Uzbekistan has set its sights on a crucial economic goal – becoming a member of the World Trade Organization(WTO). This ambition has led to significant legislative and regulatory changes to align with international trade standards and ensure fair treatment of foreign companies within the country. In this discussion, Iskandarbek Genjayev, Chief Advisor of the Department of the Ministry of Justice, sheds light on the progress and challenges faced by Uzbekistan in its journey towards WTO membership. Key principles such as transparency, equal treatment, and adherence to WTO norms are highlighted, showcasing the nation's commitment to fostering a more open and competitive global trade environment.
Q1. Becoming a member of the WTO is one of Uzbekistan's important economic goals set several months ago. Alongside this objective, the activities of the special department established within the Ministry of Justice aimed at aligning our national legislation with the requirements of the organisation are also geared toward the same goal. This department's work involves not only harmonising our laws with the organisation's requirements but also ensuring the compliance of newly produced documents. In other words, identifying and eliminating norms that provide unfair advantages to certain market participants, restricting free trade and giving a competitive edge to some participants in the market, especially those involved in cross-border trade, exports, and imports.
Iskandarbek: On June 2nd, the President issued an additional decree to establish “The Ministry of Justice and the Special Department for Aligning National Legislation with the World Trade Organization” and outlined the activities of this department. The WTO has mandatory standards for its 15 member states, which means that countries joining the organisation must adhere to the rules specified in these standards. These rules cover various aspects of international trade, such as ensuring the ease of conducting independent trade, establishing import and export procedures, and avoiding excessive regulations. Firstly, the system for assessing conformity of goods imported from other countries was abolished. Prior to this change, relevant legislation required certification and compliance with high standards for products imported from certain well-established countries. This meant that when goods were imported into Uzbekistan, they had to meet strict compliance requirements. What does this mean? Previously, goods imported from countries with well-established standards had to undergo mandatory compliance checks, but this practice has been abolished. What does this mean? When these goods arrive, they no longer undergo additional rechecks as was previously the case. Now, this rule has been abolished. Why? Because the rules of the WTO dictate that any preferential treatment given to one country in terms of compliance checks, such as exemptions from additional checks, should be extended to all countries. So, after this change, all imported goods will be treated the same way in terms of compliance checks, regardless of their country of origin.
Q2. The process of shaping legislation to meet specific requirements is a time-consuming and ongoing process. What are the primary tasks legal experts facing currently?
Iskandarbek: There are three key areas of focus. Firstly, there is the primary department for goods and trade. This department deals with the relationships related to the import and export of goods, including the entry and exit of goods. Secondly, there is the department for trade in services. This department is responsible for liberalising the provision of services, such as services from foreign countries that are provided in Uzbekistan, whether it be construction services or other types of services. Thirdly, there is the area of intellectual property, dealing with the trade of intellectual property assets. Additionally, the department for goods and trade also incorporates supplementary documents. Its most important rule is the prohibition of subsidising goods destined for export. This means that additional funds, tax breaks, or other privileges should not be provided to goods being exported. Why is this rule in place? Because if, for example, you subsidise the export of a product produced in Uzbekistan, its price will directly decrease when it is sold abroad. If the price of that product falls when it is sold abroad, for example if Uzbek sugar enters Kazakhstan at UZS 5,000, and domestically produced sugar in Kazakhstan costs UZS 10,000, this may have a harmful effect on the producers of Kazakhstan. Therefore, the countries have mutually agreed about not excessively supporting goods destined for export.
Q3. According to international experts, one of the key challenges is to provide a roadmap for fair treatment of foreign companies in Uzbekistan. What are the requirements for this and at which stage is its implementation?
Iskandarbek: If services are being provided by foreign companies, there should be equal treatment. For example, if you have requirements or conditions that you impose on one country, you should impose the same requirements on other countries as well. There should be no discrimination. Equality between countries is crucial. This is called the most-favoured-nation treatment. In other words, you shouldn't discriminate against other countries. The second principle is the national treatment principle. This means that foreign service providers, whether they are constructors or others, should be treated in the same way as local service providers, provided that similar conditions exist for both. In other words, there should not be less favourable treatment for foreign service providers compared to local ones. You should apply the rules to them that are no less favourable than those applied to domestic providers.
Q4. One of the key principles of the WTO is transparency. Providing all information about legal norms regulating the sale of specific goods or services, including foreign trade partners, is required to ensure that unannounced norms are not used. Is Uzbekistan ready to provide such information to foreign companies? Because in some cases, goods or services can be subject to customs duties or import restrictions, while others may not.
Iskandarbek: Firstly, our relevant legal documents are made publicly available. This is a standard practice in Lex.uz, national legal systems as well. Secondly, there is a demand to provide information to them in the above-mentioned guidelines. In every country, there should be information centres for relevant trade. In other words, centres that provide information to other countries and other foreign enterprises. In this regard, in our approved plan, we have established the production of relevant documents and the opening of information centres. To give an example, we will establish an information centre for the trade in services. Technical regulations - when we talk about technical regulations, what do we mean? These are procedures for certifying products, checking their compliance with certain international or national standards. In this regard, for example, when we import goods from other companies, we need to provide information on what requirements we need to meet. So, there is also the opening of an information centre in this regard. In addition, there is a field of sanitary epidemiology, and in this field as well, the production of relevant documents and the opening of an information centre are planned. This is done in close proximity to the opening of information centres, and the information is provided to foreign companies and foreign states, including whether our documents have been accepted, translated, and delivered to them.
Members met today for the sixth meeting of the Working Party on the Accession of #Uzbekistan. Jamshid Khodjayev, Deputy Prime Minister and Chair of the Inter-Agency Commission on WTO Accession summarizes the main highlights of the meeting.
For the latest: https://t.co/Jxw684SIG9 pic.twitter.com/meRumqWQr6
Q5. In May of this year, the President of Uzbekistan spoke at the meeting of the European Bank for Reconstruction and Development in Samarkand, expressing confidence in achieving "salutary results'' this year when it comes to joining the WTO. How much progress has been made in the actions taken up to today to fulfil this confidence?
Iskandarbek: There is a roadmap for making changes to the norms that are contrary to the rules of the World Trade Organization. We are actively working on it. Within this framework, Presidential Decree No. 140 was adopted. It contains amendments to 6 norms, and then the Cabinet of Ministers approved a decision on August 21st. This decision also amends 4 specific norms. To become a member, we need to complete the current roadmap, which is set until 2024, with over 40 tasks. Additionally, we are currently revising our entire legislation, as we have more than 30,000 regulatory documents in our legal framework Lex.uz. If other countries, for example, find a provision in one of our legal documents that affects their trade negatively, they can request that it be changed, and we are open to such requests. This is an ongoing process.
The World Trade Organization's accession requirements aim to ensure that there are no discriminatory practices, no additional fees, and no excessive tariffs in the import and export of goods, and that the customs duty rates remain stable. This, in turn, creates additional opportunities, not only for exporting our goods but also for filling our market with quality imported products, allowing our consumers to benefit from high-quality products.
As Uzbekistan pursues its vital economic goal of joining the WTO, significant steps have been taken to align the nation's legislation with international trade standards. The establishment of a special department within the Ministry of Justice is central to this effort, ensuring that national laws adhere to WTO requirements while promoting fair competition in the market. Uzbekistan is committed to upholding principles of transparency, equal treatment, and adherence to WTO norms as it advances toward WTO membership. This ongoing journey reflects the nation's dedication to fostering a more open and equitable global trade environment.
Earlier Daryo reported that while the path towards joining the WTO might be extended and filled with difficulties, Dr. Lawrence (Rui) Dang, economist and part-time advisor to the European Union in an interview with Daryo correspondant, highlights that Uzbekistan stands to gain significant advantages, potentially bringing about a transformation in various aspects, ranging from trade partnerships to generating employment opportunities for the youth.
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