Interlinkages between Trade and Interlinkages between Trade and Sustainable Development:Sustainable Development:

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The International Centre for Trade and Sustainable Development (ICTSD) and

ECO‐Accord

Experience Experience

of the Kyrgyz Republicof the Kyrgyz Republic

Interlinkages between Trade and Sustainable Interlinkages between Trade and Sustainable Development:Development:

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1. are there any effects (positive or negative) of WTO accession for Kyrgyzstan;

2. lessons learned from accession process;

3. what are critical issues for Kyrgyzstan on Doha round negotiations? (your position, activity of RAM coalition).

 

The Kyrgyz Republic is located in the heart of Asia

Cross road beetwen Europe and Asia

Strategic location between China, India, Persian Gulf countries, Russia and Kazakhstan

About 94% of the territory is mountain ranges

Main export and import itemsMain export and import items

Export:Export: precious metals gold electric power agriculture goods electric appliances textile

Import:Import: fuel and energy resources equipment chemicals consumer goods transport means

The main obstacles in accession process to the WTO.

• Complexity of conducting bilateral negotiations on tariffs and obligations on accession to the market of services;

• Lack of local specialists with sufficient knowledge on International Trade;

• The interdepartmental bureaucratic barriers hindering the quick acceptance of the coordinated decisions;

• Limit of financial resources in the republic required for participation of the delegation in the meetings of Working Parties and bilateral negotiations on accession of Kyrgyzstan in Geneva.

Prerequisites of Kyrgyzstan's accession to the WTO

• Improvement of existing conditions for access of Kyrgyzstan's products to foreign markets and provision of non-discriminatory treatment for Kyrgyzstan's exporters;

• Access to the international dispute settlement mechanism;

• Creation of a more favorable climate for foreign investments as a result of change in legal system in accordance with the WTO standards;

• Creation of conditions for growth of domestic production’ quality and competitiveness as a result of increased flows of foreign goods, services and investments to the Kyrgyzstan's market;

• Participation in negotiations on the international trade agreements for the benefit of the national interests.

•

Development of Kyrgyzstan’s Trade of Development of Kyrgyzstan’s Trade of Goods to Countries-members of WTOGoods to Countries-members of WTO

0

50100

150

200

250300

350

400450

500

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

Export

Import

Main trade partners inMain trade partners in 2002006 6 ::

Export

Germany0,4%

United Arabic Emirates

26,3%

USA0,4%

Canada5,9%

Turkey2,4%

China5,5%

Uzbekistan2,0%

Russia19,2%

Kazakhstan12,1%

Main trade partners inMain trade partners in 200 2006 6 ::

Import

Canada1,3%

United Arabic Emirates

0,8%

USA

4,7%

Germany5,6%

China8,5%

Turkey3,5%

Uzbekistan5,5%

Kazakhstan21,6%

Russia31,2%

Development of Kyrgyzstan’s Trade of Development of Kyrgyzstan’s Trade of Services Services

0

50100

150

200

250300

350

400450

500

1998 1999 2000 2001 2002 2003 2004 2005 2006

Export

Import

Attraction of Foreign Investment to Attraction of Foreign Investment to Kyrgyzstan Kyrgyzstan

direct investment

0

50

100

150

200

250

2001 2002 2003 2004 2005 2006

investment

Customs tariff movement since 2000Customs tariff movement since 2000 (position points)(position points)

5488 5475 55974482 4783 4811

14421416123 136 1459

406740944017456044684588

345343271596 255

332 332

486155 155

0

2000

4000

6000

8000

10000

12000

2000 2001 2002 2003 2004 2005

20%17,5%15%12%10%5%0%

Income of Customs dutiesIncome of Customs duties

269,13 296,95

413,4 418,5 441,8505,1

0

100

200

300

400

500

600

2000 2001 2002 2003 2004 2005

mln

.Som

Conclusion• Economy of Kyrgyzstan is stable in structure. The international financial institutions and

donors agree that economic situation in Kyrgyzstan is good and see prospects for further growth

• This analyses of Kyrgyzstan's economy shows, that the WTO membership does not guarantee to bring immediate benefits.

• However, the situation may change after the accession of its main trading partners (Russia Kazakhstan and Uzbekistan)

• The membership in the WTO of this countries will allow promote trade relations on WTO MFN based rules (transit issues is important for Kyrgyzstan)

• On the other hand, one could assert, that Kyrgyzstan achieved the important political and economic advantages, being the participant of multilateral trading system.

• Participation in this organization gives long-term advantages.

• Membership in the WTO is a support, but not a guarantee, for the expansion of export, fast industrialization and development or high levels of economic growth and unconditional growth of direct investments.

• The most part of economic influence may be observed only in the long-run.

Conclusion

Some benefits accrued by Kyrgyzstan from the WTO membership is its role in the international political and economic arena to be influenced in global rule making process of multilateral trading system.

Formula

The following formula shall apply on a line-by-line basis:

• where,•• t1= Final bound rate of duty• t0= Base rate of duty • a = [8-9] = Coefficient for developed Members• b = [19-23] = Coefficient for developing Members

0

01 b)or (a

b)or (a tt

t

Main issues of NAMA negotiations

• to reduce or as appropriate eliminate tariffs• reduction or elimination of tariff peaks,

high tariff non-tariff barriers, • Product coverage shall be comprehensive

and without a priori exclusions.

Current situation for RAM countries on NAMA negotiations

• there is a consensus that Moldova, the Kyrgyz Republic and Armenia should not be required to undertake tariff reductions in this Round, particularly in light of their economic circumstances.

• Former Yugoslav Republic of Macedonia, Saudi Arabia and Viet Nam should be excused from further market access commitments, in view of their very recent accession and the depth of their market access commitments.

Small, Vulnerable Economies• Those Members having a share of less than 0.1 percent of world

NAMA trade for the reference period of 1999 to 2001 may apply the following modality of tariff reduction instead of the formula

• (a) Members with a bound tariff average of non-agricultural tariff lines:[1]

• (i) at or above 50 percent shall bind all their non-agricultural tariff lines at an average level that does not exceed an overall average of 22 percent;

• (ii) at or above 30 percent but below 50 percent shall bind all their non-agricultural tariff lines at an average level that does not exceed an overall average of 18 percent; and

• (iii) below 30 percent shall bind all their non-agricultural tariff lines at an average level that does not exceed an overall average 14 percent.

•

Main issues in Agriculture negotiations

Where the base level of Overall Trade-Distorting Domestic Support is greater than US$60 billion, or the equivalent in the monetary terms in which the binding is expressed, the reduction shall be [75][85] per cent;

Where the base level of Overall Trade-Distorting Domestic Support is greater than US$10 billion and less than or equal to US$60 billion, or the equivalents in the monetary terms in which the binding is expressed, the reduction shall be [66][73] per cent;

Where the base level of Overall Trade-Distorting Domestic Support is less than or equal to US$10 billion, or the equivalent in the monetary terms in which the binding is expressed, the rate of reduction shall be [50][60] per cent.

Position of Kyrgyzstan

• Small low-income, recently acceded Members with economies in transition shall not be required to undertake reductions in bound duties