This record is a partial extract of the original cable. The full text of the original cable is not available.

UNCLAS SECTION 01 OF 02 ALMATY 000215 
 
SIPDIS 
 
SENSITIVE 
 
E.O. 190356: N/A 
TAGS: OVIP PREL ECON ETRD KZ ECONOMIC
SUBJECT: KAZAKHSTAN: SECRETARY JOHANNS' JANUARY 11 MEETING 
WITH DEPUTY PRIME MINISTER AND MINISTER OF INDUSTRY AND 
TRADE MYNBAYEV 
 
¶1. (U) Participants in Secretary Johanns' January 11 
Meeting with Kazakhstani Deputy Prime Minister and Minister 
of Industry and Trade Mynbayev in Astana: 
 
U.S. 
Secretary Mike Johanns 
 
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Mrs. Stephanie Johanns 
Ambassador John Ordway 
Undersecretary of State for Economic, Business, and 
Agricultural Affairs Josette Shiner 
Undersecretary of Treasury for International Affairs 
Timothy Adams 
Deputy Assistant Secretary of State for European and 
Eurasian Affairs Matthew Bryza 
Jim Loveland (Embassy Notetaker) 
 
KAZAKHSTAN 
Deputy Prime Minister and Minister of Industry and Trade, 
Sauat Mynbayev 
Vice-Minister of Industry and Trade, Zhanar Aitzhanova 
Vice-Minister of Agriculture, Liliya Musina 
Vice-Minister of Finance, Gani Uzbekov 
Advisor to the Minister of Industry and Trade, Dinara 
Shaymardanova 
Head Specialist of the Ministry of Industry and Trade, Aray 
Kasabekova 
 
¶2. (SBU) Summary:  During a January 11 meeting with 
Secretary of Agriculture Johanns, Minister of Industry and 
 
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Trade Mynbayev provided an overview of outstanding issues 
relating to Kazakhstan's Working Party negotiations on WTO 
accession.  Secretary Johanns complimented Mynbayev on his 
perseverance in the negotiations, and promised to inform 
the U.S. Trade Representative of Kazakhstan's keen interest 
in moving the accession process forward. End Summary. 
 
Mybayev: WTO Negotiations at "Critical Stage" 
-------------------------------------------- 
 
¶3. (SBU) Mynbayev offered a positive assessment of 
Kazakhstan's economy, noting that the country enjoyed 9% 
GDP growth, stable microeconomic indicators, and 
satisfactory balance of payments.   The principal topic to 
discuss, of course, was the WTO accession process.  "The 
negotiations have reached a critical stage," he told 
Secretary Johanns, "especially regarding agricultural 
 
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issues." 
 
¶4. (SBU) The Secretary commented on Nazarbayev's decisive 
victory, remarking that, as a politician who had run many 
times for office, he had never won by as large a margin. 
However, the Secretary continued, there has been fair 
criticism of the election.  We only ask that you make 
improvements and "continue on the path of democracy."  The 
Secretary then turned to the issue of WTO accession, asking 
 
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Mynbayev to summarize the outstanding issues. 
 
Tariffs and Safeguards 
---------------------- 
 
¶5. (SBU) Mynbayev replied that the remaining issues fell 
into two primary categories:  agricultural subsidies, and 
tariffs and safeguards.  In terms of tariffs and 
safeguards, he said, the GOK had a good idea of what the 
negotiating countries wanted.  However, the preliminary 
proposals were very broad; the GOK would like the U.S. to 
focus on issues that were "commercially significant."  It 
would be better, he said, "to come to agreement on the 
specific issues that are important to you." 
 
State Subsidies to Agriculture 
------------------------------ 
 
¶6. (SBU) Mynbayev then turned to the issue of state support 
for agriculture.  We understand that the U.S. is working 
toward a worldwide reduction of subsidies, he said.  He 
then described factors which motivated GOK subsidization of 
agriculture: long, difficult winters; export paths "blocked 
by Russia" and hindered by Kazakhstan's lack of an outlet 
to the sea; and Russia's discriminatory railway tariffs. 
40% of the Kazakhstani population works in agriculture, 
Mynbayev told the Secretary, in conditions of low 
productivity.  Thus, "it takes time" to reduce the levels 
of state subsidies.  The total amount of state support, he 
said, was 9% of gross agricultural product, and very small 
in absolute terms - only $650 million.  "This is a 
sensitive area for us," Mynbayev concluded.  "Our situation 
is not comparable to that of European countries." 
 
Labor Migration, Transport Tariffs, and Telecom 
--------------------------------------------- -- 
 
¶7. (SBU) Mynbayev then explained the GOK's position on a 
series of WTO-related issues.  On labor migration, he noted 
that the GOK still relied on a system of quotas.  The GOK's 
visa mechanism, he said, was "weak," and not "streamlined" 
as in Western countries.  "We have a lot to learn," he 
concluded. "But we are doing it regardless of the WTO 
negotiations." 
 
¶8. (SBU) Addressing the issue of railway transport, 
Mynbayev acknowledged that "we require much greater 
transparency," and noted that the GOK was in the process of 
analyzing how to lower railway tariffs.  Similarly, the 
government had "taken some steps" to lower pipeline 
tariffs.  The telecommunication sector was a concern: the 
GOK would like to retain 50% capital ownership, he said, 
for national security considerations. 
 
"WTO Plus" Issues 
----------------- 
 
¶9. (SBU) Mynbayev noted that Kazakhstan had undertaken 
numerous sector-specific WTO-plus initiatives. While the 
GOK had adopted "most" of the items, "we would like 
flexibility on the part of your negotiators."  "We would 
like to set several aside," he concluded, and work toward 
less than 100% compliance. 
 
Phyto-Sanitary Barriers 
----------------------- 
 
¶10. (SBU) Turning to Sanitary and Phyto-Sanitary Barriers 
(SPS), Mynbayev began by saying that "our negotiators will 
confirm that we've accomplished a lot."  The GOK planned 
further amendments to the customs laws, and was "trying to 
accelerate the process."  In the first six months of next 
year, he said, the GOK hoped to introduce 10 new laws to 
parliament. 
 
¶11. (SBU) Secretary Johanns concluded the meeting by 
telling Mynbayev that he appreciated his perseverance.  The 
Secretary added that he worked with the USTR on an ongoing 
 
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basis, and would "sit down with the Trade Representative 
and reassert your significant interest in moving forward on 
this." 
 
¶12. (U) Secretary Johanns did not have the opportunity to 
clear this cable. 
 
ASQUINO