Identifier
Created
Classification
Origin
09GENEVA458
2009-06-11 08:24:00
UNCLASSIFIED
US Mission Geneva
Cable title:  

JUNE 5, 2009 INFORMAL CHAIRMAN'S CONCULTATIONS

Tags:  ETRD ECON WTRO USTR BLR 
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R 110824Z JUN 09 ZDK
FM USMISSION GENEVA
TO SECSTATE WASHDC 8602
INFO AMEMBASSY MINSK 
AMEMBASSY MOSCOW 
AMEMBASSY BISHKEK 
AMEMBASSY YEREVAN 
AMEMBASSY BAKU 
USEU BRUSSELS
USDOC WASHDC
UNCLAS GENEVA 000458 


PASS USTR FOR KLEIN, HAFNER
PASS STATE FOR EUR, EB/TPP-BTA
PASS USDOC FOR JACOBS

E.O. 12958: N/A
TAGS: ETRD ECON WTRO USTR BLR
SUBJECT: JUNE 5, 2009 INFORMAL CHAIRMAN'S CONCULTATIONS
ON THE WTO ACCESSION OF BELARUS

SENSITIVE BUT UNCLASSIFIED NOT FOR INTERNET DISTRIBUTION

UNCLAS GENEVA 000458


PASS USTR FOR KLEIN, HAFNER
PASS STATE FOR EUR, EB/TPP-BTA
PASS USDOC FOR JACOBS

E.O. 12958: N/A
TAGS: ETRD ECON WTRO USTR BLR
SUBJECT: JUNE 5, 2009 INFORMAL CHAIRMAN'S CONCULTATIONS
ON THE WTO ACCESSION OF BELARUS

SENSITIVE BUT UNCLASSIFIED NOT FOR INTERNET DISTRIBUTION


1. (U) Summary. Three and a half years after the last such
meeting, WTO Members met with Belarus to discuss how negotiations
for its WTO membership might be resumed. The meeting was called at
the initiative of the Secretariat and Belarus. Belarus emphasized
its interest in encouraging investment and privatization, contended
that legislation enacted since the hiatus in negotiations was WTO
consistent, and noted Belarus' increased integration into the
international trading system (expanding exports through 2008) and
the ill effects of the global economic crisis (contracting exports
now). Several delegations (India, China, Kyrgyzstan) were
supportive of Belarus' request and suggested that a formal Working
Party (WP) meeting be scheduled to resume discussions. Brazil was
supportive, but more measured, saying that the stage is set for
resumption, whether formal or informal. A number of other attendees,
however, including the United States, European Communities and
Australia emphasized their lingering concern that Belarus was not
willing to open its market or actually implement WTO-consistent
trade measures, notwithstanding legislation that might nominally
conform to WTO provisions. They insisted that Belarus provide
improved market access offers on goods and services and information
on actual implementation of WTO provisions. Belarus did not respond
to these points, keeping its comments general. The United States
asked Belarus about its planned customs union with Russia and
Kazakhstan and any possible effects on its accession. [Note: This
was before Russian Prime Minister Putin's recent comments that
Russia, Belarus and Kazakhstan plan to launch joint negotiations on
accession to the WTO as a customs union.] Belarus gave no
indication that joint negotiations were being envisaged; they only
noted some coordination among the three countries on WTO-related
issues. Delegations will now reflect on the overall discussion and
submit written questions and requests. The Chair will consult
further before attempting to schedQe a formal WP meeting. See
paragraphs 7 and 8, below, for Next Steps and a Comment. End
Summary.

Background


2. (SBU) Belarus' negotiations for WTO accession with major WTO

delegations were effectively suspended in October 2005. For several
years, Belarus' approach to the negotiations had been almost totally
procedural, measuring progress simply by the number meetings held,
whether or not any agreement was reached on the many issues that
remain to be resolved. The Working Party met, delegations spoke,
Belarus denied there were any issues to discuss, and little progress
was made. Belarus frequently complained about how long the
accession negotiations were taking, but did little to address the
negotiating requests or systemic concerns of the WP members. With
respect to the United States, Belarus declared that it would make no
further goods offers until Russia had concluded negotiations. By
early 2006, the bilateral goods and services offers on the table
were actually inferior to the ones that Belarus had circulated two
years earlier and inferior to offers made by Russia. Then two
issues arose that brought WP members' frustrations to a head: the
routine confiscation at the border of imports for trivial or
nonexistent violations of customs regulations (and their subsequent
resale in hard currency stores) and the State appropriation of firms
based on the principle of a state golden share. Concerns raised
bilaterally and in Geneva were dismissed by Belarus as fabrications
or misunderstandings, and a significant number of delegations
withdrew support for further WP meetings and refused to meet on
market access issues until (a) there were substantially improved
offers, and (b) delegations had sufficient information on the golden
share issue and customs confiscations and responses to questions
tabled. Periodic informal consultations during 2006-2008 called by
the WP Chairman, Swedish Ambassador to the WTO Mia Horn, confirmed
this approach. Belarus has provided information stating that it has
abolished the problematic practices at the border and eliminated the
concept of (quote) golden share (unquote) in its investment laws.
Based on Belarus' statements to the WTO and the Secretariat and the
Chairman's interest in resuming work on a different basis, WTO
delegations agreed to an informal meeting to assess Belarus'
sincerity and prospects for further work on the accession.

Pre-Meeting with the Chair


3. (SBU) In a meeting prior to the scheduled informal consultation
with Belarus, the United States, European Communities, Norway,
Japan, and Australia met with Chairwoman Mia Horn to discuss
viewpoints on the status of the accession. The WTO Secretariat did
not attend this meeting. Attendees were unanimous that more credible
offers on goods and services are needed, that more evidence of
implementation of legislation is needed, and more work on
legislation, in areas such as import licensing, copyright, etc., is
needed. The United States confirmed that we would need to assess
the information provided at this meeting and further inputs from
Belarus in terms of offers, legislative action plan, checklists on
TBT, TRIPs, SPS, etc., and responses to questions from members
before resuming work.

Informal Chairman's Consultations:


4. (U) Deputy Foreign Minister Andrei Yeudachenka led the
Belarussian delegation in the informal session. In opening remarks,
he provided a brief overview of Belarus' efforts to date, focused on
broad economic indicators, rather than progress on specific WTO
disciplines. He stressed Belarus' efforts to move into the global
economy, noting that its exports had grown from 10 to 34 USD billion
from 2003 to 2008. He also pointed to difficulties that Belarus
faced as a result of the global financial crisis, in particular,
falling exports. He concluded by noting that it had been three and
a half years since the last Working Party on Belarus' accession.
The EC and US stressed that improved offers and a great deal more
information across various areas is essential to gauge Belarus'
seriousness before next steps can be determined. The US flagged
concerns about recent tariff increases on agricultural and
industrial goods and import bans imposed on pork and otherQoducts
based on an erroneous understanding of the H1N1 virus. On
multilateral issues, the United States asked questions related to
SPS matters and flagged questions that we would table related to
IPR, the relationship between Belarus' activity in customs union and
the accession process, and alcohol licensing, among other issues.
The EC focused its remarks on the areas of burdensome customs
procedures, licensing regime, and continuing lack of transparency.
Australia supported the US and EC comments. Members such as India,
China, Kyrgyzstan indicated that they viewed substantial changes
have taken place in the last several years in Belarus and that they
were supportive of resuming the Working Party process as soon as
possible. Brazil noted that they have not finalized their bilateral
negotiations, but that they have resumed engagement. Ukraine did
not make an intervention.


5. (SBU) In his initial responses to members, Yeudachenka provided
general information only, insisting that International Monetary Fund
and World Bank reports and consultations with the EC in the context
of the Eastern Partnership Program have provided opportunities for
further transparency about both legislation and current practices.
Yeudachenka stressed that Belarus is (quote) trying to be
transparent (unquote). He stressed Belarus' interest in attracting
foreign investment and efforts to privatize 600 entities in the next
several years. The Belarussian delegation throughout the meeting
welcomed further questions and offered to respond to them. Anton
Kudasov, Deputy Director of Directorate of Foreign Economic Affairs,
MFA, and a veteran of Belarus' accession efforts, responded on
substantive issues. Kudasov noted that the legislative action plan
submitted earlier has been fully implemented. He asserted that
(quote) lack of credibility in tariff offers is subjective (unquote)
and stressed that while most members are satisfied with their
offers, the difficulty lies with two delegations - the European
Communities and the United States. He took more direct aim at the
EC, noting that Belarus had made four offers to the EC since 2005
and that Belarus needs concrete direction back from the EC. Kudasov
concluded that they are in the middle of their overall effort with
members in concluding bilateral goods and services negotiatiQ. At
present, they have completed discussions with nine delegations and
are in discussions still with another 12. They hope to conclude
negotiations with three more Members in the course of 2009. He made
no promises about revised offers. Turning to multilateral issues, he
noted that Belarus intends to implement WTO commitments in most
cases, with some (unspecified) exceptions. On the customs union, he
noted that there is work going on with Russia, Kazakhstan to
negotiate and establish a single customs tariff. They are currently
attempting to eliminate impediments to trade between them. He
insisted that Belarus will pursue the customs union in accordance
with GATT Article XXIV. [Note: The Belarussians did not indicate,
as President Putin did on June 8 at the Eurasian Economic Community
Meetings, that Russia, Kazakhstan and Belarus intend to launch joint
WTO negotiations as a customs union. Kudasov indicated only that
there is inter-state coordination and stressed the importance of
both their deepening integration with Russia and the CIS as well as
with the European Union. In a follow-up call with the Belarussian
mission to the WTO in Geneva on June 10, Second Secretary Aleksandr
Tselyuk indicated that they were awaiting instructions from capital
on the Putin announcement, their negotiators were only returning
from the Eurasian Economic Meetings today and that the announcement
was (quote) quite unexpected (unquote). End note.]


6. (U) Responding to the U.S. question concerning recent sharp
tariff increases, Kudasov insisted that Belarus is not going to take
any protectionist measures in relation to trade. He said that the
tariff increases should be viewed in the contact of an overall
package, which also included tariff reductions on goods needed as
inputs for their industry. He claimed that the industrial goods
increases are temporary, and will last for nine months, while the
agricultural tariff increases will last for six months and offered
to provide additional information if questions are submitted in
writing. He questioned what specifically the EC is referring to in
relation to double licensing concerns and asked for evidence. An
unnamed representative from Belarus' customs agency provided brief
comments that they have taken 27 governmental decisions with the aim
of adhering to World Customs Organization convention by the end of
this year. They are updating information technology systems to
cover 50 percent of exports declared by the end of the year. He
challenged the EC and US representatives to clearly specify their
remaining concerns regarding customs valuation and procedures and
insisted that Belarus has implemented GATT-consistent legislation.
In response to another U.S. question about the status of import bans
on pork in relation to the H1N1 virus, Kudasov said the situation
remains fluid. Currently a ban is in place and Belarus is expecting
a guarantee from trading partners that the virus is not transferable
from animals to humans. He noted that their own meat sector is
export dependent and that their main market for exports is Russia,
whose SPS regime is quote evolving unquote. While they have a
vested interest in meeting WTO SPS requirements for imports, they
need to ensure they maintain access to their export markets.

Next Steps


7. (U) In her conclusion, the Chairwoman suggested that members
submit further questions in writing. Belarus needs to take several
concrete steps: 1) update its legislative action plan; 2) provide
updated checklists related to customs valuation, TBT, SPS, import
licensing and TRIPs; 3) reply in writing to members' questions. She
observed that responses could provide input for a more fulsome
factual summary to be prepared by the Secretariat. She encouraged
members to make more progress in their bilateral work. The Chair
insisted that the timing of any next consultations should remain
open and subject to consultations with members once they receive
these inputs from Minsk. Deputy Minister Yeudachenka made a plea
for a deadline for members' submission of questions and for
consideration to be given to setting a date for a fall Working
Party. Chairwoman Horn held firm that more consultations are needed
on the inputs. The EC and US supported the Chair's next steps.


8. (SBU) Comment. While Deputy Minister Yeudachenka's upbeat and
cooperative tone was a decided change from his predecessors more
defensive stance, neither he nor Kudasov made any unilateral
commitments to address delegations concerns, or even to comply with
the request for improved offers. We hope for something more
tangible in the written responses. The delay in Belarus' accession
has put it the position of having many new WTO Members join the
negotiations, like WTO member Ukraine, who attended the meeting but
did not speak, and possibly WTO accession applicant Russia, whose
accession process is in its late stages. We will transmit the
relevant WTO documents and our written questions to post
separately, and look forward both to post's comments and to any
information provided in the course of normal reporting on the issues
raised in these materials. End Comment. End

Allgeier