The World Trade Organization has approved terms for Kazakhstan to join, paving the way for Central Asia’s leading economy to become a full member toward the end of the year after nearly two decades of “challenging” talks.
Speaking in Geneva after signing the accession protocol with WTO Director-General Roberto Azevedo on July 27, President Nursultan Nazarbayev hailed the imminent accession as a sign that Kazakhstan’s economy is opening up to the world.
“In improving the investment climate, we are giving priority to the diversification of our economy,” he said in remarks quoted by state news agency Kazinform.
Astana sees accession as crucial to its bid to wean Kazakhstan’s economy off its dependence on oil and gas. To that end, Nazarbayev reminded investors that Kazakhstan has devised perks for those putting money into the non-extractive sectors.
The government has indicated that it aims to complete the ratification process by October 31 and hopes Kazakhstan will be a full member once the next WTO ministerial conference comes around in mid-December.
Kazakhstan’s accession negotiations have lasted 19 years and been among the most “challenging” the global body has faced with any country, the WTO said in a statement issued when talks were finally completed last month.
It made it clear that the process had been substantially set back by Kazakhstan joining the Russia-led Customs Union (a regional free trade zone) in 2010, which evolved into the Eurasian Economic Union (EEU) this year.
Kazakhstan’s accession process slowed after Russia first said the Customs Union members would negotiate as a bloc to join, before proceeding to join alone in 2012.
The “principal hurdle” in finalizing Kazakhstan’s accession talks had been tariff adjustment aimed at “resolving discrepancies between bilateral market access agreements negotiated by Kazakhstan with WTO members, Russia’s schedule of commitments and the common external tariff of the [EEU],” the WTO said.
Kazakhstan eventually agreed to lower tariffs, which were set at an average of 6.1 percent (7.6 percent for agricultural products and 5.9 percent for nonagricultural products). Astana fought tooth and nail to get higher rates for agricultural products to maintain competitiveness for local producers in a sector which contributes some 5 percent of GDP and employs around a quarter of the workforce.
Many of the rates to which Kazakhstan has agreed are lower than those of the EEU, the European Commission explained in a memorandum earlier this month. Under its WTO accession terms, Kazakhstan will gradually discontinue the exemptions on which the lower tariffs are based and eventually align rates with those of the European Union, it said.
Kazakhstan had “taken a broad range of commitments to open up its trade regime in the areas of tariffs, export duties and services,” the European Commission said.
With some Russian observers fretting that Kazakhstan’s WTO accession will dilute its strong economic ties to Moscow, Nazarbayev used the occasion to offer tacit diplomatic support to sanctions-hit Russia, through general remarks criticizing the use of sanctions. “Sanctions policy confuses the economy with politics, hinders trade and is out of line with WTO principles,” he said.
Joanna Lillis is a journalist based in Almaty and author of Dark Shadows: Inside the Secret World of Kazakhstan.
Sign up for Eurasianet's free weekly newsletter. Support Eurasianet: Help keep our journalism open to all, and influenced by none.