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WT/ACC/SPEC/KAZ/6/Rev.10/Add.1  
 
15 July 2013  
(13-3787)  Page: 1/4  
Working Party on the Accession of Kazakhstan  Original: English  
 
ACCESSION OF KAZAKHSTAN 
ADDITIONAL QUESTIONS AND REPLIES 
Addendum 
 The following submission, dated 14 July 2013, is being circulated at the request of the 
Delegation of the Republic of Kazakhstan.  
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 WT/ACC/SPEC/KAZ/6/Rev.10/Add.1 
 
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  Comments on documents WT/ACC/SPEC/KAZ/6/Rev.10 and JOB/ACC/36/Rev.2. 
Question 1  Regarding Supporting Tables DS:4 and DS:5:  The value of production (and eligible 
production in Supporting Table DS:5) for wheat was more than double in 2011 as 
compared to both 2010 and 2012.  This value was also well above the value of 
production notified in document WT/ACC/SP EC/KAZ/6/Rev.9 in Supporting Table DS:4 
for the same year.  In document WT/ACC/SPEC/KAZ/6/Rev.9, for 2011 the value of 
production for wheat was reported as zero (0).  The same was reported for 2011 in 
document WT/ACC/SPEC/KAZ/6/Rev.8.  However, in document WT/ACC/SPEC/KAZ/6/Rev.10, for 2011 the valu e of production for wheat was reported 
as US$3,410,985 in US$1,000.  Pl ease explain the significant mo dification to the value of 
production reported for wheat in 2011?  What  was the cause for this significant increase 
in value of production? 
Answer: 
With regard to WT/ACC/SPEC/KAZ/6/Rev.8 and WT/ACC/SPEC/KAZ/6/Rev.9, there was negative 
support for wheat in 2011, which was deemed as zero and thus was not carried over into Supporting Table DS:4. As there was no support to report in Supporting Table DS:4, the value of 
wheat production for 2011 in Supporting Table DS:4 was not notified and was reflected as zero. 
The same approach was used for other instances with negative support (e.g. barely in 2011 and 2012).  
In the revised domestic support tables provided in WT/ACC/SPEC/KAZ/6/Rev.10, support for 
wheat was positive in 2011 and thus was carried over into Supporting Table DS:4.  As there was 
support to notify, the value of wheat production  for 2011 was also notified in Supporting Table 
DS:4.  
This is the main reason for the significant modification to the value of production reported for 
wheat in 2011. 
The significant increase in the value of wheat pr oduction in 2011 was caused by exceptionally high 
volumes of wheat produced in 2011 compared with the volumes of 2010 and 2012.  
Question 2 Regarding Supporting Table DS:6:  As explai ned in JOB/ACC/36/Rev.2, Kazakhstan has 
notified "other direct payments" for wheat, which were not actually provided during the 
base period.  The values notified represent values based on the assumption that 
Kazakhstan will phase out export subsidie s by 2018 and will be replaced by a new 
domestic support measure.  This Member has strong reservations with Kazakhstan 
reporting non-existent programmes.  Furthermore, it appears that Kazakhstan takes the 
current subsidy rate of the export subsidy pr ogramme and applies it to all production.  
This appears to be increasing the level of trade distorting support.  We request more 
information on the programme that Kazakhstan  intends to implement to replace export 
subsidies.  We would encourage Kazakh stan to consider Green Box measures. 
Answer: 
Taking into account that export subsidies represent cost reducing subsidies, it was decided to 
replace them with subsidies of the same nature so that the Government would be able to 
compensate to wheat producers for phasing-out export subsidies.  
It is planned that new domestic support measure will represent direct payments to wheat 
producers, which will be provided based on the volume of product produced. WT/ACC/SPEC/KAZ/6/Rev.10/Add.1 
 
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  Therefore, Kazakhstan has included the required amount into the calculation of product-specific 
support in order to be able to provide it in the future.  As such, the amount reported in the Supporting Table DS:6 reflects current plans of Ka zakhstan in relation to domestic support to 
agriculture.   
 
In parallel, the Government of Kazakhstan will undertake construction and modernization of grain storage facilities and transport infrastructure in order to address the challenges with delivering 
wheat to world markets.   
From a technical point of view, data on export su bsidies was reported in the supporting tables on 
domestic support for transparency purposes only.  It should be noted that Kazakhstan is ready not 
to include programme intended to compensate for elimination of export subsidies in the tables with 
the understanding that the amount under the programme in question would be taken into account 
when negotiating total AMS commitment level so that Kazakhstan would have flexibility to 
introduce direct payments in the future.   
Question 3  
Regarding Supporting Table DS:7:  In WT /ACC/SPEC/KAZ/6/Rev.8/Add.1, Kazakhstan 
agreed that negative figures in the MPS should  not be used to offset any positive figure 
in other payments.  Kazakhstan made the necessary changes in the previous iteration of 
its domestic support tables, but in the current tables in document WT/ACC/SPEC/KAZ/6/Rev.10, Kazakhstan has used negative figures in the MPS to offset direct payments.  Please make the appropriate amendments (e.g. wheat). 
Answer: 
It should be noted that approach used in the Supporting Table DS:7 of document 
WT/ACC/SPEC/KAZ/6/Rev.4 was applied by Ka zakhstan at the request of a Member.  
Based on the Members' comments, Kazakhstan in its current submission has revised supporting 
tables and reflected negative market price support for wheat in 2011 as zero.  
Question 4 
Regarding Supporting Table DS:9:  JOB/ACC/ 36/Rev.2 also explains that Kazakhstan 
has notified an "alternative cost reducing  subsidies for agricultural producers and 
processors", which would replace the curren t VAT preferences for agriculture over a 
transition period to be negotiated.  Please provide additional clarification on how this 
new subsidy will be implemented and when  the subsidy will be implemented.   
Answer: 
First, data on value of VAT preferences that was included into the calculations of 
non-product-specific support is the actual amount of revenue foregone by the Government as a 
result of currently applied VAT exemptions.  As the revenue foregone refers to indirect agricultural 
subsidy and taking into account that some Members asked Kazakhstan to reflect these subsidies in 
its supporting tables, the measure was included in  the supporting tables on domestic support.  
Second, Kazakhstan intends to compensate losses borne by agricultural producers, who are 
currently benefited from the VAT preferences, with  the WTO consistent measure.  It is planned 
that such measure will subsidize the cost of inputs used by agricultural producers and processers 
in production of agricultural products.  The detailed description of the programme with which 
Kazakhstan intends to replace VAT preferences, is not yet available as this programme is in the process of its development.  
New measure will be implemented upon expiration  of the transition period for phasing-out VAT 
preferences.  WT/ACC/SPEC/KAZ/6/Rev.10/Add.1 
 
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  Similarly to export subsidies, Kazakhstan is ready not to include programme intended to 
compensate for elimination of VAT preferences in the tables with the understanding that the 
amount under the programme in question would be taken into account when negotiating total AMS 
commitment level so that Kazakhstan would have flexibility to introduce direct subsidies in the 
future. 
Question 5  
Regarding Supporting Table ES:1:  What was the cause for the significant increase in 
export subsidies in 2012 as compared to previous years? 
Answer: 
It should be clarified that export subsidies is annually provided based on the volume of wheat 
produced in the previous year.  Therefore, sign ificant increase in export subsidies in 2012 was 
caused by exceptionally high volumes of wheat produced in 2011 compared with the volumes of 
2009 and 2010.  
 
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