In December 1998, the Kyrgyz Republic became the first, and remains the only, country of Central Asia to join the World Trade Organization (WTO). Given time to bring its trade regime and regulatory climate into compliance with international norms, the Kyrgyz Republic has worked diligently to live up to the special dispensation awarded by allowing it to join in 1998. While neighbors make varying degrees of progress on the road to accession, the Kyrgyz Republic has committed itself to free trade, necessary for a country whose value of trade in goods is more than 67% of GDP and which shares a long border with China.
The path to WTO compliance is not an easy one, especially for a country still transitioning from the excessive industrial control of the Soviet command economy. But, to fully realize the benefits of membership in the multilateral trading system, the government has made a determined effort to work effectively within the agreed framework and to muster proper institutional and human resource structures to form compliant commercial policy to benefit the business community.
At the request of Government of the Kyrgyz Republic, USAID TFI began direct post-accession WTO consultation and assistance in July 2001. The initial focus was on development of the governmental structure responsible for performance of WTO obligations, managing effective interaction with WTO bodies, and conducting meaningful dialogue with representatives of the business community regarding WTO commitments and economic policy. Since 2001, the Kyrgyz Republic has made steady progress on the road to meeting its obligations.
USAID TFI provides on-going support and consultation to the WTO Department. According to Ms. Rakhmanova, Head of Department on Internal Economic Relations, Trade and WTO issues of the Ministry of Economic Development, Industry and Trade of the Kyrgyz Republic: “It is a great pleasure to work with the Project since the beginning of our cooperation, which is the process of accession of Kyrgyzstan to the WTO. The professionalism of USAID TFI team, its competence, and devotion to a common goal is endorsed by our successful work. For sure such cooperation should be continued and expanded.”
Recently, based on the recommendations of USAID TFI, the Kyrgyz Republic reenergized the WTO Inter-Ministerial Commission (IMC), which is composed of representatives of all ministries and whose responsibilities include coordination of WTO compliance by state bodies, definition and reduction of barriers to trade, and elimination of areas of non-compliance with WTO requirements. Originally, representatives of the business community were allowed to participate in the Inter-Ministerial Commission as observers. But, based on USAID TFI recommendations, in September 2004, the IMC governing regulation was reissued, allowing, for the first time, full membership by business representatives, including representatives of the Association of Exporters, the Chamber of Commerce and Industry, the Congress of Business Associations and the Union of Entrepreneurs. The direct involvement of the business community will further enhance the coordination work of the IMC as it strives to effectively form commercial policy, reduce barriers to trade, enhance WTO compliance and take full advantage of WTO membership.
But WTO membership and compliance is about more than a single group coordinating and overseeing commitments. A complete rethinking of laws and regulations is necessary to avoid the enactment of non-compliant legislation that may subject the Kyrgyz Republic to potential WTO dispute settlement procedures and possible trade sanctions. Part of the legislative and regulatory process is the review by the WTO Department within the Government of draft regulations and laws. In October 2005 the Parliament sent a law to the President restricting the importation of salt. While there may have been a legitimate health basis for the law, the law was a barrier to trade that required compliance with WTO procedures.
Before signing, the President sent the law for WTO Department comment. On the basis of the analysis that the law was a prohibited barrier to trade, supported by USAID TFI, the President did not sign it, but returned it to Parliament for further consideration in compliance with WTO. This demonstration of increased concern for WTO principles and provisions demonstrates that the Kyrgyz Republic is committed to compliance and progressing down to road to full adherence to the multilateral agreement.
Although there is a great deal of work that remains to be completed in the Kyrgyz Republic , the country is setting the pace for Central Asia for trade openness and membership in the international trading community.