Kazakhstan and the World Economy: an Assessment of Kazakhstan's Trade Policy and Pending Accession to the WTO
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A Service of Leibniz-Informationszentrum econstor Wirtschaft Leibniz Information Centre Make Your Publications Visible. zbw for Economics Hindley, Brian Research Report Kazakhstan and the world economy: An assessment of Kazakhstan's trade policy and pending accession to the WTO Jan Tumlir Policy Essays, No. 01/2008 Provided in Cooperation with: European Centre for International Political Economy (ECIPE), Brussels Suggested Citation: Hindley, Brian (2008) : Kazakhstan and the world economy: An assessment of Kazakhstan's trade policy and pending accession to the WTO, Jan Tumlir Policy Essays, No. 01/2008, European Centre for International Political Economy (ECIPE), Brussels This Version is available at: http://hdl.handle.net/10419/174857 Standard-Nutzungsbedingungen: Terms of use: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Documents in EconStor may be saved and copied for your Zwecken und zum Privatgebrauch gespeichert und kopiert werden. personal and scholarly purposes. 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Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, If the documents have been made available under an Open gelten abweichend von diesen Nutzungsbedingungen die in der dort Content Licence (especially Creative Commons Licences), you genannten Lizenz gewährten Nutzungsrechte. may exercise further usage rights as specified in the indicated licence. www.econstor.eu The European Centre for International Political Economy (ECIPE) is an independent and non-profit policy research think tank dedicated to trade policy and other international econo- mic policy issues of importance to Europe. ECIPE is rooted in the classical tradition of free trade and an open world economic order. ECIPE’s intention is to subject international economic policy, particularly in Europe, to rigorous scrutiny of costs and benefits, and to present conclusions in a concise, readily accessible form to the European public. We aim to foster a “culture of evalua- tion” – largely lacking in Europe – so that better public awareness and understanding of complex issues in concrete situations can lead to intelligent discussion and improved policies. That will be ECIPE’s contribution to a thriving Europe in an open world. KAZAKHSTAN AND THE WORLD ECONOMY: An assessment of Kazakhstan’s trade policy and pending accession to the WTO By Brian Hindley Number 01/2008 Advisory Board Ambassador Roderick Abbott – former Deputy Dr. Robert Lawrence – Professor, Harvard University Director General of the WTO About Jan Tumlir: The late Jan Tumlir was a leading scholar of trade policy, with a Dr. Jean-Pierre Lehmann – Professor, IMD/Evian Group Ambassador Lars Anell – former Chairman of GATT, distinctive constitutional, classical-liberal defence of free trade drawn from his reading of Dr. Brink Lindsey – Vice President, Cato Institute Swedish Ambassador to Brussels and Geneva law and economics. A Czech by origin, Jan Tumlir emigrated to the West in the 1940s and Dr. Robert Litan – Senior Fellow, The Brookings Dr. Prema-Chandra Athukorala – Professor, Australian in 1967 became the Director of Economic Research and Analysis at the General Agreement Institution; Vice President for Research and Policy, National University on Tariffs and Trade (GATT). He supervised the economic research of the GATT for almost The Kauffman Foundation Dr. Harvey Bale Jr – Director General, IFPMA; Mr. Mário Marconini – Former Foreign Trade Secre- two decades, and was known as the GATT’s “resident philosopher”. Tumlir emphasised the President Pharmaceutical Security Institute (PSI) structural nature of protectionism as the outgrowth of overactive government at home. He tary, Brazil; President, ManattJones Marconini Global Dr. Claude Barfield – Director, American Enterprise Strategies strongly advocated a rule-based international economic order pillared on free trade and Institute Dr. Patrick Messerlin – Professor GEM, Sciences Po constitutional democracy. Mr. Erik Belfrage – Senior Vice President, SEB (Chairman) • Read more about Jan Tumlir at www.ecipe.org/tumlir Dr. Paul Collier – Professor, Oxford University Dr. Greg Mills – Brenthurst Foundation Mr. Hugh Corbet – President, Cordell Hull Institute Mr. Hugh Morgan – Immediate Past President of Business Council of Australia; CEO of First Charnock Ambassador Barry Desker – Director, Institute of Defence and Strategic Studies, Singapore Dr. S. Narayan – former Union Finance Secretary and Secretary to the Prime Minister, India Mr. Ulf Dinkelspiel – former Minister of Trade, Sweden Sir Geoffrey Owen – London School of Economics Dr. Juergen B. Donges – Professor, University of Cologne Ambassador Alan Oxley – former Chairman of GATT and Australian Ambassador to the GATT Mr. Peter Draper – Programme Director, South African Institute of International Affairs Dr. Robert Paarlberg – Professor, Wellesley College/ Harvard University Dr. Fan Gang – Professor, National Economic Research Institute, China Ms. Ruth Richardson – former Minister of Finance, New Zealand Dr. Brigitte Granville – Professor, Queen Mary College, University of London Mr. Christopher Roberts – Covington & Burling/ European Service Forum Dr. David Henderson – Professor, Westminster Business School Dr. Jim Rollo – Professor, University of Sussex Dr. Brian Hindley – Emeritus Reader, London School Dr. Gary Sampson – Professor, Melbourne Business of Economics School Mr. Gary Horlick – Partner, Wilmer Hale Mr. Clive Stanbrook – Partner, McDemott, Will & Emery Dr. Douglas Irwin – Professor, Dartmouth College Mr. Andrew Stoler – Executive Director, Institute Ambassador Alejandro Jara – Deputy Director for International Trade, University of Adelaide, General, World Trade Organization Australia; former Deputy Director General of Dr. Chulsu Kim – Chairman, Institute for Trade and WTO (1999–2002) Investment, Seoul; former Deputy Director General Mr. Bob Vastine – President, Coalition of Service of the WTO Industries Mr. Peter Kleen – former Director General, National Mr. Edwin Vermulst – Partner, Vermulst, Verhaeghe & Board of Trade, Sweden Graafsma Advocaten Dr. Deepak Lal – Professor, UCLA Ms. Catherine Windels – Director, Pfizer Dr. Rolf J. Langhammer – Vice President, The Kiel Dr. Steven Woolcock – Director of the International Institute for the World Economy Trade Policy Unit, London School of Economics Dr Brian Hindley ([email protected]), Emeritus Reader of Trade Policy Economics at the London School of Economics, is a Senior Fellow of ECIPE. This paper has been produced by several ECIPE scholars. Dr Hindley led the team. Other contributors are Lucy Davis, Iana Dreyer, Fredrik Erixon, Arastou Khatibi, Florian Koebele, Razeen Sally, and Pierre- Olivier Legault Tremblay. JAN TUMLIR POLICY ESSAYS No. 01 March, 2008 ISSN 1653-8986 EUROPEAN CENTRE FOR INTERNATIONAL POLITICAL ECONOMY [email protected] Rue Belliard 4-6 1040 Brussels Belgium Phone +32 (0)2 289 1350 Fax +32 (0)2 289 1350 www.ecipe.org 1 No. 01/2008 EXECUTIVE SUMMARY that the “price of membership” that the WTO asks Kaza- khstan to pay should be low. Kazakhstan has been negotiating accession to the WTO membership, however, will provide Kaza- World Trade Organization (WTO) for twelve years. khstan with a lock-in mechanism that can help the Long accession processes have not been unusual since country to increase investor confidence. Furthermore, the creation of the WTO, which covers more policy accession will have a more profound effect on Kaza- areas than the GATT, many of which are of greater com- khstan’s trade and economic welfare if it is combined plexity and political sensitivity. with further institutional reforms and increased invest- What sets Kazakhstan-- and other countries within its ment openness. If Kazakhstan attained a similar level of region –apart from WTO applicants in general is that it institutional quality as in the European Union, quantita- is an economy in transition. In a country where degrees tive assessment suggests that trade can increase by 75 of commitment to economic and trade liberalization are percent. often uncertain, and reform speed and strength can vary between sectors of the domestic economy, negotiating Accession to the WTO is likely to have a positive influ- the commitments required to join an organization such ence on Kazakhstan’s regional trade agreements and as the WTO is even more complicated. lower the diversion of trade that these various agree- WTO membership is a matter of economic strategy, ments threaten. Kazakhstan has committed itself to and this study is chiefly concerned with such considera- deepen regional trade integration with Russia and other tions. For Kazakhstan, though, the decision to join the neighbours, but quantitative analysis shows that such WTO also involves geopolitical concerns. In the light political priorities may be economically costly to Kaza- of these legitimate concerns, this study sketches trade- khstan. Kazakhstan already trades too much with some policy alternatives and what these entail. of its regional members, and, consequently, too little The past decade of economic reforms in Kazakhstan with other parts of the world.