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25Review of law sciences
Surayyo Usmanova,
Lecturer at the University of World Economy and Diplomacy,
Ph.D. in Law s.b.usmanova@uwed.uz
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PROSPECTS OF THE SPHERE OF TOURISM IN THE CONDITIONS OF UZBEKISTAN'S ACCESSION TO THE WORLD TRADE ORGANIZATION:
ANALYTICAL REVIEW
Abstract: The prospects of the admission of Uzbekistan as a World Trade Organization's member creates a need for a comprehensive analysis offuture membership to this organization. The research is devoted to the World Trade Organization's General Agreement on Trade in Services (GATS) analysis of issues related to the prospects for signing, which plays an important role in further integrating of the Republic of Uzbekistan into the global community and contributes to many debates. The researcher examined the experience of some WTO member states and elaborated recommendations on regulation of tourism services, admission of foreign tourist companies to the national market in the conditions of accessing to the WTO.
Key words: GATS (General Agreement on Trade in Services), tourism, Uzbekistan, WTO (World Trade Organization).
Сурайё Усманова,
преподаватель Университета мировой экономики и дипломатии, д.ф.ю.н.
ПЕРСПЕКТИВЫ СФЕРЫ ТУРИЗМА В УСЛОВИЯХ ПРИСОЕДИНЕНИЯ УЗБЕКИСТАНА К ВСЕМИРНОЙ ТОРГОВОЙ ОРГАНИЗАЦИИ: АНАЛИТИЧЕСКИЙ ОБЗОР
Аннотация: Перспективы принятия Узбекистана в члены Всемирной торговой организации создают необходимость всестороннего анализа будущего членства в этой организации. Исследование посвящено анализу вопросов, связанных с перспективами подписания Генерального соглашения по торговле услугами (GATS) Всемирной Торговой Организации (ВТО), которое играет важную роль в дальнейшей интеграции Республики Узбекистан в мировое сообщество и влияет на решения многих дискуссий. Исследователь изучает опыт некоторых стран-членов ВТО и разрабатывает рекомендации по регулированию туристических услуг, допуска иностранных туристических компаний на рынок в условиях вступления в ВТО.
Ключевые слова: ГАТС (Генеральное соглашение по торговле услугами), туризм, Узбекистан, ВТО (Всемирная Торговая Организация).
Сурайё Усманова,
Жах,он иктисодиёти ва дипломатия университети укитувиси, ю.ф.ф.д.
УЗБЕКИСТОННИНГ БУТУНЖА^ОН САВДО ТАШКИЛОТИГА АЪЗОЛИГИ
ШАРОИТИДА ТУРИЗМ СО^АСИНИНГ ИСТЩБОЛЛАРИ: АНАЛИТИК
ТА^ЛИЛ
Аннотация: Узбекистоннинг Бутунжа^он савдо ташкилотига аъзо булиши истщболда мазкур ташкилотга аъзолик масалаларини щр томонлама та^лил цилиш заруриятини келтириб чицаради. Тадцицот Бутунжа^он савдо ташкилотининг (БСТ) Хизматлар савдоси буйича бош келишувини (ГАТС) имзолаш истицболлари билан боглиц жиуатларни та^лил цилишга багишланган булиб, бу Узбекистон Республикасининг жауон уамжамиятига янада интеграциялашувида мууим рол уйнайди ва куплаб муаммоларнинг ечимларига таъсир этади. Мацолада тадцицотчи томонидан БСТга аъзо мамлакатларнинг тажрибаси та^лил этилди %амда туристик хизматларни тартибга солиш, БСТга аъзолик шароитида хорижий туристик ташкилотларнинг миллий бозорга киришига оид тавсиялар ишлаб чицилган.
Калит сузлар: ГАТС (Хизматлар савдоси буйича бош келишув), туризм, БСТ (Бутунжа^он савдо ташкилоти), Узбекистон.
The World Trade Organization occupies a central place not only in the global economy, also in constructing and developing international relations [1]. The expanding globalization of the world economy is drawing into the WTO all new areas of economic cooperation among states, including cooperation in tourism. Being today one of the three most important export sectors in almost half of the least developed countries of the world, tourism has become the sector with the greatest potential to solve economic issues in many countries.
For Uzbekistan further considerations and studies on various aspects of the activity of the WTO have major implications. Uzbekistan is actively engaged in the process of preparation for joining this organization. The relevance of the current issue to the Republic of Uzbekistan, as well as the need for the country's accession to the WTO is obvious. Particularly, The State Program on implementation of the Action Strategy in the five priority areas of the Republic of Uzbekistan for 2017-2021 yearly includes this direction. Several measures are planned to be implemented in the sector of its competitiveness through deepening structural reforms, modernization and diversification of leading sectors of the national economy. Namely, it is activated joining of Uzbekistan to the WTO in near future [2].
Accession to the WTO is Uzbekistan's introduction to the prevailing development practice in the world of legal and administrative regulation of international economic relations. This step means our country's joining the current rules for the movement of goods and services in the world market. The successful implementation of progressive economic reforms in the country can hardly be possible without this step, and foreign trade will be in difficult conditions for development. At the same time, it is necessary to emphasize that the conditions for accession to the WTO are a compromise progressed during the negotiations, a compromise achieved as a set of mutual concessions and often hard, conditions that cause them.
And in that context, the Republic of Uzbekistan faces a difficult task - to determine national economic interests and priorities, to constitute the limits of concessions and conditions that guarantee national economic security.
As part of its accession to the WTO, the Republic of Uzbekistan has to ratify several agreements, including the General Agreement on Trade in Services (GATS). This agreement defines horizontal and specific obligations for various service sectors, which either open or close access to the market and provide the most favored nation treatment for all modes of supply to foreign service providers. According to academicians, the GATS supposed to widen range of participation of developing countries in the world trade of services by liberalizing their access into service market [3].
Moreover, tourism is only mentioned as one of the part of the GATS in the WTO or as defining the UNWTO in the disciplines of international economy law. Such as, "it refers to the services supplied in the territory of one member to the service consumer of any other member. This mode of supply is typical of certain services industries, such as tourism or, in some countries, health care.. .etc." [4].
According to experts, the GATS in all cases recognizes the right of member states to regulate the provision of services in accordance with their policies and their legislation. Moreover, the agreement establishing the GATS is a framework of rules aimed at ensuring that the rules of trade in services do not contain unnecessary barriers. The main idea of the GATS is to develop and adopt multilateral rules aimed at liberalizing trade in services. However, in practice, most states apply various types of restrictions to protect the interests of national service providers. The GATS establishes the rules and procedures for applying the permissible restrictions on trade in services [5 p.15]. Therefore, the states, which have joined the GATS undertake obligations that can be divided into two groups: general obligations assumed by states unconditionally and specific obligations relating to the particular conditions of access to the market for services of a certain state.
I.A.Chebotereva emphasized that, the specific obligations include such concepts as national treatment and market access. Despite the framework character, the General Agreement on Trade in Services (GATS) is of great importance for international tourism, precisely, the largest number of commitments was made in the tourism sector by 1999 [6 p.11]. Furthermore, I.I. Zenkin underlined a peculiarity character of the GATS as, namely, the WTO member state determines itself which service sector to leave closed or open. The WTO member, at least, is committed to provide access to foreign services and their suppliers to the market, as well as provide them with a national mode. Obligations of the state to open this or that sector and exemptions from these commitments are recorded in the national list of commitments and exemptions. The recorded list obliges the state not to establish new restrictions [7].
For instance, if we analyze the case of Russia, in the List of Specific Obligations it stipulated the following types of services (according to the classification of the WTO) in tourism: services of tour operators and travel agents; excursion services, hotel and restaurant services (including catering).
For the first two delivery methods, Russia fully opens up the market of travel services for foreign suppliers. In the third mode of delivery - a commercial presence Russia makes restrictions, namely the activity of hotels and restaurants are allowed only in the form of legal entity of the Russian Federation. For companies providing services to tour operators and travel agencies, as well as providing excursion services, commercial presence is allowed only in the form of a legal
entity of the Russian Federation, which is a commercial organization. Foreign member of a commercial organization with foreign participation must be a legal entity with experience in providing services of a tour operator in country of its location for not less than 5 years. For the purpose of providing services to tour operators in the field of outbound and inbound tourism, the total foreign participation in the authorized capital (voting promotions) may be limited to 49%. The restrictions will be eliminated 7 years after the date of Russia's accession to the WTO. The share of foreign participation in the authorized capital, exceeding 49%, cannot be considered as a basis for termination of activities and / or de-investment of legal entities of Russian Federation, licensed to provide travel services and services related to travel, issued before the date of the introduction of such restrictions. Individuals providing services to the guides (guide-interpreters) must be the citizens of Russian Federation [8].
According to A.Khudaynazarov, it seems appropriate to implement a set of measures to prepare for the accession of Uzbekistan to the WTO. These include conducting training seminars, conferences, round tables and other events, studying the experience of mitigating the negative effects of the accession to the WTO of countries which have similar economic features to Uzbekistan, bringing national legislation and institutional mechanisms governing foreign trade procedures according to the WTO rules [9].We appreciate this idea, with this regard from our consideration, it will be plentiful to learn the practice of Russian Federation on formulating restrictions regarding foreign supply, commercial presence and providing services in the conditions of Uzbekistan's joining the GATS.
Concerning service sector in the WTO (GATS) in China, before joining to this organization it was observed in reality that, foreign commercial agencies within cross-border supply and consumption abroad have already appeared there. The researchers predicted positive impact of joining the WTO rather than negative side of it [10 p.105]. As a result, China became one of the winners among states which join the WTO because, it could negotiate state's interests in the framework of this organization intelligently.
Hence, the Republic of Uzbekistan's attempts to negotiate in service sector, in particular in the sector of tourism will not be simple. There are no foreign commercial agencies with cross-border supply and consumption abroad in tourism sector yet. Consequently, there would appear several issues and misunderstandings with promotion of their participation in national tourism market. Surely, Presidential Decree on "Additional organizational measurements for establishment conveniences for development of tourism potential of the Republic of Uzbekistan" made the fundament for progressing tourism business in Uzbekistan. Several preferences and privileges were accorded them [11]. However, this document does not envisage the preferences in participation of foreign supply in tourism sphere. With this regard, it is advisable to elaborate legal framework on participation of foreign supply and consumption abroad in the sphere of tourism of the Republic of Uzbekistan for further development of legal basis in this direction in terms of joining Uzbekistan to the WTO- GATS.
Earlier, it was suggested to adopt Strategy for membership of Uzbekistan to the WTO, which emphasized basic directions, which should be taken into consideration while Uzbekistan's joining to this organization by the national researchers [12 p.26-28]. It possesses the probability to include legal-institutional and organizational procedure in the sphere of tourism into this Strategy.
To summarize, potential risks from joining to the WTO (GATS) for the sphere of tourism in Uzbekistan could be the followings:
- tougher competition in comparison with foreign counterparts in terms of foreign supply chain. Growth of competition will lead to increased marketing costs to maintain position in the market;
- strengthening competition in order to open tourism market for foreign organizers. Tour operators of Uzbekistan, which focused primarily on outbound tourism, will be forced, could not compete, leave the market or become their small partners or agents (movement of specialists). The affluence of cheap imports of services and tourism products will lead to the closing of a number of the weakest industries that could not withstand the competition and increase unemployment. Simultaneously, it will cause a decrease in demand for the products of the tourism sector (in the direction of outbound tourism) and threats to small business (for outbound tourism);
- potential risks of recession in the linked branches; closing of enterprises and rising unemployment will cause a decrease in demand for products of the tourism sector (for domestic tourism); threats to the small tourism industry due to the appearance of new large participants in the market (hotel chains, tour operators etc.) (for domestic and inbound tourism);
In order to avoid and overcome those risks it is suggested to learn practices of People's Republic of China and Russian Federation in terms of dictating and determining terms and restrictions on participating foreign supply and investors in national tourism market of Uzbekistan.
And from the other hand, potential opportunities from joining of Uzbekistan to the WTO (GATS) would be:
- investments for further business development due to the uncontrolled arrival of foreign banks to Uzbekistan with their huge capitals and low interest rates; However, some of the national researchers suggested that, it would negatively affect by decreasing investment flow to national market by appreciating the practice of Kyrgyzstan and Georgia. From our point of view, tourism sector would win in the process of attracting more investments in this sphere;
- insurance market can be completely captured by foreign insurers, having significantly more capital and practice than the domestic companies. More favorable conditions for insurance of tour services (for inbound and domestic tourism);
- foreign operators under certain conditions must agree during the negotiations on entering the tourist market of Uzbekistan (preferential terms of investment, mandatory target financing of tourism industry facilities etc.) will be forced to invest in the development of tourism infrastructure in Uzbekistan. Exactly this should serve as an incentive to attract customers (tourists) of these operators in Uzbekistan;
- in terms of access to the service market, there are positive consequences in liberalization of international trade is manifested to a greater extent than in trade of goods. This is primarily due to the fact that, trade in services is still in its process of development, and high resource mobility allows to quickly respond to change the conditions of competition and to take advantage of the liberalization of foreign trade.
In conclusion, we would like to note that, the entrance of any country to the WTO should not be regarded only from a positive or negative point of view. For many spheres of production, such a transition will be difficult and the tourism, as one of the spheres of service in the GATS is not an exception. So, a positive solution to the problem of joining the WTO today will pose a number of complicated economic, political and legal questions for Uzbekistan. The length of the process of its accession to the WTO is due to the comprehensive definition of its economic interests and priorities, the establishment of optimal limits for concessions and conditions that guarantee
national economic security of Uzbekistan and the ability to defend them during difficult negotiations. With this regard, the following recommendations are elaborated:
1. In order to tackle problems related to the liberalization of trade in tourism services, it is suggested to adopt the Appendix on Tourism of the GATS under the WTO. This Appendix has an important impact on international and local regulation of this issue;
2. Before joining to the WTO, it is suggested for the Republic of Uzbekistan to develop Special Action Program on tourism services regulation, admit foreign tourist companies to the market, and joining a number of agreements. In particular, on the basis of governmental regulation it is advisable to elaborate an effective legislation in the sphere of tourism industry;
3. If Uzbekistan will join the WTO, the national legislation of the country in the sphere of tourism should be fully taken into account, so not only the provisions of the WTO documents that regulate tourism services, but also the law enforcement practice of the WTO in the field of tourism;
4. Under the status of potential accession to the WTO, the Republic of Uzbekistan should assume only those obligations that it can actually fulfill, and not those obligations that are imposed on it from outside. Unjustified liberalization in the field of tourism services may lead to ongoing disputes in the WTO Dispute Resolution Authority after joining it;
5. Considering successful practice of foreign countries, which joined the WTO (GATS) and analyzed by the author (cases of China and Russia Federation), it would be useful to implement into national process of entering to the Organization's General Agreement on Trade in Services (namely, in the sphere of tourism services sector).
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