WTO NEWS: SPEECHES — DG PASCAL LAMY

“Developmental and Trade Significance, Changing Context and Future Prospects” — Geneva

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Ladies and gentlemen,

Welcome to this Symposium on the Agreement on Government Procurement (“the GPA”).

There are several reasons why it is appropriate to hold an event such as this at the present time. The economic crisis has reminded us that markets require adequate governance mechanisms, if they are to function properly.

While needless or excessive regulation should obviously be avoided, the mere removal of obstacles to trade may not, by itself, ensure optimal performance if rules are not in place to ensure fair procedures, appropriate transparency of markets, and responsible competitive behaviour that is environmentally sustainable. It is time to recognize that such rules are an essential counterpart to market opening.

The GPA is a paradigm example of a trade opening instrument that also recognizes the need for governance mechanisms — in this case, the procedural rules that Parties to the Agreement must follow to ensure fair and transparent contracting practices and the domestic review or bid challenge mechanisms that the Agreement requires all Parties to put in place. These rules and enforcement mechanisms are built around the WTO's fundamental principles of non-discrimination, transparency and procedural fairness.

Currently, the GPA appears to be in the process of taking on relatively greater importance in the constellation of the WTO Agreements. I say this in light of: first, the gradually growing membership of the Agreement, and the negotiations that are now under way concerning the future accession of important developing and transition economies; second, the importance that public infrastructure spending has taken on in the context of the economic crisis, as an element of many countries' recovery strategies; third, related concerns over the implementation of buy-national policies by some countries during the past year, and the significance that these could take on as a barrier to trade; and fourth, and possibly most important, the progress that has been made on procurement reforms in many non-GPA Parties, which may be bringing them, over time, closer to being ready to consider GPA accession.

With respect to accessions to the Agreement, I am pleased to learn that Armenia has circulated a revised accession offer just this week, and has asked that it be considered on an expedited basis. Clearly, also, India's request for observership in the Committee on Government Procurement, which I understand was approved yesterday, is an important development for the Committee and for the Agreement.

Concerning the reforms that have been undertaken in many developing and transition economies, these have, in turn, been encouraged by policies and initiatives of multilateral and regional lending institutions which are aimed at facilitating greater reliance on national procurement systems as a vehicle for the delivery of development assistance. In this regard, I see an important synergy between the work of these organizations and the aims and modalities of the GPA.

The Symposium today and tomorrow will also be an opportunity to examine together the highlights of the revised GPA text, which has provisionally been agreed, but is pending entry into force once the coverage negotiations are completed. Perhaps, the arrangement that was announced last Friday between Canada and the US, which will involve Canada's listing of previously uncovered sub-central government entities in its GPA schedules in return for reciprocal benefits from the US, will help to facilitate movement in the coverage negotiations more generally.

The revised GPA text preserves the main elements and principles of the 1994 GPA, but it updates the text, streamlines it in important ways, and introduces new flexibilities for Parties that are made possible, for example, by the use of electronic procurement tools.

The revised text also includes new transitional measures for acceding developing countries that are more specific and concrete than those offered under the existing Agreement. The above clearly plead for a rapid entry into force of the revamped GPA.

Beyond this, there is an array of intriguing and challenging issues concerning national procurement policies and international coordination of such policies that will require the attention of GPA Parties and other WTO Members in the years to come. These include matters such as the treatment of environmental policies in relation to the GPA. Ensuring environmental sustainability is a challenge that cuts across all areas of national and international policy-making. The revised text of the GPA already clarifies the scope for application of technical specifications to promote the conservation of natural resources and protect the environment. I understand that, in the course of the Symposium, consideration will be given not only to these provisions but to the question of sustainable procurement more widely and how it can best be promoted consistent with international rules.

Another issue which is worth looking at is the articulation between the GPA and provisions on government procurement in regional trade agreements. The majority of the regional agreements that have been notified to the WTO in recent years contain at least some provisions on government procurement, and a good number, by one, admittedly provisional, count, 37 of 138 agreements notified since the year 2000 contain detailed provisions on procurement.

An innovative aspect of the revised GPA text is a new provision relating to the conduct of procurement, and the avoidance of conflicts of interest and corrupt practices. This will be explored in one of the panels of this symposium, together with the harm that can be caused by collusive tendering practices among suppliers and the ways that these can be deterred and addressed through national legislation. This is clearly an area where there are strong complementarities between trade opening and national competition policies.

Considering the range of issues to which the GPA relates and the nature of the Agreement itself, it seems to me that this is a paradigm example of an area in which good policy requires not only the removal of barriers to efficient international competition, but also the creation of appropriate rules and institutions to govern trade and competitive behaviour. The challenge for all of us is to ensure that these rules and institutional provisions are up to date and in tune with commercial realities, while ensuring good governance for citizens.

To be sure, the WTO is not the only organization addressing these questions at the international level. I am pleased to see that UNCITRAL, whose Model Law on Procurement is complementary with the GPA in important ways, is part of the programme. We also look forward to the comments and observations of other participating intergovernmental organizations that are present, including the World Bank, UNCTAD, the International Trade Centre and the European Bank for Reconstruction and Development, and those of the various non-governmental organizations that have been invited to observe the proceedings.

This concludes my opening remarks. I am delighted that so many of you are present for the Symposium and look forward to hearing the reports of your discussions.

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