12 February 2010 | Carly Chynoweth

India has taken the first step towards membership of the World Trade Organization’s (WTO) Government Procurement Agreement (GPA) by joining as an observer.

In a speech at a conference on the agreement WTO director-general Pascal Lamy described it as an important development both for the organisation’s Committee on Government Procurement and the agreement itself.

Observer status allows countries to attend committee meetings so that they can learn more about the agreement and discussions between member nations. It is designed to help countries prepare for membership, although there is no requirement for them to obtain this within a particular timeframe.

The GPA promises to open domestic public procurement markets to foreign competition. Signatories agree not to favour domestic suppliers over foreign vendors, and ensure procurement processes are open and transparent.

So far 41 of the WTO’s 153 members have signed up to the agreement, 22 have observer status and nine more, including China, are negotiating full membership.

Lamy said the agreement is gaining in importance because public infrastructure spending has become a key part of recovery strategies for many world economies. The GPA helps block any protectionist policies that may be put forward as part of these spending plans.

Last year the WTO criticised the G20 leaders for not enforcing their commitments on open and fair trade.