Obid Khakimov
Director of Center for Economic Research and Reform under the Administration of the President of the Republic of Uzbekistan
President of the Republic of Uzbekistan Shavkat Mirziyoyev took part in the first meeting of heads of state in the format Central Asia – European Union in Astana on October 27. The President of the European Council Charles Michel also participated together with the leaders of the Central Asian states. Uzbek-European talks of advanced level between Shavkat Mirziyoyev and Charles Michel were held in Tashkent on October 28.
Uzbekistan’s cooperation with the EU has a long history. Relations began on April 15, 1992, with the signing of a Memorandum of Understanding between the Government of the Republic of Uzbekistan and the Commission of the European Communities (CES). Diplomatic relations were established on 16 November 1994. The Embassy of Uzbekistan was opened in Brussels in 1995 and since 2011 the EU diplomatic mission has been functioning in Tashkent.
The Agreement on Partnership and Cooperation between the European Union and Uzbekistan was signed at the level of Heads of State in Florence in June 1996 within which six joint bodies between Uzbekistan – EU were established: Cooperation Council, Cooperation Committees, Parliamentary Cooperation, Subcommittees on trade and investment, justice, home affairs, human rights and related matters, development cooperation.
Cooperation between Uzbekistan and the EU has been developing dynamically in recent years. The telephone conversations took place between President Shavkat Mirziyoyev and President of the European Council Charles Michel in April 2020, August 2021, and July 2022. EU High Representative for Foreign Affairs and Security Policy Josep Borrel visited Uzbekistan in July 2021 and EU Commission Vice-President Margaritis Schinas visited in November 2021.
Uzbekistan initiated negotiations to conclude a new Agreement on Enhanced Partnership and Cooperation with the EU in 2018, which was initialled for signature in July this year. The document provides support for high collaboration in the areas of economic and investment cooperation, energy, transport, environment and climate change, digital economy, agriculture and rural development, employment, and social issues and in scientific research.
Fifteen documents form the legal basis for Uzbek-European relations and most-favoured-nation trade is treated under the Partnership and Cooperation Agreement with EU countries
European Union and Central Asia: the development of relations
The consolidated policy of the EU members towards the Central Asian States is relatively new. The post of the EU Special Representative was established for Central Asia. The EU Strategy for Central Asia was adopted in 2007. Fragmentations did not contribute sufficiently to the implementation of the adopted strategy in our region during those years. The policy of the new leadership of Uzbekistan began from changing the relations between the states of the region for the best cooperation after 2016.
The new EU Strategy was adopted for Central Asia in 2019, which highlighted the growing importance of our region for the EU because of its geographical location and key role in connecting Europe and Asia, its energy resources and significant market potential (more than 70 million inhabitants, 35 percent of whom are under the age of 15).
The changes that have taken place in the relations between the Central Asian countries are outlined in a speech by President Shavkat Mirziyoyev at the Astana summit. Thus, a new political atmosphere has emerged in Central Asia because of joint efforts. Previously, borders with neighbour states of the region were closed, mutual trade was practically non-existent, there was no stable communication, transportation, active humanitarian exchanges.
Now a visa-free regime has been introduced, checkpoints have been opened, flights and ground transportation have been expanded. Uzbekistan’s trade with the countries of the region increased almost 2.3 times in five years (from 2.73 billion dollars in 2017 to 6.35 billion in 2021). Cooperative ties are being strengthened and joint investment companies have been established. There is an effective mechanism for regular consultative meetings of Central Asian Heads of State.
As a result of the summit, the efforts of states were commended to strengthen regional cooperation. The need to strengthen dialogue in the areas of the rule of law, human rights, gender equality and cooperation in providing humanitarian assistance has been recognized to the Afghan people. Highlighted the importance of developing a regional vision and cooperation.
Reform Assistance
The President of Uzbekistan briefly described the reforms in his address that had been undertaken to the summit. We do not stop at what we have achieved and intend to increase the scale of reforms, – said the leader of the country, mentioning the unconditional rule of law, full support for civil society institutions, ensuring human rights and gender equality, freedom of expression and religion, favourable conditions for entrepreneurs, the fight against corruption, the development of a competitive and innovative business environment.
The European Union has repeatedly praised and expressed support for the reforms in our country over the past five years. On October 19 this year, at a meeting in Tashkent, the EU Special Representative for Central Asia Terhi Hakala said that the EU highly appreciates and always supports the continuation of the program of irreversible reforms in New Uzbekistan.
The EU is actively supporting change through technical and financial assistance programmes. According to the Multifunctional indicative program for Uzbekistan for 2014-2020, priority areas of assistance were the development of rural regions to address employment issues, food security, improving welfare and protecting natural resources. Under this programme, the EU has allocated 168 million euros.
The EU adopted a new Multi-year Indicative Financial Assistance Program for Uzbekistan in 2021 within the framework of which it is planned to allocate 83 million euros for technical assistance in effective management and digital transformation, inclusive, digital, and green growth, development of smart sustainable agriculture.
The EU has been financing the project Foreign Trade Promotion of Uzbekistan since 2020, which provides technical assistance to carry out the necessary procedures for our country’s accession to the World Trade Organization.
The President of Uzbekistan noted that he dynamics of growth of trade with the EU countries after inclusion of our country in the preferential trade system GSP+ impresses. Uzbekistan has fulfilled all the conditions of the EU, including the ratification of 27 international conventions, to obtain the status of beneficiary of the GSP+ system. The EU began to apply preferential tariffs on goods imported from our country under this system from 10 April 2021. As a result, exports grew by 33.4 per cent in 2021, while imports fell by 4.7 per cent. The European Union accounted for 9.2 per cent of total trade turnover, 3.3 per cent of total exports and 13 per cent of Uzbekistan’s total imports last year.
Over the past five years, Uzbekistan’s trade with the EU grew by 50.5 per cent, from $2.6 billion to $3.9 billion. Exports increased by 39.2 per cent and imports by 52.6. Exports continued to grow this year. While the trade turnover with the European Union grew by 14.2 percent and amounted to 3.1 billion dollars, exports showed a significant growth of 68.1 percent, imports increased by 5.8 percent.
Uzbekistan’s main trading partners among EU countries in terms of total trade turnover are Germany (19.7 per cent of total trade), Lithuania (13), Italy (11.1), the Netherlands (7.4), France (7.2), Poland (6.4), Latvia (6.0), Czech Republic (5.1), Spain (4.2), Hungary (3).
The European Investment Bank and the European Bank for Reconstruction and Development have resumed cooperation with Uzbekistan since 2017, which has contributed to the growth of investors’ interest in work in our republic. Thus, the number of joint ventures with the participation of European capital has increased 2.4 times since 2017 – from 440 to 1,052 enterprises, of which more than 300 with 100% European capital.
However, the available indicators do not correspond in absolute terms to the existing significant opportunities, the head of our state stressed it in his speech. For their fuller realization it is necessary to ensure compliance of domestic industrial goods with European standards and technical regulations and form effective transport and logistics corridors to EU markets, especially the Trans-Caspian multimodal route. Conducting the actions so that products from the countries of Central Asia are in demand among European consumers.
It is proposed to establish the Committee of Economic Cooperation European Union – Central Asia at the level of vice-premiers of governments, within which to develop a long-term strategic program to deepen trade and economic cooperation and develop transport communication interconnectivity, covering the goals and objectives of the Global Gate initiative. The first meeting of the committee was proposed to be held next spring in Samarkand on the eve of the annual meeting of the Board of Governors of the European Bank for Reconstruction and Development.
Interaction in Green Development
An important mechanism of interaction in the environmental sphere of Uzbekistan with the European Union is the WECOOP (Dialogue on Environmental Protection and Climate Change) and CAWEP (Central Asian Water and Energy Programme). The European Union is also promoting the socio-economic development of the Aral Sea region. The project Contribution of the EU to the Multi-Russian Trust for Human Security worth 5.2 million euros and is being implemented for the Region of the Aral Sea. The project My Garden in the Aral Sea on greening the Aralkum desert and nearby settlements is relevant: it is planned to plant 27 thousand tree seedlings at the bottom of the dried-up Aral Sea by the end of this year.
President Shavkat Mirziyoyev invited the European side to join the implementation of the regional program Green Agenda in particular to the introduction of eco-innovations, energy-efficient and resource-saving technologies, digitalization of the economy, development of smart agriculture through Smart-AKIS European network, harnessing the potential of renewable energy. The holding of the next high-level conference EU – Central Asia on environment and water resources was supported in February next year in Rome.
Security Partnership
The European Border Management Assistance Program in Central Asia (BOMKA) is aimed at strengthening border cooperation. These include support for Governments in developing and reforming migration governance, mobility and trade policies, and capacity-building for border and migration agencies.
Within the framework of the EU Central Asia Drug Prevention Programme (CADAP), a dialogue is being held with law enforcement and law enforcement agencies of Central Asian States to enhance their capacities and to study the best practices of countries in the region in various aspects of combating this scourge.
President Shavkat Mirziyoyev expressed gratitude to European partners for supporting the position of Uzbekistan on the Afghan settlement and expressed readiness to continue fruitful cooperation in using the potential of logistics and educational hubs in the city Termeze.
Humanitarian Cooperation
More than 80 projects of the educational program Tempus for 32.2 million euros were implemented in the humanitarian sphere. 43 projects with a budget of more than 36.6 million euros have been implemented within the framework of the educational program Erasmus+ to increase the potential of higher education since 2014.
At the summit the leader of our country proposed within the framework of the programs Erasmus+ and Horizon Europe to implement the Project on the implementation of advanced European methods of education. He expressed interest in increasing the number of branches of leading European universities in Central Asia and readiness to take an active part in the implementation of the first regional project of vocational education. The Concept of a common regional tourism product at the first Tourism Forum EU – Central Asia» in Khiva next year was offered to the leading European operators.
Negotiations in Tashkent
The summit was held between Shavkat Mirziyoev and Charles Michel in Tashkent on 28 October. The parties agreed to increase cooperation in the sphere of democratic reforms and economic reforms, in the field of innovation, green economy, digitalization, as well as the preparation of a road map for the implementation of proposals and initiatives, Uzbekistan put forward during the summit in the Central Asia – EU format.
At the meeting, the Presidents confirmed that in recent years the relations between Uzbekistan and the European Union have become comprehensive and welcomed the EU’s desire to strengthen ties and interregional cooperation with Uzbekistan and Central Asia.
The establishment of sustainable transport corridors, including the development of the Trans-Caspian multimodal route, has been identified as a systemic factor for increasing mutual trade. The importance of expanding its transport capacity, harmonization of customs procedures, introduction of digital solutions has been pointed out for cargo handling and border crossing.
In conclusion, the Presidents of Uzbekistan and the EU reaffirmed their commitment to strengthening an open and constructive dialogue and partnership, as well as to further expanding regional cooperation and connectivity in order to transform Central Asia into a region of the security, stability and sustainable development.
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Holding of the first summit Central Asia – EU at the level of the heads of State of Central Asia and the President of the European Council means the growing importance of our region in the global architecture of sustainable development and security, and it strengthens the position of Central Asia in the system of international relations.
The Central Asian region which is stable and open to mutually beneficial cooperation with all countries, is of great importance and will play a decisive role in world economic relations and relations in the current global political and economic unpredictability.
The European Union banned the EU-Asia Connectivity Strategy, announcing expanded ties with Asia as a new concept of economic diplomacy in September 2018. The key link in the interconnection between Europe and Asia is the Central Asian region, which is considered a natural hub of the vast economic space of the entire continent of Eurasia.
Samarkand will host the conference Central Asia – EU: Global Gatewayon sustainable connectivity as well as a ministerial meeting in this format on November 17-18 this year. The holding of two interregional events in Samarkand illustrates the strategic importance of Uzbekistan for Europe.