Eighteen months in EEU. Trade declines, veterinary posts remain

The Kyrgyz government has summed up the results of eighteen months of the country in the Eurasian Economic Union. Officials continue to insist that there are more advantages than minuses in the Union.

Accessed in time and on good terms

According to the Deputy Economy Minister Almaz Sazbakov, Kyrgyzstan became a member of EEU timely and on good terms. At the same time, one of the main advantages, as reported, is the fact of full participation in the union. Now no decision of the union is taken without the consent of Kyrgyzstan.

"Customs control on the Kyrgyz-Kazakh border has been lifted, an institute of financial support - Russian-Kyrgyz Development Fund has been established. Transitional periods for the implementation of several provisions of EEU Treaty have been adopted. There are agreements on technical assistance. Kyrgyzstan receives 1.9 percent of funds from the general bank of the Union, while Armenia gets only 1.11 percent. We were exempted from the payment of import duties on import of equipment for infrastructure projects," Almaz Sazbakov told.

Migrant workers have improved their situation after Kyrgyzstan's accession to EEU. Now they have equal rights with citizens of the country where they work. As a result, for 11 months of 2016, the volume of remittances from migrant workers increased by 18 percent compared to 2015.

Four checkpoints have been equipped and phytosanitary control on the border has been removed. 30 laboratories have received accreditation, 9 certification bodies were included into a single EEU register. At least 19 enterprises can supply animal products to Russia and Kazakhstan.

"An agreement with Vietnam on a free trade zone has been signed. A new market opens for us. Negotiations with China on trade and economic agreement are ongoing. This will open the Chinese market for our producers and will give preferences for attraction of investments," Almaz Sazbakov said. 

The official reminded that an agreement with Kazakhstan on the technical assistance of $ 100 million for equipping the customs infrastructure and modernization of laboratories was signed at the meeting of the Supreme Eurasian Economic Council on December 26, 2016. The issue of application of unified railway tariffs to the Kyrgyz goods by Kazakhstan has been resolved.

Main problem of the Union - crisis and stubborn neighbors 

Despite the assurances of EEU benefits, there is a set of issues that remain unresolved. The government can not say exactly when the situation will change.

The increase in trade volumes remains a priority for Kyrgyzstan. In 2015, indicators have fallen significantly after the country's accession to EEU. And not only foreign trade but trade with EU countries started declining.

 At the end of 2016, there was stabilization of indicators. Exports to the third countries returned back to its usual level, but the export of goods to EEU countries, which are our traditional markets, continues to fall. Imports of goods from third countries increased by 18 percent on the results of 2016. But we import less and less allied goods.

"The decline in trade was caused by the fact that EEU economies showed a decline. Their trade volumes have fallen even more than that of Kyrgyzstan. Recovery of foreign trade in 2016, despite the overall negative trend, is a great achievement. But we have to increase exports not only to EEU, but also to the third countries," Almaz Sazbakov said.

Another problem is the removal of veterinary control on the border with Kazakhstan. In late December, most of the countries of the Union have recognized that now the Kyrgyz veterinary control system complies with EEU. But Kazakhstan had claims. As a result, veterinary posts on the border continue to work. 

"Kyrgyzstan's veterinary control system has been inspected three times - in 2015, in July and December 2016. Experts from EEU and the representatives of the Eurasian Economic Commission have visited the country. In 2015, there were many questions and comments. They have been eliminated. In 2016, experts noted great progress in the field of veterinary medicine. All countries, except for Kazakhstan, have recognized that the Kyrgyz veterinary control system can ensure the protection of animal health and food safety," the director of the State Inspectorate for Veterinary and Phytosanitary Safety Kalysbek Zhumakanov told.

As for Kazakhstan, the agency is now in talks with the neighbors. Readiness of laboratories and streamlined electronic mechanism for tracking the movement of veterinary certificates are among their main claims. 

Active work is being carried out in both areas. However, officials in Kyrgyzstan say: bringing of all country's veterinary laboratories in accordance with the norms will take time. The question can not be solved quickly. At the same time, the country has two laboratories which meet all requirements. In 2017, it is planned to construct four new zonal laboratories and completely repair 13 regional ones.

"Electronic tracking of veterinary certificates program has been developed. We plan to integrate it into the programs of EEU countries from March 1. As for the question of recognition of the Kyrgyz veterinary control system equivalent to EEU standards and the removal of veterinary posts, we are working in this direction. I think, there will be no other inspection. We need time to reach an agreement with Kazakh colleagues," Kalysbek Zhumakanov stressed. 

Time goes by, but problems grow

The number of difficulties that have plagued Kyrgyzstan since the early days of its accession to EEU will soon increase. The country is a member of the union for a year and a half already. Apart from the obvious adaptation to the new rules, this means that all transitional periods will soon be over. National technical regulations will become invalid in the country. 

Technical regulations of EEU will enter into force in Kyrgyzstan on August 1, 2017.

And this is an additional challenge to which domestic business must adapt. In fact, entrepreneurs have only a little more than a half of a year to learn how to work according to modern standards. In particular, companies have to switch to work according to HASSP and ISO standards. 

"We will work with businesses, provide trade information, so they can adapt to the new realities. It is not only entry into EEU markets, but also into the markets of third countries. We will provide information what takes place in EEU, where we're going, what are the new conditions, what are the changes in order we can immediately react to what is happening," Almaz Sazbakov commented.

In addition to purely Eurasian problems, Kyrgyzstan faced also international ones. The country is a member of the World Trade Organization, to which we also have obligations. Kyrgyzstan has to hold difficult and long negotiations, on the one hand not to violate WTO rules, and on the other - to act within EEU.

"We plan to use Armenia's experience. We will start negotiations. They will not be fast, but it must be done," Almaz Sazbakov concluded.