WTO Membership Could Obstruct Kyrgyz Regional Integration

Kyrgyzstan’s membership of the World Trade Organisation could hinder it from joining a customs union that former Soviet states are expected to set up next year, NBCentralAsia analysts believe.



Belarussian prime minister Sergei Sidorskiy told a meeting of the interstate council of the Eurasian Economic Community, Eurasec, held in Moscow on October 27, that preparations for the customs union could be completed by July 2007.



Eurasec was set up in 2000 with the goal of creating an economic community with a common market, uniform trade tariffs, and no customs boundaries. The grouping has six members – Russia, Belarus, Kazakstan, Kyrgyzstan, Tajikistan - while Uzbekistan, Ukraine, Armenia and Moldova have observer status.



Of these countries, only Belarus, Kazakstan and Russia have fully signed up to the customs union. For the moment, Kyrgyzstan, Tajikistan and Uzbekistan wish to have observer status only.



Political scientist Marat Kazakpaev is convinced that Kyrgyzstan would reap benefits if it too joined the customs union, because this would allow imports to come into the country with fewer hindrances and create a more competitive domestic market, while Kyrgyz exports could be sold at lower prices in the other Eurasec countries.



However, one complicating factor is the fact that Kyrgyzstan is already a member of the World Trade Organisation, WTO, which it joined in 1998.



According to Erkinbek Alymbekov, deputy speaker of the country’s parliament, Kyrgyzstan’s WTO status may put a brake on its relations with other Eurasec members. “Kyrgyzstan has conditions it must fulfil as a WTO member, while Eurasec will impose conditions of its own,” he said, adding that a balance must be found between these differing sets of obligations.



At the same time, Kyrgyzstan also needs to protect its domestic producers and ensure they are able to compete, Alymbekov said.



WTO membership is not the only pitfall that Kyrgyzstan could face. NBCentralAsia commentators say the role of Uzbekistan is crucial to whether the Kyrgyz could benefit from joining the customs union. This bigger neighbour of Kyrgyzstan only joined Eurasec in January 2006 after years of pursuing an isolationist policy, and analysts say the Kyrgyz-Uzbek relationship is still troubled.



Atay Namatbaev, an analyst with the Politics, Religion and Security think-tank, told NBCentralAsia, “I doubt that many of the traditional barriers with Uzbekistan will be broken down by the Customs Union. Uzbekistan is de facto a closed country, especially after the Andijan events [May 2005 violence]. If it is to be effective, integration presupposes openness and the free movement of goods.”



Kazakpaev highlighted the gulf between Kyrgyzstan and Uzbekistan, saying, “These are two different infrastructures, each with its own kind of market economy and political system.”



“It is political factors that hinder Uzbekistan from forging bilateral economic links not just with Kyrgyzstan, but also with Kazakstan and the other Eurasec members,” he said.



(News Briefing Central Asia draws comment and analysis from a broad range of political observers across the region.)