Non-Tariff Measures in Agricultural Sector in Kazakhstan and

Kyrgyzstan

Zalina Enikeeva, University of Central Asia

UN ESCAP, 28 November 2018

CENTRAL ASIA

• Kazakhstan

– Square: 2 724 900 sq.km (1.8% of the world’s land)

– Neighboring countries:Russia, China, Kyrgyzstan, Uzbekistan and Turkmenistan

– Capital: Astana

– Population: 17 926,5

– Resources: coal, oil, gas, non-ferrous and ferrous metals

• Kyrgyzstan

– Square: 199 999 sq.km

– Neighboring countries: Kazakhstan, China, Tajikistan, Uzbekistan

– Capital: Bishkek

– Population: 6 140,2

– Resources: gold, coal, antimony, hydropower

SOME STATISTICS

Kazakhstan Kyrgyzstan

2007 2017 2007 2017

GDP growth, %

8.9 4 8.5 4.6

GDP per capita

(constant 2010 US$)

8523 10857 819 1070

Trade turnover, mln. USD

80511.7 77646.8 4109.6 6259

Export, mln. USD

47755 48342.1 1321 1764.3

Import, mln. USD

32756 29304.7 2788 4494.7

Sources: World Development Indicators, National Statistic Committees

AGRICULTURE

16

15

12 12

11

9

10

89

8 8

7

6

5 65

6

55

4 5 45 5 4

39 40 4040

4038 38

36 36 35 35

3432

32 3130

2928

2626

24

20

18 18 18

0

5

10

15

20

25

30

35

40

45

0

2

4

6

8

10

12

14

16

18

199

3

199

4

199

5

199

6

199

7

199

8

199

9

200

0

200

1

200

2

200

3

200

4

200

5

200

6

200

7

200

8

200

9

201

0

201

1

201

2

201

3

201

4

201

5

201

6

201

7

Kazakhstan

Agriculture, forestry, and fishing, value added (% of GDP)

Employment in agriculture (% of total employment)

39 38

41

46

41

3635 34 35

34

3028 29

27

23

1917

17 17

15 15 1413 12

4649

54

58

3936

34

30 30 29 3032 32

2927 27

0

10

20

30

40

50

60

70

0

5

10

15

20

25

30

35

40

45

50

199

3

199

4

199

5

199

6

199

7

199

8

199

9

200

0

200

1

200

2

200

3

200

4

200

5

200

6

200

7

200

8

200

9

201

0

201

1

201

2

201

3

201

4

201

5

201

6

201

7

Kyrgyzstan

Agriculture, forestry, and fishing, value added (% of GDP)

Employment in agriculture (% of total employment)

Source: World Development Indicators

AGRICULTURAL SECTOR

• Kazakhstan

• Crop production – 55.1%

• Livestock production – 44.6%

• Agricultural services – 0.3%

• Wheat, fruits and vegetables, barley, cotton, sugar beets, sunflowers, flax, and rice;

• Beef cattle, chicken;

• Wool, cow milk, and eggs are the other major animal products of the country.

• Kyrgyzstan

• Crop production – 50.26%

• Livestock production –47.6%

• Services – 2.11%

• Wheat, barley, potatoes, vegetables and fruits, fodder and technical (cotton, tobacco, sugar beet) crops.

• Animal husbandry: breeding of dairy and beef cattle, sheep and goats, horses, and poultry;

• Small-scaled farmers

SDGs

Kazakhstan and Kyrgyzstan:

• Establishment of own national Sustainable Development Goals coordination structures;

• Adoption of Sustainable Development Goals targets;

• Development of national indicators, corresponding sub-targets

Eurasian Economic Union (EAEU/EEU)

• The Eurasian Economic Union is an international organization for regional economic integration;

• The Union was formally established on January 1, 2015;

• Four founding members — Russia, Kazakhstan, Belarus and Armenia;

• Kyrgyzstan joined on August 12, 2015;

• 182,7 million people;

• 14% of the world’s firm land;

• The EAEU provides for free movement of goods, services, capital and labor, pursues coordinated, harmonized and single policy in the sectors determined by the Treaty and international agreements within the Union;

• Eurasian Economic Commission (EEC) is a permanent regulatory body of the Eurasian Economic Union;

• The Treaty on the EAEU provides for non-use by member states of non-tariff regulation measures in mutual trade;

EAEU COVERAGE

customs tariff and non-tariff regulation;

customs regulation;

technical regulation;

sanitary, veterinary and sanitary and quarantine phytosanitary measures;

enrollment and distribution of import customs duties;

establishment of trade regimes against third parties;

foreign and mutual trade statistics;

macroeconomic policy;

industrial and agricultural subsidies;

energy policy;

natural monopolies;

government and (or) municipal procurement;

mutual trade in services and investments;

transportation;

monetary policy;

intellectual property;

financial markets (banking, insurance, foreign exchange market)

Required documents for export to the EAEU countries:

• Compliance statement

• Phytosanitary certificate (fruits and vegetables)

• Veterinary certificate (products of animal origin)

• Contract with the buyer / receiver of products (if any)

• “EAC” labelling

• Invoice

• Cargo transportation way bill

WTO

State WTO membership

Armenia 5 February 2003

Belarus Negotiating process

Kazakhstan 30 November 2015

Kyrgyzstan 20 December 1998

Russia 22 August 2012

EAEU

• Common Customs Tariffs (CCT) is a set of customs duties applied to goods imported into the customs territory of the Union from third countries;

• Russian Federation commitments in the WTO are implemented in the Common Customs Tariff of the EAEU;

• Adjustment of duty rates in accordance with the schedule of the implementation period of the binding commitments of the Russian Federation to the WTO;

• Average tariff in Kyrgyzstan before joining to the EAEU – 5.3%, after – 9%;

• Zero rate of value added tax in mutual trade;

• Approved 46 EAEU technical regulations, of them 39 came into force;

• There are product identity requirements for water. E.g. water can be identified as natural drinking water when it is an underground water with mineralization up to 1 gram per cubic decimeter, etc.

Kazakhstan and Kyrgyzstan: NTMs in the EAEU

• Kazakhstan has 393 (of 629) measures related to the EAEU;

• Kyrgyzstan has 392 (of 596) measures related to the EAEU;

NTMs and the EAEU

Partners affected

NTM code Measure description Date Products

All members SPS – A41

There are requirements on total bacterial count and presence of

salmonella in non-edible raw materials of animal origin used for production of

fodder (e.g. CFU/G is 5 x 10^6)

6/7/2016

Non-edible raw materials of animal

origin used for production of fodder

for pets and fur-bearing animals

All members TBT – B31

There are certain labelling requirements for fish and fish

products. E.g. labels for fish and fish products must contain the following

information: name of the product, type of processing, etc.

9/1/2017Fish and fish

products (fishery products)

All members SPS - A64

Requirements for storage and transportation of grain includes requirements on safety of barns

(grain storages) - it is restricted to store toxic products next to grain;

transportation means for grain should provide necessary levels of safety

7/1/2013

Grain for food and feed (grain –

products of grain varieties, pulse crops,

oilseeds used for food or feed)

NTMs and the EAEUPartners affected

NTM code Measure description Date Products SDG

All members

SPS – A41

There are requirements on total bacterial count and presence of salmonella in non-edible raw materials of animal origin used for production of fodder (e.g. CFU/G is 5 x 10^6)

6/7/2016

Non-edible raw materials of

animal origin used for

production of fodder for pets and fur-bearing

animals

Goal 3. Ensure healthy lives and promote

well-being for all at all ages

All members

TBT – B31

There are certain labelling requirements for fish and

fish products. E.g. labels for fish and fish products must

contain the following information: name of the

product, type of processing, etc.

9/1/2017Fish and fish

products (fishery products)

Goal 3. Ensure healthy lives and promote

well-being for all at all ages

All members

SPS - A64

Requirements for storage and transportation of grain includes requirements on

safety of barns (grain storages) - it is restricted to store toxic products next to grain; transportation means

for grain should provide necessary levels of safety

7/1/2013

Grain for food and feed (grain –

products of grain varieties, pulse crops, oilseeds

used for food or feed)

Goal 3. Ensure healthy lives and promote

well-being for all at all ages

NTMs and Kazakhstan

Partners affected NTM code Measure description Date Products

Turkey SPS – A51 Imported dairy products coming from Turkey need to

undergo heat treatment

8/5/2016 Dairy products

All members OTH – H9 Imports of ethanol and alcohol products can only be done by

legal entities registered in Kazakhstan (residents of

Kazakhstan)

6/16/1999 Alcohol products (including ethanol)

Armenia/Turkey/Kyrgyzstan/Mongolia/T

unisia/

SPS – A11 It is temporary restricted to import live animals that are

prone to foot-and-mouth disease, meat and dairy products, raw materials

obtained from animals that are prone to foot-and-mouth disease, used equipment intended for storage or

slaughter of animals prone to foot-and-mouth disease from

Armenia/Turkey/Kyrgyzstan/Mongolia/Tunisia/

Live animals that prone to foot-and-mouth;

- Meat and dairy products;- Raw materials obtained

from animals that are prone to foot-and-mouth disease;- Used equipment intended for storage or slaughter of animals prone to foot-and-

mouth disease;- Feed;

NTMs and Kazakhstan

Partners affected

NTM code Measure description Date Products SDG

Turkey SPS – A51 Imported dairy products coming from Turkey need to undergo heat treatment

8/5/2016

Dairy products Goal 3. Ensure healthy lives and promote well-being for all at all ages

All members OTH – H9 Imports of ethanol and alcohol products can only be done by legal entities registered in Kazakhstan (residents of Kazakhstan)

6/16/1999

Alcohol products (including ethanol)

Goal 3. Ensure healthy lives and promote well-being for all at all ages - ?

Armenia/Turkey/Kyrgyzstan/Mongolia/Tunisia/

SPS – A11 It is temporary restricted to import live animals that are prone to foot-and-mouth disease, meat and dairy products, raw materials obtained from animals that are prone to foot-and-mouth disease, used equipment intended for storage or slaughter of animals prone to foot-and-mouth disease from Armenia/Turkey/Kyrgyzstan/Mongolia/Tunisia

Live animals that prone to foot-and-mouth;- Meat and dairy products;- Raw materials obtained from animals that are prone to foot-and-mouth disease;- Used equipment intended for storage or slaughter of animals prone to foot-and-mouth disease;- Feed;

Goal 3. Ensure healthy lives and promote well-being for all at all ages

NTMs and Kyrgyzstan

Partners affected

NTM code Measure description Date Products covered

All members

EXP – P7Document sets the basis for soft

lending of export-oriented agricultural companies

2/10/2017 -2/10/2020

Export-oriented agricultural products

Applied against

EEU members

PC – F9

In order to keep receiving full amount of indirect taxes, Kyrgyz

Republic defined minimum level of control prices for certain goods.

The meaning of this measure is to define minimum prices that will be used in the calculation of indirect

taxes.

5/25/2016

Sugar; Wheat flour from durum wheat;

Wheat flour from soft wheat and spelt;

Timber; Rice; Eggs

All members

OTH – H9Foreign legal entities can't import

ethyl alcohol 10/13/2009 Ethyl alcohol

Kazakhstan

SPS – A84

Imported (food) products of animal and plant origin are subject to

documentary and physical inspection/control

5/25/2016Food products of animal

and plant origin

NTMs and KyrgyzstanPartners affected

NTM code

Measure description DateProducts covered

SDG

All members

EXP –P7

Document sets the basis for soft lending of export-oriented agricultural

companies

2/10/2017 -2/10/2020

Export-oriented agricultural

products

Goal 17. Strengthen the means of implementation

Goal 12. Ensure sustainable consumption and production

patternsGoal 8. Promote sustained, inclusive and sustainable economic growth, full and

productive employment and decent work for all

Applied against

EEU members

PC – F9

In order to keep receiving full amount of indirect taxes, Kyrgyz Republic defined minimum level of control

prices for certain goods. The meaning of this measure is to define minimum prices that

will be used in the calculation of indirect taxes.

5/25/2016

Sugar; Wheat flour from durum

wheat; Wheat flour from soft

wheat and spelt; Timber; Rice;

Eggs

Goal 8. Promote sustained, inclusive and sustainable economic growth, full and

productive employment and decent work for all

All members

OTH –H9

Foreign legal entities can't import ethyl alcohol

10/13/2009 Ethyl alcoholGoal 3. Ensure healthy lives and promote well-being for all at all

ages - ?

Kazakhstan

SPS –A84

Imported (food) products of animal and plant origin are subject to documentary and physical inspection/control

5/25/2016 Food products of animal and plant

origin

Goal 3. Ensure healthy lives and promote well-being for all at all

ages

CONCLUSION

• The topic of non-tariff measures is quite new for Central Asia;

• The frequency of its imposing might be higher in the future;

• Analysis of NTMs from the sustainable development point of view