FEB. 21 2014 (The Conway Bulletin) — Kazakhstan has banned the sale of Uzbekistan-made GM Daewoo cars, media reported, triggering a potential trade row between the two neighbours.

Officially, Kazakhstan said Customs Union rules stated that imported cars must have at least one front airbag, ABS braking, child safety seat attachment points, daytime running lights and an immobiliser.

Unofficially, the suspicion is that Kazakhstan may be using the Customs Union to protect its own car industry.

The Customs Union has been in existence since 2011. It is led by Russia and so far includes also Kazakhstan and Belarus, although Armenia and Kyrgyzstan plan to join later this year. Uzbekistan has no plans to join.

Its rules and regulations, though, are some-what murky but what we do know is that, by instinct, it is a protectionist organisation.

What is clear is that last year GM-Uzbekistan, which produces its cars at a factory in Andijan in eastern Uzbekistan sold around 23,000 of its cheaper car models in Kazakhstan and around three times that many to Russia.

GM took over the Daewoo factory in Uzbekistan in 2008.

Visitors to Shymkent, a city of 600,000 people in Kazakhstan on the border with Uzbekistan, will notice that many of the cars on the roads being driven there are Daewoo.

Both Uzbekistan and Kazakhstan have been talking up their car industries. Uzbekistan’s main car markets are Russia and Kazakhstan and the GM Daewoo factory is its biggest producer.

Losing Kazakhstan, and Russia, as an export market will be a major blow and have, potentially, far reaching implications.

ENDS
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(News report from Issue No. 173, published on Feb. 26 2014)