By Sami Jaber
Today, on 9 April 2021, Uzbekistan received the European Union’s GSP+ beneficiary country status.
The GSP is a programme implemented by the EU to stimulate the creation of jobs and assist countries in galvanising their economy through the unilateral liberalisation of international trade. To do so, the EU and the concerned state negotiate a preferential trade agreement, allowing the country in question to export goods to the EU with reduced or removed tariffs. Under the standard GSP, Uzbek producers could export 3 200 commodity items without any customs duties, as well as a further 3 000 items with reduced tariffs.
In November 2020, the European Commission issued a positive decision on the question of making Uzbekistan a beneficiary of its General System of Preferences Plus (GSP+). The implications of this decision are great, and will give a renewed impulse to cooperation between the European Union (EU) and Uzbekistan. An overview of this rapprochement’s history and the future opportunities it opens.
Begun in early 2020, the process of consideration for the GSP+ has been a consecration of Uzbekistan’s development. Indeed, in order to earn the GSP+ status, Uzbekistan has had to demonstrate exemplary compliance with 27 international conventions concerning a range of issue-areas, from the protection of human rights and labour standards, to good governance and the preservation of the environment. The European Commission did not fail to acknowledge Uzbekistan’s admirable compliance with all 27 of these accords, releasing its favourable opinion ahead of the 6 months it had to review the dossier.
In issuing its positive decision, the European Commission paves the way for a new era of cooperation between the economic and monetary union and Uzbekistan.
As a testament to Uzbekistan’s commitment to this cause, the nation’s president - Shavkat Mirziyoyev’s – personally oversaw the process, and remains actively seized of the matter. As head of state, the Uzbek president recognises the strategic significance of liberalising economic exchanges with the world’s largest economy – the EU – and has thus accordingly assigned this rapprochement great importance in his agenda. Mirziyoyev has fully understood the importance of this new status for his country, as well as for defining its future relationship with the EU.
Indeed, the GSP+ status offers a host of economic benefits to Uzbekistan, allowing for the expansion of unilateral tariff preferences to producers seeking to sell commodities into the European market. The amount of goods which may be exported to the EU free of any customs duties will witness more than a twofold increase from its previous amount, reaching the number of 6 200 items.
For example, it is estimated that – in the textile industry alone – Uzbek producers will be able to export an additional $300 million worth of goods annually. This represents a major increase in the volume of exports in one of Uzbekistan’s leading exporting industries, and will inevitably have immense benefits for the nation as a whole. However, these economic benefits are far from confined to the macroeconomic level. The benefits will impact all elements of society, with producers being able to sell more goods and, consequentially, creating domestic job opportunities to satisfy the growing demand. The living conditions and economic welfare of Uzbek citizens will, thus, inevitably further improve as a consequence of their nation’s accession to the EU’s GSP+ status.
In addition to these extensive pecuniary benefits, the future relationship between Uzbekistan and the EU will be positively impacted by the acquisition of the GSP+ status. Indeed, the GSP+ programme serves simultaneously as both a recognition of the sustainable development and good governance a country exhibits, as well as an incentive for further improvement. The redefined status paves the way for a new cooperative framework between Uzbekistan and the EU. The main areas where cooperation is set to see an increase concern highly relevant contemporary issue-areas, which will allow Uzbekistan to demonstrate its leadership in these matters, and further demarcate itself from other regional actors. These areas include good governance, green growth, and agricultural food production. Further areas of cooperation are equally significant, including the digitalisation of the economy, the betterment of education, and the innovative ecological development of the Aral Sea region.
In sum, Uzbekistan’s achievement of the GSP+ status will allow the nation and its people to reap great economic benefits, all the while presaging promising prospects for further cooperation with the EU.