REACH FOR THE STARS

The statement by Armenian Foreign Minister Vardan Oskanyan that his country might create problems for Azerbaijan's entry into the World Trade Organization "unexpectedly" coincided with the intensification of bilateral negotiations between Azerbaijan and WTO member countries. It is still not clear what sort of problems they are talking about, since Armenia has committed itself to not interfering with Azerbaijan's entry into the WTO. But there is no doubt that they will give a "headache" to the already difficult negotiating process between Azerbaijan and the organization.

Armenia is playing its "role" again

According to Armenian Minister Oskanyan, the restrictions that Azerbaijan imposes on Armenia within international organizations are unacceptable and Armenia intends to inform the WTO that Azerbaijan has imposed a "blockade" on it. "We will definitely have our say. The unilateral restrictions that Azerbaijan imposes on Armenia within international organizations are unacceptable, and I think that the World Trade Organization should definitely touch on this issue," Oskanyan said.

At the same time, he conveniently "forgot" that when the issue of Armenia's membership of the WTO was raised in 2003, the Azerbaijani side put forward a demand according to which Armenia officially addressed the secretariat of the organization with a letter promising not to create obstacles to Azerbaijan's entry into the WTO. Azerbaijan's demand was also supported by a number of other states. The deputy foreign minister of Azerbaijan, and head of the negotiating group on the country's entry into the WTO, Mahmud Mammadquliyev, said that Armenia must honour its obligation. He added that there can be no trade cooperation with Armenia until the settlement of the conflict between Azerbaijan and Armenia, even if Azerbaijan joins this organization during this period. And this does contradict WTO principles.

However, knowing the "value" of Armenian promises, Azerbaijan expects that Armenia will use every opportunity to create problems for our country. The secretary of the state commission to prepare Azerbaijan's entry into the WTO, Adalat Muradov, said that Armenia first took part in a session of the WTO working group on Azerbaijan on 30 March 2006 in Geneva. "After that, we had multilateral negotiations with the WTO on the agrarian sector, which were also attended by a representative of Armenia. These facts already testify that this country is not going to honour its obligation not to prevent Azerbaijan's entry into the WTO. The thing is that they very much want to resume economic relations with our republic by any means," Muradov observed.

Regardless of whether Armenia will manage to take such steps, there is already a precedent in the Georgia-Russia example, when Georgia recalled its protocol of bilateral negotiations, Muradov said. So Armenia can take a similar step and recall its obligations, for which the Azerbaijani side should prepare now.

Non-progressive talks

Meanwhile, as we said above, Azerbaijan has enough problems with its entry into the WTO. For example, we want to retain the right to use subsidies in the sphere of public utilities, but the WTO suggests that every sphere should be examined separately. For example, privileged credits issued through the National Fund to Support Entrepreneurship, compensation for flights to Naxcivan and Ganca and benefits in the communications sector are regarded as subsidies. "If these issues are not agreed upon in advance, the use of subsidies when it is necessary will be taken as a violation of WTO principles," Muradov pointed out.

We have to say that the recent intermediate round of negotiations in Geneva between the working groups of the Azerbaijani government and the WTO secretariat on the country's full membership of this organization did not lead to any progress. The Azerbaijani government said that the sides failed to agree on the date for the fifth formal round of multilateral negotiations (Fineko). "The only move forward is the clear formulation of WTO requirements to Azerbaijan, which make it impossible to hold the round. The secretariat has put forward three blocks of issues - the lack of progress on the implementation of the legislative reform plan, incomplete answers to a number of questions posed by WTO member countries and the lack of progress in bilateral negotiations between Azerbaijan and WTO members. Only if they are eliminated, will it be possible to hold a round of multilateral negotiations by the end of the year," the government said. The legislative reform plan aimed at bringing national legislation into line with WTO standards extends until 2008. "The WTO is demanding that Azerbaijan report which draft laws have been drawn up, which ones have been submitted for consideration and which ones have been adopted. If we step up our efforts, we can achieve full implementation of the plan by the end of the year," the government said.

In Geneva, Azerbaijan held bilateral negotiations with the USA, Japan, South Korea, the United Arab Emirates and a number of other countries. Only with the UAE was an agreement reached to draw up a protocol to be signed in connection with the completion of the negotiations. Negotiations with the other WTO members will continue. "The consultations have been held mainly on services and tariffs. But there is still no compromise on some issues - the liberalization of the market of services in various sectors," Mammadquliyev told journalists.

The main thing is to make a deal with the West

Now the Azerbaijani side is preparing intensively for autumn meetings with representatives of the European Union and the USA, who are our main partners in negotiations on accession to the WTO. For this reason, a lot depends on their agreement. Their position is that a country entering the WTO undertakes maximum obligations on customs tariffs. They are also interested in issues of intellectual property rights, in the lifting of restrictions on the opening of direct branches of banks in Azerbaijan, restrictions on the entry of foreign capital into the insurance market and the elimination of monopolies in the communications market for international phone calls (Trend).

The EU and USA are demanding that Azerbaijan lift the restriction on licensing the opening of direct branches of foreign banks which will work according to the rules of their head office, not to national legislation, and eliminate the limitations placed on the insurance market. We should point out that this is not very beneficial to local entrepreneurs working in this sector because this will reduce their competitiveness. For this reason, our country is trying to get the right to delay the implementation of certain requirements, but no real answer has been received from the organization yet.

The USA already had questions about the land market, and it was suggested that Azerbaijan should change its legislation to allow foreigners to carry out any sale and purchase operations with land. According to Azerbaijani legislation, land can be rented out for 99 years, but non-residents of Azerbaijan cannot buy it. The USA is also demanding that Azerbaijan lift legislative restrictions, for example, on the admission of foreign staff (engineering-technical staff) to the architecture and construction market.

Meanwhile, according to Muradov, the EU and USA have different positions on the audio-visual market. The point is that the European Union wants special preferences on the audio-visual market, whereas the USA is categorically against this and believes that all countries should have equal opportunities. "It is known that the process of Lithuania's entry into the WTO dragged on for a year precisely because of questions on the audio-visual market. Because of contradictions in various countries' demands, it is difficult to make a compromise, however, it is not in our country's interests to delay the negotiating process," the secretary said.

Today negotiations with Oman, Georgia, Moldova and Turkey have been fully completed. A protocol of negotiations has already been signed with Turkey, but is still being drawn up with the others.