SUMMARY:  The U.S. Chamber of Commerce “Eurasia Business Platform” held its first annual conference on December 3-4, on the theme of “Growth Imperatives and Regional Responsibilities”. This was a valuable event in which I was pleased to participate as AMCHAM Uzbekistan's representative, making ample use of the talking points provided to me by the AMCHAM.  As I report below, the conference attracted a number of high quality speakers and participants. Key conclusions which I drew from the event were:

--- the need to pursue the U.S. Chamber's initiative on secure trade facilitation, as a means of increasing intra-regional trade as well as to ease the problems of foreign businesses that seek to export to Uzbekistan and other regional countries;

--- the U.S. Chamber increasingly favors a regional approach to the issues facing American business in both Central Asia and the larger Eurasia space, since a purely bilateral focus is unlikely to achieve rapid market expansion or ensure sufficient Washington-level U.S. Government and Congressional attention; and

--- The Chamber plans to continue its efforts in the region, at annual conferences as well as between these planned events. The next annual business conference will be timed to coincide with the upcoming Central Asian regional Trade and Investment Framework Agreement (TIFA) Ministerial, which is currently scheduled to take place in July 2008 in the region itself, perhaps in Dushanbe.

Schedule and Participants:   

The first day's program, held at the U.S. Chamber of Commerce headquarters building, consisted of speeches and round tables, as detailed below. Some 65-70 representatives of AMCHAMs, U.S. Government agencies and U.S.-based chambers attended.   

The U.S. Chamber of Commerce intends that the Eurasia Business Platform should bring together, ultimately, American Chambers from Armenia, Azerbaijan, Georgia, Kazakhstan, the Kyrgyz Republic, Russia, Tajikistan, Turkey, Turkmenistan, Ukraine and Uzbekistan.   

Key Events:

“Growth Imperatives and Regional Responsibilities”: US Chamber President Tom Donohue said that the Chamber is focused on the Eurasia region because our members want us to do so, since they see so many opportunities there. They are moving the U.S. Chamber of Commerce into becoming a global entity. Eurasia offer some of the world's most exciting new markets, based upon its critical role in world energy supply, its role as a strategic entry point for commercial transport and communications (with China, India, Europe and the Middle East) and the rapid growth being experienced by the Eurasian countries themselves.    Governments in the region are open to trade and investment with the U.S., but are being aggressively courted by our key international competitors. The challenge is to overcome the patchwork of regulatory walls, customs barriers and other problems affecting foreign business there. More U.S. Government involvement with the region is needed, lest we squander this unique opportunity. The Eurasia Business Platform is meant to provide member companies with a single-system, coordinated approach to policymaking, supported by an experienced and knowledgeable staff.

Senator Chuck Hagel (R-NE) followed with a recounting of his work on the Senate Foreign Relations Committee, focused on energy issues as the centerpiece of a new, post-Cold War new world order. In his remarks, he talked about Turkey as the most indispensable American ally, a key bridge country and one with which the United States has mis-played its relationship. More broadly, he addressed the historic diffusion of political and economic power in the world today. Russia, China and their neighbors in Eurasia are key to resolving all the main issues facing the world. This represents a tremendous opportunity for the U.S., but we need to do the right thing and cannot turn our back on free trade. As our leaders did after World War II, we must build coalitions of common interest. Here, business has a leadership role to play.  
The U.S. Chamber of Commerce is putting attention and resources into this sphere. The United States needs to incorporate business, trade, investment and energy policy into our overall foreign policy in a more effective manner. We live in a transformational moment in history. We have a rare opportunity, but we must not go in a wrong direction nor continue to be held in such low regard in the world.  The next U.S. Administration, as of 2009, must begin by re-introducing America and its values to the rest of the world.    In this broader region, we must overcome feelings of despair and reach out to engage both governments and populations.   We need a new focus on public diplomacy.

“Imperatives for Growth: Transport Development and Secure Trade Facilitation”. This seminar, with Johannes Linn of Brookings and David Short of FedEx, mainly was a re-play of a similar discussion held by the same individuals at the U.S. Chamber last summer (July 18) at the time of the Central Asian TIFA Ministerial. The session emphasized the need to improve transport conditions, especially for land transport of goods, to cut down on travel time and the costs of transportation. The point was made that foreign companies tend to look at the region as a whole, and less at individual countries. So a general lowering of costs could have ripple effects on economic growth throughout Eurasia. Also, the emphasis was on opening up markets not only within the region but between the great economic centers of Europe, China, Russia and India. Linn answered a question on the threat from narcotics and arms trafficking by stating that the Uzbeks feel they have a special situation, due to the terrorist threat, which cannot be accommodated within most current regional approaches. He says that this points to the need for a corridor system to combine effective control of borders with effective trade and transit conditions. He believes that such an umbrella approach can positively impact on security while reducing transit costs. We need to reassure the Uzbeks by a series of very specific measures, such as the above.

“Regional Responsibilities: Economic Diversification and Investment Protection”. This discussion mainly focused on the services which EXIMBank can provide to U.S. business and on the views of a deputy minister from Kazakhstan regarding his own country. EXIM official Jeffrey Abramson (vice president for Trade Finance & Insurance) noted that their Eurasia exposure is only $2.6 billion out of a global total of some $60 billion. Their activity in the region is minor and shrinking, with most financing concentrated on aircraft sales. He cited other examples such as Case New Holland equipment in Uzbekistan and Diebold ATMs, GE locomotives, John Deere equipment and construction equipment sales elsewhere in the region. He said EXIM requires a culture of transparent financial reporting, especially in the SME sector.   This limits its role in Eurasia, where many firms lack financial accounting sophistication. On our competitors in the region, Abramson said Russia and China are very active; Russia is trying to develop its own export-finance bank.   And while the US and EU are parties to OECD export credit guidelines, China is not, so it can grant more concessional financing to its exporters.

“Global Stakes in Eurasia”:   Susan Eisenhower chaired a panel with the National Security Council's director for Central Asia (Jorgan Andrews), an EU representative and a Turkish diplomat. The invited representatives from China and Russia did not show up. Andrews said that the U.S. needs to help Central Asia enter fully into the process of globalization. Countries that don't jump into this current (including democracy, free trade and accountable government) will be left behind.    Currently, we do not see the rule of law in this region. He emphasized that we want to integrate these countries into the WTO, but also that the region's fortunes are seen in Washington as being linked to the fate of Afghanistan.    We must convince governments that giving up some control will actually enhance security; this will happen only if reduced control is accompanied by the rule of law. One U.S. objective is to anchor these countries in wider economic groups, perhaps some day including the EU. Central Asian now has a menu of competing models to choose from. We fear that some will choose, unwisely, some economic reform without any loosening of government control in the political space.
Secretary of Commerce Carlos Gutierrez made a brief set of remarks on the theme of  “Economic Growth and Political Risks - the Region in Ascendance”.  Calling the region vital to our country, he recounted his visits to Russia, Kyrgyzstan, Tajikistan and Afghanistan. Commerce seeks to help drive U.S. business to, and not just through, the region. He says that Central Asia, once seen as a region too far, is now within reach, thanks to the Internet, cell phones, etc.    The United States is determined to play a constructive role. Two key areas for development are the transport and pipeline infrastructures, and the area of policy/legal transparency and predictability. Current impediments include lack of Customs consistency, lack of regulatory transparency and out-of-sync licensing regimes.   Any country which tolerates corruption and lack of transparency will be left behind and lose business. Ultimately, we want all countries in the region to meet the requirements of WTO membership.   

Prepared by: Robert S. Pace, Executive Director, American-Uzbekistan Chamber of Commerce (AUCC)