Kyrgyzstan impairs the freedom of transit for Tajikistan, says ITC survey
18 January 2014
The survey conducted by International Trade Center (ITC) under financial support of the Government of Switzerland, Trade Obstacles Faced by Tajikistan’s Private Sector in Exporting Their Goods and Services to Selected Markets, notes that China is a major trading partner for Tajikistan with over 20 percent of all exports in 2011. Tajikistan, as a landlocked country, is interested in diversifying its transit connections with the regional and world markets.
In recent years, with the support from the Asian Development Bank (ADB), Tajikistan and Kyrgyzstan have made significant investments to road infrastructure that connects Tajikistan to China through Kyrgyzstan. This road is the best and least costly alternative for Tajikistan in trading with China.
However, Kyrgyzstan keeps the border crossing point (BPC) Karamyk on this route closed for international transit, arguing that under the 2004 bilateral agreement this border crossing point is intended for bilateral trade and not for international trade, the survey says.
Currently, road transport traffic from Tajikistan to China and back is carried out through the Kulma pass between Tajikistan and China or through an international border crossing point between Tajikistan and Kyrgyzstan in the north of Tajikistan. Both of these alternatives are more lengthy and costly for transport operators. Tajikistan has been negotiating this issue with Kyrgyzstan unsuccessfully during the recent years. Moreover, Tajikistan has already unilaterally changed the status of the border crossing point from bilateral to international.
This situation appears to be impairing the freedom of transit recognized by Article V of the General Agreement on Tariffs and Trade (GATT) 1994: “There shall be freedom of transit through the territory of each contracting party, via the routes most convenient for international transit, for traffic in transit to or from the territory of other contracting parties. No distinction shall be made which is based on the flag of vessels, the place of origin, departure, entry, exit or destination, or on any circumstances relating to the ownership of goods, of vessels or of other means of transport.”
Bilateral consultations could be initiated to discuss this issue within the existing WTO mechanism for settling disputes.
The study notes that the counter argument could be used by making a reference to Article V.3: “Any contracting party may require that traffic in transit through its territory be entered at the proper custom house, but, except in cases of failure to comply with applicable customs laws and regulations, such traffic coming from or going to the territory of other contracting parties shall not be subject to any unnecessary delays or restrictions and shall be exempt from customs duties and from all transit duties or other charges imposed in respect of transit, except charges for transportation or those commensurate with administrative expenses entailed by transit or with the cost of services rendered.”
In this case, Tajikistan reportedly could argue that determining the proper customs house located in significantly far location from the most convenient route would still be a violation of Article V.
Meanwhile, Article V has never been invoked in dispute proceedings and therefore, there is no relevant WTO practice on this issue.
The suervey was conducted in october 2013.