RESTRICTEDWORLD TRADE
ORGANIZATIONWT/REG81/3
20 September 2000
(00-3739)
Committee on Regional Trade Agreements Original:  English
FREE TRADE AGREEMENT BETWEEN
THE KYRGYZ REPUBLIC AND KAZAKHSTAN
Communication from the Kyrgyz Republic
I. BACKGROUND INFORMATION ON THE AGREEMENT
Before the Kyrgyz Republic and other former Soviet Union countries became independent
there was no barrier in trade between them.  After becoming independent, each of these countries
started developing measures to regulate foreign trade, which had an effect distorting the trade between
these countries.  In order to rehabilitate the former trade relations, the Governments of the Republic ofKazakhstan and the Kyrgyz Republic on the basis of the Commonwealth of Independent States (CIS)
Free-Trade Area (FTA) Agreement, of 15 April 1994, have decided to enter into a free-trade area
agreement.
1. Membership and Dates of Signature, Ratification and Entry into Force
The Parties to the Agreement are the Government of the Republic of Kazakhstan on one side
and the Government of the Kyrgyz Republic on the other.
The Agreement was signed on 22 June 1995.Afterwards, on 9 August 1995, the Kyrgyz Republic notified the Government of Kazakhstan
that no internal procedures were required by the Kyrgyz Republic for the Agreement to become
effective.  The Agreement became effective on 11 November 1995, when a note on the completion of
internal procedures was received from the Government of Kazakhstan.
2. Type of Agreement
The Agreement creates a free-trade area.  It provides for the elimination of customs duties, or
taxes and charges which have equivalent effect, and quantitative restrictions on substantially all the
trade between the Parties.
3. Scope
There have been a number of annual protocols of exceptions to the bilateral free trade
agreement with Kazakhstan.  All of the protocols provided for a free trade regime without exceptions
and restrictions.  Currently, under the Protocol on Temporary Application of Free Trade Regime withno Exceptions and Restrictions, of 21 January 2000, the Parties have agreed to apply the free trade
regime with no exceptions and restrictions until the end of the year 2000.  Furthermore, according to
the Protocol, of 2 April 1999, on Amendments and Supplements to the CIS Agreement on the
Creation of a Free-Trade Area, the Parties to the CIS Agreement agreed not to introduce new
quantitative and tariff restrictions on imports and/or exports in trade between them.  Thus, KyrgyzstanWT/REG81/3
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and Kazakhstan as the Parties to the CIS FTA Agreement will maintain the free-trade area with no
exceptions.
4. Trade Data
Data on intra-trade is represented in the Annex.
II. TRADE  PROVISIONS
1. Import Restrictions
1.1 Duties and charges
The Kyrgyz Republic eliminated customs duties, tariff quotas and charges having an
equivalent effect to customs duties on all imports covered.
2.1 Quantitative restrictionsThe Kyrgyz Republic does not apply quantitative restrictions or measures having an
equivalent effect to quantitative restrictions to trade with Kazakhstan.
2. Export Restrictions
2. Duties and charges
The Kyrgyz Republic does not impose customs duties, or tariff quotas and charges having an
equivalent effect to customs duties on the export of products covered by the Agreement in trade withKazakhstan.
2.2 Quantitative restrictionsThe Kyrgyz Republic does not apply any quantitative restrictions or measures having an
equivalent effect to quantitative restrictions to the export of products covered by the Agreement in
trade with Kazakhstan.
3. Rules of Origin
The Agreement does not contain extensive provisio ns related to determining rules of origin.
A country of origin of goods shall be a state where a product was wholly produced or substantiallytransformed.  The criterion of substantial transformation can be determined by change in tariff
classification at the level of one of the first four digits.  The Agreement does not contain provisions on
any type of cumulation of origin.
Under the CIS Free-Trade Area Agreement, of 15 April 1994, the country of origin of a
commodity in trade between the Parties to the Agr eement is determined in accordance with the CIS
Rules of Determining a Country of Origin of Goods
1 (hereinafter referred to as the Rules).  The CIS
countries signed the Rules on 24 September 1993.  The country of origin of a product is considered a
CIS country in which the product was wholly produced or subject to substantial transformation.  The
Rules provide for a list of goods which are considered wholly produced.  Substantial transformationmay be manifested through (i) an ad valorem  portion, (ii) a list of production or technological
                                                     
1 The text of the Rules was circulated in document WT/REG82/1.WT/REG81/3
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processes, and (iii) changes of tariff headings.  The list of production or technological processes is
still being negotiated among the Parties to the Agreement.  In cases where there are no criteria
specified with respect to a particular product, the general criterion of changes in tariff heading is
applied.  A product is considered substantially transformed if its tariff classification has changed at
any of the first four digits with a list of exceptions.  Such exceptions are being developed and maycontain a list of production or technological operations which, though cause a change in tariff line, are
not considered a sign of substantial transformation, or are considered such only if certain conditions
are followed, and also may contain a list of produ ction or technological operations which, though do
not cause a change in tariff line, are considered a sign of substantial transformation, provided that
certain conditions are followed.
The Rules provide for a possibility of using a cumulative principle of origin while applying
the criterion of substantial transformation.  The cumulative principle can be used with respect to the
CIS countries.  However, the Rules do not contain detailed provisions regarding cumulation.
4. Standards
The Parties to the Agreement may unilaterally introduce measures generally accepted in
international practice and which are necessary to protect life and health of human and environment,
and to protect animal and plant life.  The Agreement does not provide for common standards or
mutual recognition of certificates.  However, in accordance with the Agreement on the Uniform
Policy on Standardization, Metrology and Certification executed by the CIS countries, the Parties tothe Agreement mutually accept certificates issued by accredited institutions of the Parties.
5. Safeguards
The Parties to the Agreement may unilaterally impose quantitative restrictions and measures,
having an equivalent effect to the quantitative restrictions or other special restrictions, on the trade of
products covered by the Agreement as a safeguard measure only in cases of:
- a critical deficit of the balance-of-payment;- an acute deficit of a product in the domestic market until the market situation is
stabilized.
A Party to the Agreement, which applies the restriction, shall provide, if possible in advance,
the other Party with full information on reasons for introductions, forms and estimated terms of
applying the measure following which consultations are to be held.  There is no specific safeguard
provision related to agriculture.
6. Anti-Dumping and Countervailing Measures
The Agreement does not contain any specific provisions concerning anti-dumping and
countervailing measures.  Nevertheless, the Parties have acknowledged incompatibility of unfairbusiness practices with the objectives of the Agreement (Article 8).
7. Subsidies and State-Aid
The Agreement does not contain any specific provisions relating to subsidies and state-aid.WT/REG81/3
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III. GENERAL PROVISIONS OF THE AGREEMENT
1. Exceptions and Reservations
1.1 General exceptions
The Agreement does not preclude the Parties from using measures generally accepted in
international practice and necessary to fulfill in ternational agreements related to the following:
- protection of life and health of people, animals and plants;- protection of public moral and order;
- trade in gold, silver or other precious metals and stones;
- protection of industrial and intellectual property;1.2 Security exceptionsThe Agreement does not preclude the Parties from using measures generally accepted in
international practice and necessary to fulfill inte rnational agreements and to protect its security
interests related to the following:
- information concerning the national security interests;
- trade in arms, ammunition and military equipment;- research or production related to the needs of defence;
- supplies of materials and equipment used in the nuclear industry.
2. Accession
There is no provision in the Agreement allowing other countries to join it.
3. Dispute Settlement Procedures
Disputes between the Parties shall be settled through negotiations.
4. Relation with Other Trade Agreements
As mentioned in the Preamble of the Agreement, it was based on the CIS Free-Trade Area
Agreement, of 15 April 1994.
5. Institutional Framework
The Parties to the Agreement have agreed to form a Joint Kazakhstan-Kyrgyz Commission
for the implementation and development of recommendations to improve the trade and economic
relations between the Parties to the Agreement.WT/REG81/3
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IV. OTHER
Other provisions of the Agreement refer to the following:
- Storage, reloading, warehousing, transportation, payments and transfer of payments:
no measures discriminating the products of either Party are applied;
- Customs tariffs:  the Parties have agr eed to hold regular consultations for the
purposes of rapprochement of the levels of customs duties in trade with third
countries;
- Obligation not to allow unfair business practices, including but not limited to certain
practices of use by certain enterprises of their dominant position intending to limit
competition on the territories of the Parties to the Agreement;
- The Parties have agreed that the CIS Agreement On the Re-Export of Goods and
Procedure of Issuance of Permissions for Re-Export, of 15 April 1994 shall applywith respect to re-export;
- Freedom of transit;- The Parties have agreed to use the CIS Goods Nomenclature of Foreign Economic
Activity based on the Harmonized Commodity Description and Coding System and
the Combined Tariff-Statistical Nomenclature of the European Union.WT/REG81/3
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ANNEX
Imports into the Kyrgyz Republic from Kazakhstan
(Thousand of US$)
Year H.S.
Chapter 1997 1998 1999
Total 69,602.8 75,297.7 72,679.9
1 9.3 8.1 3.6
2 77.8 9.3 -
3 62.7 23.7 7.3
4 321.9 1,110.3 82.4
7 51.2 24.4 1.7
82 . 3 6 . 7 -
92 . 4 1 . 0 -
10 10,151.0 9,049.9 8,629.5
11 845.2 1,755.8 1,870.9
12 123.3 164.4 652.6
13 17.0 -
15 112.4 137.8 30.5
16 209.5 306.0 31.5
17 773.6 191.7 551.5
18 75.0 40.8 28.4
19 181.9 536.2 457.1
20 27.3 3.4 59.4
21 22.1 1.5 -
22 1,886.0 173.9 270.5
23 6.1 26.9 77.8
24 1,034.7 710.3 4,218.6
25 3,585.4 3,351.4 3,878.9
26 3,875.3 1,186.3 580.1
27 30,630.4 37,982.1 39,273.6
28 1,214.1 11,622.1 7,337.5
29 1,352.7 209.9 28.5
30 143.9 93.1 25.6
31 81.2 1.0 -
32 43.7 9.5 55.1
33 257.0 112.3 209.3
34 143.9 84.8 14.8
35 16.8 8.4 1.0
36 139.4 2.1 1.3
37 2.5 1.0 -
38 259.5 88.8 127.1
39 507.3 105.3 97.0
40 210.9 68.7 2.2
41 65.7 - -
42 1.7 5.5 -
44 411.1 314.4 128.7
47 12.3 19.5 8.9
48 401.0 226.9 198.2
49 237.9 90.2 50.5
51 254.5 25.0 15.2WT/REG81/3
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Year H.S.
Chapter 1997 1998 1999
52 11.7 1.2 -
53 42.7 - -
54 21.2 - -
55 9.9 - -
56 10.4 2.0 -
57 16.6 - 10.4
59 1.7 1.4 -
60 6.7 - -
61 56.3 15.4 -
62 17.9 1.7 32.1
63 131.7 16.1 92.2
64 255.2 59.6 62.7
65 1.0 - -
66 23.0 - -
68 138.2 231.4 132.0
69 198.8 94.7 48.7
70 818.7 84.7 8.0
71 - 1.0 -
72 1,177.6 1,249.4 658.4
73 775.8 438.9 908.0
74 340.1 668.7 335.5
76 121.1 74.6 121.2
78 27.3 6.8 -
79 2.2 - -
80 1.0 - -
81 7.2 7.1 -
82 89.1 357.1 1.0
83 85.6 59.6 11.3
84 2,242.8 486.0 725.6
85 1,143.2 834.7 476.0
86 295.0 142.6 2.2
87 1,017.7 270.9 173.6
88 42.3 25.0 1.0
89 10.0 - -
90 262.0 247.6 195.2
91 1.0 - -
94 247.2 27.8 19.5
95 77.7 1.9 3.5
96 4.3 - 1.4
Source: National Statistics Committee.WT/REG81/3
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Exports from the Kyrgyz Republic into Kazakhstan
(Thousand of US$)
Year H.S.
Chapter 1997 1998 1999
Total 87,094.0 85,516.4 44,960.1
1 26.4 12.8 26.4
2 10.0 10.6 17.7
3 14.0 12.1 -
4 1,736.6 1,579.0 893.6
6 3.6 7.0 10.5
7 1,099.9 713.3 591.0
8 685.9 407.3 402.6
9 1,012.9 1,115.6 41.8
10 99.3 3.5 10.1
11 35.8 14.7 13.9
12 112,1 144.2 690.4
14 1.0 1.0 -
15 27.0 77.1 111.4
16 24.3 50.1 9.0
17 12,320.3 7,347.1 4,555.2
18 156.3 101.7 30.3
19 635.4 414.4 116.8
20 246.2 155.1 59.4
21 256.2 1,294.8 -
22 11,544.2 4,564.2 270.5
23 3.9 3.8 77.8
24 3,074.7 3,362.0 4,218.6
25 9,681.0 9,739.7 3,878.9
26 - 2.4 -
27 16,589.3 10,418.3 15,896.4
28 58.4 14.3 94.4
29 68.5 3.9 1.6
30 185.9 452.9 286.5
31 13.4 17.6 -
32 923.7 1,013.1 1.6
33 867.7 333.8 144.1
34 100.6 50.0 13.4
35 46.6 2.1 9.9
36 - 27.7 5.4
37 50.8 - -
38 27.4 1.1 335.8
39 465.7 1,231.6 1,355.9
40 259.7 163.4 38.4
41 90.9 57.2 29.7
42 40.7 43.5 13.8
43 - 1.8 2.2
44 38.1 112.5 32.7
48 838.8 3,090.9 140.1
49 114.9 273.3 223.8
51 134.2 375.9 42.1
52 163.7 840.6 187.3
53 200.1 181.8 133.9WT/REG81/3
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Year H.S.
Chapter 1997 1998 1999
55 14.2 3.8 3.1
56 41.7 3.6 2.8
57 179.0 65.6 206.0
59 204.7 286.5 14.2
60 - 3.2 -
61 300.3 162.3 254.2
62 151.2 70.2 28.6
63 79.5 13.4 111.9
64 363.8 293.5 16.9
67 1.1 - -
68 2,427.0 3,106.0 2,164.2
69 174.8 36.9 41.0
70 3,608.5 3,345.3 670.6
71 - 34.0 -
72 169.3 88.6 33.4
73 455.2 1,840.5 793.4
74 165.0 10.3 -
76 735.4 284.5 29.6
78 11.7 50.0 45.0
81 864.3 - 16.9
82 336.6 16.7 3.6
83 14.8 176.2 9.5
84 8,664.1 13,929.2 5,076.9
85 1,787.8 6,722.9 2,981.7
86 58.0 260.7 101.9
87 1,764.9 3,503.6 3,719.8
88 - - -
90 47.5 1,115.4 -
94 295.7 161.3 20.0
95 27.0 59.2 46.8
96 90.5 14.7 26.6
Source: National Statistics Committee.
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