I would first like to welcome the Delegation of the Kyrgyz Republic, led by H.E. Mr Seit RYSALIEV, Deputy Minister of Economy and Finance of the Kyrgyz Republic. I would also like to thank the WTO Secretariat and the Kyrgyz Government for their reports, which form the basis for our discussion today. Let me extend our appreciation to the Discussant, H.E. Mrs. Tatiana MOLCEAN (Moldova) for introducing us to the country's trade policy review.
The European and Kyrghyz peoples have enjoyed flourishing trade through centuries. Based on personal experience, the country is unparalleled in its natural beauty.
Chair, this is the Kyrgyz Republic’s third trade policy review since its accession to the WTO in 1998. In modern times, the EU and the Kyrgyz Republic share a strong commitment to the WTO, and we look forward to further working together to strengthen the rules-based multilateral trading system. In particular, we would like to congratulate the Kyrgyz Republic for joining the WTO Trade Facilitation Agreement in 2016, and for submitting the notifications for its Category A, B, and C commitments. What is more, we welcome the Kyrgyz ratification of the Protocol Amending the TRIPS Agreement in 2017. Finally, the EU appreciates the Kyrgyz Republic’s participation in some of the JSIs. We encourage Kyrgyzstan to take part in all of them, as the JSIs constitute an important and forward-looking agenda for international trade and the WTO.
Since 2016, the EU and the Kyrgyz Republic have enjoyed favourable cooperation under the EU Special Incentive Scheme for Sustainable Development and Good Governance (‘GSP+’). We encourage the Kyrgyz Republic to make greater use of the Scheme in the future, as it could facilitate the post-pandemic economic recovery and contribute towards sustainable development.
The main change in Kyrgyzstan’s trading regime since the previous TPR is the Kyrgyz accession to the Eurasian Economic Union (‘EAEU’) in 2015. This led to significant changes in the Kyrgyz tariff regime, as the country now applies the EAEU external tariff and this has led to an increase in tariffs in several areas.
Following the Kyrgyz Republic’s accession to the EAEU, the EU has engaged Kyrgyzstan in compensation negotiations. We welcome the progress made on tariffs for non-agricultural products, where an agreement in principle has been reached. However, when it comes to agricultural products, the Kyrgyz Republic has been slow to offer meaningful compensation for the substantial reductions in market access the EU now faces. The EU invites the Kyrgyz Republic to engage constructively on this matter.
We attentively follow the development of the EAEU internal market. We note that certain EAEU technical regulations have created difficulties for the European exporters. In particular, we would like to draw attention to the Technical Regulation on the Safety of Alcoholic Products. This Technical Regulation deviates from international standards and from WTO rules, especially on GIs. In addition, discrepancies between national legislations and this Technical Regulation will lead to trade barriers. Another key area of interest for the EU is the creation of the single market for medicines and medical devices. We would be interested to hear how Kyrgyzstan assesses progress achieved in moving towards these two single markets.
The EU would like to highlight the Secretariat Report’s conclusion that despite maintaining an open investment regime the Kyrgyz Government has yet to develop a business environment that is conducive to investment. Foreign direct investment inflows to the Kyrgyz Republic are not substantial (the accumulated FDI amounted to USD 7.2 billion over the period 2012-2019).
While we recognise that facilitating FDI inflows has been an identified priority for the Kyrgyz Government, the EU would like to underline the importance of further improving the country’s investment climate. This would contribute to economic diversification and the country’s post-pandemic economic recovery.
Finally, the EU encourages the Kyrgyz Republic to embark on an economic recovery that is green and inclusive. Facing very significant challenges relating to industrial and agricultural pollution, Kyrgyzstan should seek greater public and private investment to green its economy.
The EU hopes that its comments, and those of other Members, will support the Kyrgyz Republic in reforming its economic and trade policies. The EU thanks the Kyrgyz Delegation for undergoing this important transparency exercise in a virtual format and despite of ongoing challenging circumstances. On behalf of the EU, I wish the Kyrgyz Republic a very productive and successful review.