DIRECTEURS GÉNÉRAUX ADJOINTS

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Your Excellency Pavel Filip,
Prime-Minister of the Republic of Moldova; Mr Octavian Armașu,
Minister of Finance;
Ms Corina Cojocaru,
Economic Counsellor and Chargée d'affaires for the WTO,
Permanent Mission of the Republic of Moldova to Geneva,
Ms Angela Sax, Head of the EBRD Resident Office in the Republic of Moldova

Distinguished participants; ladies and gentlemen,

Good morning. As Deputy Director-General of the World Trade Organization, it is my pleasure to welcome you to this workshop. Government procurement is an area of vital strategic importance for the WTO and for the countries of Central and Eastern Europe and Central Asia (the CEECAC region). It:

  • Accounts for a very significant proportion of GDP (13-15%, on average, or more, in countries in this region and around the world);
  • Is vital to infrastructure formation and the delivery of essential public services, including health, education and national defence;
  • Is increasingly important in negotiations regarding regional trade agreements;
  • Offers important opportunities for foreign market penetration; the promotion of inbound foreign direct investment (by ensuring transparency and fair procedures for investors); and collaboration between domestic and foreign companies; and
  • Is central to the struggle for good governance and against corruption.

Impressive leadership is being shown in the Republic of Moldova and in other countries in this region, in moving ahead with very significant reforms and market opening in the government procurement sector. For all these reasons, it is appropriate that this workshop has been convened jointly by EBRD, UNDP and the WTO and that the Republic of Moldova is hosting it.

Ladies and gentlemen, it's an interesting time to be working at the centre of the international trading system. Many have observed that the system is currently in crisis. While I share a number of the concerns that are being voiced, I am confident that global trade and the WTO have an exciting and rewarding future before them. Trade today is too important, and our futures too interconnected, to let the system wither. The task for all of us is to ensure that a strong and vibrant WTO continues as an essential platform for negotiations, dispute settlement, transparency and dialogue on trade issues of importance to our members (and to countries desiring to accede to the WTO), who collectively account for almost all of world trade. It is a time for strengthening trade rules and their coverage. And, this will not be achieved without reform.

One thing is clear – whatever happens, the revised WTO Agreement on Government Procurement of 2012 – the "GPA" -is and will remain a pillar of the global trading system. The GPA:

  • Is an international "gold standard" of best practices in government procurement, particularly since the 2012 overhaul of the Agreement to bring it up to date; and
  • Provides legally assured market access to procurements valued at up to $1.7 trillion annually. Future accessions, including those of China and Russia are expected to add in the range of an additional USD 440-1,225 billion annually.

It is to expected that due to geopgraphic proximity and familiarity, much of government procurement tends to stay at home, with domestic suppliers. Important cross border procurement also occurs.  Under GPA disciplines, an average of 1.5-1.7% of procurements (by value) are awarded through cross-border bids by foreign suppliers. When awards to locally-established foreign companies are considered, the proportion of total value won by foreign companies rises to as much as 17%. Both modes of supply are legally supported and protected by the GPA.

The Agreement:

  • Is an essential guidepost for national procurement reforms;
  • Serves as the template for procurement chapters in regional trade agreements (RTAs) around the world; and
  • Is a bulwark of the global struggle for good governance and against corruption. Good governance is promoted by:
    • Ensuring minimum standards of transparency and fair procedures;
    • Expanding the number and diversity of suppliers competing for key procurements (thereby strengthening competition and making supplier collusion more difficult);
    • Encouraging and incentivizing the use of modern e-procurement and data management tools;
    • Guaranteeing the role of strong, independent domestic review (supplier complaint or "bid challenge") systems; and
    • Involving a wider range of stakeholders (foreign governments and suppliers; civil society) in scrutinizing relevant activities.

Currently, the GPA consists of 19 parties comprising 47 WTO members. Since 2014, four additional WTO Members have acceded to the Agreement: our hosts, the Republic of Moldova, Montenegro, New Zealand and Ukraine. Only last week, during the GPA Committee meeting of 17th October, the negotiation of Australia's GPA accession was successfully concluded and celebrated as a sign of the vitality of the Agreement. Australia will become a full-fledged GPA party when necessary domestic ratification procedures are completed.

Currently, a total of nine other WTO Members are seeking to participate in the Agreement as full Parties. These include China, the Russian Federation, the former Yugoslav Republic of Macedonia, the Kyrgyz Republic and Tajikistan. 32 Members, including, most recently, Afghanistan, Brazil and Belarus, have obtained observer status under the Agreement, in order to learn more about it.

The CEECAC region is the leading area for new recruits to the GPA family. Within the region:

  • Four WTO Members (Armenia, Montenegro, the Republic of Moldova and Ukraine) have recently joined the Agreement; and
  • A further eight Members from the CEECAC region (Afghanistan, Albania, the former Yugoslav Republic of Macedonia, Georgia, Kazakhstan, the Kyrgyz Republic, the Russian Federation and Tajikistan) either have formally initiated accession proceedings or have taken commitments eventually to seek accession. In each case, GPA accession was or will be intertwined with important and far-reaching policy reforms.

Much of the focus this week will be on the benefits and challenges associated with becoming a GPA Party, and the accession process itself. For those of you who are already Parties, there will also be much to learn and to contribute. Indeed, I urge everyone present to consider that accession to the GPA is a beginning; not an endpoint. It requires continual attention to capacity building and implementation issues. Professionalization of the procurement workforce and securing the ongoing support of key stakeholders and related bodies, including senior political leaders; the supplier community; civil society; competition and anti-corruption agencies, are all crucial to success.

On behalf of my colleagues in the WTO Secretariat, we are ready and eager to support the countries of this region in their GPA accessions and implementation to the full extent that we can. We highly appreciate our partnership with EBRD in supporting the countries of this region. And, we salute the role that the Republic of Moldova is playing in hosting the workshop and sharing its relevant experiences – a very useful and appropriate role for the country as a dynamic WTO Member and recently acceded GPA Party.

I look forward to the proceedings.

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