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We are joining the WTO: is it good or bad?

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Within two hours at the National Chamber of Entrepreneurs of Kazakhstan "Atameken" was held the "round table", at which the Minister of Economic Integration Zhanar Aitzhanova explained in detail to domestic businessmen conditions of Kazakhstan's accession to the WTO.

Anticipating the question that recently is often heard in the Kazakh society, why talks lasted so long (19 years!), the Minister explained that "more important were not the terms, but conditions" under which the Republic of Kazakhstan will enter the global trading club. However, she has repeatedly stressed that negotiations on some positions were sometimes quite difficult. By the way, as noted Zhanar Aitzhanova negotiations with our country have arose interest among the other members of the organization, which was caused by the fact that in 2010 Kazakhstan has became one of the Parties of the Customs Union, on January 1, 2012 - participant of the Single Economic Space, and from January 1, 2015 - a member of the Eurasian Economic Union.

As it was noted by the Minister for Economic Integration of Kazakhstan, negotiations were held on the 4th key areas: on systemic issues, agriculture, market access for goods and services.

"In the framework of negotiations on systemic basis were discussed issues of the draft working report on Kazakhstan's accession to the WTO, as: monetary policy, technical regulation, pricing, customs and tariff and non-tariff policy, administration, the protection of intellectual property rights", - commented Zhanar Aitzhanova.

So what has been achieved by the Kazakh side during the long negotiations with WTO members?

As it was noted by the Minister for Economic Integration, the most difficult were the negotiations on agricultural support, but the highest priority for Kazakhstan, because, she said, more than 40 percent of our population lives in rural areas.

"In the end we got the right to subsidize the agriculture sector in the amount of 8.5 percent of gross agricultural output without reference to the product, as well as 8.5 percent of the total cost of production of a particular agricultural product in the so-called "amber box", that is, provide those forms of government subsidies, which have a direct impact on the final price of agricultural products. At the same time support measures aimed at institutional development of industry and infrastructure construction in rural areas can be made available without restrictions in the framework of the so-called "green box", - said in the conclusion Zhanar Aitzhanova. According to her, among the countries that are not least developed countries, only Kazakhstan and China, which joined the WTO in 2001, made possible support within the "amber box" at a rate of 8.5 percent. For example, the Russian Federation has received 5 percent.

It is important to note that, in accordance with WTO rules and obligations assumed, Kazakhstan will not provide transport (export) subsidies to grain producers.

"Ministry of Agriculture in the existing subsidy programs through development institutions as JSC NMH "KazAgro" provides interest rate subsidies for the construction of grain silos. In addition, the diversification of crops is being stimulated”, - explained Zhanar Aitzhanova.

VAT exemption for domestic farmers and agricultural processors must be removed before January 1, 2018. In this regard there will be developed alternative measures to support agricultural enterprises, legitimate from the point of view of WTO rules.

The head of the negotiating delegation reported that Kazakhstan has agreed to a transitional period until 1 January 2017 for the abolition of benefits under the SEZ and free warehouses. She noted that these conditions were discussed during the signing of the EAEU Treaty. According to her, this time is enough for our country to make alternative, legitimate from the point of view of the WTO, forms of state support for the residents of SEZ and free warehouses, which operate in this mode, and receive preferential treatment.

"In accordance with the assumed obligations, the customs exemptions for the SEZ participants and owners of free warehouses in Kazakhstan, registered before 1 January 2012, will end on January 1, 2017.

Tariff concessions that apply to existing agreements of industrial assembly in the automotive industry, must be removed before July 1, 2018", - concluded Zhanar Aitzhanova.

With the accession to the WTO will be prohibited all subsidies related to export promotion and import substitution.

According to her, quite long and difficult were negotiations on the local content in the procurement of subsoil users.

The Kazakh content requirements on preferences conflict with WTO rules that appear in the form of conditional discounts when purchasing Kazakhstani goods. "In services, we reserve the right to apply the practice of the Kazakh content" - added the Minister for Economic Integration.

The requirements of local content in the procurement of quasi-public sector for the purpose of commercial resale or their use for the production of goods and provision of services for commercial sale will be canceled from the date of entry into the WTO, because it is contrary to the rules of the WTO and WTO practice, there were no precedents.

Zhanar Aitzhanova noted that Kazakhstan will take over the obligation on 10 service sectors, including the 112 sub-sectors (155 subsectors, stipulated by WTO  classification), including telecommunications, insurance, banking, transport, tourism, trade and others.

Kazakhstan also took the obligation to ensure compliance with the technical regulation system, as well as sanitary, veterinary and phytosanitary regulations, the rules of the WTO.

Zhanar Aytzhanova also noted that despite the abolition of certain benefits in certain areas, the Government intends to continue to work together with NCE "Atameken" and the business community to develop legitimate alternative measures of support allowed the WTO from a legal point of view.

Representatives of the business community welcomed the agreement in the framework of joining the World Trade Organization and thanked the minister for the work done.

Zhanar Aytzhanova also answered questions of the domestic business community.

As it was noted by the deputy chairman of the NCE RK "Atameken" Rakhim Oshakbayev, the text of the Treaty on Accession to the WTO in the Kazakh and Russian languages ​​will soon be posted on the website of the Chamber - www.palata.kz.


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