Kazakhstan Faces WTO Hurdles

On July 23, 2013, WTO members welcomed progress in agriculture on Kazakhstan’s accession negotiations but expressed serious concerns about the absence of inputs and progress in other areas critical to the country’s accession to the WTO.

Although there is support from WTO members for the conclusion of the accession of Kazakhstan, serious systemic concerns remain on a range of questions regarding the country’s foreign trade regime and market access. At the current rate of progress, it is unlikely that the accession will be on the agenda of the Ninth Ministerial Conference in Bali in December 2013.

The main stumbling blocks concern tariff adjustment, regulations and practices governing sanitary and phytosanitary (SPS) measures, and WTO-inconsistent trade-related investment measures (TRIMS), including those embedded in state-owned enterprises. A range of other technical issues remain outstanding.

Tariff adjustment involves resolving discrepancies between bilateral market access agreements negotiated by Kazakhstan with WTO members, Russia’s schedule of commitments and the common external tariff of the customs union of Belarus, Russia and Kazakhstan. WTO members have reacted negatively to the methodology for adjustment proposed. This has emerged as the principal hurdle in completing Kazakhstan’s market access negotiations.

A range of other questions still to be resolved relate to state-owned enterprises, tariff rate quota volumes and administration, export duties, discriminatory VAT preferences, technical regulations, and trade-related investment measures.

A positive development was the Agriculture Plurilateral Meeting, chaired by the WTO Secretariat. In its revised proposal on agriculture, to be confirmed within an overall accession package, Kazakhstan committed to bind export subsidies at zero upon accession and to review “downwards” its trade-distorting aggregate measurement of support (AMS).

Minister Zhanar Aitzhanova, Kazakhstan’s Minister for Economic Integration, re-affirmed the country's commitment to conclude its accession by the Ninth Ministerial Conference and promised to intensify negotiations.

The date of the next meeting of the Working Party depends on the submission of required technical inputs on the outstanding negotiating issues.

August 6, 2013

                Source: Tax news