WTO Trade Policy Review of Moldova
Statement of the U.S. Representative
October 19, 2015
As delivered by Ambassador Michael Punke
Thank you, Chair. I would like to join others in welcoming Deputy Minister Calmac and his distinguished delegation to Geneva for Moldova’s first Trade Policy Review. In addition, I would like to thank Moldova and the Secretariat for their work in compiling the helpful reports on trade policy developments in Moldova since it became a WTO Member in 2001.
Moldova’s economy faces many external and internal challenges including geopolitical pressures in its region and a loss of 15 percent GDP due to a billion dollar banking crisis. It has few natural resources and a relatively small economy. GDP per capita is one of the lowest in Europe, and it relies heavily on remittances from abroad.
Notwithstanding those challenges, since its independence in 1991, Moldova has been on a path of trade and economic liberalization, moving from a centrally-planned economy toward a market-driven economy. A critical step in that progression was Moldova’s WTO accession in 2001. The Republic of Moldova has continued its support for the WTO principles, for example, by recently completing the negotiations to join the Government Procurement Agreement – for which we congratulate Moldova. In addition, we were pleased to read that the Republic of Moldova continues to support the multilateral trading system and also endorses the Bali Package and the WTO Agreement on Trade Facilitation.
Changes to Moldova’s trade and investment regime have also been driven by its desire to join the European Union. The United States supports Moldova’s pro-EU integration agenda. We believe that the implementation of the commitments in the EU Association Agreement, including provisions of the Deep and Comprehensive Free Trade Agreement, applied consistently with WTO rules, will bring results such as increased transparency, reduced corruption, and improved rule of law to Moldova – goals that underscore the core principals of the WTO. Attaining these objectives should improve Moldova’s overall trade and investment environment.
The United States is working to support Moldova’s economic revitalization through our bilateral trade relationship. In a year when Moldova lost access to some of its traditional markets, we have worked to expand the country’s competitiveness on the U.S. market. Two recent reverse trade missions to the United States for Moldovan wine producers exemplify our mutual efforts.
While we see great potential in Moldova, significant structural reforms are needed to combat still prevalent corruption, and, in particular, address the crisis in the banking sector. Many of the questions we pose today reflect our desire to encourage Moldova to increase transparency and predictability in its business sector in order to attract much needed commercial engagement and foreign investment.
For example, we seek additional information on the sorts of entities subject to privatization. We support Moldova’s goal of increased energy efficiency and would like further details. Similarly, there appears to be some inconsistency in Moldova’s treatment of branching in commercial establishment that should be addressed to ensure it is fully implementing its Mode 4 GATS commitments.
Reducing tariffs has been a core objective of this organization dating back to its GATT origins, yet both the Secretariat’s and the Government’s Reports indicate that Moldova’s applied rates have increased over the period of review. Moreover, some of Moldova’s applied rates exceed their bound rates – in one case by as much as 22 percent. We find this trend quite troubling. In addition, there are questions about the application of other duties and charges being applied at the border that may be discriminating against imports.
We are also concerned about “behind the border” restrictions, and note with interest the Secretariat’s Report’s discussions of TBT and SPS measures. We hope that Moldova will not use its conformity assessment procedures or its SPS border inspections as a veiled barriers to imports. The Secretariat’s Report identifies some other areas of concern for hidden protectionism – for example in the administration of Moldova’s Free Economic Zones, the provision of certain incentives provided to investors and its regulation of “socially important products”.
The United States has always advocated for strong intellectual property protection as critical to creating a business-friendly economy. We believe that Moldova, in general, has a strong regime for protecting and enforcing of IPR, and that the regime will improve with implementation of the terms of the DCFTA. However, we encourage Moldova to take steps to strengthen its enforcement of IPR.
All told, Moldova is playing with a difficult hand, but we congratulate Moldova for its commitment to pursuing an open trade and investment regime. We believe that its continued move toward integration with the EU, and continued adherence to the rules and principles of the WTO, will bring Moldova a brighter future. We hope that this discussion today will encourage Moldova’s continuation of those policies and we look forward to continuing our work with Moldova to achieve those goals.