘Measures to Improve Transparency and Cooperation in Government Procurement & Trade in Times of Crisis’.

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