AMBASSADOR'S MEETING WITH PRESIDENTIAL

UNCLAS ALMATY 000900

SIPDIS


DEPT FOR EB/IPE SWILSON, BSOILA
DEPT PLEASE PASS TO USTR JCHOE-GROVES,
DOC JBOGER,
USPTO JURBAN,
LOC STEPP

SENSITIVE

E.O. 12958: N/A
TAGS: ETRD KIPR ECON KZ ECONOMIC
SUBJECT: AMBASSADOR'S MEETING WITH PRESIDENTIAL
ADMINISTRATION DEPUTY MASIMOV ON WTO ACCESSION AND IPR
PROTECTION



1. (U) Summary. On March 3, Ambassador met with
Presidential Administration (PA) Deputy Karim Masimov.
Deputy Minister of Industry and Trade Zhanar Aitzhanova, PA
Chief of the Center for Foreign Policy Nurlan Yermekbayev,
Astana PO and Astana USAID officer were also present. In
preparation for WTO accession, Aitzhanova told Ambassador
that Kazakhstan is ready to begin making systemic
commitments. She asserted that Kazakhstan has made
tremendous progress on intellectual property rights (IPR)
protection. Ambassador encouraged keeping ahead of
Russia's WTO accession plans and for quick action on legal
measures that will strengthen IPR enforcement. (Note:
Aitzhanova will lead a delegation to Washington March 7-9
for bilateral discussions with USTR on WTO accession.)
Other issues reported septel. End Summary.


2. (SBU) Ambassador emphasized U.S. support for
Kazakhstan's accession to WTO. He asked Masimov for an
assessment of the government's progress in building a
consensus in favor of accession among the businessmen and
in Parliament. Masimov said that Kazakhstan would probably
be ready in the 2006-2007 timeframe.


3. (SBU) Masimov confessed to some concerns about the
impact of WTO on local industries after reading an account
of China's accession. He also asked that the United States
take another look at graduating Kazakhstan from the Jackson-
Vanik required waiver for "Most Favored Nation" (MFN)
trading status. The Ambassador pointed out that although
there is no linkage, WTO accession would likely help
consideration of this question.


4. (SBU) Aitzhanova expressed appreciation to USTR for its
support in the Working Party's decision to transform
Kazakhstan's Factual Summary into a draft Working Party
report. She described Kazakhstan as ready to begin making
specific commitments on systemic issues that will focus on
Trade-Related Investment Measures (TRIMS.) Kazakhstan is
also reviewing all legislation to ensure conformity for
with WTO rules.


5. (SBU) Any preferences and benefits, Aitzhanova
continued, will be granted in conformity with WTO
regulations. There will be no link between special
economic zone industries and the country's overall economic
plan because of the use of exports or export substitution.
During a January visit by an EU delegation, Kazakhstan
demonstrated that these special economic zones are either
infrastructure projects or will not be engaged in
exporting. Kazakhstan also described how future subsidies
will be in conformance with WTO. However, it is too soon,
she said, to discuss export performance.


6. (SBU) Returning to timing of accession, Aitzhanova
acknowledged that Kazakhstan faces challenges since Saudi
Arabia, Ukraine, and Russia are viewed as priority
countries. Ambassador advised that a serious effort where
the Kazakhstan's WTO team is ready to engage, including
with technical answers, will go a long way in causing
Kazakhstan's case to be treated as a priority as well.


7. (SBU) The Ambassador asked who are the expected winners
and losers in Kazakhstan's WTO accession. Aitzhanova
explained that Kazakhstan is running a series of studies on
the implications of accession. Sequencing, she said, could
be a problem ahead. She also agreed that further
groundwork with Parliament and the business community was
needed.


8. (SBU) Turning to intellectual property rights (IPR)
protection, the Ambassador noted that the annual review of
Kazakhstan's position on the Special 301 Watch List is
starting to take place. He urged Kazakhstan to move
quickly on enacting Criminal Code amendments now before
Parliament, including a provision to lower the threshold of
criminality for IPR violations. He emphasized the need for
civil ex parte search procedures and ex officio authority
for customs agents.


9. (SBU) Aitzhanova responded that Kazakhstan had done
enormous work in 2004 and expected local legislation to
conform to TRIPS (WTO agreement on Trade-Related Aspects of
Intellectual Property Rights) by the first half of 2005.
She agreed that the Criminal Code was "soft" and maintained
that changes are being made. The Customs Code is being

revised, she continued, to include civil ex parte search
procedures and ex officio authority. Judges and other law
enforcement officials, Aitzhanova noted, are receiving
training that sensitizes them to IPR issues. The IPR
environment will not change overnight, she cautioned, but
the political will is there to make it happen.

Ordway


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