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Identifier
Created
Classification
Origin
06ALMATY215
2006-01-23 09:36:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
US Office Almaty
Cable title:  

KAZAKHSTAN: SECRETARY JOHANNS' JANUARY 11 MEETING

Tags:   OVIP  PREL  ECON  ETRD  KZ  ECONOMIC 
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						UNCLAS SECTION 01 OF 02 ALMATY 000215 

SIPDIS

SENSITIVE

E.O. 190356: N/A
TAGS: OVIP PREL ECON ETRD KZ ECONOMIC
SUBJECT: KAZAKHSTAN: SECRETARY JOHANNS' JANUARY 11 MEETING
WITH DEPUTY PRIME MINISTER AND MINISTER OF INDUSTRY AND
TRADE MYNBAYEV



1. (U) Participants in Secretary Johanns' January 11
Meeting with Kazakhstani Deputy Prime Minister and Minister
of Industry and Trade Mynbayev in Astana:

U.S.
Secretary Mike Johanns

SIPDIS
Mrs. Stephanie Johanns
Ambassador John Ordway
Undersecretary of State for Economic, Business, and
Agricultural Affairs Josette Shiner
Undersecretary of Treasury for International Affairs
Timothy Adams
Deputy Assistant Secretary of State for European and
Eurasian Affairs Matthew Bryza
Jim Loveland (Embassy Notetaker)

KAZAKHSTAN
Deputy Prime Minister and Minister of Industry and Trade,
Sauat Mynbayev
Vice-Minister of Industry and Trade, Zhanar Aitzhanova
Vice-Minister of Agriculture, Liliya Musina
Vice-Minister of Finance, Gani Uzbekov
Advisor to the Minister of Industry and Trade, Dinara
Shaymardanova
Head Specialist of the Ministry of Industry and Trade, Aray
Kasabekova



2. (SBU) Summary: During a January 11 meeting with
Secretary of Agriculture Johanns, Minister of Industry and

SIPDIS
Trade Mynbayev provided an overview of outstanding issues
relating to Kazakhstan's Working Party negotiations on WTO
accession. Secretary Johanns complimented Mynbayev on his
perseverance in the negotiations, and promised to inform
the U.S. Trade Representative of Kazakhstan's keen interest
in moving the accession process forward. End Summary.

Mybayev: WTO Negotiations at "Critical Stage"


--------------------------





3. (SBU) Mynbayev offered a positive assessment of
Kazakhstan's economy, noting that the country enjoyed 9%
GDP growth, stable microeconomic indicators, and
satisfactory balance of payments. The principal topic to
discuss, of course, was the WTO accession process. "The
negotiations have reached a critical stage," he told
Secretary Johanns, "especially regarding agricultural

SIPDIS
issues."



4. (SBU) The Secretary commented on Nazarbayev's decisive
victory, remarking that, as a politician who had run many
times for office, he had never won by as large a margin.
However, the Secretary continued, there has been fair
criticism of the election. We only ask that you make
improvements and "continue on the path of democracy." The
Secretary then turned to the issue of WTO accession, asking

SIPDIS
Mynbayev to summarize the outstanding issues.

Tariffs and Safeguards


--------------------------





5. (SBU) Mynbayev replied that the remaining issues fell
into two primary categories: agricultural subsidies, and
tariffs and safeguards. In terms of tariffs and

safeguards, he said, the GOK had a good idea of what the
negotiating countries wanted. However, the preliminary
proposals were very broad; the GOK would like the U.S. to
focus on issues that were "commercially significant." It
would be better, he said, "to come to agreement on the
specific issues that are important to you."

State Subsidies to Agriculture


--------------------------





6. (SBU) Mynbayev then turned to the issue of state support
for agriculture. We understand that the U.S. is working
toward a worldwide reduction of subsidies, he said. He
then described factors which motivated GOK subsidization of
agriculture: long, difficult winters; export paths "blocked
by Russia" and hindered by Kazakhstan's lack of an outlet
to the sea; and Russia's discriminatory railway tariffs.
40% of the Kazakhstani population works in agriculture,
Mynbayev told the Secretary, in conditions of low
productivity. Thus, "it takes time" to reduce the levels
of state subsidies. The total amount of state support, he
said, was 9% of gross agricultural product, and very small
in absolute terms - only $650 million. "This is a
sensitive area for us," Mynbayev concluded. "Our situation
is not comparable to that of European countries."

Labor Migration, Transport Tariffs, and Telecom


--------------------------

--



7. (SBU) Mynbayev then explained the GOK's position on a
series of WTO-related issues. On labor migration, he noted
that the GOK still relied on a system of quotas. The GOK's
visa mechanism, he said, was "weak," and not "streamlined"
as in Western countries. "We have a lot to learn," he
concluded. "But we are doing it regardless of the WTO
negotiations."



8. (SBU) Addressing the issue of railway transport,
Mynbayev acknowledged that "we require much greater
transparency," and noted that the GOK was in the process of
analyzing how to lower railway tariffs. Similarly, the
government had "taken some steps" to lower pipeline
tariffs. The telecommunication sector was a concern: the
GOK would like to retain 50% capital ownership, he said,
for national security considerations.

"WTO Plus" Issues


--------------------------





9. (SBU) Mynbayev noted that Kazakhstan had undertaken
numerous sector-specific WTO-plus initiatives. While the
GOK had adopted "most" of the items, "we would like
flexibility on the part of your negotiators." "We would
like to set several aside," he concluded, and work toward
less than 100% compliance.

Phyto-Sanitary Barriers


--------------------------





10. (SBU) Turning to Sanitary and Phyto-Sanitary Barriers
(SPS), Mynbayev began by saying that "our negotiators will
confirm that we've accomplished a lot." The GOK planned
further amendments to the customs laws, and was "trying to
accelerate the process." In the first six months of next
year, he said, the GOK hoped to introduce 10 new laws to
parliament.



11. (SBU) Secretary Johanns concluded the meeting by
telling Mynbayev that he appreciated his perseverance. The
Secretary added that he worked with the USTR on an ongoing

SIPDIS
basis, and would "sit down with the Trade Representative
and reassert your significant interest in moving forward on
this."



12. (U) Secretary Johanns did not have the opportunity to
clear this cable.

ASQUINO