«As the Central Asian countries are trying to comply with EU/international norms to get the preferences, the level of benefiting from them remains very low» – mentioned Sarvar Jalolov, international Relations Specialist, in an article written specifically for CABAR.asia.
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When the EU High Representative Catherine Ashton declared that If Europe is to be a credible player in the world, it requires more than just soft power, she was talking about the necessity of military (hard) power, but in fact the EU’s soft power is not just a soft power; it is a normative power. Europe is a normative power because Europe itself is based on norms that the EU wants to promote. It starts from the European Union itself as acquis communautaire, spreads to the candidate countries, to the neighbors and to the neighbors of neighbors. And here is Central Asia.
While the candidates and neighbors are highly motivated in harmonizing their legislation with EU norms, others, including the Central Asian countries need more to be interested in accepting the EU values. It can be in the form of development aid, trade preferences or others. So far, the EU’s commitment to sign the Enhanced Partnership and Cooperation Agreements with the countries of the region and to offer the trade preferences indicates not only to the EU’s interest in the region, but also to the readiness of the Central Asian countries to accept the EU/international norms. So, is the EU a normative power in Central Asia too? How Central Asian countries are changing their legislation and practices to match the EU preferential regime? Where is the limit of normative power of EU?
How EU Treats Central Asia?
As the Lisbon Treaty describes, “The Union’s action on the international scene shall be guided by the principles which have inspired its own creation, development and enlargement, and which it seeks to advance in the wider world: democracy, the rule of law, the universality and indivisibility of human rights and fundamental freedoms, respect for human dignity, the principles of equality and solidarity, and respect for the principles of the United Nations Charter and international law.” From this perspective, EU insists on legal approximation of other countries to its acquis communautaire. The candidate and potential candidates to the membership must harmonize their legislation with acquis communautaire as determined by the Stabilization and Association Agreements (SAA) signed with each of them. Further, the EU tries to spread its norms to the neighboring countries in exchange to free trade area as in the case of Association Agreement establishing Deep and Comprehensive Free Trade Area (DCFTA) with Georgia, Moldova and Ukraine. Of course the depth of the harmonization is less than for full EU members.
Even though Central Asia is not considered as a neigboring region, the EU tries to spread its norms here too. The new EU Strategy on Central Asia highlights the new-generation bilateral Enhanced Partnership and Cooperation Agreements (EPCAs) which promote the approximation of legislations as a cornerstone of EU engagement in the region. The EU Council conclusions on the new strategy also draw a special attention to EPCA, underlining that the scope of the EU’s relations is linked to the readiness of individual Central Asian countries to undertake reforms and strengthen democracy, human rights, the rule of law and the independence of the judiciary, as well as to modernize and diversify the economy.
Partnership and Cooperation Agreements were prepared for the 15 former Soviet republics and were signed with 10 of them (all but 3 Baltic States which became EU members + Turkmenistan and Belarus). Currently, the Enhanced Cooperation and Partnership Agreement between Kazakhstan and the European Union, signed in 2015, is pending implementation as Italy was the last EU member ratifying it in November 2019. Negotiations on EPCA with Kyrgyzstan was launched in November 2017 and with Uzbekistan in December 2018. Tajikistan has requested to begin negotiations on EPCA in November 2018, but it is not started yet. PCA with Turkmenistan was negotiated in the 1990s, but the European Parliament withheld its consent due to human rights concerns. However, the EU’s Liaison Office in Ashgabat was upgraded to a fully-fledged delegation in July 2019.
Tajikistan and Uzbekistan currently benefit from the GSP. Kazakhstan and Turkmenistan were “graduated” from the GSP respectively in 2014 and 2015 because they were classified as upper-middle income countries for the third consecutive time. In 2016 Kyrgyzstan has transitioned from GSP to GSP+ scheme.
Enhanced Partnership in Exchange to Implementation of Norms
The EU’s new Central Asia strategy shows that the priorities were determined not by the EU itself, but based on the needs and requests of Central Asian countries. The way the countries of the region formulate their needs and request toward the EU confirms that the Central Asian elites understand well how their countries can benefit from the partnership with the EU – by implementing the EU/international norms in their legislation.
The main indicator of the readiness of Central Asian countries to adopt the EU norms is the progress on the Enhanced Partnership and Cooperation Agreements which put a strong emphasis on shared values, democracy and the rule of law, human rights and fundamental freedoms and sustainable development. Kyrgyzstan have already finished negotiations on EPCA, with the seventh and final negotiating round took place in Bishkek on 6-8 June 2019 and the Agreement was initialed a month later in the margins of the 15th EU-Central Asia Ministerial Meeting in Bishkek. The Agreement ensures better regulatory environment for the economic operators in areas such as trade in goods and services, government procurement or intellectual property rights and enhanced cooperation in some other 24 key sector policy areas, including in the sectors of economic and financial cooperation, energy, transport, environment and climate change, digital economy, agriculture and rural development, employment and social affairs, culture, education and youth or research. In other words, there is the same logic of harmonization of norms as in the case of agreements with the countries of European Neighborhood Policy, but with less obligations.
Uzbekistan hold four rounds of negotiations on EPCA with the European Union in 2019. The future agreement is expected to cover areas such as political dialogue and reforms, the rule of law, justice, freedom and security, human rights, anti-corruption, migration, and trade, as well as economic and sustainable development. President Mirziyoyev confirmed the country’s commitment to continue negotiations with the EU and dialogue with WTO, curiously while speaking about the Eurasian Economic Union. Tashkent intends to sign the EPCA already in 2020.
Trade Preferences for Sustainable Development
An important and more concrete part of the ECPAs concerns the GSP+ status which imply the promulgation of more concrete norms from the Central Asian countries. There are certain strict criteria to joining GSP+: the country must be vulnerable, without diversified sectors of economy; import levels from the EU must be low; the country must have ratified 27 conventions on human and labour rights, environment and other socially important issues. As Kyrgyzstan is already benefiting from GSP+, Kazakhstan and Turkmenistan were graduated from GSP, we can talk about the cases of Uzbekistan and Tajikistan.
For example, in response to a request by the Government of Tajikistan to prepare a possible accession to the GSP+, the EU deployed a joint technical mission from the DG Trade and EU’s Delegation in Dushanbe on February 2019. This request can be resulted by the calculations according to which Tajikistan can save up to 1.8 million euros in fees from switching to GSP + per year by exporting goods to EU while in Standard GSP, save on duties is 350 thousand euros. Export of goods from Tajikistan to Europe in 2018 reached 40 million euros.
Uzbekistan is also negotiating with Brussels the question of switching to GSP+ regime in exchange for Uzbekistan’s commitment to effectively implement 27 international conventions. When Uzbekistan expressed interest in joining GSP+ regime for the first time in May 2018, the country has already ratified 25 of 27 conventions. The remained 2 conventions were ratified shortly: Tashkent have ratified the Stockholm Convention on Persistent Organic Pollutants in May 2019 (entered into force in September 2019) and joined to the Cartagena Protocol on Biosafety to the Convention on Biological Diversity in October 2019.
The interest of Uzbekistan is also justified by the desire of adjusting its trade balance with the EU: in 2018, the trade turnover with the EU countries amounted to 3.73 billion dollars, while imports – 3.4 billion dollars, almost ten times exceeded exports – 0.33 billion dollars. Now Uzbekistan uses the Standard GSP, according to which it can export 3,000 goods to the EU without customs duties and 3,200 items at reduced rates. If a country receives the GSP + status, it will be able to import more than 6,200 goods without duties. The EU itself actively supports the preparation of Uzbek application to receive this status and to assist Uzbek suppliers in entering the markets of EU countries.
However, the enthusiasm about the GSP+ falls when observing Kyrgyzstan’s first years as its beneficiary. Kyrgyz exports to the EU are not significant, representing only 5.4 per cent of total Kyrgyz exports (€151 million in 2017). So far, Kyrgyzstan is the country that has least benefitted among the 10 countries worldwide included in the GSP+ scheme, accounting for 0.04 per cent of the total exports of this group. In 2017, three-quarters of Kyrgyzstan’s exports to the EU came from a single commodity (gold), while just 3 % of the country’s total European exports benefited from GSP+, compared to 88 % in the case of Pakistan. The overall GSP+ preferences utilization for Kyrgyzstan in 2016 was 53%, leaving still ample room for improvement. Also, there is skepticism from Tajikistan confirming that the effect of GSP+ on rural poverty in Tajikistan will be limited. The GSP+ program does not exempt tariffs on wheat, for instance, or cotton – still Tajikistan’s primary cash crop. The products that would qualify for exemptions, such as dried fruits and nuts, come mainly from Tajikistan’s northern Sughd region, the country’s most prosperous, which already enjoys strong market access in bordering Uzbekistan and Kyrgyzstan.
These problems show that the desire for switching to GSP+ status with zero tariffs for 66% of goods and even acquiring it is not enough. Central Asian countries are trying to adopt and implement the international norms in order to get the preferential regime in trading with the EU, but the real challenge is to acknowledge the relevant business on these preferences and help them to adapt their products to the EU standards.
For the EU, which have a non-traditional, normative power in the international scene as its main feature, Central Asia is a region where this controversial power can be tested for efficiency. Locating in close proximity and in one historical and geopolitical space with the EU’s Eastern Partnership countries, the Central Asian states are observing and recognizing how these countries are benefiting from a deeper partnership with the EU in exchange to implementation of EU norms in various spheres. Central Asian elites are aware that Brussels is ready to offer more development aid and trade preferences if they promulgate more international norms promoted by the EU into their legislation. This scheme is the main purpose of new generation of partnership and cooperation agreements with the countries of the region – the EPCAs which are currently in different levels of development with individual countries.
The EU’s capacity to leverage with trade preferences in exchange to implementation of norms is becoming a real power in Central Asia because the countries of the region are showing their readiness which can be justified by the fatigue from the controversial power of the region’s main external players (geopolitical “caprice” of Russia and economic “overinfluence” of China). These trends are showing the changes in the logic of mutual disinterest which was predominant in the relations between the EU and Central Asia during the whole period of its existence.
As the Central Asian countries are trying to comply with EU/international norms to get the preferences, the level of benefiting from them remains very low. It is due to the fact that the main items of Central Asian export to the EU are raw materials (oil, gas, metals) and not the products with high added value, which are subject to preferences. This is because the main target beneficiaries – business are not sufficiently aware of the benefits coming from preferences and/or have no capacity to comply their products with the standards acceptable in EU. Both Central Asian countries and the EU should focus on awareness of relevant business about the preferences and capacity building of enterprises to match the EU standards. Promoting the establishment of intermediary organizations will be one of the most efficient solutions as they can solve at the same time both problems with awareness and capacity building.
This material has been prepared as part of the Giving Voice, Driving Change – from the Borderland to the Steppes Project project. The opinions expressed in the article do not reflect the position of the editorial board or donor.
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