The following is an archived copy of a message sent to a Discussion List run by the Campaign Against Sanctions on Iraq.

Views expressed in this archived message are those of the author, not of the Campaign Against Sanctions on Iraq.

[Main archive index/search] [List information] [Campaign Against Sanctions on Iraq Homepage]

[Date Prev][Date Next][Thread Prev][Thread Next][Date Index][Thread Index]

Re: [casi] EU to investigate Pentagon Iraq ban

[ Presenting plain-text part of multi-format email ]

Financial Times

International lawyers pore over details of Iraq contracts
By Tobias Buck in Brussels and Edward Alden in Washington
Published: December 10 2003 20:20

Can the US defense department award Iraqi reconstruction contracts worth $18.6bn to businesses from 
Mongolia, Britain and the Marshall Islands but leave companies from Germany and France out in the 

In order to find an answer to that question, European trade officials were on Wednesday reaching 
for their copies of the Government Procurement Agreement, an international treaty signed in the 
Moroccan city of Marrakesh nine years ago.

All parties to the agreement, including the US and the EU, promise not to favour their domestic 
companies over competitors from abroad when bidding for a government contract. The GPA also bans 
governments from discriminating between foreign companies based on their nation- ality.

While the wording of the agreement is unambiguous, there are numerous exceptions and loopholes 
which could allow the US to claim that the GPA does not apply to the 26 contracts that it is 
looking to hand out. Most importantly, the GPA does not apply to "procurement indispensable for 
national security or for national defence purposes".

Trade lawyers and academics argue, however, that this provision would only cover some of the Iraqi 

Christian Pitschas, a Brussels-based trade lawyer for Freshfields, said: "When it comes to 
rebuilding the general infrastructure, I really cannot see how the US would be able to argue that 
its national security was at stake. I just do not see that the exceptions can be applied to things 
such as building schools or restoring the electricity grid."

Sue Arrowsmith, a law professor at Nottingham University who specialises in government procurement, 
said it was "very unlikely" that the US would succeed with this argument, but argued that 
Washington might be saved by another loophole.

She pointed to an endnote attached to the GPA, which states that certain kinds of development 
assistance, so-called tied aid, is not covered by the agreement.

However, like most trade specialists she said that international government procurement was a "grey 
area" - a problem exacerbated by the fact that there had been only very few World Trade 
Organisation rulings in this field.

Richard Mills, a spokesman for the office of the US trade representative, said in a statement on 
Wednesday "there is no need to invoke the essential security exception to our trade obligations". 
Instead, he said, the US would argue that the Coalition Provisional Authority was not covered by 
the WTO rules, and therefore the CPA was free to discriminate in contracts as it saw fit.

This line of argument came as a surprise in the light of the wording of the Pentagon decision, 
which makes references to "national security" and "essential security interests".

Both terms appear in the GPA, suggesting that the Pentagon was initially preparing to base its 
defence on the national security argument.

This in turn suggests that the Pentagon's decision was assembled without a full vetting by the US 
trade representative's office, which is the lead agency in dealing with Washington's international 
trade obligations.

However, Commission officials rejected the US claim that contracts would be awarded by the CPA. 
They pointed out that the announcement on the bidding procedures had been made by Paul Wolfowitz, 
deputy defence secretary, indicating that the Department of Defense was closely involved in the 
awarding of the contracts.

Brussels officials also argued that the CPA had close links to the Pentagon, and that Tuesday's 
statement itself made clear that contracts would be awarded by the CPA "and the Department of 
Defense, on behalf of the CPA". According to an annex to the GPA, most contracts awarded by the 
Pentagon explicitly fall under the GPA.

Sent via the discussion list of the Campaign Against Sanctions on Iraq.
To unsubscribe, visit
To contact the list manager, email
All postings are archived on CASI's website:

[Campaign Against Sanctions on Iraq Homepage]