Azerbaijan may join the WTO in 2013

Azerbaijan may join the WTO in 2013

If Government of Azerbaijan speed up membership negotiations

If the negotiation process will continue at a pace that in 2013 Azerbaijan will become a member of the World Trade Organization (WTO)- said Vugar Bayramov, chairman of the Center for Economic and Social Development (CESD). Dr. Bayramov said that after holding bilateral meetings on goods and services in the framework of the IX round of multilateral talks on Azerbaijan’s membership in the WTO held in February, Switzerland Government of Azerbaijan continues negotiations with  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 we 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 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.

So a profitable entry into the WTO?  In Russia, which has, in fact, become a member of the organization, began to count the losses. In particular, according to “Moskovsky Komsomolets”, the forthcoming entry into the WTO will bring Russia trillions of losses: in 2020 the GDP of the country will lose 3.5%. Most prosyadet agriculture – the output will fall to 3.5 trillion. rubles. “Breakthrough” last year, researchers have debunked the WTO and the lobbyists for a number of manufacturers, presenting a report on the implications of our entry into the global trading club. WTO will be expensive for the Russian budget, – said one of the authors of the report – a member of the Working Group on the technological modernization of the agriculture of the Russian Government Yevgeniy Korchevoi. – Only for the loss of the federal budget will amount to half a trillion rubles a year.

Separately, experts thought the losses incurred due to the displacement of several branches of the import of domestic products – a 4 trillion. rubles and 2.2 million jobs from 2012 to 2020. Most affected agriculture and food industry.Although the overall import tariffs will be reduced and not significantly (3.2%), but the number of “agricultural” interest rates will fall only prove the pessimists. For example, duties on imports of live pigs have reduced by 8 times. At four times – the duty on rice. As a result, agricultural production will fall by 30% by 2020, or 3.5  trillion. rubles, the resulting estimates have a skeptic – economist Artem Kuznetsov. The work will have to replace 1.6 million. In light industry, which has suffered from cheap imports, experts generally put a cross. Over the past 12 years the share of industry in GDP, and so fell in ten. The further removal of barriers would lead to a drop in production for another 15-20%. But that’s not all: missed opportunities for growth through 2020 may cost Russia has 2.7 trillion.rubles, for entry into the WTO will make the implementation of development strategies adopted by a number of industries impossible. The sad result: in general, the loss of GDP by 2020 will amount to 3.5%, the loss of industrial production – 20%, and the decline in manufacturing – more than 30%.

According to Bayramov, WTO membership not only provides income but also leads to some losses. “The fact that the products manufactured in Russia are not particularly competitive in world markets. A similar situation is with Azerbaijan.The majority of manufactured products in the country uncompetitive in world markets. Based on this, Azerbaijan is also incur losses. ” But, in his opinion, should also be borne in mind that WTO membership has no alternative. “Member of the WTO are 154 countries and approximately 95% of world trade is conducted by member countries of the organization. Russia is also based on the principle that rapid WTO membership could cost the country less losses, accelerated the process of joining the organization. ”

In this case the loss of Azerbaijan will not be as impressive, said Bayramov. “On the one hand, Azerbaijan has such an extensive export market such as Russia.But instead of WTO membership will increase the export potential of the agricultural sector. Due to the fact that Azerbaijan has its agricultural products mainly exported to neighboring countries, WTO membership will provide us with more favorable conditions “, – said Bayramov.

Vugar Bayramov, however, mentioned that WTO membership, and the huge boost it would imply for liberalization in Azerbaijan, is not an option unless the relevant government agencies decide it is serious about this reform. But as long as the oil price remains high there is no incentive. There is another concern related to reducing the monopoly power in foreign trade.  That’ is why although Azerbaijan’s accession to the WTO has more benefit to the country although no any significant steps taken related to the admission process.

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, 2012


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