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U.S. Statement on the Trade Policy Review of the Kyrgyz Republic
November 21, 2013

Statement by U.S. Mission to the World Trade Organization Attaché Quentin Baird

19 November 2013


The United States welcomes the participation of the delegation of the Kyrgyz Republic, headed by Mr. Temir Sariev, Minister of Economy, in this review of the government’s trade policies and practices.  We are grateful for the valuable work produced by both the WTO Secretariat and the government of the Kyrgyz Republic.  Each of the reports has helped to inform our consideration of Kyrgyz Republic’s trade and investment policies at an interesting juncture in its economic development.  I would also like to thank our discussant, Ambassador Selim Kuneralop (Turkey), for his valuable contributions to this review.

In 1998, the Kyrgyz Republic was the first country from the CIS to accede to the WTO.  Since then, it has established itself as an important member of the WTO community, by contributing to WTO committee work and negotiations, in particular, on WTO accession negotiations.  WTO Membership, in turn, has been a central tenant of the Kyrgyz Republic’s economic reforms and global strategy to diversify its trade to numerous trading partners and to act as a bridge between regions and larger economies.  The Kyrgyz Republic has integrated itself into the global value chain of production, particularly in the textiles sector.

According to the report by the Government of Kyrgyzstan  “…accession to the WTO has facilitated ensuring the freedom of trade to national businessmen, thus it has opened access to both foreign and domestic markets and created the competitive environment for domestic producers.  The fundamentals for a safe and predictable trading regime have been established, the geography of trade has expanded, and the foreign trade profile has changed.”  As the Secretariat’s report explains, the Kyrgyz Republic’s merchandise trade more than doubled during 2006-2012.   Despite challenges such as underdeveloped infrastructure and vulnerability to commodity price swings, the Kyrgyz Republic doubled its GDP per capita in that same period.

Chair, we would like to commend the Kyrgyz Republic for several policy changes it has made to facilitate trade. For example, it has introduced paperless trade at customs.  Expediting customs clearance at the border is essential to helping ease some of the challenges of being a landlocked country.  We would also like to commend the Kyrgyz Republic for maintaining a flexible exchange rate regime, especially considering other examples in the region where exchange rate and currency conversion policies form a major barrier to imports.

Several of the questions that we submitted in writing for this Trade Policy Review relate to the process by which the Kyrgyz Republic may join the customs union with the Russian Federation, Kazakhstan, and Belarus.  We seek a clearer understanding of what the impact of that process will be on the Kyrgyz Republic’s foreign trade policy.  We seek information on how it will ensure that the process of adopting customs union tariffs complies with WTO provisions related to tariffs and the formation of a customs union.  We note with great concern the Secretariat’s assessment that nearly 50 percent of Kyrgyz Republic’s bound tariffs do not align with the Customs Union and would require re-negotiation and compensation to WTO Members.

We also want to ensure that in the process of adopting customs union rules and procedures, that the Kyrgyz Republic maintains WTO compliant legislation and implementing rules in key areas such as SPS.   It is further important, in that regard, that the Kyrgyz Republic finally establish its SPS inquiry point.

We also have some concerns about several existing compliance issues in the Kyrgyz Republic’s current trade policy.  We are concerned that the Kyrgyz Republic is currently exceeding its bindings on certain products, including on certain auto parts, machinery, alcohol and juices.  We also see that notifications are long overdue in numerous areas.  Notifications remain a central way for WTO Members to understand and monitor developments in one another’s trade policy.  We would like to urge the Kyrgyz Republic to accelerate its negotiations to join the Government Procurement Agreement.  And finally, we are closely watching developments in the financial services sector related to electronic payments to ensure foreign operators’ activities are not constrained.

Chair, the United States and the Kyrgyz Republic enjoy a close friendship and partnership across a range of issues based on shared values and principles.  Our governments regularly consult with each other on issues of mutual importance and both of us recognize the value of continued cooperation on such issues, including international trade.   Last week, in fact, our two governments met in Ashgabat, Turkmenistan as part of the U.S. – Central Asia Trade and Investment Framework Agreement meetings.  We discussed with our Kyrgyz counterparts ways to work on regional trade issues as well as to enhance and deepen our bilateral trade relations.  The United States has a bilateral investment treaty with the Kyrgyz Republic and provides generalized system of preferences benefits to its traders.

The United States provides various forms of technical assistance and foreign assistance to help the Kyrgyz Government and economic operators in the Kyrgyz Republic to further develop the economy and to take advantage of trade opportunities.  The U.S. Department of Commerce’s Commercial Law Development Program has provided the Kyrgyz Republic with assistance on customs, government procurement procedures, and the adjudication of intellectual property rights.  USAID assists the Kyrgyz Government in the implementation of its economic policy reform agenda to promote business development, economic growth, and job creation. It is working in the areas of trade, agricultural development and food security, development of energy sector infrastructure, among other areas.

In closing, Chair, I would like to emphasize that the Kyrgyz Republic is a valued partner of the United States, and that our cooperation in the WTO is a key element of our partnership.  We look forward to working closely with the Kyrgyz Republic and our WTO partners to strengthen and build on the WTO’s rules-based system.  We thank the Kyrgyz delegation for its attention to our questions and for its active participation in this review.

Thank you.