Chapter 4: Accession of Uzbekistan to the WTO
4.1. Chronology of accession of Uzbekistan to WTO
Uzbekistan has ａ WTO/GATT status as an observer from June 19941 气On December 21 ， 1994, the General Council of the WTO, during its normal session made ａ decision to set up an acces‑
sion working group to cover the WTO accession of Uzbekistan1 气 After several deliberations with other WTO members, the working group chairman, in October 1998, was appointed. He was Mexico's Permanent WTO Representative − Ambassador Alejandro de la Pena1 气
According to the procedure of accession, the acceding country submits ａ memorandum describing in detail the foreign trade re‑
gime of the country and provides relevant statistical data to dis‑
tribute it among ａ １ １ WTO members in accordance with the form, which is based on the experience gained in working groups of the GATT‑41, and in ａ broader way reflects the coverage of WTO agreements148｡
Since its application for accession to the WTO, Uzbekistan
145 'WTO Ｉ Accession Status: Uzbekistan', accessed ３ November 2013, http:// ｗｗｗ･
wto.org/english/thewto̲e/acc̲e/a 廴ouzbekistan e.htm･
146 Ibid,"WTO Ｉ Accession Status: Uzbekistan."
147 "Accession of the Republic of Uzbekistan − Uzbekistan̲Country̲Study‑
Revised･pdf," 32, accessed November 3, 2013, http:// ｗｗｗ.unescap.ｏｒｇ/oes/
speca/docs/Divisions/TID/Accession̲to̲WTO‑Tashkent/Uzbekistan̲Country Study‑revised･pdf･
148 Peter John Williams, A Handbook on Accession ￡ｏ ￡加W7 ・O (Cambridge, 2008), 34.
worked on the drafting of the Memorandum on the foreign trade regime. In September 1998, the country completed a draft of the final version of the Memorandum and held its official launch at the WTO Secretariat. Along with the Memorandum were distributed
copies from laws and legislation of Uzbekistan, concerning its for‑
eign trade regime1气
The first meeting of the Working Party on the accession of Uzbekistan to the WTO was held on July 17 ， 2002 1n Geneva. Ａ statement of support for the process of accession of Uzbekistan to the WTO was submitted from 14 countries1 气
The second meeting of the Working Party on accession was held on the 29 0f June, 2004 and the third meeting of the Working Party took place in October 14 ， 2005. During the last meeting, member‑countries agreed to start preparations for the next meet‑
ing of the "factual summary," which contains the conditions of Uzbekistan's accession to the WTO151.
4｡2. Past discussions in CIS countries
Particularly, organizational‑legal aspects of WTO member‑
ship of the Republic of Uzbekistan are widely investigated in the doctoral (PhD) dissertation of H.S. Islamkhodjaev102. In his paper, Islamkhodjaev focuses on the organizational and institutional as‑
pects of Uzbekistan's application to the WTO.
He mentioned that the Uzbek Ministry of Foreign Economic Relations, Investments, and Trade (MFERIT) serves as the secre‑
149 Islamhodjaev H.S., "Op ΓaHM3aiIMOHHO‑ ripaBOBbie AcneKTbi BCTyruieHHH Pecny6jiHKH y36eKMCTaH BO BceMnpHyio ＴｏｐΓOByiO ＯｐΓa H M 3 a U HK) (Organizational‑Legal aspects of accession of Uzbekistan to Ｗ Ｔ Ｏ)¨( Ｔａｓhkent State Law Institute, 2008), 44.
150 Ibid.
151 Ibid.,
152 Islamhodjaev H.S., "Op ΓaHH3aiIMOHHO ripaBOBbie AcneKTbi BCTynneHMH
Pecny6jiMKM y36eKMCTaH BO BceMMpHyio ＴｏｐΓOByiO ＯｐΓa H M 3 a U HK) (Organizational‑Legal aspects of accession of Uzbekistan to WTO).", 2008.
39
tariat for the Uzbek Interdepartmental Committee that works with the WTO153. The Interdepartmental Committee coordinates ministries and agencies in implementing measures for the coun‑
try's accession to the WTO, including adapting legislation to WTO rules154. In the Ministry there is no separate division directly re‑
sponsible for this area of work100. ０ｎ WTO issues, an engaged staff is in charge of cooperation with international organizations in general, and Islamhodjaev, in his paper, proposed that it is neces‑
sary to create ａ specialized division within the MFERIT, whose ｏ仁 ficers have focused on the issues to the WTO accession on ａ professional basis and provide some incentives to motivate them1 气 For example, in foreign countries the WTO issues are handled by
experts with many years of experience in this field and which pos‑
sess deep subject matter expertise that is very important since fre‑
quent personnel turn over negatively affects the negotiation process10'｡
The author also noted the important aspect of the TRIPS
Agreem･?nt for Uzbekistan, because ａ country's participation in this Agreement ｗ111 require significant costs to create an expensive control system108. 1n particular, it will be necessary to significantly expand the appropriate judicial and administrative legal frame‑
work, to improve the system of registration of trademarks and brands by creating ａ computerized information system1 气
Several aspects of membership to the WTO create issues for the CIS countries and have been investigated by its scholars. For example are, O.Salimbaeva "Kazakhstan and WTO,"160 D.Pahomov
Ｑり ４ てり
Iに Ｏ ﹂Ｏ Iに叭りＩＩＩ
156 157︵
Ｍ︶０． ″Ｏｋり ｋり 冖ｈ︶
ＩＩＩ
Ibid., 213.
Ibid.
Ibid.
Ibid.
Ibid., 214.
Ibid., 188.
Ibid., 189.
O. Salimbaeva, "Kazakhstan and WTO" (Almata, 2000)
"The Development of Market of Business Services in Russia's Accession to WTO,"161 Sh.Shadihodzhaev "WTO and Developing Countries: issues in dispute settlement,"162 A.Nevskiy "Experience and Challenges of Cooperation of EurAsEC Countries in the WTO
Accession,"163 A.Borsheva "Development of ａ system of state sup‑
port of agriculture in Russia's entry into WTO,"164 among others｡
Salimbaeva, in her paper "Kazakhstan and WTO," mentioned that the Customs Service of Kazakhstan, under ａ transition period of the economy, should become an ongoing concern and ａ very ｅ仁 fective tool of state regulation of foreign trade. The main purpose of her research was to develop methodological approaches and practical recommendations for improving customs regulation of foreign trade and the Customs Service of the Republic of Kazakhstan to ensure the economic security, and promote develop‑
ment of priority sectors in terms of integration of national econ‑
omy into the world economy160｡
Pahomov noted in his paper the important roles in the nego‑
tiations over accession to the WTO as issues of international trade in services (tourism, business services, insurance, construction, transport, etc.). However, the scope of business services in Russia is in its infancy, and many services are relatively new to the
161 D.Pahomov, Pa3BMTne PbiH k a he ji obmx Yc JiyΓ Ｂ Yc JIOBHH χ npHCOeflHHeHHH POCCHM Ｋ ＢＴＯ(Ｔｈｅ Development of Market of Business
Services in Russia's Accession to ＷＴＯ)¨( Ｍｏｓｃｏｗ State University of Service, 2004).
162 Sh. Shadihodzhaev 厂'World Trade Organization and Developing Countries:
Issues in Dispute Settlement," Moscow 6, no. 12 (2005)･
163 A. Nevskiy, " OnbiT Ｈ npo6jieMbi COTpy flHUM e CTB3 CTpaH EbpA33C Ｂ yCJIOBMHX BCTynneHMH Ｂ BTO (Experience and Challenges of Cooperation of
Eur As EC Countries in the WTO Accession)" (2007).
164 A. Borsheva," Pa3BMTwe CncTeMbi ΓQcyziapcTBeHHOH Ｈｏａａｅｐ}ＫＫＨ CenbCKO Γｏ X03HMCTBa npH BxO>K/ieHMM POCCMM Ｂ BTO (Development of a System of State Support of Agriculture in Russia's Entry into ＷＴＯ)¨( Ｏｍｓk State Agrarian University, 2010).
165 O. Salimbaeva, "Ka3a χc t a h Ｈ BceMwpHaa ＴｏｐΓ0B3H ＯｐΓaHM3aiIHH (Kazakhstan and ＷＴＯ)¨(2000).
47
Russian market ( ｓｕch as consulting, legal support, etc.)166｡
Pahomov said that organizations providing business services have insufficient competitiveness compared with foreign services･
Many sectors of business services (s ｕch as designing, research, and survey services) lost ａ unique material and technical base, and the remaining is out of date; there was a brain drain. Second, in contrast to foreign competitors, Russian organizations have not accumulated sufficient experience, both in the provision of busi‑
ness services, and on their consumption16'. In addition, not estab‑
lished practice of actively seeking of professional assistance in the process of management, many business leaders do not trust the consultants. Therefore, free access to domestic markets of foreign suppliers of business services, caused by the adoption of WTO agreements, would lead to negative consequences such as reducing the share of domestic supply, the release of highly qualified profes‑
sionals, capital flows out abroad, etc. Ｐａｈｏｍｏｖ'ｓ view of the fore‑
going was the need of organizational and economic measures to support the development of the domestic market of business serv‑
ices is of particular relevance168｡
Shadihodzhaev mentioned in his work that many WTO agree‑
ments are ambiguous for Uzbekistan: accession to them can both positively and negatively affect the economy. The objectives of his research was to analyze and evaluate mechanisms for resolving disputes settlement under the WTO and monitoring of decisions concerning them, identifying gaps in the regulation in these areas, as well as developing proposals to eliminate identified deficiencies･
To achieve these objectives, in this research paper, the author ana‑
lyzed the dispute settlement mechanism of the WTO for identify‑
166 D. Pahomov, "The Development of Market of Business Services in Russia's Accession to WTO" (2004).
167 Ibid.,
168 D. Pahomov, "The Development of Market of Business Services in Russia's Accession to WTO."
ing its strengths and weaknesses. In his paper the author deter‑
mined the legal force of reports of groups in the resolution of dis‑
putes and of the Appellate Body for the parties of the dispute and to their WTO member country169｡
Nevskiy discusses that a11 EurAsEC countries are interested in an agreed position at the WTO, especially when joining the WTO as they can save ａ preferential free trade regime between the coun‑
tries of the Community. In this regard, the author discussed and proposed issues and assessment of the prospects for creating ａ Free Trade Area and Customs Union as the basis for cooperation of the EurAsEC, and opportunities of WTO accession should not be taken individually by each country, but should be as the integration
group as the Customs Union. Such an approach would preserve the EurAsEC countries' preferential trade and economic regime among member countries without any obligation to provide similar treat‑
ment to third countries, even WTO members. In his thesis the author focused mostly on issues of foreign economic activity of EurAsEC countries and conditions of development of the coordina‑
tion of positions with the entry into the WTO as ａ necessary tool for the development of economic integration cooperation of the Ｃｏｍｍｕnitｙ170｡
The thesis of Borsheva addresses the problem of ａ system of state support of agriculture in the regions within the accession of Russia to World Trade Organization. Russia's accession to the WTO makes it extremely urgent that the consideration of state support for agricultural producers through the prism of rules and regulations of this international organization are settled.
Conditions for accession are subject to both multilateral and bilat‑
169 Sh. Shadihodzhaev, "World Trade Organization and Developing Countries:
Issues in Dispute Settlement."
170 A. Nevskiy, "Experience and Challenges of Cooperation of EurAsEC Countries in the WTO Accession." (2007).
む
eral negotiations with interested member countries of the WTO for market access. Problems in theoretical and methodological as‑
pects are caused b ｙ the imperfection of legislation and lack of clear government policy on 「ural areas171｡
1n this regard, research was conducted by Borsheva, which aimed at the formation of ａ mechanism of rationale, location of government support, and development of criteria of their efficient use with the requirements of the World Trade Organization. The author studied theoretical aspects of state support of agriculture in the region with conditions of Russia's accession to the WTO,
clarified the concept of "government support for agriculture," and identified factors that influence on the procedure of agricultural subsidies1'2.
4｡3. Objectives of Uzbekistan's accession to WTO
For Uzbekistan WTO accession will mean attracting more in‑
vestments to domestic industry, improved fair‑tariff export oppor‑
tunities for Uzbek products with WTO member countries, opening of the domestic Uzbek market to cheaper imports, mutual grant‑
ing by member countries the most‑favored nation and national
treatment to goods and services of foreign origin (principle of non‑
discrimination), trade regulation mostly by tariff methods, aban‑
donment of quantitative restrictions, transparency of trade policy, and the resolution of trade disputes through consultations and ne‑
gotiations.
4｡4. Trade in Goods
4.4.1. Export licenses and quota
In order to maintain the safety, nature, and people's health,
171 A. Borsheva, "Development of a System of State Support of Agriculture in Russia's Entry in to ＷＴＯ¨(2010).
172 Ibid.
Uzbekistan forbids licenses for export and import of some prod‑
ucts like military equipment, ｕ 「anium, and radioactive goods173.
Usually licenses are issued by the Ministry of Foreign Economic Relations Investment and Trade of Uzbekistan (MFERIT)174｡
As Uzbekistan is the world's 10th biggest producer1'0 ０ ｆ gold and ａ leading exporter it licenses exports of gold products for not failing gold prices in world market176. For monitoring the move‑
ment of assets out of ａ country the gold import is licensed177｡
The export of vegetable oil, meat, flour, grains, sugar, raw hides, and silkworm cocoons are prohibited or licensed178. For moni‑
toring the foreign exchange profit from exports of cotton fiber, the export of cotton only can be done by MFERIT179｡
０ｎ January 1 ， 2000 Uzbekistan became ａ member of the Interna ぴonal Convi?ntion on Ha Γmoniz･?d 旅 涎･?m of Coding Goods180. Customs Code of the Republic びｚ加kistan says that im‑
port goods will be charged by value added tax ( ＶＡＴ)，cｕｓt ｏｍ duty, excise tax, and customs levies181. Customs duties were not ap‑
plied to the export of products like works and services that were canceled in 1997. In accordance with the Tax Code of the Republic ｏ/回し 咫加kistan182 VAT, on free convertible currency export prod‑
173 Brion Anderson and Yuriy Klimov, "Uzbekistan: Trade Regime and Recent Trade Developments," University of CentΓal Asia, 2012, 8･
174 International Monetary Fund, "Annual Report on Exchange Arrangements and Exchange Restrictions," 2006, 1272･
１７５ Mining Techonology, "The Top １０ Gold Producing Countries," October 7 ， 2013, http://ｗｗｗ.mining‑technology.cｏｍ/features/feature‑ten‑largest‑gold‑producing‑
countries‑china/.
176 Brion Anderson and Yuriy Klimov, "Uzbekistan: Trade Regime and Recent Trade Developments," 8.
177 Ibid.
178 International Monetary Fund, "Annual Report on Exchange Arrangements and Exchange Restrictions," 1272･
179 Brion Anderson and Yuriy Klimov, "Uzbekistan: Trade Regime and Recent Trade Developments," 8･
180 Brussels, International Convention 071 召αΓmonized System of Coding Goods, 1983.
181 Customs Ｃｏ心of the沢印 功 汾 ｏﾊﾞJzbekistan, 1997.
182 Tax Code of the 沢印 功 劭 ｏﾊﾞｿzbekistan, 2008.
石
ucts, is charged at ａ zero rate except for valuable metals, and also countries (Kazakhstan, Kyrgyzstan, Azerbaij Ｍ ｏｌｄｏｖａ）
who have bilateral agreements with Uzbekistan are not charged for export183. Excise tax is not applied to export products. For ex‑
ample, on imported goods the excise tax charge on mineral water is 100%, oil goods 20%, furniture 50%, air conditioner 20%, pet food 70%. Ｔｈｅ VAT rate to all imports is 20%184｡
Customs duty range is between 0% and 30%. For example, clothing is taxed 10%to 30%, furniture 10%to 30%, food 5% to 30% ， etc. Application of customs duties may vary by country of origin
of imported goods180.