On August 22, Russia officially became a full WTO member. That day a government resolution on the approval of export duties came into force, and on August 23 a new Common Customs Tariff of the Customs Union, which sets import duties, was introduced.

Since August 23, Russia has lowered the so-called "anti-crisis" taxes that were increased for some products in 2009.

After Russia's accession to the World Trade Organization, Kyrgyzstan will have more favorable conditions for the entry into the Customs Union of Kazakhstan, Russia and Belarus.

However, the Russian market will be closed for the re-export of Chinese goods through Kyrgyzstan. In recent years experts have been advising local entrepreneurs to switch over from re-export to production of goods, and to create joint Kyrgyz-Chinese garment enterprises. After Russia's joining the WTO, China will lower customs duty on raw materials.

In the future, Kyrgyzstan could become a transit country through which other countries which are not members of the WTO and TC could trade with Russia.

After the recent meeting between Russian and Kyrgyz Prime Ministers in Moscow, actions regarding Kyrgyzstan’s joining the CU are going noticeably faster.

Russia is expecting Kyrgyzstan to be a CU member. "We just have to move within the defined road map, coordinating our activities with our partners, Belarus and Kazakhstan,” said Russian PM Medvedev. He wished Kyrgyzstan quickly develop the set of agreements for accession to the Customs Union, because they are numerous and complex.

Background

Kyrgyzstan made a decision to enter the CU more than 10 years ago, when the country joined the Eurasian Economic Community (EurAsEC). However, due to certain circumstances, of the five EurAsEC member countries (Kazakhstan, Russia, Belarus, Kyrgyzstan, and Tajikistan) only Kazakhstan, Russia and Belarus formed the Customs Union. Now the accession of Kyrgyzstan to the CU can be seen as the fulfillment of international obligations as a EurAsEC member.

The Kyrgyz Parliament has to ratify about 70 international treaties within the EurAsEC, of ​​which about 40 are directly related to the CU.

Some months ago, the work on CU joining slowed down due to political events in Russia, such as presidential elections and the formation of a new government. The CU Commission ceased to exist on January 1, 2012, when the Common Economic Space began to operate.

Currently, working groups representing CU and Kyrgyzstan are discussing CU technical issues. An action plan will be implemented in phases.

The number of CU members and the Common Economic Space will be expanded, “but Russia is not going to rush or push anyone. This must be a sovereign decision of a state, dictated by its own long-term national interests," Russian President Vladimir Putin said in an interview to Rossiyskaya Gazeta.

Commodity turnover

Once the CU rules have started operating in full, all the CU members have increased their sales of goods produced in the CU. However, due to fact that the external economic environment has changed in Kyrgyzstan, trade turnover has fallen sharply in the country. To survive in new conditions, Kyrgyzstan needs a development program for the all sectors of the economy. Earlier, some businessmen were against Kyrgyzstan's entry into the CU, but now they have changed their mind. Today traders of the Bishkek’s Dordoi, the largest market in Central Asia, are facing serious problems because they cannot sell their goods outside the country. Entrepreneurs understand that in order to have the borders open, the country should join the Customs Union.

Opinions

Experts believe that there will be many disadvantages during the first year after joining the CU, but in the medium and long term period the country will have more advantages, so it makes sense to go through a difficult initial period. However, so far pros and cons are not calculated completely. As a result, there is a gap between expectations and real possibilities of economic integration.

Kyrgyzstan should join the Customs Union only when certain preferences are created, said expert Ednan Karabaev. Kyrgyzstan has already made a lot of mistakes when entering the WTO as the country joined many binding agreements. Thus, it is needed to learn lessons from the past experience.