DEPUTY DIRECTORS-GENERAL

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Excellencies, Ladies and Gentlemen,

I thank the Government of Uzbekistan and the United Nations Regional Centre for Preventive Diplomacy for Central Asia for inviting the WTO to present views at this Conference.  For one thing, the invitation gave me the chance to visit Samarkand, which at one time was at the heart of the Silk Road, perhaps the most famous trade routes in all of human history.  It was a marvel of the world.  There has not been a time of extraordinary economic opportunities for Central Asia since the use of the Silk Road was at its peak, over 600 years ago.

Far-reaching economic reforms are taking place in a number of countries following the dissolution of the Soviet Union. A number of countries in the region have consolidated the gains of domestic economic reform and are building on them by their integration into the world economy. To achieve this, they have joined or are taking steps to join the multilateral trading system, created and maintained by the World Trade Organization, the WTO.

 Trade is key factor in economic and social development, providing enhanced prospects for prosperity. The trading system, founded in 1947 with the General Agreement on Tariffs and Trade, was an integral part of the recovery, reconstruction and development effort to deal with the ruins of the Second World War.   Today, its successor, the WTO, addressing a rapidly changing world economy, is playing a central role as the chosen forum for cooperation among countries accounting for over 98% of world trade as the only global institution setting and overseeing trade rules.     

The WTO, successor to the GATT, was established in 1995, only a few years after Central Asian countries gained their independence.  Shortly thereafter, a number of these countries initiated the process of joining the WTO — Uzbekistan in 1994, Kazakhstan and the Kyrgyz Republic in 1996, and Tajikistan in 2001.  The Kyrgyz Republic was the first of these countries to become WTO member in October 1998.  Tajikistan became WTO Member in 2013 and Kazakhstan in 2015.  Uzbekistan has recently resumed its accession process with a strong commitment to re-engage and work toward a positive conclusion as soon as possible. 

WTO accessions continue to be a high priority for the Organization.  Since 1995, WTO accessions have expanded the Organization's membership to 164 with a profound effect, providing a platform for accelerated economic growth for many economies and regions across the globe. 

The accession process provides countries a unique opportunity to drive and implement fundamental domestic reforms based on the values and principles of the multilateral trading system.  The dividends of the WTO accession process can be seen in Kazakhstan, which joined the WTO in 2015.  Its negotiations for accession, accompanied by an extensive domestic economic reform program, resulted in the country's transformation from a Soviet planned economy to a modern, knowledge-based economy.  Any can visit Kazakhstan for themselves, as I have, and see the transformation in progress. 

From a country with GDP per capita at USD 1,350 in 1996, Kazakhstan reached a level of per capita GDP at USD 8,900 in 2017, nearly a 600% gain. It has been estimated that Kazakhstan's WTO accession has resulted in welfare gains equal to 3.7% of its GDP.  Much is due to the liberalization of foreign investment in the services sectors following from Kazakhstan’s WTO accession and improved access to the markets of non-CIS countries. Over the past ten years, the business environment has improved dramatically. According to the ease of doing business index of the World Bank, in 2010 Kazakhstan ranked in 63rd place, while in 2019, Kazakhstan is in the 28th place, among the world’s top 30 economies in ease of doing business. This is an impressive jump and the WTO accession process, combined with national reforms were instrumental in achieving these results.

Although a relatively new member, Kazakhstan has exercised leadership for Central Asia and the WTO by hosting the next WTO Ministerial Conference in Astana in June next year, bringing 164 WTO Member Trade Ministers from around the world to Central Asia for the first time in the history of the multilateral trading system. 

The WTO accession process requires countries to undertake commitments extended to other Member countries, while receiving trade benefits from all other WTO member countries in return. 

Uzbekistan has recently made the WTO accession one of the priorities in the Uzbekistan's Development Strategy for 2017-2021.  For Uzbekistan the WTO accession can bring tangible results for the key sectors of the economy.  One example is agriculture, which accounts for approximately 17.6% of GDP and employs about 26% of the country's labour force.  Understanding and playing a part in dealing with evolving standards for food products is essential for agricultural trade to expand.  Moreover, Uzbekistan is the 5th largest exporter of cotton in the world. The Government's plan is to develop the textile sector and process more of its own raw cotton at home. This goal can be supported by the WTO’s extensive efforts with respect to cotton development assistance. The Director-General’s Consultative Framework Mechanism on Cotton, which I chair on his behalf, provides the forum within the WTO in which donors and recipients work together on development cooperation regarding cotton. Uzbekistan, as a WTO Observer, can already begin to take part in this forum and benefit from the knowledge of improvements being contemplated for cotton development assistance.

Despite the region's long historical association with the flows of goods, people and culture, Central Asia faces several challenges: low population density, long distances and limited connectivity. One way to address these issues is to implement an open trade policy agenda, which can increase the attraction for foreign invest investment.  Another is to participate actively in the work of the WTO which can promote greater connectivity within the region and with the rest of the world.  Let me highlight two WTO agenda items which are of high relevance to Central Asia: Trade Facilitation and E-Commerce.  

High costs linked to trade across borders can be lowered through the implementation of the Trade Facilitation Agreement (TFA). This is a landmark Agreement which is meant to cut red tape by reducing regulatory burdens when conducting international trade and improving cooperation between custom authorities and other authorities. Kazakhstan, Tajikistan and Kyrgyz Republic are already in the process of implementing the TFA, while Uzbekistan, I hope will ratify its participation in the TFA upon its WTO accession. For the landlocked countries in Central Asia, the WTO's TFA offers a multilateral framework to address the region's connectivity challenges that are integral to its agenda for economic diversification and modernization.

Developing countries have the most to gain from the implementation of the TFA. It has been estimated that developing countries’ exports are expected to increase by between US$ 170 billion and US$ 730 billion per annually. Further, it has also been estimated that over the 2015-30 period, full and accelerated implementation of the TFA could help developing countries’ economic growth by 0.9% annually and boost their exports by an additional 3.5% annually.

It is imperative that the rules of the multilateral trading system meet the needs of its Members as the trading system itself evolves.  Today, with the disappearance of old ideological battle lines and the establishment of new forms of trade, an integral and rapidly increasing component of global trade is e-commerce. E-commerce is essential to interconnectivity and is rapidly transforming the way economies and societies function, and how goods and services are produced and traded.  A WTO report estimated that in 2016 the value of e-commerce transactions totalled US$ 27.7 trillion, of which US$ 23.9 trillion was business-to-business e-commerce transactions.

In a fully digitalized world, in order to make full use of the opportunities provided by e-commerce but also address the challenges linked to it, the WTO's role is critical. The world of e-commerce needs to have a regulatory framework for e-commerce based on openness, transparency, non-discrimination and predictability. WTO Members are working to provide the platform to create a comprehensive e-commerce set of rules. At the end of January this year, during the World Economic Forum Annual Meeting in Davos, a group of WTO members – 76 of the 164 Members representing approximately over 85% of the global trade, stated their intention to launch negotiations on electronic commerce and Kazakhstan is among them.

WTO Members from Central Asia are part of the exciting dynamics which are aimed at modernizing the WTO into the 21st Century, including E-Commerce.  Kazakhstan is not only part of the Joint Initiative on E-Commerce, but also on Micro-, Small- and Medium- Enterprises (MSMEs) and Investment Facilitation for Development.  Kyrgyz Republic and Tajikistan are also part of the Joint Initiative on Investment Facilitation (along with 42 other Members), while Kyrgyz Republic is also part of the Initiative on MSMEs (with 55 other Members).

These Initiatives are plurilateral discussions open to all WTO Members and open as well to countries that are WTO Observers, like Uzbekistan. 

Today's discussion is an excellent opportunity to help the policy making process reflect on what has been achieved so far with respect to regional cooperation in Central Asia and to help establish the way forward.

There is still a lot of work to be done but I have no doubt that tangible results for the region can and will be achieved. 

Thank you.

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