In an exclusive interview, the Minister of Trade and Integration of Kazakhstan Bakhyt Sultanov discussed the upcoming WTO ministerial under his country’s chairmanship, EU-Kazakhstan economic relations, and carbon border tax.
Bakhyt Sultanov is a mathematician, engineer and economist, and since 1994, he has served in various administrative positions in the economic sector of Kazakhstan. He has also been mayor of the capital, Astana.
He spoke to EURACTIV’s Senior Editor Georgi Gotev on 17 November. The interview was conducted in Russian.
My first question to visiting ministers is what brought you to Brussels, and who did you meet?
Next week, our President Kassym-Jomart Tokaev will visit Brussels and the EU institutions. Many meetings are being planned with politicians, but also leading businessmen. After that, he will visit Switzerland, where he will attend the opening of the Twelfth Ministerial Conference of WTO, which will take place in Geneva under the chairmanship of Kazakhstan. So basically, my task was to help prepare for this visit. I had meetings with the European Commission, Vice President Valdis Dombrovskis, various MEPs in leading positions, and business representatives.
The overarching theme is the further development of bilateral cooperation. Kazakhstan is the first country from Central Asia with an Enhanced Partnership and Cooperation Agreement (EPCA) with the EU, which is paramount in this respect. The EU is our largest partner in terms of trade and the largest investor in our country.
We need to avail ourselves of the new instruments and better mechanisms to enhance mutually beneficial cooperation. We are the leading economy in the region, and our country is an active stakeholder in all the regional initiatives, including Belt-and-Road. We have our programme, Nurly Zolh, in which during 30 years of independence we built new roads and new railroads. We are ready to develop as a hub to ensure multi-modal transit between the biggest economies, the EU and the Eurasian Economic Union, Central and South-East Asia, and China.
We have also consulted the European Commission on climate change issues regarding the agenda in Glasgow and the goal to gradually phase-out coal. Kazakhstan is committed to these goals, and we have set a target to achieve carbon neutrality by 2060. It needs to be taken into account that as a young country, with only 30 years of independence, that has been a raw material appendage of a bigger country, we are only at the beginning of our economic development. This is why in our consultations with our EU partners, we seek that the circumstances of our region and our country, be taken into account.
The Twelfth Ministerial Conference of WTO (MC12) was expected to take place from 8 to 11 June in Nur-Sultan, the capital of Kazakhstan. The international community and the EU, in particular, had put high hopes in this WTO ministerial, held at a time of crisis for the organisation. However, the conference was cancelled because of the COVID outbreak. Perhaps the timing now is even better because Donald Trump is no longer in the White House, and WTO reform is long overdue. What is your take?
The Twelfth Ministerial Conference of WTO wasn’t cancelled but postponed, as you said, because of the COVID outbreak. The decision was taken to hold the conference in Geneva, but Kazakhstan remains chairman of the Ministerial Conference, which will start on 30 November. As far as COVID restrictions are concerned, the physical participation at this conference is in the format of one-plus-one, and we expect our head of state to attend the opening ceremony. The details of the program of the conference are being worked on.
In addition to the way out after the COVID crisis, the issues include those discussed over many years, the distorting subsidies provided by members to their industries, farmers and fishermen, and of course, the internal reform of WTO an organisation. As a country chairing the conference, we are interested in reaching consensual decisions that will be reflected in the concluding document – the ministerial declaration.
When you said physical presence one plus one, this means the President and you?
No, one plus one refers to the Minister of trade of the member countries plus one. The Head of State will come to attend the opening ceremony.
The EU is a crucial trade and investment partner accounting for about half of Kazakhstan’s foreign trade turnover and investments in the economy. Can you tell us the trends in trade between the EU and Kazakhstan over the last period, including during COVID?
Indeed, our trade turnover is as you described it, but from our part, this is primarily raw materials, from the petrol-gas sector. This is why a key task is to diversify our exports and increase processed products’ share. We are very interested in the climate component, and after we made an analysis, we proposed to include 140 additional products, which would increase the volume of our trade by $1.5 billion.
In the last period, the tendency was to increase the share of processed products in the export of Kazakhstan. For this purpose, we have aligned with the highest standards, i.e. organic standards. One of the issues we discussed with the European Commission is our exports of agricultural products, which would fully comply with the EU requirements.
Unfortunately, the COVID pandemic impacted us negatively, as with many other countries, and our trade with the EU was reduced. But we now notice a dynamic rebound. We haven’t yet reached the pre-COVID levels, but we are going in this direction with new business contacts.
I have a question about the EU push for a carbon border tax. Igor Sechin, chief of oil giant Rosneft, said that carbon border taxes like the European Union wants to put in place will cause far greater damage to Russia’s economy than sanctions. Do you agree with such a statement? What is your take on EU policy for a carbon border tax?
The reduction of CO2 is of extreme importance, and the carbon border tax is one of the instruments to achieve such reduction, and we understand this position. But similar to our Russian colleagues, we would like the specificity of our economy to be taken into account. Our industrialisation and Russia’s have similarities, and it should also be considered that we are situated in the centre of the Eurasian continent. We are the largest landlocked country, we have huge distances internally, and we wouldn’t like our products to lose competitivity when they arrive at the EU market.
This is why we think it’s beneficial to have permanent consultations and discuss the mechanisms and deadlines for introducing such instruments.
[Edited by Alice Taylor]