 Ladies and gentlemen, welcome to the Center for Strategic and International Studies. My name is Andy Kutchins. I'm Director of the Russian Eurasia Program, and today is a very, very special day. In case you haven't heard the news in Geneva, the General Counsel of the World Trade Organization welcomed Kazakhstan as a member, a new member of the WTO. I feel like we should be popping some champagne. This was a 19-year process, 19-plus years, and we have several people today on our panel who were instrumentally involved in this process, so it's very exciting. Once in a while, in life, one feels like you have a Nostradamus moment. About a month ago, my colleague Aijan Kul-Muhammad and I were in Kazakhstan, and we'd heard, I think, on June 18th, that basically the working group negotiations had been concluded that Kazakhstan's membership was imminent now. I can't say that we expected that on July 27th the day that we agreed to hold this event that Kazakhstan would join the WTO, but as they say, better lucky than good. It was, this is a really quite significant development. It was 19 years of negotiations, and it's a very strong statement about President Nazarbayev's commitment for Kazakh integration into the global economy, and his ambitious plans for modernization and development that were outlined recently in the new Kazakh program referred to as the 100 Steps. And if I could, I'd like to quote the Director-General Roberto Azevedo in what he said in meeting with the Minister of Economic Integration, Janar Ajanova, on June 23rd, because a little more than a month ago, because I think it well captures the moment, quote. The conclusion of Kazakhstan's accession is a tribute to the untiring efforts of the government of Kazakhstan as well to the WTO and its members. The high quality of the accession package will accelerate Kazakhstan's integration into the global trading system and provide a boost to Kazakhstan's economy for years to come. I particularly want to congratulate President Nazarbayev and Minister Ajanova for their key role in concluding these negotiations. As President Nazarbayev has said, it is an historic moment. I look forward to welcoming Kazakhstan as a member of the WTO very soon, and very soon happens to be today. And we really have a splendid program that I would like to transition to now with our speakers, and it will be led off by Assistant Secretary Arun Kumar of the Department of Commerce. Now this is a special honor, not only because Mr. Kumar shares the same initials as myself, A.K., and not only because he spent the most significant period of his life in the San Francisco Bay Area, but of course because of the position that he holds and the distinguished achievements of his career. He is, as I said, the Assistant Secretary of Commerce for Global Markets and the Director General of the U.S. and Foreign Commercial Service, and in this role he leads the trade and investment promotion efforts for the U.S. government. He also serves as the International Trade Administration's lead official advocating for better market access for U.S. exporters. And prior to his nomination by President Obama, he was a partner and member of the Board of Directors at KPMG, LLP, and he led the firm's West Coast Management Consulting Practice, serving major global clients as well as emerging Silicon Valley ventures while creating thought leadership to advance business practices and finance management. For more on Mr. Kumar, you can read the biography that we prepared for you. Mr. Kumar was also recently in Kazakhstan in June of this year. He was a keynote speaker at the first U.S. Kazakh Business Forum, and he led a delegation of 20 U.S. companies to Kazakhstan and also to Uzbekistan. In Kazakhstan he had a number of meetings, including with Prime Minister Masimov and Foreign Minister Idrisov among others. And I should note that he was in this trip the highest level commerce official in Kazakhstan in Central Asia in more than 10 years. And I think that signifies the commitment, not only to the Department of Commerce that the U.S. government gives to promoting U.S. business ties as well as Kazakhstan's accession to the WTO in that regard. So with no further ado, let me welcome Mr. Kumar to the podium. Well, thank you, Andy, for that very kind introduction. I am very pleased to be here today representing the U.S. Department of Commerce. Thank you, Andy, and your colleagues at CSIS for this invitation. On behalf of the United States and Secretary Pritzker, I want to offer a hearty congratulations to Kazakhstan on its accession to the World Trade Organization. This is a momentous event. Kazakhstan has been on a long road to complete WTO accession negotiations, and it's truly special and an honor for me to be here today. You mentioned opening a bottle of champagne. One thing I learned on my trip to Kazakhstan and later meeting Ambassador Umarov is that perhaps the right beverage would be a Snow Queen vodka. No argument here. Thank you. I want to offer special congratulations to United States lead negotiator Cecilia Klein and her whole team for all the hard work that helped get us to where we are today. Both the U.S. and Kazakhstan have clearly benefited, Cecilia, from your experience, your wisdom and determination, and thank you for your service. I want to acknowledge the business community. While governments are responsible for creating the conditions to do business, the actual work gets done by the business folks, the other people at the Department of Commerce serve day in and day out. So thank you for your support for all the efforts that have gone in to get to where we are today. The Commerce Department appreciates the vital role of the public, of the private sector, including the U.S.-Kazakhstan Business Association represented here by Ambassador Kourtney, and the role its members play, both in encouraging market reform efforts and creating a vibrant commercial environment in Kazakhstan. Last month, as mentioned, I was on my first visit to Kazakhstan. My team there led by Senior Commercial Officer Pat Cassidy, I know Pat was going to be here today, maybe you will come later, organized the first ever U.S.-Kazakhstan Business Forum that highlighted 21 U.S. companies looking for new opportunities in Kazakhstan. Kazakhstan has become an increasingly important partner in many areas, including global security, nonproliferation, and strengthening economic connections within Central Asia and between Central and South Asia. And we have seen repeatedly how the U.S.-Kazakhstan partnership contributes to greater stability and prosperity. We believe that Kazakhstan accession to the WTO is crucial due to the importance of rules-based trade that provides clarity and confidence to traders in the long term as the look for commercial opportunities. This is important for Kazakhstan's desire to emphasize the development of non-oil sectors and for the implementation of its 2050 strategy. The Commerce Department strongly supports the continued development of bilateral trade and investment with Kazakhstan for its own prosperity and in support of the region as a whole. It is our view, however, that the key to fully unlocking the bilateral commercial potential is the most stable and transparent business environment in Kazakhstan that supports business development and cooperation, not hinders it. Therefore, we hope to see implementation of Kazakhstan's WTO commitments and the fulfillment of President Nazarbayev's 100 Steps Plan of Economic Reform. Kazakhstan, with its rich human and natural resources, and strong record of macroeconomic reform, has much to offer investors. The Commerce Department congratulates Kazakhstan on its achievements and urges you to keep moving forward. In conclusion, as Kazakhstan exceeds to the WTO, we will work to ensure that U.S. companies are aware of the increased ways in which they can do business with Kazakhstan and we will support growing bilateral trade and investment. Although located on opposite sides of the planet, in spirit, we're on the same side. We share the goal of a strong, independent, and vibrant Kazakhstan that can strengthen the security, freedom, and prosperity of not only the Kazakhstani people and the broader central Asian region, but also of the United States itself. Thank you. Thank you, sir, for sharing your words of wisdom and congratulations this afternoon. I'd like to make a brief infomercial before we turn to our panel, and that is that I want to announce that the five country study reports that we discussed in a meeting that we held here in May, May 12th, in the launch of a report about U.S. recommendations for U.S. policy towards central Asia, those five country study reports dealing with Kazakhstan, Uzbekistan, Tajikistan, Kyrgyzstan, and Turkmenistan are now all available on the CSIS website, and I urge you please to take a look at them. I think there's a lot of useful information, and this is the first big step for what we call our Eurasia Initiative, in which this program today is very much a part of looking at, in particular, the economic drivers behind the reconnecting of the large Eurasian continent. Now let me turn to our panel discussion. We are going to go in this not exactly in the order as our panelists are listed. They're listed alphabetically. I will introduce all of our speakers briefly now. I won't read everything on their biographies, as they are well known to you, but our first speaker will be Cecilia Klein, who had probably as much to do as anybody, or more to do, than anybody in the U.S. government, I think, with Kazakhstan's WTO Assession. She is the senior director for WTO Assessions at the office of the U.S. Trade Representative, a position that she has held since 1995, and she has been with the U.S. Trade Representative's office since 1980, holding a number of different roles. Then we will turn to our non-resident visiting fellow here at CSIS from Kazakhstan, Aytotlan Kormanova. She specializes in economic policies in Central Asia, as well as the media, and has written recently a commentary on the CSIS website about the significance of Kazakhstan's WTO Assession. And she is fortunately with us here through the end of the year. We're delighted that that is the case. And then, thirdly, we'll be turning to Michael Lally, who is the executive deputy assistant secretary of commerce for Europe, the Middle East, and Africa, where his duties include business and policy development, operational oversight of five Washington business units, and over 40 U.S. commercial services, service offices in the EMEA region. He's had a lot of experience in this region. He was the senior commercial officer at the U.S. Embassy in Baku. He spent several years in the private sector with the AES Corporation, the world's largest independent power producer, where he was co-head of AES's Moscow office. And prior to that, Mr. Lally was also a senior commercial officer with the U.S. Embassy in Almaty when that was the capital. So that was back in the day. And he was also served as a commercial attaché at the U.S. Embassy in Kiev. And finally, last but not least, batting cleanup, so to speak, is Ambassador William Courtney, who is an adjunct senior fellow at the RAND Corporation, where he is executive director of the RAND Business Leaders Forum. And more apropos to our discussion today. He is the president of the U.S.-Kazakh Business Association. Mr. Courtney has a long and distinguished career in the U.S. Foreign Service, from which he retired in 1999, including an ambassadorial post, including serving as our first ambassador to Kazakhstan back in the early 1990s. So we'll turn to Cecilia Klein to make initial remarks and then move along the panel. Well, thank you very, very much, particularly for this opportunity to celebrate a great day, a great day for Kazakhstan, but a great day also for the United States and for the trading system. Those are the three things that always keep me going in accessions. It's good for the country that applies. It's good for the United States, and it's good for the trading system. To join the World Trade Organization is not simply to present yourself and ask for your seat. You have to negotiate collectively with the other members. In Kazakhstan's case, the number varied somewhat during the period of its negotiation from about 128 to 161. During that period, the working party that the council had established back in 1996 examined the trade regime and the policies that Kazakhstan provided information for. The negotiations themselves are done both by examining these documents also by face-to-face work, but the end result is a package containing the terms of the accession of the applicant country. This includes commitments and legislation to implement World Trade Organization provisions, restraint on trade distorting agricultural support, and additional commitments and concessions on tariffs and on the right to provide services. The process is multilateral, but much of the work is done bilaterally. It can take as little as a couple of years, or it can take decades. And after all of that, at the end, we, the members, completely lose control of the process, and it is totally up to the applicant as to when they ratify and when they join. Kazakhstan's accession terms are good. They cover all of the rules, they cover tariffs, services, agricultural supports. It implements, Kazakhstan will implement most of its requirements, but from the date of accession, which I understand will be sometime in November so that they may participate in the upcoming ministerial conference in Nairobi, Kenya as full members. Our office in Geneva has confirmed that today the general council did approve the terms of Kazakhstan's accession. There was a huge party. And they, even though the process took 20 years, a bit longer than we had expected, that reflects the complexity of aligning a trade regime that at its outset was fully outside the GATT and WTO system. And to align this perhaps well functioning, but totally different entity with the WTO framework of rules and expectations of members, that takes time. And it takes patience. And it has to align with the political cycle of the country that you're negotiating with. And sometimes it even has to align with the political cycle of your own country. And this isn't just for the United States. It's also for the other, I think in the case of Kazakhstan, 50 members of the working party, something like 25 of whom participated in bilateral negotiations. So Kazakhstan's application was accepted in early 1996. And this was 13 years before Kazakhstan announced that it would join the customs union with Russia and Belarus. So the negotiations at that time started on the basis of Kazakhstan's post-Soviet, sui generis, I'm doing this starting from day one and working forward legal system. During the period of the next six years, Kazakhstan provided documentation. It initiated the complex dialogue, pluralog, multi-log with WTO members on its trade regime. This covered everything. It covered customs practices, customs evaluation, rules of origin. The very right to conduct trade, fees, charges, taxes on imports, quotas, import licensing, pre-shipment inspection, I don't know if all of you know this, but at one time Kazakhstan had a pre-shipment inspection regime, trade remedies. And most visibly and I think most tangibly, its willingness to establish commitments and concessions on tariffs and services. The part of WTO negotiations I think that are less well understood has to do with domestic policies that affect trade, not just the water's edge, but what you have to do to come in and participate on a national treatment basis after you've passed the water's edge. This included domestic agricultural support. It included standards and technical regulations, veterinary and plant protection requirements. The legal framework for, this is very important, the legal framework for protecting intellectual property. Investment requirements and subsidies that depended on export or depended on the use of local materials. And the operation of one of the largest most comprehensive state-owned enterprise systems I have ever made contact with in a WTO accession. Work on resolving these issues was not progressing during this period, however. In the six years up to this point, while there was great preparatory work going on in Geneva and while there was an enormous amount of technical assistance being applied to move the country into a position to convert its system over to something that was more standard worldwide. There had been numerous governmental changes affecting the Kazakhstan team conducting the accession, and this was having a very negative effect on Kazakhstan's ability to pull together an accession package. In 2003, a new negotiator, Jeannara Jeanova, came aboard, and she was determined to stabilize the situation and make definitive progress towards completion of the negotiations. She had a team of young, learning men and women with her, but the carousel stopped. The team that she put in place in the mid-2000s was the team that essentially completed this negotiation, and that made a huge difference. Work on resolving issues over the next six years did make good progress. And by 2009, the Working Party had identified the remaining issues that had to be negotiated and resolved. Work was underway to develop the commitments in the draft report and the protocol that would be their terms of trade, and market access negotiations were advancing with over 20 members. I think the ultimate number on goods was maybe 25, and on services it was something like 19 or 20. The serious issues that remained included agricultural subsidies and supports, local content investment requirements, sanitary and phytosanitary measures, and legislative implementation was still a work in progress. And then, in June of 2009, Russia, Kazakhstan, and Belarus announced the formation of a customs union, which covered all important export policy issues, excluded only export duties, agricultural support, intellectual property, and most services were also outside the purview. But everything else was inside, and that meant that six years of work on the documents, particularly the documents with the rules, but also on tariffs, were going to have to be adjusted. I was on my deck that morning when I took the call and got the word. Yeah. So it- How many floors up was that deck? It was second floor. And just to add poignancy to it, we were still hip deep in the Russian negotiation as well. Belarus had kind of sidelined itself, but I mean suddenly the world shifted on its axis and we were going to have to reinvent how gravity worked in the accession. It was really a very intense moment, very intense moment. So the Working Party report text had to be substantially rewritten because the first third of every section is the legal basis. Well the legal basis was now changed. And we had to basically read all the new legislation, which was a work in progress because the Customs Union didn't actually come into operational effect until January of 2010. The new Customs Union-based legal structure was based on Customs Union agreements, treaties, and protocols. A great deal of this was, how can I say? Not so much cribbed as emerged from both Russian laws, which we had been going over in their accession, and basic WTO agreements. So in the end, we weren't dealing with something totally different, but not totally alien. And that made a huge difference. A version of these laws embedded, they weren't laws, they were actually international agreements, treaties, and protocols, which in Russia's case superseded their domestic legislation and in Kazakhstan's case were simply inhaled as their domestic legislation. Since we had to do a version of this for Russia as well, there was some overlap in the determination of the work. There was actually some synergies for us. But in both accessions, the new Customs Union legislation would be necessary to meet WTO requirements. So the extra work, while not too onerous, did in fact complicate things. Essentially, the Working Party reports of both Russia and Kazakhstan had to be rewritten. Services negotiations weren't that heavily impacted. But anything that had to do with import or export policy, with the exception of intellectual property or agricultural supports or services, all the names changed and it all had to be read and it all had to be run up against the WTO. There were issues that transcended Kazakhstan's shift to the Customs Union that were still on the table. And these actually are the ones that we've spent most of our time on in the last four or five years. There were extensive requirements for the use of local labor and goods by investors in the automotive and oil and gas sectors. There was an extensive state-owned enterprise operation. A formula needed to be developed that would allow Kazakhstan to phase out the contracts that had these local content requirements in them. And we also had to write a provision into their services schedule that, well, it was negotiated, but it was negotiated with full understanding that they were, it's the one place where labor rules are actually negotiated in the WTO. And this is in the terms of investment and the provision of services by labor. And that's negotiated in the services schedule. In the end for the trims in the oil and gas sector and in their state-owned enterprises, there was a standstill for contracts and a transition period for the expiration. And these will all expire sometime towards the end of 2020, which we consider a very, actually 2021, but we still consider it a very good commitment because this was pervasive throughout their investment system. And at the end of this time, there will no longer be any legal requirement in Kazakhstan, nor will there be any right through government fiat to use local content to be forced to use it if you invest. And we consider this a huge victory given the size of the issue. Entry of US poultry and meat products into Kazakhstan has been a problem for quite some time. Part of these problems are local, part of them have to do with, shall we say, various interpretations of customs union provisions. But due to our experience with the Russians in working out their negotiations, we were able to put the pedal to the metal with the Cossacks and come up with a more specific and detailed framework for our trade in this area, which I have every hope is going to remove a major irritant to our bilateral relationship. We got a very good commitment from them on the use of commercial considerations by their state owned enterprises, something I have to admit is required of us by Congress, but we did do it. And then finally, big victory in the agricultural area. Kazakhstan has a unique agricultural problem. They have, for example, wheat is a major product. They absolutely had to support the wheat. And then they absolutely had to be able to dispose of it after if one of their years came in and they had more than they could use or vend in the area. With an excess like that, they had to use export subsidies. Well, export subsidies on agricultural products we couldn't have. So, and they also needed a, what I would call a stable level of support because this is a social support as well. They have a lot of previously nomadic people living in towns and working their farms. They are not in a position to kind of make it up as they go along with the lives of a huge portion of their population. What we came up with was a higher level of stable additional support that they could use over time with no reduction. It would only vary with the amount of support that they gave, the amount of agricultural production. And that was 8.5% de minimis is the term of art. The only other country in the system that has that is the People's Republic of China. And in both cases, they have no additional right to support. That's it. The unique problem and the hardest problem we had was with the tariffs. Approximately one quarter of their negotiated tariff bindings were now below the level of their applied rate. They, and they couldn't get there. They were in a customs union. The Russians were definitely not going to alter their bindings or their applied rates to capacitate Kazakhstan's problem. These lines covered a large number of our priorities. In the end, a completely unique formula for tariff adjustment was developed that provided for a Kazakh exception to the customs union common external tariff. This would be for three and a half years. At the end of which, there would be negotiations based on trade data that had been developed in that period to realign these rates towards the common external tariff. The reason we needed three years of data is because this is the data you use to evaluate how you're going to be compensated. You have a binding at zero. The rate you want is at 10%. You've got, if you're going to go to 10%, you've got to cut it somewhere else. You have no idea how many hours you spend doing stuff like this. It's amazingly technical. But the one thing that didn't change was that they are now members, are going to be members, very soon of the Information Technology Agreement. And very probably of the, well, possibly not the expansion, but definitely of the agreement itself. And they were able to sustain this. And this is huge because one of our biggest markets in Kazakhstan is electronic inputs to what they manufacture. So during the last three years, these issues were addressed and resolved by Kazakhstan, bilaterally working with us, quadrilaterally working with the European Union and other interested members. In the Cairns Group, Australia, Brazil, Argentina and Canada were heavily involved. The EU negotiated export subsidies for the multitudes and worked closely with us on all the remaining issues, in particular, in particular on sanitary and finance sanitary. Ukraine came in at the last minute asking for the right to negotiate this was heavily contested since the schedules had already been consolidated. But at the end, they were able to work out an agreement with Kazakhstan. And so we have been able to conclude the negotiations on time. It has been a very long journey for Kazakhstan to complete its WTO accession. People often ask why accessions take so much time. I think I gave you a sense. I've already gone over my time. And whether it's all really necessary since in the end it's just good trade policy and darn, you know, couldn't you just change your laws? But if anything, Kazakhstan's hard work on this stands as a reminder of the importance of the institution of the WTO. It is kind of a one-stop shop for cleaning up your trade policy act. It is the value that WTO membership offers that keeps the accession applicants coming. When I started in this job, we had maybe 15 applicants. It's been as high as 40. It's now back down to 22 actually with Kazakhstan, it'll be 21. So President Nazarbayev went to Geneva today to personally lead his country into the WTO system. That vote of confidence should demonstrate as well as anything else, the value of WTO to the exceeding members. It is a forum for negotiation, discussion, and dispute settlement. You do not have to kill someone if you can't get a raw material. You can actually discuss things with them. A proven framework for best practices in economic development and the building of trade capacity to foment growth and investment. That's a mouthful, but what it means is it's a ladder to dig yourself out of whatever economic hole you are in. And if you're not in a hole, it's a ladder to help you climb the next hill. It's a seat at the table going forward in formulating the international trade rules. You're going to be subject to those rules whether you like it or not. So you might as well be a member and help make them. For those of us working on this for almost 20 years, for Minister Aitjanov and her team, and for all the U.S. agencies and offices, the departments of commerce and agriculture and state and treasury and labor and endless numbers of people over the last 20 years. I really should sit down and make a list. And very much for our head of delegation, Assistant USTR, Mark Linscott. I think I can say it was all worth the effort. And as Kazakhstan undertakes critical domestic reforms, broadens and expands its trading relationship across the spectrum of WTO membership and assumes an important role in helping bring the WTO membership together, we can work together to realize future successes. Thank you very much. Thanks, Cecilia, so much for the inside story. I'm sure there will be a number of questions further. You know, when Cecilia kind of casually said that the working party report had to be rewritten. In the Russian case, I remember the working party report was approximately 900 pages, I think, and had to be rewritten paragraph, sentence by sentence. With a few exceptions, yes, because all the rules had changed. And so they, we had to re-specify all the rules. And then you had to go in and figure out what they'd said about the old rules and make sure if it was still true about the new rules, it was a real job, a labor of love by all of us who worked on it. Indeed, indeed. Well, let me turn now to your colleague to your left, Aya Kormanova. Aya, what does this mean now for Kazakhstan's economy and economic development and business sector? Well, thank you very much, Cecilia. Really it was a very interesting and informative presentation of yours. Because really, I mean, in Kazakhstan itself, a local domestic debate is a little bit lacking of this kind of information. We have published, I think, the details of the WTO agreement only a few weeks ago. And this kind of led the whole public in Kazakhstan to be in some uncertainty what kind of implications there are from WTO and especially because we are already the member of the Eurasian Economic Union, how that would complement each other, what kind of implications there will be, especially at a time of lower oil price and some loss of competitiveness that Kazakhstan is already facing. So I think the issue is really very complex, but I'm very happy to hear that the negotiations have ended because I think that the WTO is basically a new model for Kazakhstan. I really believe that it will bring more benefits to Kazakhstan. I think that Kazakhstan will be able to really reap mostly positive advantages from the membership. But I mean, the reason why we are not performing so well in the global trade is that because we have been isolated for a long time from the world trade networks, from the world commercial networks. And on some level of instinct, I would say that there is little understanding of how commercial networks really work, of how market incentives really work, of how global trade really works. And I think you have to be in WTO to understand how WTO works really. And then the second reason for that is that Kazakhstan economy is still heavily dominated by oil, unfortunately. And this leads to the fact that most of the medium and small businesses in Kazakhstan have limited capacity to export. And there are figures that from the World Bank, for instance, that the percentage of exporters among SME sector in Kazakhstan is really very low. It's about 5% while the average for Europe and Central Asia region is something like 23.5%. So most of the small and medium enterprises in Kazakhstan are engaged in imports because a wide range of goods is being imported because of the lack of domestic production, because of the quality and price match. And this kind of provides really big business for SME. And that's why the Eurasian Economic Union had really hurt the local businesses so much because there were higher import tariffs and that made the imports more expensive. And particularly that this coincided with the oil price drop and the devaluation of the Russian ruble. And in a whole it kind of created the negative experience and this negative experience in some way is affecting the domestic debate. In Kazakhstan, some business people say that maybe WTO would make it even worse. But of course, I mean, WTO is not a miraculous tool to make, you know, to raise the experts immediately. It's, and the issue of competitiveness in Kazakhstan has really serious roots. It's again, it's an oil factor, it's geographical factor, it's legislation. And we have already, I mean, but WTO should be really different experience for Kazakhstan because other than the Eurasian Economic Union because it's an open space versus the open block. So these are kind of different incentives to diversify different rules for the Kazakh exporters. Let, I think that if the information is true that Kazakhstan import tariff will go down to some 6%. And that kind of brings Kazakhstan back to the level it had before joining the Eurasian Economic Union. So that means that Kazakhstan will liberalize its import tariffs on over 3,000 goods and agricultural tariff will be more than half from 16.7% to 7.6%. And yeah, while this economic benefits from WTO may not be immediate, but we have to remember that there should be, there are many potential gains in the longer run, imports may become cheaper and more diversified. The level of shadow economy may be reduced. And most importantly, that should bring more foreign investment into the country, more foreign technologies. And maybe the time will be for the Kazakh producers to set up new production facilities within the global value chains, something that we really want to have. And yeah, I mean, it's been 19 years of negotiations for Kazakhstan. But in fact, I think that WTO accession is really timely because Kazakhstan has already invested significantly in its own competitiveness. I mean, we invested like billions of dollars into local production capacities. And as Cecilia said, some of the state support will be still continued until 2020. And after that, it will no longer be rendered. But still, I think that the good thing is also that oil price drop maybe will provide some more incentives to diversify. And then also it coincides with more bold reforms that the Kazakh government has announced on. And these are the investment climate, the steps that the Kazakh government has announced to bring more FDI into the country. And in fact, FDI is a really important block, I think, in future WTO benefits for Kazakhstan because there was one research from the World Bank back in 2008. And it showed that liberalization of barriers to foreign investment in services in particular will amount to some 70% of gains for Kazakhstan from WTO accession. And so we all know that the 100 Steps Program announced by the President Nazarbayev specifically places a focus on making FDI come to Kazakhstan in a larger quantities. And this visa-free regime, this taxation incentives, this support of the state in providing some infrastructure and some other measures. I also think that it is very important in the short term that Kazakhstan WTO accession comes in a moment of geopolitical uncertainty. I think that Kazakhstan's foreign policy, which seemed to have lost some kind of a balance during the Russia-West conflict, is kind of regaining back its multi-vector orientation. And the country really views WTO and China's Silk Road economic belt as real alternatives to trade and integration in the region. And during the last Astana Economic Forum, President Nazarbayev said specifically he offered the alternative meaning of the Eurasian integration. And suggested to establish a common Eurasian economic space and called for greater cooperation of the EU, China, and the European Union, and the rest of the world. So that really shows that Kazakhstan's seeks to establish its kind of independent role. And it really wants to see itself as an open, modernized country. And it borrows a lot from the Western standards and practices. It wants to see its population trilingual. It wants to bring British law into the financial center in Astana. It really, I think that institutional reforms that have been announced, I mean, they have really serious meaning if implemented properly. And even the Chinese Silk Road economic belt, I think this is as a project has a potential to be developed more effectively because of Kazakhstan and China being both WTO members. And in fact, most today, most of Kazakhstan's neighbors and important trade partners are WTO members. It's starting from Kyrgyzstan, which has become a member since 98, China since 2001, Ukraine, Russia, Tajikistan, and even Uzbekistan, as we heard has resumed its talks to enter the organization. So that makes 90% of Kazakhstan trade to be done within the WTO. And the last point that I'd like to make because I personally advocate for greater trade within Central Asia region. And I think that there is a potential for setting up really truly a regional value chains in Central Asia, which could capture complement and advantages of the countries, such as labor, land resources, accumulated local capital and so on. I think it would be really interesting to watch how the trade between Kyrgyzstan and Kazakhstan will develop because Kyrgyzstan is becoming the member of the Eurasian Economic Union. But that also means that the first border in Central Asia is now open. And it had been always a very economically intense border and we'll see what kind of challenges or what kind of advantages it will bring, although there is a certain economic slowdown now, both in Kyrgyzstan and Kazakhstan, but still I think that can maybe lead to drive some regionalization in setting up some joint production facilities on something else, joint mutual investment, et cetera. So in any case, I think the WTO membership, it was a long-awaited event for Kazakhstan. I think that we will be able to reap good benefits from this and we just have to reorient ourselves from this old stigmas of import substitution. We should really look at the world more broadly. We should really try to develop the industries with higher value added and look at the services more in focus. So I think that mostly it should be, we really hope that coupled with the reforms that the current government is doing, it will bring more of good rather than bad. Thank you. Thank you very much, Aya. I think your point about the timeliness of the accession is especially important. Let me now turn to Michael Lally from the Department of Commerce. Michael has been very close to this process and was with, of course, the Assistant Secretary, Kumar, together in Kazakhstan and Uzbekistan last month. Sure thing. Andy, thank you very much and appreciate your time and your leadership on all of this and it's been a great pleasure working with CSIS. I have a few slides this morning, but before we start, I wanna call back to the great report that Andy and Jeff Mankoff did in terms of engagement in this region and how I'm gonna be looping in a few of, I think, the lessons that you've taught us on some of that into some of my presentation. So again, thanks to CSIS for its real thought leadership in a lot of different ways. I have three slides, so rather than doing the presentation and giving you my summary, I'm gonna give you the summary and do my presentation to get us off the ground. So behind me, I think you'll see my first slide, which is, what I've been asked to talk about today is what are the implications for American companies here as we look forward to this continuing that out on my current capacity. But I think the play is pretty clear. I know I see a number of company reps in the audience who have had, in some cases, couple of decades of experience in the market and the play is clear. I mean, you're looking at a $225 billion economy, a high GDP per capita. When you look at overall, when you aggregate it, you look at Kazakhstan as having an economy equivalent to that of Czech Republic, but given its large geographical component as well as fairly small population, it adds up to high GDP. And you're seeing the import market, the large and growing import market, especially in capital equipment, because that's where Kazakhstan is in its economic formation right now, bringing in large capital equipment, which is part of its larger investment plan. Well, and right now, just this year, I think we hit probably one of the largest two-way trade numbers in certainly in recent years, if not in the full history of about $2 billion. We'll go to the next slide. I'm gonna try this. There we go. And we continue the play here and we look at what USFDI stock is. And I think it was interesting just to look at the National Bank of Kazakhstan report just recently, which talked very specifically about the United States is the number one investor in Kazakhstan has been, and also even in the first quarter of 2015. And I prepared sort of comparative numbers between the US and Kazakhstan's northern neighbor to look at this as well. So it gives you a sense of how really significant the US play is into Kazakhstan, both in terms of the commercial, but the long-term interest as well. World Bank doing business pretty straightforward. Lots of improvement, still fairly middling when you look at the overall competitive environment. And I think that a lot of the work that Cecilia and our Kazakhstan colleagues have done is gonna look that move that number north even better. I've talked a bit about the capital equipment play. And I think it's obviously very clear as the Assistant Secretary pointed out in his remarks, we had about two dozen American companies come to Astana just about six weeks ago. Some new to the market, some older to the market. Across the whole gamut of agriculture, infrastructure, services, aerospace, and the like. So the interest is there. And I think now WTO accession puts a larger even halo on the market on that. So we've talked about the strong US presence in the natural resource and transportation sector. I think that's true, whether you look at oil and gas and aviation and the like. And obviously the geographical position. The opportunities that are there given Kazakhstan's great bridge capacity between East and West. But I think as Ms. Kurmanova has talked about as well, some of the constraints that are there, when we actually, when you look at intraragional trade, you find it is amongst the lowest in the world. And so those are things that WTO tries to hit at. And as I point out, I'll talk a little bit to our role as the US Department of Commerce where we work with our partners in USTR and State Department and others and the private sector to create the space for US Kazakhstan business partnerships. The final summary slide I'll come to is number three. And this is where I'm gonna come back. And I think this provides, I think a little past as prologue for how we need to look at Kazakhstan's accession to WTO accession. Cecilia has already explained how the rules-based trading system gives that sense of confidence, the well-defined mechanisms, how to sort out problems. Because that's especially important. And has Kazakhstan already improved its doing business rankings? But frankly, it remains a challenging place to do business. But we see that things are on the right track. We've seen the WTO accession move forward. That I think is important play. But I think then as we look forward, we have to see what does this mean and how does this work really for companies doing business, whether they're Kazakhstanian companies or American or international firms. And we don't need to look no farther than a great report that was put up by the American Chamber of Commerce in Kazakhstan in May 2014, which is basically laying out what were the top 10 barriers to foreign investment. This report has received very strong support from Prime Minister Massimov, with whom the Assistant Secretary met just about six weeks ago, where we talk very specifically about what can be improved in order to really make a really strong environment for business in Kazakhstan. And I think that it also I think is fair to say, and I think Cecilia would agree and many others that WTO accession for any country, including Kazakhstan, is not a panacea. It doesn't mean that overnight in December, things will all be great. January one will wake up into a new environment. It will take five, 10, maybe more years for the processes and the regulations. And I call it the mentality sometimes too, to seep into legislation and to regulations into business practices. So it becomes a norm rather than an exception. So that's the summary I would mention. So I'll turn back a bit and give a kind of a broader sense of this. But I mentioned past as prologue and I want to recognize another person in the audience, Ambassador Beth Jones. For those of you who might know Beth, there's Beth. Yeah. She was our second ambassador in Kazakhstan. I had the honor to work with her, an absolutely fabulous boss. But what we did was at the time when Kazakhstan started its accession process in 96, Beth got us all together with a lot of our implementing partners from which are the US Agency for International Development, our Kazakhstan partners. And she said something very clear, which I remember to this day, which comes to the past as prologue point, which is that it's great to do the reforms and get them on paper, but if they're not working for business, it really doesn't matter. How do we make those, the companies be, how do we have the companies see this as an effective part of what they do and that it makes business and lets companies grow, hire people, pay payroll taxes, that then build hospitals and infrastructure. So that was a very important lesson that we learned early on when USAID and other organizations as well, but I certainly work very closely with USAID, Ambassador Jones, to link up what American companies needed with the actual reforms that were taking place and to remove as much of the air between the two as possible to make it work. And I think that's a kind of an important lesson as we look forward into 2016, 27, 2018. Ms. Kromanova has talked a good bit about the why, the importance of diversifying the economy. When you look at the Kazakhstan's economic growth projections for this year and next year, they're not gonna exceed 2%. So with depressed oil prices and economic downturn in the region, the old saying, bad weather makes good sailors. Well, bad weather will have to make good sailors and I think Kazakhstan is understanding that it's time to diversify and how WTO will be that lighthouse to get us there. It might be a rough road, but we know where we're going and I think that that's important. As I mentioned before, WTO, I think for any market, whether it's American companies, Kazakhstan companies or international, it's not the panacea. There's still gonna be challenges in the market, but the whole goal of this is the marathon, not the sprint. So it's a matter of change over time. And what we'll find is American companies who are working either directly through JVs or indirectly through sales agents, distributors and the like, we'll find that. But I think the good news here, there's a lot of good news when you really read the details for American firms and for competitiveness, for their competitiveness in Kazakhstan, which also means competitiveness for Kazakhstan companies because quite often American firms will partner with Kazakhstan firms. It's important to understand the market, to understand the language, how do I market, how do I solve problems? You need to have a Kazakhstan company with you. It's very important. So one of the elements of the CSIS report, Andy, was if I remember correctly, engage with Central Asia on its own terms. And I think Cecilia, you'd agree that this is probably the case where Kazakhstan with its negotiating partners engage with this on its own terms. And when we look at the actual elements of the agreement, it's important. And I think when you look at the headlines, if I understood this correctly, Cecilia, this was one of the most challenging negotiations in the history of WTO. I saw that one. High quality package was put forward as well in terms of what the quality of the Kazakhstan package. And Ms. Kurmanova talked to some of the bound rates with regard to import tariffs. But import tariffs were never the biggest issue, I think, when you talk to American firms. A lot of it was technical barriers to trade, as you point, behind the waterfront issues of actually getting things into market and keeping them there. But when you look at the agreement and based upon my review of the WTO documents, I leave it to Cecilia to correct me if I'm wrong on some of this. There's some important gains. Allowing pharmaceuticals and medical equipment, wholesale entry into the Kazakh study market within five years of accession. That's going to be, I think, a competitive element. The elimination of a foreign equity limit on telecom enterprises. Currently, now it's 49%. There was a carve out for Kazakh telecom, okay? Insurance and banking, foreign firms will be allowed in both of these sectors five years after accession. These are particularly high, we compete very well in these areas, in these service areas. But what's important in those areas is it enables a whole different layer in all different sectors of firms to operate. When you're bringing in life insurance and health and property, commercial, industrial, that's providing a whole level of different market support to allow companies to develop. Never mind, look at the banking side on the competition. When you have more banks coming in, you're looking at different banks that you can go to for cash and treasury management, for SME loans and the like, it's very important. Kazakhstan buys a lot, government of Kazakhstan buys a lot of stuff, billions of dollars, I don't have the exact number in front of me. Kazakhstan will begin its accession negotiations to receive the government procurement agreement within four years of accession later this year. And then you look at other things as well, which is important in terms of anti-monopolistic behavior or pro-competition behavior, I would call it. And quoting from one of the WTO summary documents, access to Kazakhstan government-owned regulated pipelines that will be granted to foreign investors producing oil and gas in Kazakhstan on a non-discriminatory basis. This is very important for providing a competitive and fair environment for the same. There'll be no discrimination with regards to origin or destination of hydrocarbons or in applications of transportation tariffs for foreign or domestic investors, even playing field. That's the takeaway line. So you look at the practical implications and considerations for American firms. And as I mentioned before, the American Chamber of Commerce in Kazakhstan, working with our partners with the U.S. Kazakhstan Business Association and others had done a great report in the May, 2014. And it talked about 10 specific areas where business environment issues where improvements can mean greater investment and trade. We've got great support from Prime Minister Massimo who meets, I think, on a monthly basis in very specific agenda areas with foreign businesses, with our American ambassador, with the U.K., the Canadians, the Europeans, and the like. And I don't have time to go through all 10 here, but I'll give you three. And let me just look at local content requirements, licensing, and tax and VAT refunds that are part of the WTO accession package that will have, I think, real-world benefits for American firms. So LCRs, local content requirements. What does that mean? It means that you're gonna have to buy local even if you buy, even if normally your supply chain would take you back to the United States or Europe or wherever, because you have to buy local. That's essentially the argument. Even if the standards and the schedule and the price and the quality were not effective, this is a distorting element of what private companies should make the decision about how they should buy. But now, what you'll have is that there's, within WTO now, within the accession procodes, WTO inconsistent measures, including LCRs, applied in existing investment contracts in the oil and gas sector will be eliminated by January 1st, 2021. So we're on the glide path there. And as I think Ms. Cromanova pointed out about competitiveness as well, we see where, when you can do supply side supports, in other words, help the companies in Kazakhstan get to the levels that they can be in terms of schedule, price, and quality, that will then run the local content rather than making it an administrative fiat. Licensing, let me choose specifically from the AMCHAM report, which talks to specifically engineering and construction. Previously, when granting a license, the government could only look at a company's experience in Kazakhstan. So you take a company that's, say, an American firm for this case, has experience all around the Gulf, has done work offshore around in the Arctic and others. That doesn't matter. That didn't matter because they hadn't been in Kazakhstan. So automatically, you're pulling out very competitive firms that can hire Kazakhstanis, can hire Americans, can hire third country nationals and do this. Well now, what will happen is under WTO, quantitative restrictions, including imports, quotas, bans, permits, and licensing requirements that cannot be justified under the WTO agreement will be eliminated and not reintroduced, whether by Kazakhstan or the competent bodies of the Eurasian European Union, the Eurasian Economic Union. Right, so that's basically putting the burden saying, if you can't prove that it's justified, it can't happen. So that's, I think, good stuff. Tax VAT refunds. When you look at what American companies say about the tax situation, normally they say, look, the tax rates are reasonable. The implementation with regard to inspections and looking at your books and going back and being retroactive can be unpredictable and excessive at times. They're words. And then also a case of where a civil case, if you didn't pay your taxes, becomes a criminal case. Okay, that's another point that's been pointed out. And this has been presented to the Kazakhstan government and they're looking at all of these elements. But now under this, you're gonna find where a company, so what was happening before was when a company exported a product from Kazakhstan, the VAT should have been refunded. Well, that wasn't happening because you had to prove that VAT was played all along the chain of the actual export. That's really hard to do. But now with this, you know, and so you'll have all of that refund holding in an account that you can't get to, you had a devaluation last year which took another 20% off of that. So now all of a sudden your receivable is x minus 20%, but you still can't get to it. But what happens is under a WTO, you're gonna see that internal taxes including VAT and excise taxes will be applied in compliance with WTO agreements. Okay, so there's real important, I think, accomplishments within this. Let me just close very quickly with kind of our department's role and what Assistant Secretary Kumar and my other colleagues here as well are trying to do. And Andy, looking back at your report from CSIS, you talked very specifically, and if I may quote, when you talked about your interviews throughout the region, you said our interlocutors in Central Asia were virtually unanimous in emphasizing the commercial dimension of their relations with the United States. And we saw this last month when Assistant Secretary Kumar was in Kazakhstan and Astana where we had over 200 Kazakhstan firms come to one-on-one meetings with 20 American firms. So we were oversubscribed. We didn't have enough room, physical, and on the schedule to do this. And I think that's the challenge. How do we keep sustaining this momentum? Because I think one of the questions that will come up in 2016, 17, and 18, and maybe Ms. Kurmanova can comment on this in a bit, is what did we get out of this? If I'm a Kazakhstan company, what did I get from WTO accession? How did it benefit my firm? And we have to be prepared to answer those questions and address them. So I think that's important. In terms of our department's work, I just want to recognize a couple of people here. Danika Starks, I think is here as well, was our senior policy officer. Rebecca Dash also from our desk as well. I don't know if Pat Cassidy has joined yet. I will introduce Pat Cassidy as our commercial counselor based in Almaty. But one of the things I think that's important is how we're engaging as we move forward. And as I think Cecilia will agree with, we have worked very closely with our Central Asia partners, including Kazakhstan, through what's called our commercial law development program. For we're working on all the not so sexy issues of standards and animal health and all the real details that can really get quite political sometimes. And I'm going to give you an example. But over the last several years, we've been working on a number of multilateral work streams and this goes back to 0.6 in the CSIS paper, Andy, which is Couraging Interregional Cooperation. But we're working at things that are, again, as I say, don't make the news, but they're important, customs valuations. How much is this worth? Is it worth $100 or is it worth $1,000? Depends on what's on the paper, right? Having to figure that out. IPR enforcement, lots of counterfeits that come into this part of the world, both from the North and from the East, as well as from within the region. How do we reduce customs inspection time so we can get product to market and not hold it on inventory? Manual inspections, do we really need manual inspections for 100% of the goods coming through? No, you don't. You do intel or intelligence-driven inspections when you know that you're having a problem with a certain importer or a certain exporter. These are the things that WTO facilitates. And we're going to be, we worked on that last month as a follow-up to Assistant Secretary Kumar's visit. Next fall, this fall, we're going to be looking at standards, animal health, plant health and food safety. And again, while this might seem not the most exciting thing, we just look at what happened in April, where there was a flood of Russian agricultural goods into the Kazakhstan market, given the ruble depreciation. And Kazakhstan took measures noting that, and specifically in meat, that there was substandard quality. And that was added also dairy and confectionery for good measure. Well, what happened then the same day, and I love the name of this organization, the Russian Federal Service for the Oversight of Consumer Protection and Welfare, took a reciprocal action and also kept Kazakhstan agricultural goods out of the Russian market. How WTO gives a sense of parties and judgment, of how to say this is how you go and handle these differences. And I think that's important. But I think as we look forward, what kind of engagement we'll have in a, this was, we looked at a lot of these issues in a pre-accession environment. Now we have to look at it in a post-accession environment, and that's something we're working on within our department and certainly with other U.S. government agencies to figure out how do we work closely with the American business community there to find, to understand the issues that they confront even in a post-accession environment and begin to solve those questions, those very specific details that have to, that can make business work. So Andy, that's all I have, so I'll turn it back to you. Michael, thank you so much. I think it's often underestimated the degree to which U.S. commercial engagement in countries around the world is really such a comparative advantage of our overall portfolio of tools for engagement. And as you rightfully noted from our research, Michael, that across the board in all of the central Asian states, as well as the South Caucasus states, if there's one thing that's absolute unanimity and consensus about is they would like to see more U.S. business engagement there. Now, of course, it takes two to 10 go, but more on that later. I now turn last and hardly least Ambassador Bill Courtney and I want to take this opportunity to thank Bill for his wise advice as a member of the advisory council for our Eurasia Initiative for the past 18 months. You've contributed a tremendous amount and really enjoy working with you. You are speaking from multiple hats, so you can say whatever, you can address whatever the heck you want to. Okay, thank you, Andy. Thank you, and congratulations on the terrific report. And Michael, that was a wonderful presentation. Kazakhstan deserves congratulations for its impending entry into the World Trade Organization. This will help it level the playing field in trade negotiations and, importantly, increase Kazakhstan's weight in the Eurasian Economic Union. Kazakhstan's gain will be greater if WTO accession is reinforced by deeper economic reforms. In my remarks today, Eurasia is the contiguous region of Russia, the South Caucasus, Turkey, Iran, and Central Asia. So in this lexicon, Belarus is European, China is East Asian, and Afghanistan is South Asian. And I say that because they use a slightly different formulation. Kazakhstanis have made impressive economic gains. As measured by purchasing power parity, GDP per capita last year was $24,200. This is only slightly below Russia's $25,600. But Kazakhstan's GDP per capita, it was 26% above Turkey's, 48% above Iran's, and 434% above Uzbekistan's. Kazakhstan hopes to rise above its middle income status by transforming its economy to become more knowledge-intensive. Let's look at some of the strategic aspects of reconnecting Eurasia and how they affect Kazakhstan, Eurasia, and the West. First, the correlation of economic forces in Eurasia is changing. China is a rising power with a huge and diversified economy, whereas Russia is a declining power and a raw material supplier. China plans to invest tens of billions of dollars in developing Eurasia's physical infrastructure. The Eurasia Economic Union's external tariff wall, however, may inhibit trade with China. In visits last May to Astana, Moscow, and Minsk, Xi Jinping likely voiced concern about this. If China remains dynamic, Russia's relative sway in Central Asia will ebb. Kazakhstan is on point between the two great powers and enjoys close and productive ties with them. Second, the correlation of energy forces is changing. The global price of oil has dropped, new world sources of supply are emerging, Russia's energy market in Europe is declining, and China needs more secure sources of energy. In this context, Eurasian producers should improve their investment climates to enhance the international competitiveness of their energy industries. In parts of Eurasia, high oil prices led to profit get spending and complacency in improving productivity. This is common among resource economies. In the early 1990s, Kazakhstan began economic reforms when oil was $20 a barrel. It can thrive at $50 a barrel by increasing economic efficiency. Third, deep economic reforms are vital. WTO membership is not a panacea. It will not spur trade and investment unless a member fully embraces the rules and norms of the WTO in practice and improves business conditions, transparency, and the rule of law. Kyrgyzstan and Tgkstan are WTO members, but this has not brought increased trade and investment. Eurasian governments unduly restrict the private sector and entrepreneurship. On the World Bank's Ease of Doing Business Index, which measures 189 countries, Kazakhstan ranks 77 from the top. This is well above the average rank for four other European, Eurasian powers, Russia, Iran, Turkey, and Uzbekistan. Eurasia has some distance to go to become more competitive in attracting foreign investment. Kazakhstan has put forth an ambitious economic reform plan referred to earlier as the 100 Steps. They are intended to provide a margin of safety in a difficult period. If implemented, the reforms would help Kazakhstan make its WTO membership more meaningful and more substantive. Eurasia is burdened by too much state control and intervention in economic life. Eurasians would benefit by privatizing most assets still in state hands and by regulating and taxing economic activity rather than owning and managing assets. Corruption is correlated with the role of states and economies. On the Transparency International Index of Corruption Perceptions for 175 countries, Kazakhstan ranks 126. This is equal to the average of the other four Asian powers. Fourth, everyone gains from voluntary economic cooperation. A recent book warns of a growing threat from a Russian-Chinese axis and urges a rebirth of American global leadership to counter it. Sino-Russian economic cooperation, however, ought to speed the flow of goods across Eurasia and increase investment in natural resources and infrastructure. China's import of oil from Kazakhstan and gas from Turkmenistan benefits all parties. Eurasian economies are insufficiently competitive, yielding high rents for the well-connected and the industrious. In an efficient Eurasian Economic Union, businesses will be free to choose where to locate and can export without hindrance across the Eurasian Economic Union. This will encourage competition to improve business conditions and lower political risk. The frequent use of non-tariff barriers against members of the union is an ill omen. So was the cajoling of Armenia to join a union it did not prefer. Kazakhstan is right to resist Kremlin pressure for a political union and a common currency. Considerable doubt remains whether Russia will allow the Eurasian Economic Union to become a rules-based entity that depoliticizes trade and other economic arrangements. China's growing power may become a counterweight to any Kremlin ambition to misuse the union. Fifth, Russia's turn to the east is sensible but will bring limited benefit. Russia has learned that China's banks and capital markets only partially substitute for reduced access to the financial centers of London and New York. It is uncertain whether the $400 billion China-Russia gas deal signed in May 2014 will become viable. As President Vladimir Putin put it, our Chinese friends are difficult, hard negotiators. Sixth, Eurasia gains if the West and Russia have good relations. As the superb CSIS report notes, the current dip in U.S.-Russian relations has created serious challenges for Kazakhstan. Western sanctions on Russia cause collateral damage to Eurasian economies. This is unavoidable as long as Moscow intervenes militarily in eastern Ukraine. Eurasians must therefore pursue risk avoidance strategies such as boosting economic ties with China and relying more on channels to and through the South Caucasus and Iran. Seventh, Western interest in Eurasia will depend on economic, I'm sorry, on democratic progress. Some Eurasians worry that the West is losing interest as coalition forces leave Afghanistan. U.S. and European companies have invested heavily in Caspian energy, and this will remain a key Western interest. Increasingly, countries that make democratic progress will create supportive political constituencies in the West. Democratic gains have enabled Georgia and Ukraine to obtain EU association agreements and substantial Western aid in times of travail. Eighth, a lifting of sanctions on Iran will be a game changer. If and when this happens, Iranians and Eurasians will embrace each other. Kazakhstan and Turkmenistan will ship more energy southward, some may transit Iran via pipeline to Turkey and Europe. Iranian businesses will fan out in Eurasia to develop new markets and supply chains. Some of the Iranian interest will camouflage security threats, and Westerners ought to help Eurasians understand them. Ninth, multi-vector foreign and economic policies are wise. Europe and especially America are distant from most of Eurasia. The West will marshal international political support on behalf of Eurasian states that face external threats. In some cases, the West may apply sanctions to offer military aid. Overall, however, the West can help Eurasians only modestly as they maneuver among powerful neighbors. Eurasians will largely have to fend for themselves. Ukraine is a lesson. Being democratic and in Europe, and in having a large diaspora in the West, Ukraine has received strong European and US support, although not defensive weaponry. In conclusion, Eurasians face complex challenges, but have new opportunities. By cooperating with others and liberalizing their own economies, Eurasians can enhance their living standards and their security. Thank you. Thank you very much, Bill, for your wise words on the 10 points and really putting the Kazakh WTO is sessioned into a much broader Eurasian geopolitical and geo-economic context. Our time left is limited, so I'm gonna put one question to the panel, and I'll collect a two or three from the audience, and then the panelists can make some concluding remarks. My one question really has to do with, I think to some extent with what all the panelists were referred to, but one point or another, and Michael Lally talked to about is the post-assession environment. If we're looking at actual accession taking place in the fall of this year, you know, what are the one or two things that you really would like to see Kazakhstan focus on in that first year within the context of the WTO? And now let me get a couple of questions from the floor. Ambassador Jones, please. Welcome. And the European, the Eurasian... Sorry, you wanna grab them? Sorry, thanks. I realize I'm confused about how WTO and the European, the Eurasian Union works together. Does the WTO document include every possible contingency that comes under the EEU or is it still going to be a work in progress to see how these two organizations and the two sets of requirements work together? Yes, right here. What? Sorry. We'll go right to the young woman right here. And then the third question will be right here. Hi, I'm Dr. Donna Wells, my mathematician. I make predictive math models. We talked a little bit about the energy landscape of the region. Can we talk a little bit about the telecommunications landscape of the region? Have you noticed any trends in Kazakhstan? Any specific firms? You mentioned Gulf and Kazakhstan. Motorola, Blackberry Limited, anything trends like telecommunications? Thank you. Ariel Cohen, the Atlantic Council. With WTO providing a general roadmap, a general rules framework, how do you think Kazakhstan will deal with the Chinese Belt One Road infrastructure megaprogram that the Chinese are promoting for Eurasia? Thank you. Okay, and, okay, Navajor, you're in. I'll make sure it's very short. Navajor Imamova from The Voice of America. Transparency, obviously, is a very important element, requirement here. What kind of steps has Kazakhstan taken recently, over the years, to become more transparent? Okay, so I think we have transparency, one Belt One Road, telecom, and the Eurasian Economic Union, and the day after. Would anyone like to go first? I see your microphone is still on. Just on one issue of the day after. So speeding internal economic reforms is probably the single most important thing Kazakhstan can do. Kazakhstan already has a list of, I think, 650 companies that's planning to privatize. Accelerating that process in a climate in which oil prices are lower, economic prospects are a little bit more uncertain in the region, certainly with regard to the declining Russian economy will be important. And then secondly, finding ways to cooperate with China, which is going to be making the big new investments in Eurasian infrastructure. Finding ways to work with China and incentivize as much of that investment to come in to China as opposed to other countries will be the second issue. Michael. I'll take a couple of these, Andy. I think there's other people who can speak better to the other ones. I'll mention about transparency and I'll mention about telecommunications landscape as well. I mean, I would just say that, what kind of has struck me over the years is that the engagement between the business community and with the Kazakhstan government and regulators and others has become one really of listening and understanding questions and answers and coming up with ideas. And I think it's mostly very well captured when Prime Minister Massimo meets on a regular basis with foreign investors, not as a sort of pro forma deal, but really listening and understanding. And there's very active agendas, including on telecoms, on ag, on all matters of transparency and where he brings in his ministers and the like. And it's a session that is designed to try to find solutions. And I think that, again, I keep coming back to this, but we have a roadmap, which I think will be important and I think it'll hit another question in a second about how American Chamber of Commerce in Kazakhstan has developed its top 10. And that provides, I think, an important way of looking for what are the top two things we'd like to see over the next year. I think we need to have a lot of patience where we want to be. Kazakhstan is only 20, just about 25 years, a little bit less into its development cycle. Okay, we're gonna now, it's because it's now essentially the young adult that is gonna be entering into adulthood as a state. So I think we need to kind of really think, carefully about that, but that's one of the things that struck me, how things have changed and it's become much more transactional and like, yeah, we understand that this is an issue with the VAT refund. We have to figure this out, very important. On the telecommunications side, I mean, because Kazakhstan's huge geographic lengths and widths, the whole oil and gas overlay of the need for very strong data links because you have geology going back into Houston and Aberdeen and wherever else it means, the Kazakhstan has had to build this out. And investment is what has driven it primarily in the oil and gas sector. I would say 90 plus percent of that is driven in the oil and gas sector. So you're gonna still have a fairly small market with regard to whatever 15, 20 million people as consumers. But as been pointed out before, now you're gonna have the ability for, you're gonna remove the limitation on 49% maximum ownership for foreign entities that's gonna potentially bring in other players, maybe not huge, large players, but sort of medium, large players that can come in and provide more choice in the market. So you can say you have 3G, you have 4G, you're gonna have new data services, you might have things, services specifically, designed for small and medium-sized businesses. So I think those are important areas. That's what I'll stop there, but Ms. Kurmanovna. Yeah, if you want, I can add a little bit on telecommunications. Yes, I think that this is a very lucrative sphere, not only in Kazakhstan, but in the whole Central Asia region. And we see that, although it is a very prospective sector for investment, it still remains a little bit not very transparent. And there is a high influence from the Russian, I think, operators in the whole post-soviet space in the telecommunications sector. So I think that government probably will still retain some strategic presence in that, and although it's still considered to be more or less liberalized sector, allowing for greater investment. Regarding your question on transparency in Bahur, I think that it's a very timely and it's a good question. And since the 100 steps that are now being discussed have placed a really special focus on developing civic service, the government apparatus, how to make the government more accountable, more professional. And of course, a big question here is corruption. And we see that the government is becoming more competent across the board. We have younger people coming to ministers. We have more accountable structures within the ministries and within the government. But I think it's a longer process probably. I mean, it's a really challenging task. And going back to the question of Andy, what I would personally like to see in a post-succession period, I really think that for all investors, foreign investors and domestic investors, corruption and political reforms are really challenging. I mean, this is something that the government will have to deal with. And we really hope that the whole discussion of Singapore, for example, and particularly the last interview of President Azerbaijan, he said that corruption is really a big thing. We hope that we will see greater efforts in this. On China, as I said, on the question of China and WTO, I think that since both countries are WTO members, I think China and Kazakhstan are both WTO members. I think it would really speed up the development of these Silk Road belts. And on EU, I think you're the best expert to address. Well, we've heard talk of a trans-Eurasian link between Europe and China. And the first thing that crept into my mind was, oh my, they'll have to do something about the change of gauge of the railroads. So, I think in WTO terms, however, the fact that China and Kazakhstan and Europe have the same framework of rights and obligations in trade policy is bound to have a positive impact on the nature of the discussion whenever these things come up. This is one of the great services that the WTO provides. A framework that is proven and is understood by all open and available to all. Kazakhstan's commitments are not going to be a secret. They're going to be published and you can download them from the public website of the WTO. I think going to the issue of the Customs Union, which I used as the single point, it's easier. The Eurasian Economic Union is a lineal descendant, an evolution from the Customs Union. And basically took all of these agreements and treaties and protocols and made annexes of them and slapped them into a treaty obligation that kind of listed all the little things they were going to do, but they did it very briefly. And then the annexes have all the detailed rules. In our experience, and we had to read all of this, the nature of what's going on in the Customs Union versus the Eurasian Economic Union didn't, what was in the Customs Union pretty much transferred into the Eurasian Economic Union, there are some additional issues, but not all of them are WTO. So I don't see that as a problem. Now the Eurasian Economic Union vis-a-vis the WTO, at a certain point in 2009, 2010, the decision was made, and I use the passive very, because I want to, a decision was made in many different places for many different reasons and under many different stimuli, that there would not, as some had hoped, be a Customs Union accession to the WTO. And at the end, it became obvious to everyone that the only way to go forward, that is to go forward with both the Russian and the Kazakhstan accessions, which were both all trend at the time, was to go forward individually, that there could be no agglomeration of accessions. And so I think what you're going to have is a situation not unlike the one you have with many other such economic agreements. You're going to have, we call it WTO plus. We negotiate this into our free trade areas, both large and small. And it does go beyond, in some cases, what is in the agreement. But that does not compromise our responsibility as for every other WTO member. The hardest thing you have to do as a member is every single day you have to try to align your practices and your trade policies to the WTO. And in that respect, it's a lot harder to be a member than it is to be an applicant, because the applicant is simply looking ahead, trying to figure out how this fits in. Once you're a member, you don't get a second chance. This is who you are for as long as you stay with the organization, that framework, that set of rules, that set of commitments. The good news is that everybody up until now at least seems to have found it quite a positive thing. So I don't really see, I don't see how on paper at least the Eurasian Union can somehow compromise the WTO requirements that Kazakhstan has agreed to. In fact, there is a separate treaty within the Eurasian Union called the Treaty on WTO Implementation, which says each and every member of the Eurasian Economic Union that comes into the WTO, those WTO requirements will actually flow back into the Eurasian Economic Union. So on paper at least, we're covered. Thank you. On paper we are covered. That is an excellent conclusion, Cecilia, to our session today. And very timely in that it has just stopped raining. It appears outside. So let me take this opportunity to once again thank Assistant Secretary Kumar, Cecilia Kline, Ayaka Manava, Michael Nally, Bill Courtney. And we look forward to seeing you in the fall to continue the discussion.