PRESIDENTIAL DECREE ON WTO ACCESSION AND

C O N F I D E N T I A L SECTION 01 OF 02 BAKU 000949 SIPDIS SIPDIS DEPT PLEASE PASS TO USTR FOR SHAUN DONNELLY, BETSY HAFNER AND PAUL BURKHEAD GENEVA FOR AMBASSADOR ALLGEIER DEPT PLEASE PASS TO USTDA DAN STEIN DEPT FOR EB, EUR/CARC E.O. 12958: DECL: 07/23/2017 TAGS: ETDR ECON USTR WTRO EAGR PGOV PREL AJ SUBJECT: PRESIDENTIAL DECREE ON WTO ACCESSION AND FUNDING--COMING SOON Classified By: DCM DONALD LU; REASONS 1.4 (B,D) ¶1. (C) SUMMARY: The Ministry of Economic Development's (MED) World Trade Organization (WTO) Division Head Muradov told Econoff July 12 that by September, President Aliyev would issue a decree outlining nine steps to accelerate Azerbaijan's WTO accession. The decree would likely include an announcement that the GOAJ would contribute approximately USD 1 million towards WTO-related activities. Muradov asked for Embassy and USAID participation and assistance with 10 regional workshops the MED is working on to increase WTO awareness. Muradov told Econoff that he is also working with the World Bank to try to obtain funding to create an economic model of the economic impacts of WTO accession for Azerbaijan. Both he and the Ministry of Foreign Affair's (MFA) WTO Division Head Mehdizadeh warned that reliable statistics to run the model would be difficult to obtain. Mehdizadeh and the State Customs Agency's Directorate for Customs Regimes Gasimov described other trade liberalization efforts, including establishing a "one-stop-shop" for imports and exports along the borders by 2008. END SUMMARY. Nine Steps to WTO Accession -- Funding Included -------------- -- ¶2. (C) Econoff met separately with the Ministry of Foreign Affair's (MFA) World Trade Organization (WTO) Division Head Shovgi Mehdizadeh and with the Ministry of Economic Development's (MED) WTO Division Head Adalat Muradov July 12. Muradov told Econoff that by September, President Aliyev would issue a decree outlining nine steps to accelerate Azerbaijan's WTO accession. The decree would likely include an announcement that the GOAJ would contribute approximately USD 1 million towards WTO-related activities. He added that the MED hoped to submit new service offers and Customs hoped to submit new tariff offers (goods) by early September. Muradov said the MED is working to increase WTO awareness in the regions by organizing 10 workshops on WTO accession in 10 different economic regions of Azerbaijan. He asked for participation and assistance from the Embassy and USAID on the regional workshops. 
¶3. (C) Separately, Mehdizadeh said the GOAJ is pushing forward with separate WTO-related bilateral negotiations, which Muradov also made clear. When Muradov asked Econoff for another copy of the correct formatting for market access proposals and explained that the GOAJ is unsure what should be designated as an agricultural versus non-agricultural product, it was clear that confusion about expectations still exists. Econoff suggested separately to Mehdizadeh and Muradov that the GOAJ should consider hiring an independent WTO accession consultant to assistwith questions and answers, market access offers,and negotiations. Economic Modeling -------------- ¶4. (C) Muradov told Econoff that he is working hard to obtain an economic model that would show the projected effects of WTO accession. Muradov said the World Bank said they could create an economic model for WTO accession before the end of the year for approximately USD 150,000. The World Bank said it could finance approximately USD 50,000 and was negotiating with British Petroleum to obtain additional funding. Muradov said he had not received any information from the World Bank recently, so the MED is considering obtaining economic models from Russia since the cost would be significantly less (estimated around USD 50,000). Both Muradov and Mehdizadeh admitted that reliable statistics would be difficult to obtain. However, Muradov said, the model did not need to have exact predictions. He added that the model should define the general trends of the economic impact of WTO accession. Trade Liberalization Efforts -------------- ¶5. (SBU) Mehdizadeh told Econoff that the GOAJ is working hard on WTO accession, and separately, has been taking some steps to towards trade liberalization. On trade liberalization, Mehdizadeh said that Customs is heading an effort to consolidate the separate import licenses and border BAKU 00000949 002 OF 002 requirements into a "one-stop shop on the borders." The Head of the State Customs Agency's Directorate for Customs Regimes Javad Gasimov told Econoff July 25 that with EU assistance, Customs would coordinate the establishment of a single pay point at the borders by the end of 2008. This is part of Custom's development program (to be implemented 2007-2011) that was approved in 2006, Gasimov said. He is proceeding according to the action plan, he added, and is conducting a risk assessment, procuring equipment, and instituting training for Customs, Border Guards, and others. The next step will be to obtain approval for one-page import/export document that every GOAJ agency will accept. Eventually, Gasimov said, the GOAJ will adopt legislation to simplify import/export procedures. It will create a single database to help officials answer questions and track information. Also, there will be single pay/inquiry points available for import/export questions internally as well as on the borders. Comment -------------- ¶6. (C) We are encouraged to see the GOAJ taking steps to accelerate WTO accession, particularly its intention to dedicate an estimated USD 1 million from the budget to WTO accession. The economic model is also an important step that many high-level officials, including the President, are anxiously awaiting. The lack of reliable statistics is a real challenge, so we are encouraged to hear that the MED is working with the World Bank on the economic model project design. GOAJ officials repeatedly emphasize the high-level commitment to WTO accession, and plans and intentions are good. The concern is the speed of implementation and the admitted lack of capacity. DERSE