DEPUTY DIRECTOR-GENERAL YI XIAOZHUN

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Remarks by DDG Yi

Distinguished participants, ladies and gentlemen, good morning.

It is my pleasure to welcome you to the WTO for this year's Advanced Global Workshop on Government Procurement. I know that many of the speakers and participants travelled a long way to be here. I certainly appreciate the efforts you have made to join us. We know that you are senior officials with demanding schedules and considerable expertise and experience, so we are all the more grateful that you have been able to set aside the time this week to take part.  No doubt, the strong level of interest in this event is a measure of how important this issue has become for governments across the globe.

This workshop is an annual "flagship" activity for us to disseminate information and foster dialogue on government procurement in all its dimensions.

You will all be conscious of the importance of government procurement and its relationship to trade, economic growth and prosperity.  However, let me outline a few key factors:

  • First, government procurement is a key economic sector, representing 15 to 20 percent of GDP in most economies. It has major implications for growth, competitiveness and the welfare of citizens.
  • Second, it is vital for building infrastructure and delivering essential public services, including health, education and national defence.
  • Third, it is increasingly addressed in negotiations for regional trade agreements.
  • Government procurement also offers valuable opportunities for access to foreign market; for the promotion of inbound foreign direct investment (by ensuring transparency and fair procedures for investors); and for partnerships between domestic and foreign companies and the knowledge flows they promote;
  • Importantly, it is central to the struggle for good governance and against corruption; and
  • And it is relevant for the UN Sustainable Development Goals, which have illuminated the path toward building the societies and economies of the future.

Policymakers therefore have compelling reasons to consider how government procurement policies can support trade, economic advancement and social progress.

On reviewing the workshop programme, one can see how comprehensive and diverse is its scope. You will be considering core issues and legal instruments, making an overview of the work of other leading organizations, and exploring emerging topics such as e-procurement, new data, and sustainability. Of course, the WTO Government Procurement Agreement – the "GPA" - will be an overarching theme and central element for your discussions:

  • The GPA is an international "gold standard". It sets out best practices in government procurement, particularly since the 2012 overhaul of the Agreement which brought it up to date. The 2012 revision put in place a modern, flexible tool to enhance transparency, good governance and market access in government procurement;
  • The GPA provides legally assured market access to covered procurement valued at over 1.7 trillion US dollars annually. Future accessions, including those of China and Russia, are expected greatly to expand this value, potentially adding a further trillion dollars to the annual value of procurement activities covered by the GPA;
  • The GPA also serves as the template for procurement chapters in regional trade agreements around the world, serving as a valuable point of coherence;
  • From the perspective of good governance, the GPA is an essential policy benchmark for reform of national procurement systems;
  • And it is a bulwark of the global struggle for good governance and against corruption.

The revised Agreement embodies new transitional measures for developing countries that join. It encourages the use of modern e‑procurement tools. And it ensures enhanced flexibility for all participating Members. It also gives increased emphasis to the conservation of natural resources and the protection of the environment.

The GPA membership has been increasing in recent years. More significantly, it has become ever more geographically diverse. Currently, the GPA comprises 20 parties covering 48 WTO members. Only a week ago, Australia became the 48th WTO member to be bound by the GPA.  This brings to five the WTO Members that have acceded to the Agreement since 2014. The others are the Republic of Moldova, Montenegro, New Zealand and Ukraine.

Nine other WTO Members are seeking to participate in the Agreement as full Parties. And 32 Members have obtained observer status under the Agreement, which enables them to learn more about it and about current government procurement policies and practices.

The more intense and diverse activity surrounding the GPA sends a clear message about its growing relevance for today's global economy.

Another significant development is that countries are increasingly joining the Agreement for more diverse reasons than was the case previously.

Market access objectives remain central to the discussion. But a growing number of transition economies are joining the Agreement for other reasons as well – notably, the promotion of good governance, and economic and social reform.

In fact, I think that the GPA can provide an important tool for building linkages between major emerging economies and the developed world. It is notable that both China and the Russian Federation are among those seeking to join the Agreement.

I would also like to highlight the potential contributions of new and emerging digital technologies. They can help with more efficient procurement, transparency and effective governance.

These issues seem to be precisely the right ones on which to focus in light of the sustainable development needs of the WTO's Members. By making possible a full and thoughtful exploration of these questions, through dialogue with participants from a diverse and inclusive range of regions and economies, and with the input of outside experts, the Workshop will provide an essential contribution to the international dialogue on these issues.  We hope it will equip you with greater understanding and broader ideas of how to translate policy goals in this area to actual impact in practice, based on the rich and diverse expertise that we have been able to assemble here this week.

Before closing, I would like to mention another reason why this workshop is timely and valuable. Today, there are many misconceptions about the nature and objectives of the international trading system and the value of multilateralism.

Some feel that the system exists only to support trade, and it is or should be indifferent to other public interest objectives. If one looks, though, at the Preamble to the Marrakesh Agreement Establishing the World Trade Organization, one sees clearly a reference to "the optimal use of the world's resources in accordance with the objective of sustainable development", as an overarching goal of the system.

The GPA is part of this. It is recognized in the Preamble of the GPA that "the integrity and predictability of government procurement systems are integral to the efficient and effective management of public resources, the performance of the Parties’ economies and the functioning of the multilateral trading system". This recognition has further led to subsequent Committee discussion in the framework of a work programme on sustainable procurement. Importantly, the GPA encourages these discussions through the work programmes set out in its text, in particular, the work programme on sustainable procurement. The GPA also expressly recognizes the importance of "carrying out procurements in a transparent and impartial manner and of avoiding conflicts of interest and corrupt practices, in accordance with applicable international instruments, such as the United Nations Convention Against Corruption."

Your discussions here to further international dialogue on this topic could not be more important and we look forward to all your contributions.

So I warmly thank you for joining us here, and for your commitment to cooperation and dialogue on these issues. I wish you a very positive and productive week and encourage you to keep up the dialogue and cooperation in your future work.

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