The European Union on November 22 decided to extend the Generalized Scheme of Preferences Plus (GSP+) for the next four years: until December 31, 2027.
The EU Ambassador to Uzbekistan Charlotte Adrian made this announcement at a press conference held jointly by the Ministry of Investment, Industry and Trade (MIIT) and the EU Delegation in Uzbekistan on November 23, Gazeta.uz correspondent reports.
The event was also attended by Deputy Minister of Investment, Industry and Trade of Uzbekistan Badriddin Abidov, advisor to the head of the Uzbekistan Textile and Garment Industry Association (UzTextile association), Shakhzoda Kuchkarova, and advisor to the head the Association of electrotechnical enterprises of Uzbekistan (UzElTexSanoat association), Bektemir Murodov, and director of the Tashkent Metallurgical Plant, Zafar Tuychiev, who represent the interests of the Uzbekistani beneficiaries of GSP+.
“I am delighted to see that GSP+ is becoming a real success story in the closer daily partnership between the EU and Uzbekistan,” noted Charlotte Adrian. “Not only is this the success of the last two years, but I also am sure that it will grow even more in the next four years.”
The ambassador reminded that GSP+ is the main instrument of the EU trade policy to support exports of developing countries to the EU. By obtaining the beneficiary status of GSP+, a country is exempted from paying taxes to export more than 6,000 types of goods to the European market. So far only eight countries in the world have access to such favorable conditions, Uzbekistan being the most recent one to receive it.
“GSP+ has given a strong boost to private sector development in your country, providing easier access to Europe’s 448 million consumer base, closer cooperation between European and Uzbekistani companies, and significant savings at borders,” the ambassador emphasized. She added that the recent GSP+ report for 2020−2022 confirms that the GSP+ system continues to contribute to economic stability and sustainable development in Uzbekistan even in times of uncertainty.
Since Uzbekistan joined GSP+, its exports to the EU have quadrupled. GSP-eligible exports from Uzbekistan amounted to €93 million in 2019, and as early as 2022, €450 million. “This is what we can call a success, isn’t it?” Charlotte Adrian highlighted.
In addition, as a result of import tariffs elimination, Uzbekistani exporters saved more than €28 million in 2022. “This means that there is an opportunity to save €28 million, which should have been paid in tariffs to enter the EU market. Those would have gone to the EU budget, for the further development of your companies and the private sector. This is the EU’s contribution to the development of the private sector in Uzbekistan last year. Compared to 2019, this contribution has increased more than 10 times (from 2.5 million euros),” the EU ambassador outlined.
She also mentioned that three years ago textiles and plastics were the leading products within the GSP. In 2022, the main direction shifted toward pharmaceuticals and other chemical products. “Thus, the GSP has a positive impact on the diversification of Uzbekistan’s economy and industry,” the ambassador said.
Charlotte Adrian also named a list of goods that will be in higher demand within the EU in the future. “As we expect growth in the production of machinery, automobiles, high-tech goods and medical equipment, the demand for various electronic components and metal parts will increase. Thus, your country will be able to further build on its success by expanding the production of electronic goods and components due to reduced operating costs.”
In addition, the ambassador pointed out, as the EU moves to a green economy, the supply of metals and critical raw materials could further increase Uzbekistan’s exports to the EU.
Through GSP+, the EU supports Uzbekistan’s strategy to achieve international standards in the areas of human and labor rights, as well as environment, climate and good governance.
Charlotte Adrian noted that Uzbekistan has made clear progress in applying the 27 international conventions related to GSP+.
“Significant progress has been noticed in improvement of legislation and respective policies, with some distinction in terms of compliance and implementation,” she shared.
The EU accentuates the recent law on strengthening the protection of women and children from violence, the elimination of child and forced labor and the adoption of a new Labor Code among the most successful cases.
However, Charlotte Adrian noted, there are also issues that need to be addressed to fully implement international commitments. “We see some inconsistency between the legal framework and the realization of civil and political rights. More efforts need to be made, for example, to ensure freedom of association, including for professional unions. Freedom of expressing opinions is still sometimes questioned,” the ambassador emphasized.
These issues, brought up in the GSP+ 2020−2022 report, will need to be addressed to ensure Uzbekistan’s continued compliance with the GSP+ requirements. More on this below.
“And, of course, we will continue to support you in your efforts to implement reforms,” Charlotte Adrian noted. “As we extend the GSP+ for the next four years, we will have more time to work together on international human rights standards. The EU will continue to monitor the implementation of the 27 UN conventions. The next EU observer mission to Uzbekistan is likely to take place next year.”
Deputy Minister Badriddin Abidov commented that the EU’s decision to grant Uzbekistan the status of a GSP+ beneficiary country and extend the term of these benefits is “an international recognition of the comprehensive reforms being carried out in the country today.” Those include reforms in the sphere of establishing a democratic state with solid institutions of state governance and civil society.
“Along with the successful use of benefits under GSP+, we express our readiness to cooperate with the EU in the processes of monitoring this mechanism and to work together to fulfill the requirements of the relevant international conventions,” Badriddin Abidov said.
“At the same time, we are interested in making our cooperation with the EU within the framework of GSP+ a significant impetus for strengthening trade, economic and investment relations with the European side to expand the fundamental reforms being carried out in Uzbekistan to form a market economy,” he added.
According to MIIT, by the end of 2022, the following list of products were exported to the EU markets within the framework of GSP+:
- textile products worth 177.4 million dollars (126.4% growth compared to 2021),
- chemical products — 138.3 million dollars (4.7 times),
- agro- and food products — 19.7 million dollars (103%),
- electrical products — 9 million dollars (117%).
According to Badriddin Abidov, in 2022 Uzbekistan became a full member of the International Laboratory Accreditation Partnership (ILAC) and the International Accreditation Forum (IAF). This created a basis for mutual recognition of results of conformity assessment of Uzbekistani products by 125 bodies from 82 countries within ILAC and conformity assessment agencies of 97 member countries within IAF.
403 requirements stipulated by technical regulations of European countries and 8,945 other EU requirements for goods have been introduced into production in Uzbekistan, the deputy head of the ILAC said. In addition, 3,381 International Organization for Standardization (ISO) standards have been introduced in Uzbekistan today.
Having adopted these measures, the total volume of exports to European countries in 2023 will reach $1 billion dollars, according to the MIIT forecast. This will be a 55% increase compared to last year (according to MIIT estimates, exports to the EU in 2022 amounted to $647 million).
In 2024, within the framework of GSP+, international management system standards are planned to be introduced at 822 exporting enterprises of Uzbekistan. Additionally, the agenda includes the introduction of 1,400 international and European standards related to products of light industry, leather and footwear, electrical engineering, construction, food and agricultural, metallurgical and chemical industries.
Uzbekistan’s policy efforts to comply with GSP+ requirements
The report on the GSP+ system in Uzbekistan for 2020−2022 denotes positive changes in the country’s policies in line with the 27 international conventions being implemented.
These include progress in legislative work on women’s rights and gender-based violence, and increased efforts to deinstitutionalize childcare.
“The previously widespread practice of torture appears to have been significantly reduced, and the authorities are prioritizing further measures to prevent it,” an excerpt from the report read.
Uzbekistan has also made progress in protecting biodiversity and combating climate change. The Montreal Protocol on ozone-depleting substances (ODS) is currently being implemented. Consumption of hydrochlorofluorocarbons (HCFCs) has been significantly reduced.
The EU also highlighted the establishment of an independent anti-corruption body in Uzbekistan in 2020.
For future policy works, the report features several key areas.
Improvement of legislation in the sphere of non-governmental non-profit organizations is expected to solve problems related to restrictions on civil society space and freedom of opinion and association.
According to the EU rapporteurs, the revision of the Criminal Code should be used as an opportunity to revise the articles on insults and libels addressed to the president that do not comply with international norms.
In addition, the report suggests reconsidering the decriminalization of same-sex relations, as well as outdated clauses on punishment by forced and compulsory labor.
The EU stresses the need for practical action to combat domestic violence, including the provision of shelters and support for abused women across the country.
The EU mentions the gaps remaining in the Labor Code with regards to freedom of association (meaning professional unions), forced labor and gender equality. With this, the monitoring system for cotton harvesting should be improved with the full participation of civil society.
The implementation of the Convention on International Trade in Endangered Species of Wild Flora and Fauna (CITES) and the Basel Convention on the control of transboundary movements of hazardous wastes and their disposal is lagging behind and needs further consideration, the EU report remarks.
The report also brings attention to Uzbekistan’s lasting “serious problems with corruption at the highest level.” Efforts are needed in various areas: improving the legal framework, empowering institutions to prevent corruption at all levels, strengthening the ability of law enforcement and justice agencies to investigate and prosecute, and solidifying mechanisms to combat money laundering. There is also a need to continue to promote zero tolerance for corruption.