Central Asia’s Ambassadors to the US discuss WTO membership

At the SAIS event

At the SAIS event

On 13 February 2013, the John’s Hopkins School of Advanced International Studies (SAIS) Central Asia-Caucasus Institute (CACI) held a panel event on the accession of the Central Asian countries to the WTO.  Ambassadors from Tajikistan, Uzbekistan, Kazakhstan and Kyrgyzstan were all present:

Kairat Umarov, ambassador of the Republic of Kazakhstan to the U.S.;

Muktar Djumaliev, ambassador of the Kyrgyz Republic to the U.S.;

Nuriddin Shamsov, ambassador of the Republic of Tajikistan to the U.S.;

llhom Nematov, ambassador of the Republic of Uzbekistan to the U.S.;

In addition, Mara Burr, deputy assistant U.S. trade representative for South and Central Asia in the Office of the U.S. Trade Representative; and Laurie Curry, director for Central Asia in the Office of the U.S. Trade Representative were also present to discuss their experiences with the technical and diplomatic negotiations with the accession process. Dr. Frederick Starr, the Chairman at CACI moderated the discussion.

Perhaps most the most interesting facet of this discussion was Ambassador Nematov of Uzbekistan’s defense of the country’s choice to abstain from the WTO accession process. Nematov stated that right now, it would do more harm than good for the country, particularly the agricultural and automotive sectors of the economy (he cited a USAID study that reached these conclusions that we would love to see if anyone can find it!). Recent GM foreign direct investment has helped grant the country incremental progress toward its stated goal of economic diversification away from cotton.  When pressed on this issue, Nematov stated that Uzbekistan did want to join the WTO for the sake of joining, but rather when they had more to gain from accession than lose. However, he repeatedly reassured the audience that Uzbekistan did value WTO membership and hoped to join at some point.

Kazakhstan echoed similar concerns about the cost of joining the WTO, but their ambassador approached the issue with political concerns being the primary reason for their lengthy accession negotiations – Kazakhstan submitted their application to join the WTO in 1996. Ambassador Umarov stated that while they hope to join the WTO in 2013, their current robust trade agreements and position as a “logistical hub” in Central Asia give them numerous interests that have created friction with accession requirements and slowed negotiations.  With an economy bolstered by significant hydrocarbon wealth and transit rents, Kazakhstan has preferred to dig their heels in against WTO. However, the ambassador stated they have submitted their protocols for multilateral discussion, and are looking forward to joining the WTO.  Umarov mentioned that Kazakhstan is increasingly hoping to develop a formula to harmonize tariff levels with its numerous trading partners to prevent line item-by-line item arguments from driving negotiations to a standstill.

Audience members turned the discussion about the costs and benefits of joining the WTO to Kyrgyzstan, which, according to Ambassador Djumaliev, had to expend political capital in their negotiations, particularly in the agricultural sector.  Farmers were incensed about new expensive requirements to meet international quality standards.  When asked if the benefits of joining the WTO outweighed the cost, he said yes because of the predictability of the business climate but, interestingly, that Kyrgyzstan was still hamstrung until its Central Asian neighbours joined the WTO. He attributed this to the large amount of trade Kyrgyzstan currently does with their neighbours.  Until all nations in the region are following the same multilateral agreements the benefits of WTO member status will not be realized.

As the newest member of the WTO, the ambassador from Tajikistan, Ambassador Nuriddin Shamsov, didn’t contribute to the cost/benefit analysis with respect to his country and instead simply outlined Tajikistan’s application achievements. Tajikistan applied for membership in 2001, and after 11 years of negotiations will be joining the WTO on 2 March 2013. Ambaddador Shamsov stated that he hoped the WTO would bring vitality to the energy industry, strengthen food security and help the country navigate the communications deadlock they are in.  Undoubtedly Tajikistan has taken keen notice of the successes and failures Kyrgyzstan faced in its own accession.  As a similarly small, landlocked, natural resource-poor mountainous nation, the Tajik experience is likely to strongly resemble that of its neighbour.

The USTR reps highlighted the importance of including Afghanistan in trade agreements and when thinking of Central Asia as a region. Due to the ongoing US conflict, Afghanistan (and Pakistan) are often lumped into their own region in casual discussion, ignoring the affect the country has on trade, both illicit and legal, and the benefits that the other Central Asian countries could enjoy should trade relations improve and the economy stabilize. Mara Burr emphasized this in her discussion of including Afghanistan in a trade investment framework agreement (TIFA) in the region – they now hold observer status of all council meetings for that TIFA. One thing Burr pointed out was the emphasis on women’s economic empowerment in 2011 and 2012. Laurie Curry, discussing the technical side and impacts of WTO accession (she is the director for Central Asia in the Office of the U.S. Trade Representative), gave context to this very high level discussion, examining the process of accession and how countries capitalize on membership.

Regarding the institutional impacts of WTO membership in general, the USTR reps also highlighted how smaller countries, once in, become dependent on WTO rules and norms.  Smaller nations depending more heavily on import/export flows are likely to become the greatest champions for rules enforcement and for bringing their trade partners into the Organization.  As Ambassador Djumaliev pointed out, Kygyzstan will not fully enjoy the benefits of member status until its trade partners and neighbours join and are forced to play by the same rules.  Involvement in WTO proceedings also gives countries a seat at the table for discussion and negotiations of importance for their economies.  Finally, Laurie Curry stressed that WTO membership is a sign that a country has received an international “stamp of approval” and is “open for business”.

Many thanks to CACI for organizing the event.

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