OREANDA-NEWS. November 08, 2010. The IBC held an Open Meeting on the topic: "Kyrgyzstan and the Customs Union: Practical Solutions for Businesses".  The meeting was held in the framework of the USAID Regional Trade Liberalization and Customs Project (RTLC), reported the press-centre of IBC.     

The meeting was attended by Deputy Minister of Economic Regulation Oleg Pankratov, Chairman of the State Customs Service of the Kyrgyz Republic, Kubanychbek Kulmatov, and Country Manager of the RTLC Project, Kubat Kanimetov.

Presentations on the benefits and problems associated with the establishment of the Customs Union, as well as the prospects of Kyrgyzstan’s entry into the CU, were made by: Deputy Minister of Economic Regulation, Sultan Akhmatov; independent expert Jumakadyr Akeneev; Executive Director of the Future Project Public Fund, Askar Beshimov. Head of the Representation of the Federal Customs Service of Russian Federation  in   the Kyrgyz Republic, Vladimir Nekrasov, and  RFCS Consultant Igor  Kurkov answered the participants’ questions. President of the Council of Kazakhstan Association of Customs Brokers, Gennady Shestakov, informed about the changes in the Kazakh economy, as well as in customs procedures after the introduction of the Customs Union.

Deputy Minister of Economic Regulation Oleg Pankratov stated that the view of the businesses is very important for the government when considering the possible entry of Kyrgyzstan in the Customs Union.

Chairman of the State Customs Service Kubanychbek Kulmatov said: "Today the challenge for the Kyrgyz economy and for the Customs Service is to adjust to working with the CU countries. In this situation, the analysis of the business is important." The SCS asked the CU Commission to include in it a representative of the Kyrgyz SCS as an observer. Observer status is needed to consistently and timely information on new documents adopted by the Customs Union.

The Kyrgyz economy is not fully ready to join the Customs Union on the proposed terms. That is the conclusion of the interdepartmental group which was studying the issue of possible accession of Kyrgyzstan to the TC, Deputy Minister of Economic Regulation Sultan Akhmatov said.

There are high tariffs in the CU, and the average customs duty is 10.6 percent while in Kyrgyzstan it is 5.1 percent. Thus, in Kyrgyzstan prices will raise for goods imported from third countries, in particular from China. The average local prices will reach the level of Russian and Kazakh prices. As a result, the inflation will grow at 1.5 - 2 percent.

The meeting participants also noted the positive aspects of entry into the Customs Union. Cancellation of customs control and freedom of transit will reduce the costs of trading participants. There will be no restrictions on exports, and consumer prices will stabilized. Joining the Customs Union The market will expand and Kyrgyzstan will attract more foreign investments. Investors are more interested in investing in the regional association than in one country.

However, the question of joining the Customs Union is not as vital as it seems. More important is to know on what terms Kyrgyzstan can enter the TC.

Before making a decision about joining the TA Kyrgyzstan should undertake a series of economic reforms. Necessary to increase the growth rate of industrial and agricultural production, diversify and increase exports.