Azerbaijan may join the WTO if oil prices continue to remain low

Azerbaijan may join the WTO if oil prices continue to remain low

Azerbaijan is preparing for the next meeting of the working groups on the country’s admission to the World Trade Organization (WTO). Azerbaijani Deputy Foreign Minister Mahmud Mammadguliyev informs that the meeting of the working groups will take place in Geneva from 19 to 23 July.

“In addition to the meetings of the working groups; Geneva will host multilateral negotiations on domestic support of agriculture and bilateral negotiations on goods and services with a number of countries,” Mammadguliyev said. He added that the Azerbaijani delegation is to hold scheduled Geneva meetings with representatives from Russia, Norway, and Saudi Arabia. Meetings with delegations from other countries are not ruled out as well.

“There are still a lot of questions on the WTO, and it’s hard to tell when all the necessary negotiations finish and Azerbaijan becomes a full member of the Organization,” Mammadguliyev said.

If the negotiation process will continue at a pace that in 2016 and oil prices remain low, Azerbaijan will become a member of the World Trade Organization (WTO by 2018- the Center for Economic and Social Development (CESD) Expert Group has reported. According to the group’s assessment that after holding bilateral meetings on goods and services in the framework of the previous round of multilateral talks on Azerbaijan’s membership Government of Azerbaijan has continued negotiations with the U.S., EU, Norway, Canada, Ecuador and Japan.

Meanwhile, Ministry of Foreign Affairs has announced that admission to the organization as a developing country is favorable for Azerbaijan: «If the country can get this status, we will be able to get some privileges. Talks are under way on this; some countries agree, while others do not”. The ministry has also added that ”the second issue is of course the improvement of legislation to meet WTO standards. We have got an action plan. Some of it has already been fulfilled. There are 40-50 documents, 30 of which have been approved in accordance with the organization’s requirements”.

The Ministry has declared that, the issue on privileges, which the county will gain on “yellow” basket of inner subsidizing, becomes important. Referring itself to developing countries, Azerbaijan is claiming for level of subsidies not less than 10% of goods cost of agriculture production.

The CESD Research Group analysis show that oil price is the one of key factors in context of Azerbaijan’s accession to the WTO. If oil prices remain low, then the Government of Azerbaijan will gradually have more interest to speed up membership negotiations. WTO Accession is very crucial for sustainability of continuation of reforms. This accession may become a key factor for diversifying of the economy in Azerbaijan.

The Research Group has reminded that after Kazakhstan’s accession to the WTO, a membership is becoming more crucial for oil producers in oil producing countries in the region. Kazakhstan’s cases shows that a political risks of the membership for region countries is not as high as has perceived by the governments.

It is mentioned that Azerbaijan is in bilateral talks with 12 countries on its WTO.

Azerbaijan holds bilateral negotiations with the United States, Japan, Brazil, Ecuador, Sri Lanka, European Union, Norway, India, South Korea, Taiwan Province of China, Canada and Switzerland for today.

Since 1997, Azerbaijan has observer status at WTO.

© CESD, 2016

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