Interlinkages between Trade and Sustainable Development: Launch of Bridges Russian Edition

1. Interlinkages between Trade and Sustainable Development: Launch of Bridges Russian Edition The International Centre for Trade and Sustainable Development (ICTSD) and ECO‐Accord Experience of the Kyrgyz Republic

2. Interlinkages between Trade and Sustainable Development:Launch of Bridges Russian Edition • are there any effects (positive or negative) of WTO accession for Kyrgyzstan; • lessons learned from accession process; • what are critical issues for Kyrgyzstan on Doha round negotiations? (your position, activity of RAM coalition).

3. 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

4. Main export and import items Export: • precious metals • gold • electric power • agriculture goods • electric appliances • textile Import: • fuel and energy resources • equipment • chemicals • consumer goods • transport means

5. 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.

6. 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.

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

8. Main trade partners in 2006 : Export Kazakhstan United Arabic Emirates 12,1% 26,3% Canada Russia 5,9% 19,2% USA Uzbekistan 0,4% 2,0% Turkey China Germany 2,4% 5,5% 0,4%

9. Main trade partners in 2006 : Import Germany USA United Arabic Emirates Canada 5,6% 4,7% 0,8% 1,3% Turkey Kazakhstan 3,5% 21,6% China 8,5% Russia Uzbekistan 31,2% 5,5%

10. Development of Kyrgyzstan’s Trade of Services

11. Attraction of Foreign Investment to Kyrgyzstan

12. Customs tariff movement since 2000(position points)

13. Income of Customs duties

14. 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.

15. 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.

16. 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

17. 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.

18. 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.

19. 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.

20. 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.

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