Regional cooperation in trade policy, transport, and customs transit can help the CARs lower these trade barriers, increase the gains from participation in international trade, and reduce the associated costs, the report says.
However, the report adds that regional cooperation in trade policy in the form of preferential trade liberalization under regional trade agreements is unlikely to do so in itself, mainly due to poor design and lack of implementation.
Therefore, the CARs need to prioritize accession to the WTO and pursue regional cooperation in trade policy within the multilateral framework.
To fully realize the benefits of WTO membership, they also need to improve regional cooperation in transport and customs transit.
The report argues that increased regional cooperation in transport and customs transit would help the CARs reduce transport costs and make transport times shorter and more predictable for international shipments.
This would in turn help the CARs expand trade, participate more in global production networks, and diversify trade in terms of both geographical distribution and commodity composition.
Quantitative estimates [or simulation results] presented in the report suggest that, if the estimated reductions in transport costs that would result from increased regional cooperation in transport and customs transit occurred in 2006, the cumulative increase in the Kyrgyz Republic's real GDP in 2006-2015 would be US$2.1 billion (at 2002 prices) greater or 112.3 percent (relative to 2005) higher than in the baseline scenario.
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