VZCZCXYZ0010
PP RUEHWEB

DE RUEHTA #1448 1490536
ZNR UUUUU ZZH
P 290536Z MAY 07
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC PRIORITY 9572
INFO RUEHAK/AMEMBASSY ANKARA 2055
RUEHGV/USMISSION GENEVA 0956
RUEHCR/DEPT OF AGRICULTURE WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC

UNCLAS ASTANA 001448 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
DEPT FOR EB/ESC; SCA/CEN (O'MARA); PLEASE PASS TO USTR 
 
E.O. 12958: N/A 
TAGS: EAGR ECON ETRD WTRO USTR KZ
SUBJECT: DEMARCHE DELIVERED: KAZAKHSTAN'S INCREASE IN MEAT 
IMPORT TARIFFS 
 
REF: STATE 67132 
 
¶1. (U) The Ambassador raised the issue of increased meat 
import tariffs with Prime Minister Masimov on May 17, 
underscoring the negative impact on WTO accession efforts. 
Pol-Econ Chief delivered reftel demarche on May 23 to Zhanar 
Aitzhanova, Deputy Minister of Industry and Trade and lead 
WTO accession negotiator; and on May 25 to Akylbek 
Kurishbayev, Vice-Minister of Agriculture, and Naylia 
Abdimoldayeva, Deputy Head of Agriculture Ministry,s 
Department for Development of Processing Industry and WTO 
affairs. 
 
¶2. (SBU) Aitzhanova told Pol-Econ Chief that the GOK's 
decision to raise the import tariffs was difficult and a 
political compromise resulting from lengthy discussions 
between the Ministry of Industry and Trade and the Ministry 
of Agriculture.  The push for higher tariffs, she said, came 
from agricultural producers and parliamentarians who believe 
that the agricultural sector is not ready for Kazakhstan's 
WTO accession.  The move, of which Prime Minister Masimov was 
fully aware, was aimed at demonstrating that the government 
is doing something to help the farmers.  Aitzhanova added 
that she had no choice but to take some action.  Had her 
Ministry done nothing, she stated, other ministries would 
have blocked WTO accession negotiations, and she would not 
have been able to get necessary legislation through 
parliament. 
 
¶3. (SBU) Both Aitzhanova and Kurishbayev stressed that the 
tariff increase is not expected to have a serious impact on 
U.S. agricultural exports to Kazakhstan.  Poultry meat, 
Kurishbayev said, is the only market where higher tariffs 
have the potential of adversely affecting U.S. exporters. 
But, he stated, the actual tariff increase is "very 
insignificant," and Kazakhstani agricultural tariffs remain 
"quite low."  Aitzhanova went further, telling Pol-Econ Chief 
that the tariff hike was carefully calculated not to have an 
impact on U.S. sales; effective protection of Kazakhstani 
products, she added, would have required a rate increase to 
200%.  Abdimoldayeva added that the tariff's impact would be 
weakened by the tenge's appreciation against the dollar. 
(Note: Over the past six months, the tenge has appreciated 
against the dollar by approximately 6%.  End note.) 
Kurishbayev said that Kazakhstani farmers had requested much 
stronger action, including import quotas.  The actual rate 
increase, he remarked, is merely a small step to stimulate 
much-needed development of Kazakhstan's domestic poultry 
industry.  Currently, Kurishbayev elaborated, Kazakhstan 
imports 75% of its annual poultry meat consumption of 200,000 
tons. 
 
¶4. (SBU) Aitzhanova stated that the tariff hikes came into 
force one month after Prime Minister Masimov's April 11 
signature of the decree.  Both Kurishbayev and Aitzhanova 
asked for time to evaluate the impact of the higher tariffs. 
Aitzhanova requested "a few months" to see the impact of the 
tariff increases on the market before revisiting the issue. 
Kurishbayev remarked that he does not expect poultry imports 
to change next year.  In regard to the standstill agreement, 
both Aitzhanova and Kurishbayev stressed that it represents 
an expectation rather than a formal obligation. 
GILMER