Azerbaijan's position on the disputed Nagorno-Karabakh region and its human rights record have frayed the country's reputation with most international bodies. The Parliamentary Assembly of the Council of Europe has stepped up criticism of President Heidar Aliyev since the summer began, and the World Bank and other international lenders have faced demands since late June to press for anticorruption measures in the country. These scuffles have not directly affected Azerbaijan's progress toward membership in the World Trade Organization, but the country's increasingly harsh relations with European policy bodies could complicate that progress in the next several months.
Unlike the Nagorno-Karabakh conflict or the fallout from a June 3 riot in the Baku suburb of Naradan, Azerbaijan's accession to the WTO has triggered little emotion. Economic Development Minister Farhad Aliyev led a delegation in Geneva from June 3 to 7, at which WTO officials reportedly advised the government to prepare for accession negotiations in the spring of 2003. Experts say that the European Union, United States, Japan, Turkey and other countries already support Azerbaijan's bid to join the trade body, which would subject it to international rules on tariffs and other economic policy. Unlike PACE's rebuke over Nagorno-Karabakh and domestic dissidents, the WTO's position does not give President Heidar Aliyev the liberty to reject demands. [For more information, see today's other story.] Because his economy and legacy depend so strongly on international investment, Aliyev must find a way to comply with the WTO's requirements no matter how he fights with other international bodies.
Those requirements may be hard to meet. In the Geneva meetings, WTO officials reportedly urged Azerbaijan to reduce its customs tariffs to zero or otherwise tailor its economy to promote free trade. Economic expert Gubad Ibadogli expects the government to handle this recommendation gingerly, as customs tariff reduction could cause some local industries to collapse. "The WTO pays particular attention to the subsidy issue," he says. "Members are prohibited from granting any state privileges to industries. And in the foreign market, if a country makes concessions to one other, it should make the same concession to all other members of the WTO." Complying with a no-tariff agenda, then, would require Azerbaijan to remove favorable tax treatment from farmers and other agricultural businesses. This could in turn aggravate human rights concerns.
At Azerbaijan's current level of development, say experts, agricultural subsidies favor poor farmers and internally displaced people. If new economic policy makes these people poorer- and if Aliyev continues to control the state oil fund without having to account for how he spends it- unrest could spread in more violent and persistent forms. Azerbaijan should manage to comply fairly easily with WTO requirements regarding the privatization of services and the protection of copyrights, but it's unclear how a mandate to promote trade would affect taxes, corruption and dissent.
The benefits of free trade for Azerbaijan, on their face, outweigh the cost of complying with WTO prescriptions. WTO standards would probably force Azerbaijani producers to deliver consistently good wares, which would elevate local goods' reputation and price. This progress might cost some local industries their future, as Azerbaijan would have to lift import restrictions on other goods. Farhad Aliyev told reporters upon returning from Geneva that citizens should understand the gains and losses that WTO membership would bring. Tellingly, he made a point of refusing to establish normal trade relations with Armenia, even if both countries join the WTO. Whatever progress occurs on Azerbaijan's economic front, the country's intransigence on political matters may affect its economy more swiftly than any tariff policy could.
Nailia Sohbetqizi, an independent journalist in Baku, assisted in the reporting of this article.
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