Concluding remarks by the Chairperson

This third Trade Policy Review of the Kyrgyz Republic has provided an excellent opportunity for the Trade Policy Review Body to examine economic, trade, and investment developments that have occurred since the previous Review in 2013. I would like to thank the delegation of the Kyrgyz Republic, headed by H.E. Mr Seit Rysaliev, Deputy Minister of Economy and Finance, for its participation in this Review. I also wish to thank our discussant, H.E. Mrs Tatiana Molcean, Ambassador of Moldova, for her insightful remarks, the 11 Members who submitted advance written questions, and the 20 delegations that took the floor during this meeting.

Members appreciated several positive aspects of the economic performance of the Kyrgyz Republic since its previous Review, including the steady economic growth achieved during the period 2014-19, the significant reduction of poverty, and the growth of the services sector. Members noted the severe impact of the COVID‑19 pandemic and commended the Kyrgyz Republic for its efforts to address the negative effects.

As Members acknowledged, the Kyrgyz Republic faces special challenges because its location limits access to global markets and it is heavily reliant on the mining sector and remittances. Several Members pointed out that the country's external debt situation and its dependence on a single sector necessitated a comprehensive strategy to diversify export markets and attract investment to new sectors. Members appreciated recent policy initiatives to develop a more modern, sustainable, and diversified economy, particularly the national development strategies that have been adopted since 2013 and the digital transformation strategy.

Members welcomed the Kyrgyz Republic's active engagement in the WTO and support of the multilateral trading system. They acknowledged its acceptance, in 2016, of the amendment to the TRIPS Agreement and of the Trade Facilitation Agreement. The Kyrgyz Republic participates in the Joint Statement Initiatives (JSI) on investment facilitation for development and on micro, small, and medium-sized enterprises. Members encouraged the Kyrgyz Republic to consider joining the JSIs on e-commerce and domestic regulation in services and the Informal Working Group on Trade and Gender. They also looked forward to the Kyrgyz Republic's accession to the Government Procurement Agreement.

The Kyrgyz Republic's accession to the Eurasian Economic Union (EAEU) in 2015 was widely regarded by Members as the most significant development that has occurred in its trade policy since the previous Review. This accession resulted in a comprehensive transformation of the framework for the conduct of trade policy in the Kyrgyz Republic. Members highlighted the positive effects of this accession on the trade and investment relations with its EAEU partners. Additionally, Members commented on the far-reaching changes that resulted from this accession in specific areas, such as competition law.

At the same time, certain aspects of the EAEU accession have negatively impacted market access for third countries, particularly the increase in the Kyrgyz Republic's MFN tariffs and the substantial decrease in the number of duty-free tariff lines. Some Members expressed concern regarding changes in customs valuation, protection of intellectual property rights, and technical regulations, which in some areas (for example, a recent technical regulation on the safety of alcoholic products), appeared to deviate from international standards and WTO rules. The issue of customs clearance at the border between Kyrgyz Republic and Kazakhstan was also raised.

The Kyrgyz Republic's treatment of foreign investment received much attention in this Review. Considering recent developments, the need for a more stable, transparent, and predictable climate for foreign investment was emphasized. Members noted that while the investment regime is relatively open, the general business environment is not conducive to investment and requires more fundamental reforms, including reforms to improve the quality of governance. This is a critical aspect given the important role of foreign direct investment in the economy. Many Members discussed the potential for further development of their bilateral trade and investment relationships with the Kyrgyz Republic. 

Members commended the Kyrgyz Republic for taking steps to achieve a more open trade regime, such as the development of the Single Window Information system, amendments to legislation on intellectual property rights protection and on government procurement, and liberalization of visa requirements for tourists. The Kyrgyz Republic also adopted measures aimed at reinforcing its anti‑corruption legislation, strengthening the integrity of the judicial and law enforcement system, and enhancing the transparency and efficiency of public administration.

Members raised questions and/or concerns regarding the application of import and export prohibitions, customs valuation, use of minimum prices, application of indirect taxes, export incentive schemes, and privatization and reform of state-owned enterprises. Members noted that notifications from the Kyrgyz Republic are overdue in several areas, including import licensing, agriculture (domestic support and export support), subsidies, and food safety measures.

Prior to this meeting, the Kyrgyz Republic received 158 advance written questions and answered many of them. Its responses were much appreciated, and its replies to any outstanding and follow‑up questions are expected in a month, at which time the third Trade Policy Review of the Kyrgyz Republic will successfully conclude. I trust that the Kyrgyz authorities will consider the many constructive comments and specific issues raised in this Review.