Geneva negotiations and 14th meeting of WTO Working Group on Azerbaijan's accession: 24-28 of July 2017

On July 24-28 bilateral negotiations were conducted with the EU, US, Russian Federation, Brazil, Thailand, Japan, India and Switzerland, market access on agriculture and non-agriculture goods as well as services were discussed. All countries with which bilateral negotiations are conducted requested Initial Negotiation Rights (INRs) for the goods subject to their interest. On June 27, a multilateral meeting on domestic support to agriculture took place. Finally, consultations with Accession Division of the WTO were held.

Concessions required by Azerbaijan

All concessions granted to the countries acceding as a developing country, including: 

1. “De minimis”  (minimum permitted amount of domestic support expressed in percentage to the amount of total annual agriculture production) - 10% 
2. Total Aggregate Measurement of Support (the sum of all domestic support provided in favour of agricultural producers, calculated as the sum of all aggregate measurements of support for basic agricultural products) – USD 1 bln. 
3. The right to use additional amount for regeneration of rural areas after de-occupation of Daglig Karabakh and surrounding areas
4. The right to use Article 6.2 of the Agreement on Agriculture

The US, EU, Brazil, Australia and Thailand commented on this issue. Generally, taking into consideration the fact that no recently acceded country with an economy similar to Azerbaijan received 10% “de minimis”, thus such kind of exemption shall not be expected. Possibility to grant USD 1 bln. concession as a Total AMS exists (for certain transition period), but Azerbaijan shall gradually convert its amber box subsidies (currently applied and to be eliminated or reduced according to the WTO requirements) to green box subsidies (to be used without any limitations according to the requirements of the WTO). Use of green box subsidies in a greater degree after deoccupation of Daglig Karabarh was recommended to Azerbaijan. Members refused to grant Azerbaijan the right to use Article 6.2 of the Agreement on Agriculture. At the same time, it was stressed that in accordance with the results of 10^th Ministerial Conference held in Nairobi in 2015, WTO members shall not apply export subsidies any more, and upon accession the commitment on elimination of export subsidies shall be undertaken.  

14^th meeting of WTO Working Party on the accession of Azerbaijan (July 28)

The representatives of Azerbaijan stressed that diversification of non-oil already produce results and once the development of prioritized areas of Azerbaijan reaches certain sustainable level, the accession process will be accelerated. The initial positive results of a number of economic reforms are expected by 2020.

Mandatory commitments to be undertaken by Azerbaijan:

• Elimination of export restrictions
• Holding list and rates of export tariffs invariable
• Elimination of discriminatory tax exemptions during accession
• Align excise rates
• Align charges for services rendered
• Eliminate export subsidies
• Implement necessary measures with regard to competition (adoption of relevant legislation)
• Align sanitary and phytosanitary measures to international standards (adoption of relevant legislation)
• Accelerate work on technical regulations (adoption of relevant legislation)

Part of questions was replied by the Members of Azerbaijan's Working Party.  At the end of the meeting, Member countries decided to submit their questions to Azerbaijan in a short period of time. 

In addition, the following recommendations to Azerbaijan were made: necessity to pay more attention to bilateral negotiations, to accelerate completion of bilateral negotiation and signing of protocols.

In both multilateral and plurilateral meetings, the ongoing process of alignment of national legislation to the WTO rules were discussed. To be a WTO Member as well as fully fledged member of the multilateral trading system, national legislation shall totally be aligned with existing WTO standards. In this regard, the current state of the Action Plan on Approximation of legislation to the WTO requirement was discussed; in particular importance of adoption and enacting the “Competition Code”, Laws on “Technical Regulation”, “Standardization”, amendments and changes to Laws on “Veterinary”, “Phytosanitary control”, and “Sanitary-epidemiological well-being”, as well as of a number of acts in the field of intellectual property rights was highlighted.  In addition, the importance of adoption in a short period of time of a new law on “Food safety” stipulated in the Decree of the President of the Republic of Azerbaijan No 1235 dated by 10^th of February 2017 on “Additional measured to improve food safety system in the Republic of Azerbaijan” was stressed.

Meeting with the International Trade Centre

In addition to the meetings conducted in the framework of WTO accession, on July 25, 2017 a meeting with the Executive Director of International Trade Center (ITC) Ms. Arancha Gonzalez took place. Possible support programs of ITC to the WTO accession of Azerbaijan were discussed at the meeting. As a result, production of research in 3 directions by ITC was agreed:

• Research on influence of WTO membership to the economy of countries acceded during last 10-15 years (in separate examples)
• Being a Member of the WTO and taking into consideration commitments within the frame of the organization, research on the possibility to use defense instruments prescribed in the WTO Agreements for the protection of domestic industry and national companies during regional and global financial and economic crises, as well as detailed report on protection mechanisms within the frame of WTO requirements
• Information on instruments used in international practice to stop illegal trade-economic activity of third countries in the occupied territory of the Republic of Azerbaijan, as well as such possibilities reflected in the WTO Agreements