Azerbaijan coming closer to WTO

Analysis Materials 15 August 2006 12:05 (UTC +04:00)

One of surprising manifestation of the past few years is an unusual survival of discussions over problems linked with Azerbaijans possible entrance to the World Trade Organization (WTO). There are more important issues like terror, unemployment, loss of scientific-technical potential, boundless corruption, mass poverty. They all could be expected to push the issue on membership at the WTO to the periphery of public mind. However, the issue on entrance to the WTO is on focus of business community, scientific institutions and even in people. The abbreviation WTO is as cognate as the GDP (Gross Domestic Product).

Today the organization unites 150 world countries with exact legal system, which as basis for international goods turnover. For the time being Azerbaijan is not a member of the WTO, but continuous preparations for the entrance to the organization is underway. The improvement of the legislation, its adjustment to the international standards and agreement within the framework of the WTO has been set up. The Azerbaijani President issued a decree on 2 August for the implementation of an action plan on the imprint of the Azerbaijani legislation. The Head of negotiation group on the WTO, Deputy Foreign Minister Mahmud Mammadguliyev, this is a serious step to activate and strengthen the work in the direction of review, revision, injection of change and supplements to the legislative acts, which is the task set for Azerbaijan by the WO member-states. Firstly, it will give impetus to the negotiations on Azerbaijans entrance to the WTO. On the other hand, the country needs to continue successfully the economic refor
ms, he underlined. In accordance with the action plan on injection of changes into the legislation must be implemented in 2007. It conditions the completion of talks on entrance to WTO.

Trade regime in Azerbaijan is one of the major issues in the negotiations on entrance of Azerbaijan to the WTO, which has also found its reflection in questions put forward to Azerbaijan by the member-states. They concern the licensing, customs procedures, and they are most of all interested in the changes which the Azerbaijani government will inject into the legislation in respect to foreign trade and terms of injection.

The State Commission on Preparation for Joining the World Trade Organization (WTO) is to send answers on questions put by member-countries of this organization to the WTO Secretariat in Geneva till the end of August beginning of September, the Head of Group negotiated with WTO, Deputy Foreign Minister Makhmud Mammadguliyev said.

The preparation of proposals is underway in accordance with the plan. As soon as the proposals are approved by the Commission, they will be submitted to the WTO Secretariat to prepare the basic report of Factorial Summary. That will include the information about Azerbaijan`s activity over this period. The report will be the basis for preparation of other documents in future, including the final report concerning Azerbaijan.

The preliminary document is to be agreed with the working group till the fifth round of talks on Azerbaijan`s joining WTO that is to be held at the end of October November 2006. The countries, which members are parts of the working group should express their opinion towards the report. It should be mentioned that it is for the first time over the whole history of talks when two meetings at once will be held in a year, pointed out the Deputy Minister.

Azerbaijan has hold four meetings with WTO until now. The first two meetings were devoted to discussing of foreign trade regime issues. Since 2005 during the last two meetings the country has begun full-scale negotiations. The bilateral negotiations are aimed at issues connected with goods and services access to Azerbaijan market, the multilateral talks are aimed at internal support of agriculture and export subsidies in this field.

The United States and Canada are first of all interested in licensing, tariff policy, custom legislation, intellectual property rights issues. WTO member-states want to make it clear for themselves how much Azerbaijan tariff policy is liberal and transparent and how it corresponds with the todays requirements. By the WTO request a unified regime for import and local goods and services to be introduced in Azerbaijan.

After membership at the WTO Azerbaijan will become m ore attractive for investments in the non-raw industrial production. Big foreign companies will consider the membership at the WTO as a guarantee for presence of major international business standards, such as protection of patent and intellectual ownership, in the country. Moreover, in-flow pf investments will depend on other factors, including the inviolability of private ownership, independence of legal system and transparency of tax system.

Azerbaijan is interested in the admission to the organization as a developing country, as this status envisages 10%-privilege in subsidizing the national agriculture. The WTO offers Azerbaijan to cut customs duties for import and definition of their size after entrance to the organization. Azerbaijan applies liberal customs duties not exceeding 15%. At present the partners demand cut in the rates. We will try to maintain the current level of customs duties for import of strategic goods, in particular, agriculture products and some field s of industry, a group on Azerbaijans entrance to the WTO says.

Another requirement touches upon the domestic market of Azerbaijani energy resources, increase of domestic prices of fuel and gas in line with the world prices. The Azerbaijani government pursues a policy on by-stage increase of prices of energy resources. However, extreme rise in prices will lead to automatic rise of energy prices, which is certain to affect the non-raw goods in the country and diminish the win-win-situation in the world market. Moreover, these measures will inevitably lead to further increase of prices of foodstuff and communal services. In term when there is 30%-poverty in the country, in case of unwise approval of the requirements their number might increase.

Membership at the WTO represents for Azerbaijan an intention to break the existing situation in the local economy, attract investments and to enter with its non-raw products to world markets. But there is a question whether Azerbaijan is ready for concrete win-win situation rivalry with the western producers. Azerbaijans readiness for entrance to the WTO from the aspect of win-win industrial output is very important. However, in the current scene of development of industrial production in the country, cut in the level of customs barriers, which follows the entrance to the WTO will entail sharp rise in import of machine-building industry.

While entering the WTO the Azerbaijani enterprises should seriously regard the quality of products. The measures are already taken. For instance the State Agency for Standardization Metrology and Patent ceased the activities of 7 local enterprises on salt manufacturing enterprises for production that fell short of necessary standards.

The Anti-Monopoly Department of the Ministry of Economic Development revealed law-breaks in the market of cool drinks during the monitoring in trade facilities.

Such facts of law-break of quality standards of local production strongly beats on the country prestige and complicates in its way to membership at the WTO. It means there are still problems and Azerbaijan will have to pass more than one round of talks and work long in line with the WTO requirements.