In an exclusive interview, the Minister of Trade and Integration of Kazakhstan, Bakhyt Sultanov, discusses the next ministerial meeting of the WTO under the chairmanship of his country, the economic relations between the EU and Kazakhstan and the carbon tax at the borders.
Bakhyt Sultanov is a mathematician, engineer and economist. Since 1994, he has held various administrative positions in the economic sector of Kazakhstan and he has also served as mayor of the capital, Astana.
He spoke in Russian with EURACTIV editor-in-chief Georgi Gotev on November 17th.
My first question to the visiting ministers is: what brought you to Brussels, and who did you meet?
Next week, our President, Kassym-Jomart Tokaev, will travel to Brussels and visit the European institutions. Numerous meetings are planned with political leaders, but also with leading businessmen. He will then travel to Switzerland, where he will attend the opening of the twelfth WTO ministerial conference, to be held in Geneva under the chairmanship of Kazakhstan. My task was therefore essentially to contribute to the preparation of this visit. I have had meetings with the European Commission, Vice-President Valdis Dombrovskis, several MEPs in senior positions as well as business representatives.
The main theme is the further development of bilateral cooperation. Kazakhstan is the first country in Central Asia to have concluded an enhanced partnership and cooperation agreement (APCR or Enhanced Partnership and Cooperation Agreement, EPCA in English) with the EU, which is crucial in this area. The EU is our biggest trading partner and also the biggest investor in our country.
We must take advantage of the new instruments and better mechanisms put in place to strengthen mutually beneficial cooperation. We are the largest economy in the region, and our country actively participates in all regional initiatives, including the New Silk Roads initiative (Belt and Road Initiative). We also have our own program, Nurly Zolh, whereby during our 30 years of independence we have built new roads and railways. We are ready to develop as a hub to ensure multimodal transit between the largest economies, namely the EU and Eurasian Economic Union, Central and Southeast Asia, and China.
We have also consulted the European Commission on climate change issues relating to the Glasgow agenda and the goal of phasing out coal. Kazakhstan is committed to achieving these goals, and we have set a goal of carbon neutrality by 2060. We must take into account that our country is young, with only 30 years of independence. We are only at the beginning of our economic development. That is why, in our consultations with our EU partners, we seek to ensure that the characteristics of our region and our country are taken into account.
The twelfth WTO Ministerial Conference (MC12) was to be held from June 8 to 11 in Nur-Sultan, capital of Kazakhstan. The international community and the EU, in particular, had placed high hopes in this conference, held at a time of crisis for the organization. However, it was canceled due to the Covid-19 pandemic. The timing is perhaps even better today with the departure of Donald Trump from the White House and since the reform of the WTO is long overdue. What is your opinion ?
The twelfth WTO ministerial conference was not canceled but postponed, as you said, due to the pandemic. The conference will be held in Geneva, but Kazakhstan will still chair the ministerial conference, which begins on November 30. Regarding the restrictions related to Covid-19, physical participation in this conference is on a ‘one plus one’ format, and we expect our Head of State to attend the opening ceremony. Details of the conference program are being worked out.
In addition to the outcome to be given to the Covid-19 crisis, the issues addressed include those discussed for many years such as the competitive distorting subsidies granted by members to their industries, farmers and fishermen, and of course, internal reform. of the WTO. As the country chairing the conference, we want to reach consensus decisions that will be reflected in the outcome document, namely the ministerial declaration.
When you say physical presence in one plus one, does that mean you and the President will get there?
No, this means that trade ministers from member countries are invited and that another person can also attend the conference. The Head of State will come to attend the opening ceremony.
The EU is a crucial trade and investment partner, accounting for around half of Kazakhstan’s foreign trade turnover as well as investment. Can you tell us about the current trends in trade between the EU and Kazakhstan, including during the Covid period?
Indeed, what you are saying is correct, but when it comes to our exports, it is mainly commodities from the oil and gas sector. This is why one of our essential missions is to diversify our exports and increase the share of manufactured products in our exports. We are also very interested in the climate component, and, after analysis, we proposed to include 140 additional products, which would increase the volume of our trade to the tune of $ 1.5 billion.
In the last period, the trend was to increase the share of manufactured products in Kazakhstan’s exports. To this end, we have aligned ourselves with the highest standards, that is, organic standards. One of the issues we have discussed with the European Commission concerns our exports of agricultural products, which would fully comply with EU requirements.
Unfortunately, like many countries, the Covid-19 pandemic has taken a toll on us, and our trade with the EU has been reduced. However, today we are seeing a dramatic rebound. We have not yet reached pre-crisis levels, but we are moving in that direction with new business contacts.
My next question concerns the pressure exerted by the EU for a carbon tax at the borders. Igor Sechin, head of oil giant Rosneft, said border carbon taxes like the ones the European Union wants to put in place will do far more damage to the Russian economy than sanctions. Do you agree with such a statement? What do you think of the EU’s policy on carbon tax at borders?
Carbon reduction is extremely important, and the border carbon tax is one of the instruments that will achieve this reduction. Therefore, we understand this position. However, like our Russian colleagues, we would like the specificity of our economy to be taken into account. Our industrialization and that of Russia have similarities, and we must also consider that we are located in the center of the Eurasian continent. We are the largest landlocked country, we have enormous internal distances, and we would not want our products to lose their competitiveness when they reach the European Union market.
That is why we believe that it is beneficial to hold permanent consultations and to discuss the mechanisms and deadlines for the introduction of such instruments.
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