(ADB
Press Release, April 26, 2006)
MANILA,
PHILIPPINES - The Central Asian republics (CARs) would reap considerable
benefits from accession to the World Trade Organization (WTO) and regional
cooperation in trade policy within the multilateral framework, combined with
greater regional cooperation in transport and customs transit, a new ADB report
says.
The
report, which is part of ADB’s study on Central Asia regional cooperation in
trade, transport, and transit, aims to inform policymakers and contribute to
the ongoing dialogue on regional economic cooperation in Central Asia.
It
seeks to show how Azerbaijan, Kazakhstan, Kyrgyz Republic, Tajikistan, and
Uzbekistan - five member countries of the Central Asia Regional Economic
Cooperation (CAREC) Program referred to in the report as CARs - can increase
the gains from participation in international trade through regional
cooperation in trade policy, transport, and customs transit.
While
the CARs have been able to expand trade considerably in recent years, they
currently derive relatively little benefits from, and pay relatively high costs
for, participation in international trade.
This
is because their exports are dominated by a handful of primary commodities,
they take very limited part in global production networks and related trade in
manufactured products, and their trade is concentrated in a small number of
countries.
The
report blames the presence of numerous trade barriers related to trade policy,
transport, and transit systems in the CARs, in their trading partners, and in
transit countries for constraining the growth of trade in the CARs, skewing the
structure of their exports towards primary commodities, and limiting their
trade with countries in East and South Asia and Western Europe.
“Regional
cooperation in trade policy, transport, and customs transit can help the CARs
lower these trade barriers, increase the gains from participation in international
trade, and reduce the associated costs,” the report says.
However,
the report adds that regional cooperation in trade policy in the form of
preferential trade liberalization under regional trade agreements is unlikely
to do so in itself, mainly due to poor design and lack of implementation.
“Therefore,
the CARs need to prioritize accession to the WTO and pursue regional
cooperation in trade policy within the multilateral framework. To fully realize
the benefits of WTO membership, they also need to improve regional cooperation
in transport and customs transit.”
The
report argues that increased regional cooperation in transport and customs
transit would help the CARs reduce transport costs and make transport times
shorter and more predictable for international shipments. This would in turn
help the CARs expand trade, participate more in global production networks, and
diversify trade in terms of both geographical distribution and commodity
composition.
Quantitative
estimates [or simulation results] presented in the report suggest that, if the
estimated reductions in transport costs that would result from increased
regional cooperation in transport and customs transit occurred in 2006, the
cumulative increase in the Kyrgyz Republic’s real GDP in 2006-2015 would be
US$2.1 billion (at 2002 prices) greater or 112.3% (relative to 2005) higher
than in the baseline (“no-change”) scenario.
To
read the full report, go to:
http://www.adb.org/Documents/Reports/CA-Trade-Policy/default.asp