Integration in world economy could boost Central Asia’s trade
21.06.2024 438
Countries in Central Asia can foster closer regional ties and increase trade amongst one another if they are all members of the World Trade Organization (WTO).
This emerged at the second Central Asia Trade Policy Forum, held from 3-5 June 2024 in Almaty, Kazakhstan. It brought together senior representatives of the five Central Asian countries and Azerbaijan to discuss the region’s integration into the global economy through WTO accession. The event was jointly organized by the WTO, the International Trade Centre (ITC) and the Asian Development Bank, in partnership with the government of Kazakhstan.
Among the attendees were eight senior government representatives of Uzbekistan, led by Azizbek Urunov, special representative of the President of Uzbekistan on WTO issues and the country’s chief negotiator at the WTO.
WTO Director-General Ngozi Okonjo-Iweala gave the keynote address at the high-level event. She noted that the overall accession experience for the region had been positive, with Kazakhstan and Tajikistan, within five years of joining the WTO, seeing their goods exports of goods grow by 14% and the value of foreign investment inward FDI swell by 41%.
‘Missing piece in the puzzle’
‘“The more countries are bound by the same set of international rules, the more they tend to trade among themselves, especially in a region where intra-regional trade is below its potential. Central Asia is of great significance to the WTO and a key missing piece in the global multilateral trading system,’” she told the gathering.
Trade among the countries of Central Asia is currently at a modest 10%, despite their proximity and shared culture and history. Moreover, their total trade with the world is low, with only 40% of the region’s gross domestic product (GDP) deriving from exports. This presents considerable scope for the countries to expand their economies through trade.
Common rules and procedures
If all the countries in the region are members of the WTO, their trade rules and procedures will automatically be harmonised, making it easier and cheaper to do business across borders in the region. This would give a healthy injection to economic activity thereby benefiting the whole population of the region.
Kazakhstan, the Kyrgyz Republic and Tajikistan respectively joined the WTO in 2015, 1998 and 2013. Uzbekistan’s accession process is already well advanced. With Azerbaijan and Turkmenistan now also in the process of joining the WTO, this could give impetus to regional integration in Central Asia and generally bolster trade.
The forum created a platform to share experiences and lessons learned on WTO accessions and post-accession to enhance acceding countries’ knowledge about the policy implications of WTO membership.
The ITC is assisting both Uzbekistan and Turkmenistan with their WTO accessions, with funding from the EU. This support includes helping to formulate negotiating positions, reviewing relevant laws and policies to ensure compliance with WTO requirements, and building technical capacity so officials could effectively implement the WTO agreements.
The overarching purpose of the assistance is to support these countries’ development plans to modernize their economies by leveraging the WTO accession.