Trade Agreement Azerbaijan Kyrgystan.pdf

Third Draft November 2008

The Benefits of Joining the Asia-Pacific Trade Agreement (APTA) for Azerbaijan, Kazakhstan and Kyrgyzstan by Richard Pomfret

CONTENTS: 1. From the Bangkok Agreement to APTA 2. Azerbaijan, Kazakhstan and Kyrgyzstan: Economic Structure and Relation to ESCAP 3. Trade Policies of Azerbaijan, Kazakhstan and Kyrgyzstan 4. Current Trade Flows and Patterns of Trade between Azerbaijan, Kazakhstan and Kyrgyzstan and APTA Members 5. Impact of Azerbaijan, Kazakhstan and Kyrgyzstan Joining APTA 6. Potential Benefits to Azerbaijan, Kazakhstan and Kyrgyzstan from Extensions to APTA 7. Conclusions

1

The Benefits of Joining the Asia-Pacific Trade Agreement (APTA) for Azerbaijan, Kazakhstan and Kyrgyzstan This study analyses country-specific benefits of APTA membership for Azerbaijan, Kazakhstan and Kyrgyzstan. After a review of the Asia-Pacific Trade Agreement (APTA) and of the three countries’ economic structure and trade policies, the analytical starting point is a detailed assessment of the three countries’ disaggregated bilateral trade with the five APTA members in Section 4. This is used in Section 5 for a baseline assessment of the impact of applying current APTA trade preferences to existing exports of Azerbaijan, Kazakhstan and Kyrgyzstan. The conclusion is that APTA accession offers positive but small benefits to existing exporters. For Azerbaijan, Kazakhstan and Kyrgyzstan an economic imperative is to use the breathing space granted by buoyant primary product exports to develop a diversified economy. The study argues that APTA membership could play a positive and strategic role in this process by offering improved market access to some large Asian markets.

If domestic conditions are conducive to entrepreneurship,

internationally competitive producers in Azerbaijan, Kazakhstan and Kyrgyzstan would be encouraged to export within APTA. In sum, the larger benefits from APTA accession are likely to come from a deepening and widening of the Agreement to ensure greater product coverage, guaranteed market access, trade facilitation measures, and so forth, as well as bringing in new members. This is a plausible vision as long as members are serious in their 2006 commitment to revitalize APTA.

1. From the Bangkok Agreement to APTA

As early as the 1960s the United Nations regional commission began to explore instruments for intra-regional trade expansion and other measures for economic cooperation in the Asia-Pacific region. In July 1975, under the aegis of a Trade Negotiations Group convened by the United Nations Economic and Social Commission for Asia and the Pacific (ESCAP), seven countries met in Bangkok and agreed on a list of products for mutual tariff reductions. This First Agreement on Trade Negotiations among Developing Country Members of ESCAP became known as the Bangkok Agreement. It was ratified by five of the participating countries (Bangladesh, India, Lao People’s Democratic Republic, the Republic of Korea and Sri

2 Lanka); the Philippines and Thailand had attended the Bangkok meeting but did not ratify the Agreement. 1 In the first round of negotiations, concluded in 1975, tariff preferences were agreed on 104 products, plus special concessions were granted to Lao PDR on fifteen items. In 1979 the tariff preferences were renegotiated as some signatories felt that the balance of advantages was unequal. The number of products covered was reduced to 93, plus special concessions to Lao PDR on sixteen items and to Bangladesh on three items. The second round of negotiations, held between 1984 and 1990, resulted in tariff concessions being exchanged on 438 items, plus special concessions to Bangladesh on 63 items. During the second round a number of countries attended as observers: China, Indonesia, Iran, Malaysia, Nepal, Pakistan, Papua New Guinea, the Philippines and Thailand.

In 2001 China formally became a member of the

Agreement, and listed 739 concessions, in addition to 18 items for which special concessions were granted to least developed member countries. The third round was held from 2001 to 2005. The outcome was a large increase in the number of items covered, from 1,721 to 4,270, and a widening of the margin of preference, from 22% to 27%. The number of special concessions granted to least developed member countries was increased from 112 to 587, and the margin of preference on these increased from 32% to 59%. The concessions and margins of preference after the third round are listed in Table 1.2 The third round also formalized rules of origin for APTA-qualifying trade. 3

In November 2005 the Ministerial

Council of the Bangkok Agreement adopted a new name for the Agreement: the AsiaPacific Trade Agreement (APTA). 4 1

Lao PDR has not issued customs notification of concessions granted and is thus not an effective participating member, although some other members have extended their APTA concessions to include Lao PDR. Papua New Guinea acceded to the Agreement in December 1993, but the government has still to ratify the Agreement. Pakistan announced its intention to accede in February 1998, but has not completed the accession process. 2 A more detailed analysis is contained in the study by Indra Nath Maukherji “Asia Pacific Trade Agreement: Implications of Exchange of Trade Preferences for Member and Prospective Member Countries”, available at http://www.unescap.org/tid/apta/tradepref.pdf, which also considers the impact of APTA accession by Bhutan, Cambodia, Indonesia, Mongolia, Myanmar, Nepal, Pakistan, Philippines, Thailand and Vietnam. 3 APTA rules of origin require 45% local value-added (35% for least-developed country members) or a cumulative content of over 60% from APTA members. For more details, see the document available at http://www.unescap.org/tid/aptaro.pdf 4 The Ministerial Council is the highest decision-making authority of APTA. After the inaugural meeting in November 2005 in Beijing (China), the second meeting of the Ministerial Council was held in Goa (India) in October 2007.

3 APTA is a preferential trading arrangement aimed at expanding trade within the ESCAP region. It was approved by GATT in 1978 “provided that any preferential treatment under the Agreement shall be designed to facilitate trade between the participating states and not to raise barriers to trade of other contracting parties”. 5 All developing member countries of ESCAP are eligible to accede to APTA. Secretariat services are provided by the Trade and Investment Division of ESCAP. Although the five APTA countries account for over a tenth of world trade and trade among the members has been growing, it seems unlikely that more than a small proportion of their total trade is undertaken at APTA preferential tariff rates. 6 Not only is the positive-list approach to integration slow and partial, but it also invites selection of items where there is little expectation of trade creation at the expense of domestic producers. Moreover, several of the APTA members participate in other regional trading arrangements. 7 Finally, although mention has been made of nontariff barriers and trade facilitation (not to mention trade in services, investment and other deep integration issues), these topics have yet to feature in APTA outcomes. The members have since 2006 committed themselves to a process of revitalizing APTA. Apart from expanding the coverage of APTA by a fourth round of negotiations, due for completion by September 2009, the members are also committed to actively promoting the accession of new members.

5

APTA was notified to the WTO under the Enabling Clause covering preferential tariffs on imports from developing countries, so that the conditions are less stringent than they would be under Article XXIV. The issue has been raised at the WTO of whether South Korea qualifies as a developing country. 6 Utilization rates are high on imports from Bangladesh, which as a least-developed country benefits from greater margins of preference, but low on imports from other APTA members. Rajan Sudesh Ratna has calculated (in “APTA Market Access: Results from the Third Round”, paper presented at the APTA seminar organized by ESCAP in Bishkek, 5 November 2008) that, in the ten-month period from September 2006 to June 20007, 88% of imports from Bangladesh into the Republic of Korea and 58% of imports from Bangladesh into China that were eligible for APTA preferences actually claimed the preferential tariff rate, while the utilization rates on all APTA-eligible imports were 13% for the Republic of Korea and 25% for China. Because coverage expanded after the third round of negotiations, however, the utility rate (i.e. the share of total imports from APTA partners receiving preferential treatment probably increased in all cases, but the levels remain small, e.g. utility rates of 34% on APTA imports into the Republic of Korea and China in the ten-month period analysed by Rajan Sudesh Ratna. 7 Bangladesh, India and Sri Lanka are in the South Asian Free Trade Area (SAFTA) and in BIMSTEC (the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation). India has signed bilateral trade agreements with several potential APTA members (for example, with Bhutan, Nepal, and Thailand). China and the Republic of Korea have FTAs with ASEAN, and are negotiating with India.

4 2. Azerbaijan, Kazakhstan and Kyrgyzstan: Economic Structure and Relation to ESCAP

After the dissolution of the Soviet Union at the end of 1991, Azerbaijan, Kazakhstan and Kyrgyzstan joined the United Nations in July 1992 and together with Tajikistan, Turkmenistan and Uzbekistan elected for membership in the UN’s Asian regional commission.

Azerbaijan, Kazakhstan and Kyrgyzstan are among the twelve

landlocked developing countries that are ESCAP members, but none of the three is a designated least-developed country. Table 2 provides summary economic statistics for the three countries. At the time of independence, although Azerbaijan and Kyrgyzstan were among the poorest of the republics of the Soviet Union, all three could be considered middle-income countries, with good human development indicators (e.g. almost universal literacy). They experienced hyperinflation in the early 1990s and a deep decline in real output in the early and mid-1990s, which was most severe in war-affected Azerbaijan (Tables 3 and 4). The economic situation turned around in the second half of the 1990s, since when all three countries have experienced positive growth and moderate inflation.

With booming energy prices, important new discoveries and the

construction of new pipelines, oil-rich Kazakhstan and Azerbaijan have been among the fastest growing economies in the world since the turn of the century. 8 All three countries’ role in the Soviet economy was as producers of raw materials: cotton, energy products and minerals, plus some farm products (especially grain in northern Kazakhstan). This specialization has become more pronounced, with the development of a goldmine in Kyrgyzstan and the booming oil exports of Azerbaijan and Kazakhstan (Table 5). The three countries’ export specialization can be illustrated by Balassa’s index of revealed comparative advantage. 9 A number below one indicates that the country exports less of a good relative to the global average, while a number above one indicates above average export specialization.

8

For more details on the countries’ economies, see Richard Pomfret The Economies of Central Asia (Princeton University Press, 1995), Asian Economies in Transition (Edward Elgar, 1996) chapter 8 (on Azerbaijan, and The Central Asian Economies since Independence (Princeton University Press, 2006). 9 Bela Balassa (Trade Liberalization and 'Revealed' Comparative Advantage, Manchester School 33 (1965), 99-123) defined revealed comparative advantage as a country's share of world exports of a good divided by its share of total world exports. The index is 100.(Xi,j /Xw,j)/(Xi,,t /Xwt), where Xi,j is exports by country i of good j, Xw,j is global exports of good j, Xi,,t is country i’s exports of all goods, and Xw,t is total world exports.

5 Table 6 shows the strong specialization of Azerbaijan and Kazakhstan in oil and gas exports and of Kyrgyzstan in gold (reported under SITC group 9).

Kyrgyzstan

continues to have some specialization in agricultural exports, although in part this shows up in the index because overall exports are small. Kazakhstan is a much more important food exporter, but in the country’s aggregate trade data grain exports are overshadowed by oil. Apart from Kazakhstan’s processed metals, all three countries have a pronounced comparative disadvantage in manufactured goods (groups 6-8). For Azerbaijan and Kazakhstan the concentration of exports on oil and oil products became even more pronounced in the period 2002-7 as oil prices rose rapidly. Table 7 illustrates the point for Azerbaijan, where by 2007 exports consisted almost entirely of oil and oil-related products. The situation was only a little less extreme for Kazakhstan, whose farm exports were aided by booming world grain prices in 2007-8 and which continued to export steel and minerals.

For both

countries, even as they benefit from booming energy revenues, concerns about Dutch Disease effects and the need to promote economic diversification are important. 10 The three countries’ direction of trade before 1992 was heavily oriented towards markets within the Soviet Union, and the historic trade patterns continued to be important for most of the 1990s. Almost all railways and roads run north to Russia; the only significant exception is a rail link from Kazakhstan to China which opened in 1992 and which has been primarily used by Kazakhstan to export iron and steel to China, and Azerbaijan’s road links to Iran and Turkey. Relatively easily transportable high value-weight items such as gold and cotton were soon being sold on the global market. Oil exports were more difficult to redirect, given the inherited pipeline network, but especially after the opening of new pipelines in the early 2000s, 10

A Dutch Disease effects arise when exchange rate appreciation due to exports from a booming sector make other traded goods uncompetitive; the concerns include the possibility that the declining sector may have desirable dynamic externalities or that if the boom ends due to exhaustion of the commodity or to falling world prices there will be high set-up costs to re-establishing the activities which have been destroyed. Azerbaijan’s National Oil Strategy has four pillars: provision of capital and technology by major oil companies, establishment of multiple transport routes, accumulation of managerial expertise, and investment in sustainable development; the last is primarily the responsibility of the national oil fund, which transfers some oil revenues to the government budget and is mandated to invest the remainder to mitigate Dutch Disease effects (so far primarily by conservative overseas investment). Kazakhstan’s national oil fund (in which some USD23 billion had been allocated by mid2008) has less formal guidelines, but the President has a vision of the country becoming a diversified and transparent market economy by 2030. Kazakhstan has pursued diversification by such polices as the billion-dollar 2003-5 Agriculture and Food Program, the Innovative Industrial Development Strategy for 2003-15, and a cluster model of industrial policy advocated by Harvard Professor Michael Porter and adopted in 2004. See Martha Brill Olcott, Kazakhstan: Will “BRIC” be spelled with a K? China and Eurasian Forum Quarterly 6(2), 2008, 41-53.

6 such as the Baku-Tbilsisi-Ceyhan pipeline to Turkey’s Mediterranean coast, energy exports are becoming more geographically diversified. A feature of oil exports is that the final destination may be unknown, and of little interest, to the producer. Azerbaijan’s trade statistics for 2006 and 2007, for example, show over 85 per cent of exports going to countries not identified in the State Statistical Committee’s trade data (Table 8), and this is overwhelmingly oil and oil products. The sources of imports have also diversified, although Russia remains the largest supplier to all three countries. 11 In particular, China has become an important trading partner, and is now the second-largest supplier of imports to Kyrgyzstan and to Kazakhstan and seventh-largest supplier to Azerbaijan. 12 However, apart from China, Asian countries have lagged as trading partners, and other APTA member countries have not featured strongly in the three countries trade (Section 4).

3. Trade Policies of Azerbaijan, Kazakhstan and Kyrgyzstan

For all three countries trade policies are difficult to track in the early postindependence years. Borders were extremely porous. Different practices applied to trade with CIS countries and external trade, although the two may not have been easy to distinguish at borders which were internal to the former Soviet Union. 13 Azerbaijan was involved in a conflict with Armenia over the disputed NagornoKarabakh territory; war displaced about a million people in 1992-4 and, even after a ceasefire was agreed, Armenia continued to occupy a substantial part of Azerbaijan’s territory.

After the mid-1990s trade policy became more transparent and better

enforced. All three countries applied for membership of the World Trade Organization (WTO) and, although the Kyrgyz negotiations were speedily concluded, Azerbaijan 11

Treating the European Union as a single entity, according to WTO trade data the EU is the biggest supplier of imports and market for exports for Azerbaijan 12 Imports of Chinese consumer goods are difficult to measure because some arrive through unmonitored channels. In Kyrgyzstan large quantities of Chinese imports end up in two huge bazaars (in Bishkek and near Osh) where sales are often to customers from Uzbekistan. 13 A large part of international trade in the 1990s was conducted by individual shuttle traders (chelnoki) travelling to cities in the Gulf, Turkey, China, India or southeast Asia, and often bypassing or bribing the customs officials. The Kazakh authorities estimated that over a quarter of total imports in 1995 and a third in 1996 were shuttle imports (reported in the International Monetary Fund IMF Staff Country Report No. 97/67 Republic of Kazakstan - Recent Economic Developments, August 1997, p. 114-50), but by their nature such estimates are gross approximations. The shuttle trade phenomenon has become relatively less important in the twenty-first century as the retail sector, especially in the principal cities has become better organized, but it has not disappeared.

7 and Kazakhstan have still to accede to the WTO. In 1998 Kyrgyzstan became the first Soviet successor state to join the WTO, reflecting its liberal trade policies with low tariffs and few non-tariff barriers to trade.

Kazakhstan’s accession negotiations

moved apace in 1996-7 as a fairly liberal tariff schedule was adopted, but slowed down after 1998 when the economy was hit by the Russian Crisis and the government reacted by introducing ad hoc trade restrictions. 14 The pace of negotiations picked up again in 2003-5, but since then they appear to have stalled at the final stage.15 Although Azerbaijan applied for WTO membership only a year after Kyrgyzstan and Kazakhstan, it has taken a more cautious approach; the accession negotiations have moved slowly and are at a more preliminary stage than Kazakhstan’s. 16 Azerbaijan, Kazakhstan and Kyrgyzstan joined the Commonwealth of Independent States (CIS) in 1992 and have signed statements of intent to create preferential trading arrangements within the former Soviet space. Apart from the Eurasian Economic Community (EurAsEC), of which Kazakhstan and Kyrgyzstan are members, these agreements have had little impact to date. The three countries have been members of the Economic Cooperation Organization (ECO) since 1992, and Kazakhstan and Kyrgyzstan are members the Shanghai Cooperation Organization (SCO), neither of which has had an impact on trade policy. 17 Despite their differing paths to WTO accession, all three countries now have low average tariffs with few peaks and relatively few non-tariff barriers to trade. The WTO reports average tariffs of 4.8% for Kyrgyzstan, 7.8% for Kazakhstan and 9.6%

14

Following the August 1998 Russian crisis, Kazakhstan introduced a 20% value-added tax on all personal imports from Russia, the Kyrgyz Republic and Uzbekistan, and then in December 1998 enacted a law on “Measures to Protect the Domestic Market from Imported Goods”. Under this law, tariffs as high as 200% were imposed on a number of goods imported from the Kyrgyz Republic and Uzbekistan in February 1999, when other restrictions such as import quotas on cement imports from the Kyrgyz Republic were also imposed. In April 1999 the 200% February tariffs were eliminated, but new licensing procedures, transit fees and mandatory deposits on imports from the Kyrgyz Republic and Uzbekistan were introduced. 15 After 2001 several rounds of talks with countries expressing interest in specific aspects of Kazakhstan’s application formed the basis for the Working Party’s Factual Summary. This appeared in September 2004, and was followed in May 2005 by a Draft Working Party Report, which was revised in September 2006. The Working Party Report normally signals the final stage of the accession process but there has been little formal progress in the following two years. 16 The Working Party did not meet until June 2002. Since then the Working Party has met five times, most recently in May 2008, but has not yet produced a Factual Summary. 17 See Central Asia Human Development Report: Regional Cooperation for Human Development and Human Security (United Nations Development Programme, Bratislava, 2005), Central Asia: Increasing Gains from Trade through Regional Cooperation in Trade Policy, Transport and Customs Transit (Asian Development Bank, Manila, 2006), and Richard Pomfret, The Central Asian Economies since Independence (Princeton University Press, 2006), chapter 10.

8 for Azerbaijan. 18 Thus, although all three countries are concerned about the decline of some economic activities and the risk of becoming over-reliant on primary product exports whose price is volatile, none has resorted to tariff protection as a primary instrument of industrial policy. 19

Other than in non-traded activities, any new

investments have to be internationally competitive and dynamic producers will need to find export markets.

(a) Kyrgyzstan

In 1994 Kyrgyzstan’s government abolished the state monopoly on international trade, and since 1995 the country has pursued a trade policy based on moderate mostfavored nation (MFN) tariffs with a maximum rate of 15% and no specific duties. Most tariffs were set at 10%, with 5% for imports from developing countries and 0% on intra-CIS trade. The effective tariff in the second half of the 1990s was around 2%. Higher VAT rates applied to imported goods than to identical domestically produced goods, but this was discontinued after WTO accession in 1998. In February 1996 Kyrgyzstan initiated its WTO accession process and became a WTO member in December 1998.

Kyrgyzstan’s WTO commitments are

remarkably liberal, with bound tariffs set at low rates and with virtually all sectors included in its GATS commitments. The growth of international trade and integration into the global economy since WTO accession has been disappointing, partly because the business environment remains unattractive to private investors due to institutional shortcomings and widespread corruption, but the poor trade performance is also due to geography and lack of regional cooperation to facilitate transit.20

18

Azerbaijan and Kyrgyzstan are in the WTO’s World Tariff Profiles 2006 (latest version) – available at http://www.wto.org/english/tratop_e/tariffs_e/tariff_profiles_2006_e/tariff_profiles_2006_e.pdf and the Kazakhstan estimate is from the Country Profile section of the WTO website. According to a report Trade Taxes in CAREC Countries prepared by Veronica Bacalu of the IMF for the September 2006 CAREC Trade Policy Coordination Committee meeting, actual collected duties are even lower; the ratio of duty collected to total imports in 2005 was 1.2% in Kyrgyzstan, 2.4% in Azerbaijan and 2.6% in Kazakhstan - the report is available at http://www.adb.org/Documents/Carec/trade-taxeseng.pdf 19 This is in contrast to neighboring Uzbekistan and Turkmenistan, both of which have adopted importsubstituting industrialization strategies. 20 Roman Mogilevsky (“Role of Multilateral and Regional Trade Disciplines: Kyrgyzstan’s Experience”, CASE Studia i Analizy 278, Center for Social and Economic Research, Warsaw, 2004) provides more details on the accession terms. For an assessment of post-accession trade performance see Richard Pomfret “Lessons from Kyrgyzstan’s WTO Accession for Kazakhstan, Tajikistan and Uzbekistan”, Asia-Pacific Trade and Investment Review, 3(2), December 2007, 27-46.

9 Neither Russia nor any other Central Asian country is a WTO member, so that Kyrgyzstan operates in a dual-track trade environment whereby much of its trade is conducted outside WTO rules.

Kyrgyzstan is a member of several regional

organizations, of which the most significant is the Eurasian Economic Community (EurAsEC) which contains its major CIS trading partners. 21

In February 2000,

reflecting the lack of progress towards a customs union, a new agreement was signed, which envisaged tariff harmonization within five years, but by 2005 the common external tariff covered only 6,156 of the 11,086 tariff lines identified in the union’s classification system (and these were largely ones where the members’ pre-existing tariffs had been similar). Tariff harmonization within EurAsEC is implausible for Kyrgyzstan, which as a WTO member has bound tariffs at levels below what is acceptable to Russia. Russia’s tariffs are higher than those of Kyrgyzstan, both on average and with peaks on individual items, and it is highly unlikely that Russia would agree to lowering its tariffs to the bound rates agreed by Kyrgyzstan in its WTO accession. Even if the Kyrgyz authorities were tempted to override their WTO obligations, they would not want to raise tariffs which would hurt the country’s consumers to the benefit of Russian producers, when Russia’s own tariffs would remain unchanged providing no new preferential advantage to Kyrgyz exporters. 22 In sum, despite strong paper commitments the EurAsEC is unlikely to evolve into a stronger trading arrangement in the near future. Despite the existence of a regional agreement, Kyrgyzstan’s trade relations with its contiguous neighbors suffer from lack of WTO commitments. Following the 1998, Russian Crisis, Kazakhstan introduced a number of draconian import duties, including tariffs of up to 200% on dairy fats and margarines, which hurt Kyrgyz dairy exports. Kyrgyzstan reacted with restrictions on the wheat trade, although a seasonal (July-November) export tax on wheat in 1999 and 2000 appeared to have minimal impact. More important than trade taxes has been the lack of agreement on issues like

21

In 1996 Kyrgyzstan signed a customs union agreement with Belarus, Kazakhstan and Russia, and in 1999 the union was extended to include Tajikistan. In October 2000 the union was renamed the Eurasian Economic Community and the institutional structure was strengthened. In October 2005 Uzbekistan acceded to the Eurasian Economic Community, and this was accompanied by dissolution of the Central Asian Cooperation Organization, another regional organization with lofty aspirations but minimal achievements. 22 Patrizia Tumbarello (Regional Integration and WTO Accession: Which is the Right Sequencing? An application to the CIS. IMF Working Paper 05/94, February 2005, Table 4) estimates the net welfare cost of Kyrgyzstan implementing the EurAsEc customs union at $3.5 million, which is the difference between loss of consumer surplus ($26.3 million) and gain in tariff revenue ($22.5 million).

10 customs valuation or transit which have augmented the costs of inter-regional trade in Central Asia. Since December 2003, however, the situation with Kazakhstan has improved substantially. 23 For a landlocked country, almost all of whose overland trade passes through Kazakhstan or Uzbekistan, transit arrangements are crucial. Partly for this reason Kyrgyzstan has been an active participant in Central Asian Regional Cooperation (CAREC), a forum for trade facilitation among Central Asian countries, Azerbaijan, Afghanistan, China and Mongolia.

(b) Kazakhstan

Since 1995 Kazakhstan has pursued a trade policy based on moderate most-favored nation (MFN) tariffs, although with some variability of implementation. Kazakhstan is a member of several regional organizations, although the only one to have a significant influence is the Eurasian Economic Community. 24 Following the Russian price reform of January 1992, an immediate concern in Kazakhstan was the fear of losing goods in return for rapidly depreciating Soviet rubles, and export restrictions were imposed. The export controls were also aimed at supporting the interstate delivery system, although this disintegrated rapidly in 1992-4 as exporters found more favorable prices outside the system. Export duties were simplified in 1995 and abolished in 1996. The government showed some predilection for non-CIS markets as the value-added tax was initially refunded only on exports to non-CIS markets; this disincentive to supply CIS markets was removed in the 1997 budget, and all exports are now zero-rated for VAT. The initially ad hoc tariff schedule was simplified during 1995 and 1996 to form 12 bands, ranging from 1-100%. In January 1997, a new tariff schedule reverted to 13 bands, but with a maximum of 50% and a lower weighted average tariff

23

In January 2005 the Kazakhstan parliament ratified the 1998 International Transport Agreement, establishing permit-free transit for Kyrgyz trucks and in March 2005 the two countries’ customs authorities signed an agreement establishing that transiting trucks do not have to pay a deposit at the border and no longer have to be accompanied by customs officials. See IMF, First Review under the Three-Year Arrangement under the Poverty Reduction and Growth Facility, October 2005, p.14. 24 In February 2003 the leaders of Russia, Belarus, Ukraine and Kazakhstan agreed to create a Common Economic Space, but the outcome of the December 2004 Ukraine election undermined Ukraine-Russia cooperation.

11 (12%). 25 Tariffs were further reduced in July 1998, with fewer tariffs over 20% and a weighted average tariff of slightly less than 9%.

After the Russian crisis and

appreciation of the tenge, several temporary tariffs of up to 200% and bans on some imports, mainly food products from Russia, Kyrgyzstan and Uzbekistan, were introduced in the first half of 1999, although these were rescinded fairly quickly. Apart from these temporary spikes, the only major peak at the 6-digit level is the 100% duty on ethyl alcohol (HS220700); no other category has an individual tariff line peak over 30%. In January 1996 Kazakhstan lodged its application for WTO membership. The process lagged in the late 1990s, associated with slowing reform and economic crisis, 26 but resumed in the early 2000s (Table 9). Key issues in Working Party meetings in 2003-4 concerned high tariffs on some industrial and agricultural goods, Kazakhstan’s desire to maintain some export subsidies and to have ‘developing country’ status, inadequate coverage of areas for liberalization under GATS, and weak legislation on TRIMS and inadequate institutions to meet SPS, TBT or TRIPS requirements. 27 Kazakhstan responded positively to these concerns. Investment laws passed in 2003 adhere to non-discrimination principles, creating a level playing field for domestic and foreign investments; incentives are granted to both, provided they are directed towards priority economic sectors such as food processing, machinery and textile production, information technology, construction, tourism, and transportation. In 2004, Kazakhstan adopted new laws bringing safety regulations into conformity with WTO rules on technical barriers to trade. Kazakhstan also changed its tax code and licensing and business registration requirements in compliance with WTO norms, implemented internationally recognized accounting and reporting standards; eliminated restrictions on foreign participation in the banking and

insurance

sectors

in

2005,

fostered

a

competitive

market

in

the

telecommunications, transportation and energy sectors, and liberalized its trade

25

International Monetary Fund: Republic of Kazakhstan – Recent Economic Developments, IMF Staff Country Report No.97/67 (August 1997), 62. At the same time Kazakhstan introduced preferential tariffs of zero for 46 low-income countries and 75% of the general tariff for other developing countries. 26 Trade reform commitments included in 1998 EFF-supported programs were not implemented. Kazakhstan, however, maintained its commitment to current account convertibility. 27 The industry policy formulated in 2002-3, which included sector- and even firm-specific assistance to promote diversification and non-oil development, may have also complicated the accession process. See International Monetary Fund, Staff Report for the 2003 Article IV Consultation, 7th. May 2003, p.14, and International Monetary Fund, Republic of Kazakhstan: Selected Issues and Statistical Appendix; IMF Staff Country Report No. 03/211, July 2003, p.37-55.

12 policies through lowered import duties. The Draft Report of the Working Party, which is the basis for the final negotiations phase of WTO accession, was completed in May 2005 and revised in September 2006. By mid-2008 Kazakhstan had finalized bilateral negotiations with twenty countries, and only the United States, the European Union, Australia and India remain. 28

The major remaining sticking point is Kazakhstan’s wish for a transitional

period to legislate local content provisions for investments into non-energy goods production industries and services such as machinery production and chemical industries. The WTO has also requested third-party access to Kazakhstan’s existing energy pipelines and a favourable investment climate for the construction of new pipelines, to which Kazakhstan affirms that it will maintain non-discriminatory access to its pipelines after its accession to the WTO, but will not make such commitments on a non-reciprocal basis. Political considerations may also be influencing the timing of Kazakhstan’s WTO accession. 29 Kazakhstan has aimed to keep special ties with other former Soviet republics, variously described as a free trade area, customs union or unified economic space, although the practical implementation has often been difficult to document. In May 1993, when the CIS was clearly failing to establish itself as an economic organization, ten CIS members, including Kazakhstan, reached an agreement to form an economic union; a formal treaty to that effect was signed in September 1993, but it had little or no effect. In January 1995 Kazakhstan signed a customs union agreement with Belarus and Russia. Tariffs on trade between members were eliminated in March, and there were moves towards harmonizing external tariffs in 1995-6, although this seemed to halt with Kazakhstan’s January 1997 tariff revision.

The union was

extended to include Kyrgyzstan in 1996, Tajikistan in 1999 and Uzbekistan in 2005. As described in the previous subsection, a February 2000 agreement envisaged tariff harmonization within five years, but implementation is far from complete. As with Kyrgyzstan, a common external tariff anywhere close to Russia’s tariff is unacceptable to Kazakhstan because Russia’s tariffs are higher than those of 28

Zhanar Aitzhanova, Deputy Minister of Industry and Trade and a leading WTO accession negotiator for Kazakhstan, speaking at a Central Asia Caucasus Institute (CACI) Forum on 4th. June 2008 at the Johns Hopkins University in Washington DC. 29 Many commentators expected the large CIS countries, Kazakhstan, Russia and Ukraine, to coordinate their WTO entry. After Ukraine’s WTO accession in the first half of 2008, however, Kazakhstan failed to conclude its accession while asserting that its timetable was not tied to that of Russia

13 Kazakhstan, both on average and with peaks on individual items. Although the Kazakh authorities have indicated that Russia’s tariff is used as an informal benchmark for Kazakhstan’s offers of bound tariff levels in its WTO negotiations, it is unlikely that Kazakhstan would want to raise tariffs which would hurt the country’s consumers to the benefit of Russian producers, when Russia’s own tariffs would remain unchanged providing no new preferential advantage to Kazakh exporters. 30

(c) Azerbaijan

Azerbaijan’s more disruptive transition from Soviet republic to independent state is reflected in a slower adoption of a sustained trade policy regime. Between 1991 and 1995 trade policy was largely driven by ad hoc measures, e.g. Azerbaijan signed the CIS free trade agreement in 1994, but this was not implemented. 31 After 1995, however, as the political situation stabilized and the economy began to grow, more consistent trade policies were adopted. Export restrictions were gradually reduced, and had disappeared by 1997. A simplified tariff schedule was introduced, and peaks were smoothed off. By 2005 the simple average applied tariff on all goods was 9.6 percent: 14.3 per cent on agricultural goods and 8.8 per cent on non-agricultural goods). There were no contingency measures (anti-dumping or countervailing duties or other safeguard measures) in force, and on 99 per cent of tariff lines the duty was expressed in ad valorem terms.

There is also a substantial free list, with 28 per cent of

agricultural imports and 12 per cent of non-agricultural imports entering Azerbaijan duty free in 2005. 32 Azerbaijan signed the CIS free trade agreement in 1994, but it was never implemented.

Azerbaijan has bilateral free trade agreements with seven of the

countries: Georgia, Kazakhstan, Moldova, Russia, Turkmenistan Ukraine and

30

Patrizia Tumbarello (Regional Integration and WTO Accession: Which is the Right Sequencing? An application to the CIS. IMF Working Paper 05/94, February 2005, Table 4) estimates the net welfare costs to Kazakhstan from tariff harmonization at Russian levels to be $32 million; the trade diversion and trade destruction would impose large costs on consumers ($255 million), which would be only partially offset by higher tariff revenue ($223 million). 31 Azerbaijan also signed nine bilateral trade agreements with CIS countries during the 1990s; four of these appear to be active, under which imports from Georgia, Kazakhstan, Russia and Ukraine enter Azerbaijan duty-free. The other agreements were with Belarus, Moldova, Turkmenistan and Uzbekistan. 32 Data from World Trade Organization Trade Profiles 2007, page 12.

14 Uzbekistan, but implementation of the bilateral agreements is incomplete.33 Azerbaijan has been a member of the GUAM grouping since its establishment in 1997, together with Georgia, Ukraine and Moldova (Uzbekistan joined in 1999, but left de facto in 2002 and de jure in 2005); GUAM has had little economic impact, but is seen as a counterweight to Russian influence in the CIS.

4. Current Trade Flows and Patterns of Trade between Azerbaijan, Kazakhstan and Kyrgyzstan and APTA Members

Bilateral trade flows between Azerbaijan, Kazakhstan and Kyrgyzstan and APTA members account for a small share of all three countries’ trade (Table 10), apart from trade of Kazakhstan and Kyrgyzstan with contiguous China. China is the fourth biggest destination for Kazakhstan’s exports and sixth biggest for Kyrgyzstan.

For

Azerbaijan, India is the tenth largest export destination and Korea the twelfth largest, but each of these two countries accounts for less than three per cent of the total value. Both Azerbaijan and Kyrgyzstan do not export at all to Sri Lanka or Bangladesh. In general, the APTA countries are not major destinations for the three countries’ exports. 34

The three countries’ imports from APTA members are more significant.

China is the second largest import supplier to Kazakhstan and Kyrgyzstan, and seventh largest to Azerbaijan. Korea is the ninth biggest supplier of imports to Kyrgyzstan and eleventh biggest to Kazakhstan. Korea is the second largest APTA supplier to all three countries, and India third-largest. However, the three countries’ import demand is small compared to the total exports of the APTA member countries. Table 11 illustrates the evolution of trade flows between Azerbaijan, Kazakhstan and Kyrgyzstan and APTA members since 2002. The values of trade with China, India and the Republic of Korea have increased, in some cases (e.g. Kazakhstan’s trade with China, Kazakhstan’s imports from the Republic of Korea, and Kyrgyzstan’s imports from China) substantially.

33

Apart from those few

A March 2003 Asian Development Bank report (Azerbaijan: Trade and Trade Facilitation Review, page 35) claimed that only imports from Georgia, Kazakhstan, Russia and Ukraine entered duty-free -http://www.adb.org/Documents/Reports/Trade_Facilitation/trade_facilitation_review_AZE.pdf 34 It should be noted that, with the greater commodity concentration, it is increasingly difficult to say much about the direction of exports because oil and gold are sold on world markets and may be going anywhere – including APTA countries - once they leave the Caspian Basin or Kyrgyzstan. However, oil and gold normally enter countries duty-free, so they are of little relevance to discussion of preferential tariffs.

15 exceptions, the overall picture is of small values and shares. For analytical purposes the “latest year” data reported in Table 10, and analyzed in this and the next section seem to be representative of recent trade relations between Azerbaijan, Kazakhstan and Kyrgyzstan and APTA members. Bilateral trade flows between Azerbaijan, Kazakhstan and Kyrgyzstan and APTA members exhibit similar characteristics to the three countries’ aggregate trade flows, with exports concentrated in a narrow range of energy-related products and minerals. The largest single exception is Kazakhstan’s iron and steel exports to China and Korea. Azerbaijan exports substantial amounts of oil-related equipment to India and Korea.

Although the magnitudes are smaller, Kyrgyzstan’s manufactured

exports, especially its niche in communications and monitoring equipment, are important for the country. Imports into the three countries from APTA members are dominated by manufactured goods. The export data presented in the Appendix tables are summarized in the remainder of this section.

(a) Azerbaijan

Azerbaijan’s exports to APTA countries are heavily concentrated in a small number of HS06 categories (Table A1). Azerbaijan’s exports to India ($145 million) and Korea ($125 million) in 2007 were almost entirely concentrated in oil products (HS270900). Casting alloy ($312,000) and roots for pharmacological use ($36,260) were the only other exports to Korea. Non-oil exports to India amounted to less than $100,000 in total and the largest category ($85,800 in HS780199) is a miscellaneous group. Out of $10.1 million exports to China in 2007, over 90 percent consisted of equipment for oil production; $8 million was drilling equipment (HS843143), $0.8 million special purpose vehicles (HS870590), $0.5 million other boring machinery, (HS843049) and $0.1 million geological survey instruments (HS901580) and interchangeable tools with diamond parts (HS820790). Azerbaijan exported $334,463 worth of roots for pharmacological use and $33,820 of fruit and vegetable juices to China. The only other item with over $50,000 worth of exports to China in 2007 was “other silk waste” (HS500390 -- $79,807). Azerbaijan had no exports to Bangladesh or Sri Lanka in 2007.

16 (b) Kazakhstan

Kazakhstan is by far the largest Central Asian exporter to APTA countries, and its exports cover a fairly large range of commodity categories, although the values are heavily concentrated in energy products and minerals (Table A2). Exports to China are much larger than to the other four APTA countries. Exports to Bangladesh and to Sri Lanka in 2006 consisted of a single iron and steel product, which is not included in either of the APTA countries’ preferential tariff list. Kazakhstan’s 2006 exports to China amounted to 3,592.5 million dollars. These were primarily raw materials: $1,370 million were mineral fuels (HS27), $550 million zinc (HS79), $524 million copper (HS74), $331 million ores (HS26), $281 million iron and steel (HS72), $203 million inorganic chemicals (HS28), $199 million hides and skins (HS41) and $43 million wool (HS51).

Apart from iron and steel,

Kazakhstan exports a large range of manufactured goods (HS84-96) to China, but current quantities are small. Korea and India are not major export markets for Kazakhstan, ranking 24th and 37th by value of exports in 2006, and in both cases Kazakhstan’s exports are heavily concentrated in a few products. Of Kazakhstan’s $215 million exports to Korea, $126 million was iron and steel (HS72) and $88 million precious metals (HS71); apart from $1 million of copper (HS74) and $0.8 of cotton (HS52), other export items were small. Of Kazakhstan’s $59 million exports to India, $46 million was cereals (HS10), $7 million asbestos (HS252400) and $6 million iron and steel (HS72)

(c) Kyrgyzstan

Kyrgyzstan’s exports to APTA countries are overwhelmingly directed to China, $62 million in 2007 (Table A3). Exports to Korea and India were small: $3.1 million to Korea and less than a million dollars to India. There were no exports to Bangladesh or Sri Lanka in 2007. Kyrgyzstan exports primary products to China; out of $61.9 million exports to China in 2007, $14.6 million were hides and skins (HS41), $7.9 million aluminum (HS76), $6.9 million mineral fuels (HS27), $2.6 million copper (HS74), and $2.1 million wool (HS51).

However, Kyrgyzstan also exports a substantial range of

manufactured goods, including specialized monitoring units ($14.3 million under

17 HS870590) and communications equipment ($4.3 million HS842539) and walkie talkies ($587,212 under HS852520). 35 Exports to Korea were also concentrated in monitoring and communications equipment, such as HS847141 ($584,594) and 847160 ($242,104) and walkie talkies ($1,047,351 under HS852520). Apart from $552,000 of cereal exports (HS10), no other export amounted to over $100,000. Exports to India are spread over a large number of categories, each of minor value, with the residual category (HS99999) accounting for almost a quarter of the total.

5. Impact of Azerbaijan, Kazakhstan and Kyrgyzstan Joining APTA

This section analyses the benefit to Azerbaijan, Kazakhstan and Kyrgyzstan from joining APTA under the existing list of tariff preferences. With the product coverage and margin of preference agreed in the third round of negotiations and effective since September 2006, acceding to APTA would yield benefits primarily on Kazakhstan’s exports of some metal products. Otherwise, preferential treatment would only apply to a small number of the existing exports of Azerbaijan, Kazakhstan and Kyrgyzstan, mostly with small current trade flows. Application of current APTA preferences would reduce the duty paid on about half a billion dollars worth of exports from Azerbaijan, Kazakhstan and Kyrgyzstan out of total exports worth $45 billion and exports of around $4 billion going to APTA member countries. The main items are summarized in Table 12. The largest trade flows to benefit would be Kazakhstan’s metal (copper and iron and steel) exports. Flat-rolled iron and steel product (HS 7208 and 7209) exports worth $37 million would benefit from a 50% margin of preference in Korea. In China, Kazakhstani exports worth $50 million would benefit from a 30% margin and another million dollar’s worth of exports would benefit from a 15% preference margin, while miscellaneous iron and steel products (HS732690) worth $2.9 million might be eligible for a 30% margin of preference Kazakhstan’s iron and steel exports to India would not receive preferential treatment. Exports to Bangladesh and to Sri

35

These specialized production units reflect the Kyrgyz republic’s role in the Soviet era, when it produced some key inputs for the military complex, and its isolated location was an advantage. With the dissolution of the Soviet Union, these producers lost their captive internal market, but they have succeeded in creating some export lines in which they have a comparative advantage.

18 Lanka in 2006 consisted of a single iron and steel product, which is not included in either of the APTA countries’ preferential tariff list. Copper exports (HS740811) to China, worth $159 million in 2006, would benefit from a 30% preference margin and aluminum alloys worth $4.5 million in 2006, would benefit from a 15% preference margin. Some energy products would qualify for preferential treatment, such as Kazakhstan’s exports of naphthalene (HS270740) and liquefied propane (HS2711) to China, both of which are already million dollar plus export items. Gold jewelry exports (HS 711319) to Korea, worth $1,971,389 in 2006, would benefit from a 30% margin of preference. Kyrgyzstan

would

benefit

from

preferential

treatment

for

its

telecommunications and monitoring equipment to China and Korea. Margins of preference range from zero to 50% depending on the precise coverage of the preferential treatment, which is defined at very narrow commodity definitions, including some communications equipment and components but not others. Some Kyrgyz clothing exports (HS61-62) might qualify for preferential access to China and Korea, although current trade flows are small. The biggest export flow from Azerbaijan to benefit from APTA preferences would be the $124 million oil exports to Korea, but the MFN tariff is low; it was cut from 3% to 1% in March 2008. The main gain to Azerbaijan would come from lower duties charged on exports of oil equipment to China, which should have a margin of preference ranging from ten to ninety percent. Azerbaijan’s exports of fruit and vegetable juices would potentially benefit from China’s APTA preferential tariffs. However, the preferences apply to subcategories of HS06 groups, varying from a ten to a fifty percent margin of preference and including some fruit juices and not others, and may not match Azerbaijan’s specific exports. Azerbaijan’s exports to China of plants for pharmacological use should benefit from a fifty percent tariff preference. Exactly how valuable these preferential duties would be to the three countries depends upon the current tariff rates. Moreover, some preference margins are defined more narrowly than at the HS 6-digit level and whether they apply to a specific export item may be a matter for clarification and negotiation.

Most of the benefits arise

from China’s offered preferences, which cover a much wider range of products than other APTA countries’ offers, but because Chinese applied tariffs are fairly low the actual reduction in duty paid may be small. Benefits to the exporter also depend upon the elasticity of demand for its exports. If it is a small supplier of a competitive

19 market, then a preferential tariff reduction will accrue to the exporter, whereas if the exporter faces inelastic demand then most of the benefit will accrue to buyers in the importing country. In joining APTA, new members will be expected to offer their own preferential terms for imports from APTA members. This may be beneficial or harmful for the acceding country, depending upon whether the increase in imports under preferential terms is trade-creating or trade-diverting. Given the moderate MFN tariffs of Azerbaijan, Kazakhstan and Kyrgyzstan, the magnitude of these effects is likely to be small. There will also be political pressure against offering much in the way of preferential treatment, insofar as major trading and political partners, notably Russia and to a lesser extent the USA and EU, would be unhappy to see their exports entering Azerbaijan, Kazakhstan and Kyrgyzstan on worse terms than imports from APTA members.

6. Potential Benefits to Azerbaijan, Kazakhstan and Kyrgyzstan from Extensions to APTA

The main attractiveness of APTA trade preference is their potential to stimulate economic diversification through export-oriented activities and access to global value chains. For this reason, the analysis in the previous section, which was restricted to current exports, is too limited. The most attractive APTA preferences are the ones that would encourage expansion of non-traditional exports whether Azeri fruit juices or Kyrgyz specialized electronic equipment or export activities that do not yet exist. It is difficult to predict the precise products that would be exported, but the process would be best aided by wide-ranging low preferential tariffs plus guarantees that the preferential tariffs would not be raised if a successful investor in Kyrgyzstan or Azerbaijan or Kazakhstan identified a successful export niche. The attractiveness of APTA to Azerbaijan, Kazakhstan and Kyrgyzstan would be much enhanced if it can offer more than tariff preferences. For Kazakhstan, for example, a lower tariff on iron and steel exports would be beneficial, but even more important would be a guarantee against anti-dumping duties or other safeguard measures or non-tariff barriers, given the political clout of big steel in China, India and Korea. Such guarantees, which are currently absent from APTA, are critical if any acceding country is to seriously view APTA as a means for gaining a foothold in

20 existing APTA members’ markets. A flaw in many preferential tariff programs, such as the Generalized System of Preferences, is that the non-contractual nature of preferences and ease with which the importing country can restrict preferential access if preferred imports start to threaten domestic vested interests reduce the incentive for a beneficiary country to invest in a potential export activity; under such conditions non-utilization of preferential access becomes self-fulfilling. On the agenda for APTA is extension of coverage to include trade facilitation, services and investment. Such deepening of APTA commitments could be beneficial to Azerbaijan, Kazakhstan and Kyrgyzstan. Although they are not major exporters of services, the oil-exporting countries are beginning to have significant outward flows of direct foreign investment.

More importantly, as an obstacle to diversifying

merchandise exports trade costs are today often a greater barrier than tariffs. Trade facilitation is in its impact often non-discriminatory, but by being at the negotiating table APTA members can influence the choice of which trade costs to target for reduction. Also on the APTA agenda is extension of membership.

Expanded

membership generally makes a preferential trading arrangement more attractive to incumbent members. Few of the countries currently mentioned as potential new members are important trading partners of Azerbaijan, Kazakhstan or Kyrgyzstan, although neighboring Pakistan or the larger ASEAN economies have potential as export markets.

7. Conclusions

The Bangkok Agreement and its successor APTA were acknowledged to have had a disappointingly small impact on intra-Asian trade before China’s accession in 2001 and the 2006 commitment to revitalize APTA. Assessment of the benefits of membership must be forward-looking, based on the premise that the existing members are committed to deepening the Agreement by going beyond tariff preferences and widening it by attracting new members. For Azerbaijan, Kazakhstan and Kyrgyzstan accession to APTA would bring benefits to some existing exporters, but the benefits from receiving current APTA tariff preferences would be relevant to only a few products and cover only about two per cent of the three countries’ total exports and an eighth of their exports to the five

21 APTA members. In sum, there are positive consequences but they are quantitatively small. This static analysis, may, however, substantially understate the potential benefits from joining APTA. If APTA members are serious about revitalization, then the tariff preferences should incorporate an implicit guarantee not to resort to safeguards (important for Kazakhstan’s iron and steel exports) as well as a commitment to extending the preferences to cover more products.

Moreover,

bringing trade facilitation onto the APTA agenda will further reduce the barriers to trade among members. These considerations are important for Azerbaijan, Kazakhstan and Kyrgyzstan. All three countries inherited a production structure heavily concentrated in a narrow range of primary products and, although that has brought benefits in an age of soaring oil and metal prices, the governments are concerned about diversifying their economies. Given the reasonably high human capital endowments, there are undoubtedly export niches in processed foods or manufacturing that the countries could fill. Success presupposes a good domestic environment for such activities, but it can be helped by favorable market access and APTA members constitute a substantial market. In sum, the benefits from APTA accession accrue to some extent from receiving existing tariff preferences granted by APTA members, and to a much greater extent from the opportunity to find new export activities targeted at APTA markets. Accession to APTA would also presuppose a reciprocal granting of preferential access to APTA members.

This may be politically awkward for

Azerbaijan, Kazakhstan and Kyrgyzstan, due to their relations with other large economic powers, and could be best accommodated within the framework of low MFN tariffs (i.e. in a setting consistent with Kyrgyzstan’s WTO commitments and Kazakhstan and Azerbaijan’s WTO accession). What acceding countries could offer unreservedly to existing members is a commitment to work on trade facilitation and other new areas. Such a commitment would be consistent with the spirit of the original approval of the Bangkok Agreement within GATT. Deepening intra-Asian trade relations in an expanded APTA, without creating large margins of preference on high MFN tariffs, would be a win-win situation for all concerned.

22 Table 1: Products Covered and Margin of Preference offered under APTA: After the third round of negotiations (completed mid-2005; in effect September 2006)

Number of products covered Margin of preference General Special General Special Concessions Concessions Concessions Concessions Bangladesh 209 -14.1 -China 1,697 161 26.7 77.9 India 570 48 23.9 39.7 Korea 1,367 306 35.4 64.6 Sri Lanka 427 72 14.0 12.0 Total 4,270 587 26.8 58.8 Source: Trade and Investment Division UN-ESCAP, Facts About the Asia-Pacific Trade Agreement (Bangkok Agreement): Informal Information Note, Bangkok, October 2006, page 5. Notes: Special concessions are to least developed country members. Margin of preference -- [(MFN tariff – APTA preferential rate)/ MFN tariff].100 -- is the simple average of all items, expressed in percentage terms.

Table 2: Azerbaijan, Kazakhstan and Kyrgyzstan: Economic Indicators Azerbaijan Kazakhstan Kyrgyzstan Population (2007, million) Life expectancy (2008) GDP (2007, USD billion at current prices) GDP per capita (2007, purchasing power parity) Openness [(exports + imports)/GDP], 2006 Current account balance (percent of GDP), 2006

8.6 66.3 31.1

15.1 67.6 95.5

5.3 69.1 3.5

8,521

10,658

2,315

111

92

120

+16

-2.2

-16.8

Sources: IMF World Economic Outlook, October 2007; IMF International Financial Statistics, February 2008; OECD, Black Sea and Central Asia, 2008.

23

Table 3: Azerbaijan, Kazakhstan and Kyrgyzstan: Growth in real GDP 1989-2007 (per cent)

1989

Azerbaijan Kazakhstan Kyrgyzstan

1990

0 8

1991

0 3

-13 -5

1992

1993

-3 -19

1994

-9 -16

1995

-13 -20

1996

-8 -5

1 7

1997

1998

1999

2 10

1 -2 2

6 2 4

1999; 1989 =100

63 63

Source: European Bank for Reconstruction and Development Transition Report Update, April 2001, 15.

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

10

11

11

10

11

11

10

24

31

23

20

-2 2

3 4

10 5

14 5

10 0

9 7

10 7

10 0

11 3

9 8

5 7

Azerbaijan Kazakhstan Kyrgyzstan

Source: European Bank for Reconstruction and Development Transition Report (accessed online at http://www.ebrd.org/country/sector/econo/stats/index.htm 21 July 2008). Notes: 2007 = preliminary actual figures from official government sources. Data for 2008 represent EBRD projections.

Table 4: Azerbaijan, Kazakhstan and Kyrgyzstan: Inflation 1991-2007 (per cent change in retail/consumer price index) 1991

Azerbaijan Kazakhstan Kyrgyzstan

1992

79 85

1,381 855

1993

1994

1,662 772

1995

1,892 229

176 41

1996

1997

39 31

1998

17 26

1999

8 36

7 12

Source: European Bank for Reconstruction and Development Transition Report Update, April 2001, 16.

Azerbaijan Kazakhstan Kyrgyzstan

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

-1 7 11

-9 8 36

2 13 19

2 8 7

3 6 2

2 6 3

7 7 4

10 8 4

8 9 6

17 11 10

20 17 19

Source: European Bank for Reconstruction and Development Transition Report (accessed online at http://www.ebrd.org/country/sector/econo/stats/index.htm 21 July 2008). Notes: 2007 = preliminary actual figures from official government sources. Data for 2008 represent EBRD projections.

24 Table 5: Azerbaijan, Kazakhstan and Kyrgyzstan: Export Concentration, 1994 and 2002 (top three products’ share of total exports) Azerbaijan 1994 2002 Oil 32.5 88.8 Cotton 15.5 1.0 Metals 16.5 1.0 Top 3 64.5 90.7

Kazakhstan 1994 2002 Oil 16.7 50.6 Steel 14.5 9.8 Copper 10.5 7.1 Top 3 41.7 67.5

Kyrgyzstan 1994 Nonferrous metals 15.3 Electricty 10.0 Machinery 10.9 Top 3 36.2

2002 51.7 9.8 12.0 73.5

Source: Katrin Elborgh-Woytek: Of Openness and Distance: Trade Developments in the Commonwealth of Independent States, 1993-2002, IMF Working Paper No.03/207, October 2003, page 8.

Table 6: Azerbaijan, Kazakhstan and Kyrgyzstan: Export Specialization (Balassa Index of revealed comparative advantage), average 2001-6 SITC group Azerbaijan Kazakhstan Kyrgyzstan

0 0.6 0.6 1.5

1 0.8 0.2 3.5

2 0..9 2.1 3.6

3 8.8 6.9 1.4

4 2.3 0.1 0.0

5 0.2 0.2 0.2

6 0.2 1.4 0.7

7 0.1 0.0 0.2

8 0.0 0.0 0.5

9 0.1 0.3 10.5

Notes: calculations using UN COMTRADE database. SITC groups = 0 food and live animals, 1 beverages and tobacco, 2 inedible crude materials, 3 fuels and lubricants, 4 animal and vegetable oils and waxes, 5 chemicals, 6 manufactured goods by material, 7 machinery and transport equipment, 8 miscellaneous manufactures, 9 other.

Table 7: Commodity Composition of Registered Trade, Azerbaijan, 2003-7 (million USD) 2003

2004

2005

2006

2007*

Total Exports: 2,625 3,743 7,649 13,015 14,315 Oil and oil products 2,250 3,097 6,618 11,999 13,448 Chemicals and petrochemicals 85 144 204 294 110 Metals 55 97 106 150 116 Floating drill rigs 47 50 40 75 122 Other machinery and equipment 0 136 265 76 62 Cotton 33 36 40 39 19 Other 155 183 376 382 438 Total Imports: 2,723 3,582 4,350 5,269 4,159 Food 424 538 555 651 538 Natural gas 215 253 277 465 52 Chemicals and petrochemicals 86 120 165 203 185 Metals 419 513 400 508 444 Machinery and equipment 859 1,116 1,578 1,841 1,469 Other 720 1,042 1,375 1,601 1,471 Source: national data reported in International Monetary Fund: Republic of Azerbaijan: Statistical Appendix, IMF Staff Country Report 08/216, July 2008, Table 22. Note: * first nine months.

25

Table 8: Direction of Registered Trade, Azerbaijan, 2003-7 (percentage shares) 2003 2004 2005 2006 2007* Exports: CIS of which, Russia Iran Turkey UK Other countries Imports: CIS of which, Russia Iran Turkey UK Other countries

12.7 5.6 1.9 4.1 0.3 81.0

16.4 5.6 4.1 4.9 0.2 74.4

11.9 3.8 2.2 3.6 0.1 82.2

7.3 2.7 2.3 4.4 0.1 85.9

6.1 2.5 2.5 5.5 0.1 85.8

31.8 15.6 5.7 8.2 8.9 44.0

33.3 17.0 4.8 7.0 10.2 43.5

31.8 16.4 3.2 8.5 8.3 47.0

33.5 23.1 2.6 9.2 8.6 44.8

29.2 16.5 3.8 12.5 7.2 45.5

Source: national data reported in International Monetary Fund: Republic of Azerbaijan: Statistical Appendix, IMF Staff Country Report 08/216, July 2008, Table 23. Note: * first nine months

Table 9: Azerbaijan, Kazakhstan and Kyrgyzstan: Status of WTO Accession Negotiations

Application Working Party Meetings

Factual Summary Draft Report of Working Party Latest revision of Report

Kyrgyzstan February 1996 March 1997

Kazakhstan Azerbaijan 29 January 1996 30 June 1997 19-20 March 1997 7 June 2002 9 October 1997 14 October 2004 9 October 1998 30 June 2005 13 July 2001 30 March 2006 15 July 2003 6 May 2008 4 March 2004 3 November 2004 7 June 2005 9 October 1997 (revised 3 September 2004) July 1998 20 May 2005

Source: http://www.wto.org (accessed 30 July 2008).

29 September 2006

26 Table 10: Azerbaijan, Kazakhstan and Kyrgyzstan: Trade with APTA Countries, latest year (current US dollars)

Azerbaijan (2007) total Bangladesh China India Korea Sri Lanka

Value of exports Share 6,058,319,100 -0 10,103,551 0.2 144,947,941 2.4 124,771,069 2.1 -0

Value of imports Share 5,712,178,288 1,479 0.0 278,794,421 4.8 71,983.972 1.3 91,556,391 1.6 10,232,949 0.2

Kazakhstan (2006) total Bangladesh China India Korea Sri Lanka

38,244,423,102 1,167,107 3,592,514,164 59,407,632 215,015,731 321,293

0.0 9.4 0.2 0.6 0.0

23,663,081,975 1,139,164 1,924.942,799 150,569,090 359,331,551 4,719,765

0.0 8.1 0.6 1.5 0.0

Kyrgyzstan (2007) total Bangladesh China India Korea Sri Lanka

1,134,181,270 -61,876,518 831,384 3,120,296 --

0 5.5 0.1 0.3 0

2,416,987,376 364,955 355,557,541 8,927,026 39,058,401 1,004,106

0.0 14.7 0.4 1.6 0.0

Source: UN Comtrade database Note: -- = no reported trade; shares are as a percentage of total exports or imports.

Table 11: Azerbaijan, Kazakhstan and Kyrgyzstan: Evolution of Trade with APTA Countries, 2002-7 (millions of US dollars) 2002 2003 2004 2005 2006 2007 Azerbaijan Import Exports Import Exports Import Exports Import Exports Import Exports Import Exports World 1,665.6 2,167.5 2,626.4 2,591.7 3,515.9 3,615.4 4,211.2 4,347.2 5,266.7 6,372.2 5,712.2 6,058.3 Bangladesh 0 0 0 0 0.1 0 0 0 0 0 0 0 China 51.0 1.3 92.4 19.3 145.5 31.7 173.8 99.2 222.5 6.4 278.8 124.8 India 19.4 2.2 35.4 1.3 47.0 5.4 55.9 1.6 57.5 1.0 72.0 144.9 Korea 7.3 0 16.0 1.0 24.1 3.8 41.6 0.5 46.9 68.4 91.6 10.1 Sri Lanka 10.7 0 6.0 0.1 9.1 0 8.7 0 9.1 0 10.2 0 2002 2003 2004 2005 2006 2007 Exports Import Exports Import Exports Import Exports Kazakhstan Import Exports Import Exports Import World 6,584.0 9,651.5 8,408.3 12,926.6 12.631.8 19,922.3 17,352.2 27,849.0 23,663.1 38,244.4 32,756.4 47,755.3 Bangladesh 1.6 1.2 1.0 1.6 0.8 3.1 1.7 1.2 1.1 1.2 1.2 10.3 China 313.0 1,004.2 523.5 1,653.1 758.1 1,931.5 1,251.8 2,423.9 1,924.9 3,592.5 3,507.3 5,639.6 India 55.1 4.2 73.0 5.9 86.0 8.6 100.9 19.9 150.6 59.4 147.6 48.1 Korea 110.2 48.9 114.6 55.5 247.7 162.8 256.1 187.5 359.3 215.0 625.9 217.4 Sri Lanka 3.0 0.2 2.7 0 3.3 0.2 4.1 0 4.7 0.3 5.3 0.1 2002 2003 2004 2005 2006 2007 Kyrgyzstan Import Exports Import Exports Import Exports Import Exports Import Exports Import Exports World 579.4 460.3 717.0 581.7 940.9 718.7 1,107.8 672.0 1,718.2 794.1 2,417.0 1,134.2 Bangladesh 0.0 0 0.1 0 0.1 0 0.1 0 0.2 0 0.4 0 China 59.0 40.1 77.6 23.3 80.0 39.3 102.9 26.6 245.6 38.1 355.6 61.9 India 2.9 0.8 3.7 0.7 4.0 0.6 3.9 10.2 6.2 3.7 8.7 0.8 Korea 6.9 1.1 11.7 0.4 25.0 0.5 27.8 1.3 29.1 2.1 39.1 3.1 Sri Lanka 1.5 0 1.7 0 1.9 0.0 1.4 0 1.3 0 1.0 0 Source: UN Comtrade database

Table 12: Major Items which would benefit from Application of Current APTA Preferences to Exports from Azerbaijan, Kazakhstan and Kyrgyzstan

Exporter Kazakhstan Kazakhstan Kazakhstan Kazakhstan Kazakhstan Kazakhstan Kazakhstan Kazakhstan Kyrgyzstan

Importer China China Korea China China China China Korea China

Kyrgyzstan Korea Azerbaijan Korea Azerbaijan China

Item flat-rolled iron and steel products ------- ditto ------------------- ditto ------------miscellaneous iron and steel products copper aluminum alloys naphthalene and liquefied propane gold jewelry telecommunications and monitoring equipment ------- ditto ------------oil oil equipment

Value $50m $1m $37m $3m $159m $5m $3m $2m $19m $1m $124m $9m

MOP 30% 15% 50% 30% 30% 15% 14-30% 30% up to 50% 50% 50% 10-90%

Source: Appendix tables Note: value of current trade flows is for 2006 for Kazakhstan and 2007 for Azerbaijan and Kyrgyzstan.

1

APPENDIX TABLES

Table A1: Azerbaijan: Exports to APTA Countries, HS 6-digit categories, 2007 (current US Dollars) HS Code 121190 200980 270900 391590 401693 420291 442090 481730 482050 490199 490600 491191 500390 570249 621010 630232 630251 630900 640590 700992 701329 730711 731100 732394 732399 732690 740321 740400 740929 760120 780199 780419 820551 820790 841229 841391 843049 843143 847141 847330 850300 851999 852439 870590

China India Korea value MOP value MOP value MOP 334,463 50 36,260 33,820 10-50 144,854,972 124,422,809 50 26,000 35,710 50 45 10 30 15 130 60 30 79,807 4,650 33 670 30 55 80 350 770 30 25 977 12,971 9,086 100 10,450 95 89 34,650 8,250 33,000 312,000 50 85,800 7 4,500 60 10 60,000 15 34,796 18,457 50 458,721 7,981,850 20-90 120 390 9,796 5 80 15 841,817 10

2 871200 890310 901580 940360 950390 950590 950691 960500 970110

50 40 72,450

30 50 125 45 300 25 605

5 5

5

Source: UN Comtrade database (no reported exports to Bangladesh and Sri Lanka). Note: MOP = margin of preference as in Table 1. Some preferential tariffs apply only to sub-categories (eg. HS121190 for China). Blank cells not included in the preferential tariff list

3 Table A2: Kazakhstan: Exports to APTA Countries, HS 6-digit categories, 2006 (current US Dollars) HS code

01060 03037 05079 10011 10019 11010 12060 12076 12111 12119 14042 21069 22019 22086 23063 25010 25030 25061 25169 25174 25174 25240 25262 26011 26011 26020 26030 26070 26080 26100 26110 26139 26171 26179 26203 27011 27011 27074 27090 27100 27111 27111 27139 28020 28049 28182 28191 28199 28261

Banglade sh

MOP China

MO P

110 48,172 37,000 2,000

India

MO P

Korea

50 9,290 45,523,6

46,017 186,808 11,082 5,480 25,300 3,473,172

23,343 17,200

50 4,306

9,600 93 351,997 93 20,545,262 791 8,350 1,303 $614 3,120,152 281 39,123,327 252,698,162 2,795,593 2,304,708 1,227,507 6,146,654 21,468,363 649,500 3,150,609 953,442

30

7,179,71

784 153,458 450 13,167 1,190,258 1,317,196,5 49,943,502 1,608,410 4,060 12,533,280 125,279 1,105,835 48,686,309 3,265,489 1,950,645 5,000

14

30 30

42,278

MO P

Sri Lanka

MO P

4 28332 28352 28365 28413 28429 28441 28469 29152 30049 31055 32091 32141 38249 39011 39123 39151 39152 39159 39162 39169 39173 39201 39202 39233 39234 39235 39239 39241 39249 39252 39263 39264 39269 40122 40159 41011 41012 41022 41031 41039 41042 41051 42021 42029 42050 43021 44152 44182 44201 46012 47042 48089 48112 48113

1,597,193 24,390 1,414 4,596,570 130,489 140,277,545 732,000 2,807

403,948

858,232

38,293 3,813,075 42,915 179 1,315 12 31,147 77,600 34,740 169,546 449 32,149 101 310 216 328

8 5

30 30 30

30 285 401 1,200

30 122

200 78 245 67 372,768 680 1,472,627 11,879 210,625 41,121 19,100 188,476,465 8,147,769 1,250 1,230 82 730 865 344 163 17,111 309 101 20 2,885

30 17 10

14

21

5 48149 51021 51052 51122 52010 52021 52029 52052 52052 52052 52111 57021 57024 57025 57033 61044 61099 61159 61161 62019 62043 62052 62111 62114 62149 63023 63039 63049 63059 63061 63090 64029 64031 64051 65059 66020 67021 68061 68091 68111 68113 69029 69089 69109 69111 69120 70099 70132 70133 70169 71069 71081 71081 71131

56 61,230 43,181,550 18 11,080,505 116,995 224,790 14,457 745,545 26,501 35,804 1,223 110 4,402 3,349 4,472 448

15 33 45

9,778 88 20,125 1,135 180 2,727 122 37 25 484 163 800

50 27 27 30

3,917

1,879 245 336 24,500 550 13,600 192,249 3,711 420 131 17,787

1,814 30 25 20

30

5

17 210 34 986 228

40 60 5 5 5

105 23,712,3 51,258,7 10,924,2 1,971,38

30

6 71132 72012 72015 72023 72024 72024 72025 72042 72042 72044 72044 72081 72083 72083 72083 72083 72085 72085 72085 72085 72089 72091 72091 72091 72092 72092 72092 72092 72099 72101 72104 72124 72163 72269 73021 73023 73030 73041 73053 73061 73063 73069 73072 73083 73084 73089 73090 73181 73181 73202 73221 73239 73239 73261

1,957 343,927 150,100 7,605,144 123,613,102 583,105 422,582 176,346 220,696 654,054 59,820,047

1,167,10

39,034 1,002,356 947,329 14,774,732 41,117 296,225 117,882 833,582 1,250,705 4,614,484 30,289,329 9,493,310 801,944 4,846,817 4,607,746 2,560,007 1,064,300 7,188,903 1,011,854

14

3,381,35 66,092,8 8,117,75 7,860,40

50 50 50

748,240 152,616 2,523,90 653,262 804,096

115,396 3,179,41 8,076,37 26,615,6

50 50 50

282,865 137,862

58,056 136,342

15 15 30 30 30

30

321,29

30 706,675 6,180

787,335 232,647 4,486,275 7,022,401 87,798 253,555 30,661 130,681 323,480 28,673 111 4,860 239,622 138,141 48,785 842 343 4,375 245 82

50 15

88 183,287

288

30

7 73269 74011 74031 74032 74032 74032 74040 74050 74072 74072 74081 74082 74091 74091 74092 74093 74111 74112 76012 76020 76061 76061 76109 76169 76169 78019 78020 79011 79011 79020 79070 81039 81071 81081 81121 81129 81129 82071 82083 82152 82159 83030 84136 84138 84151 84159 84181 84182 84182 84185 84198 84209 84211 84212

2,852,629 1,282,645 321,739,044 7,456,120

15

13,860 1,258,59 145,289

29,104,793 279,881 5,122,406 65,238 70,016 158,549,263 937 480 96,555 4,891 8,608 40,162 11,349 4,469,565 225,005 6,638 71,700 7,000 56 48,600 2,321,213

170,736

30

30 15 30 30

15 26,904

438,073,383 111,223,193 275,063 112 18,566

10

4,536,676 900,000 120,000 796,727 146,049 285,714 16 3,754 2,156 56 474 5 7,350 160 1,053 4,466 2,471 973 40 4,133,350 137 60

50 10 20 565 10

100

8 84212 84213 84279 84291 84295 84304 84314 84331 84439 84501 84571 84581 84581 84589 84589 84592 84594 84596 84602 84609 84612 84614 84619 84622 84622 84669 84716 84717 84729 84733 84735 84772 84773 84842 85013 85044 85049 85091 85094 85114 85115 85119 85143 85162 85163 85163 85164 85166 85167 85182 85199 85201 85219 85229

27,972

30 $15

1,500 104,350 40,000 1,196,096 396,298 30 663

37.5

30

130 8,583 820 8,976 2,477 37,753 4,574 30,949 21,713 9,595 828 2,916 25,677 1,507 35,000 9,900 22,601

8-17

800 7,700 50 16 8,000

9,491 7,691 3,300 2,400

10 231

551 4,101 23,755

8 50 30 402

2,694 4,195 67 4,900 3,509 600 1,148 435 2,940 600 3,003

10

100

11 210 32 80 34

475 185,687

20 10

30

9 85231 85243 85243 85245 85245 85251 85281 85282 85291 85299 85362 85365 85381 85421 85424 85481 86071 86090 87012 87029 87032 87032 87054 87081 87088 87089 87089 87091 87120 87150 87163 90099 90159 90251 90258 90308 90318 91059 92071 94016 94016 94017 94018 94034 94035 94036 94039 94042 94049 94051 95034 95037 95039 95049

28 66 9,611 20 8

42 2,000 20,503 3,364 28,934 3,312 216 1,400

30

6,687 109,525

100 50 100 50 27,248

1,132 10,913 45,240 6,237 73,000 44,740 41,000 123,990 104,000 875 9,070 55,241 4,083 100

10 10 10 4 10

38 15 9,800 2,000 4,144 710 2,742 24,000 10,000

5

11 25 294 11,288 368 2,235 10,169 1,930 7,014

300 210

5 10

438 105

5 5

360

30

45 2,821 4

10 207

8

50 20 15

30 30

10 95061 95061 95063 95069 95072 96032 96034 97011

61 1,285 15,040 5,088 472

295 25 50 160

30

1,487

Source: UN Comtrade database (no reported exports to Bangladesh and Sri Lanka). Note: MOP = margin of preference as in Table 1. Some preferential tariffs apply only to sub-categories. Blank cells not included in the preferential tariff list.

11 Table A3: Kyrgyzstan: Exports to APTA Countries, HS 6-digit categories, 2007 (current US Dollars)

HS Code 040110 050100 080211 080212 080231 080530 080610 080620 080810 080820 081090 081190 090111 090240 100110 100190 110429 121110 130190 140420 150200 160220 170199 170290 170490 180690 190530 190590 200799 200860 200990 210690 220110 220210 220300 220421 220600 220820 220860 250590 250870 251400 251710 252010

China value MOP 122,865 150,949 51,563 50,703 73 2,775 55,943 3,189 640 2,807 1,044 975

India value MOP

8

17 33

50

10

26,421 2,160 58,534 116 30,360 267 146 26 3,520 52,886 30,366 822 196 730 4,819 1,463 2,652 911 1,860 353 1,418 1,093

Korea value MOP 11

21,229 2,565 26 20 168,000 384,000 30,000 35,297 375

100 4,301 62

1,325 1 113

14

4,301

990

13 8

39

304

1,497 39 59 130

131 122 54 840

214 118

154 1,046 831

18 20

12

517 160 13,550 160

40 50

12 252100 252329 253090 260300 261690 261710 261900 262090 270111 270119 271000 271600 280461 280469 300490 330499 381190 381800 382000 390120 391510 391590 392113 392410 392490 392520 392630 401693 410110 410121 410129 410210 410221 410229 410310 410422 410439 410512 410520 410612 411000 420229 481830 490199 490700 500310 500390 510111 510119 510121

240 20,330 157 79 458 162,481 159 9,000 168,900 150 6,718,756 24,360 504,780 119,179 13,440 500 781 49,264 169 1,327 79,562 22,903

25

30 3,280

4,561 7,843 8

825,458 18,000 106,064 245,269 14,550 123

16,886

1,750

373 53 112

2,790

416 587 4,413

5

13,862 5,400 2,500 179,520 5,245,659 1,937,795 5,000 2,759,781 142,727 333,205 380,422 2,345,554

89,764

30

28,734

11 14 6,469 2,558 4,484 7,758 20,974 30 94 1,913

44,827 90,582 69,174 472,189 416,683

50

13 510129 510210 510220 510320 510529 510530 520100 520210 520419 520514 520911 520919 540120 551219 551512 551599 610110 610342 610910 611010 611020 611030 611212 611430 611593 620312 620329 620342 620419 620429 620449 620453 620990 630260 630900 640299 640590 650400 650590 710812 720421 720429 720441 720449 720450 721420 721499 722830 722840 730690

647,201 17,739 914 44,421 366,377 22,534 56,301 2,283

15,000

20,627 75,135 1 7 5,640 3,730 40,600

30

2,000 4,400 1,100 1,600 2,750 5,500 4,200 18,880 1,100 1,375 2,400 50,250

28 15 33

19,500

50

17,673

21 32 30 32 30 30 19 45,987

2,400 1,000 2,000 2,000 1,000

29 27 27

44 11,420 8,662

50 30 6,854

3,900

5 40,980

112,898 4,988 14,186 553,975 1,200 5,006

100 4,549 3,114 $4,221

$4,565

37.7

14 731029 732690 740321 740329 740400 740929 760120 760200 760410 760429 760611 761090 761699 780110 780199 780200 780600 790200 810199 810299 820190 820590 820750 820770 820790 841319 841370 842240 842539 842790 842911 842940 842951 842952 843039 843041 843139 843143 846620 847141 847160 847180 847490 847989 850440 850710 851310 851529 851539 851750

1,506 5,076 85,800 59,370 2,421,075 32,245 1,552,339 1,724,045 48,589 4,528,200 672 41,595 1,560 50,868 35,321 59,516

15 13,811 30 30 15

15,190 57,119 5,032 2,625 6,941

30,823 18,723 11,638 28,300 1,573

3,000 27

10 7 5

5 14,762

4,300,000 33,436 39,204 212,620 460,002 152,289 75,098 598,424 454,226 52,046 160

60,425 5,200 6,000 1,000 25 250 163

10

50 30 30 584,594 242,104 88,575

50

7,381

50

50 31 12 5 100

15 851790 4,628 851850 1,000 852110 101,800 40 852190 23,600 20 852320 200 30 852431 852520 587,212 50 852812 52,500 20 852910 7,840 100 852990 5,723 10-100 854411 189 30 854810 65,586 860900 529,200 870190 36,988 870324 42,632 10 870410 215,029 870510 106,024 870540 53,253 10 870590 14,265,915 10 870894 49 870899 2,250 871190 4,702 871639 15,382 880400 148,960 901580 110,135 30 920290 920992 940330 940540 940600 30,000 30 950341 1,800 10 950430 12,000 950490 21,000 950720 400 960850 21,780 961800 250 999999 1,648,592 202,113

87,448

443 1,047,351

186

50

4,500

24,804 6,498 2,766 20,433

50

65,250

Source: UN Comtrade database (no reported exports to Bangladesh and Sri Lanka). Note: MOP = margin of preference as in Table 1. Some preferential tariffs apply only to sub-categories. Blank cells not included in the preferential tariff list.