KAZAKHSTAN TO RESUME WTO ACCESSION TALKS SEPARATE FROM

C O N F I D E N T I A L SECTION 01 OF 02 ASTANA 001535 SIPDIS STATE FOR SCA/CEN, EEB/ESC PLEASE PASS TO USTR E.O. 12958: 09/17/2019 TAGS: PGOV PREL ECON EFIN WTO RS KZ SUBJECT: KAZAKHSTAN TO RESUME WTO ACCESSION TALKS SEPARATE FROM RUSSIA? REF A. ASTANA 1509 ¶B. MOSCOW 2372 Classified By: Ambassador Richard E. Hoagland: 1.4 (B),(D) ¶1. (C) SUMMARY: There are signs Kazakhstan might be willing to resume its suspended bilateral WTO accession negotiations. Concluding U.S.-bilateral WTO negotiations would be in our national interest and would enhance Kazakhstan's independence and sovereignty. END SUMMARY. ¶2. (C) On September 4, immediately following a meeting with the Minister of Finance Bolat Zhamishev (reftel A),the Ambassador had an unexpected conversation with former WTO negotiator and current Finance Ministry Head of International Relations Sophia Isagalieva in which she freely expressed personal frustration with the planned Russia-Belarus-Kazakhstan Customs Union (RBK-CU) and what she sees as an attempt by Prime minister Putin to enhance Russian economic influence in Kazakhstan. Eager to provide some personal insights into the current WTO negotiation process and the impact of the planned RBK-CU, Isagalieva said Kazakhstani officials were "very surprised" by the June announcement of the customs union. Isagalieva grumped that Russia's WTO negotiations appear to be going forward now, "but ours have stopped." Clearly concerned, Isagalieva explained, "Kazakhstan is in deep trouble now and we don't know what to do." When asked why she felt that the customs Union had been announced when it was, and the underlying purpose, Isagalieva readily attributed it to northern neighbors: "Putin wanted this as a way to reestablish influence in Kazakhstan." ¶3. (C) On September 11, USDA WTO Accessions Coordinator Karina Ramos-Hides met with Econoff to discuss recent queries from Kazakhstani government officials about possible direct WTO negotiations to be held on the margins of the October TIFA meeting in Washington, DC. Ramos had spent the previous week delivering technical seminars to an "eager and attentive" audience at the Center for Trade Policy Development (CTPD) on sanitary and phytosanitary certification (SPS) as part of the Embassy Science Fellows program. (NOTE: The CTPD is considered part of the Ministry of Industry and Trade and operates under the direction of Ministry of Industry and Trade SPS negotiator Aray Kassebekova. Its activities are supervised by lead WTO negotiator Vice Minister Zhanar Aitzhanova. END NOTE.) According to Ramos, CTPD staff were told that the official deadline for the harmonization of regulatory systems for the Russia-Belarus-Kazakhstan Customs Union is January 1, 2010. However, Ramos also reported that CTPD staff are diligently preparing for technical tariff negotiations to be conducted in Washington in early October. When pressed whether the technical meetings would be relevant to the Customs Union or WTO, Ramos said that CTPD staff would not directly answer the question, saying on that they were "accession negotiations." (COMMENT: The indirect response from CTPD staff would seem to indicate the practical resumption of WTO negotiations on a technical level. END COMMENT.) ¶4. (C) During a September 16 meeting, OECD Deputy Secretary General Aart de Geus briefly described to the Ambassador what he had heard of a possible "decoupling" from Russia and the likely restart of independent WTO negotiations. According to de Geus, who cited unnamed Kazakhstani officials with whom he had met earlier in the week, Kazakhstan has been frustrated by a lack of action on the part of the lead Russian WTO negotiator and is planning to reinvigorate its accession talks separate from the Customs Union. ¶5. (C) COMMENT: We note in reftel B Russian Deputy Prime Minister Igor Shuvalov's comment that Russia might be willing to postpone the entry-into-force of the RBK-CU by a year or two to allow time for Russia to enter the WTO first. If so, that would give a new window of opportunity to conclude accession talks for Kazakhstan. Should this happen, Astana would press hard for what it perceives are its interests, and high-level direction would be needed on our part. Concluding U.S.-bilateral WTO negotiations would be in our national ASTANA 00001535 002 OF 002 interest and would enhance Kazakhstan's independence and sovereignty. END COMMENT. HOAGLAND