European Commission Directorate-General for Trade

Central Asia

Central Asia is of fundamental geostrategic importance to the EU. The region represents for the EU a bridge to China as well as to Afghanistan and the Middle East. The region is a source of significant energy imports for the EU. All five Central Asian countries are beneficiaries of the EU's Generalised System of Preferences (GSP).

Over the last five years EU trade with Central Asia has grown and the EU is now the main trading partner of the region, accounting for almost a third of its overall external trade (29.1% in 2007). Nevertheless, total turnover of the EU's trade with Central Asia remains low and the five countries are insignificant trade partners for the EU. Even Kazakhstan, the EU's largest trade partner in Central Asia by far, -accounting for almost 85% of the EU's overall trade with the region - represents only 0.7% of the EU's overall trade with the world.

Central Asian exports to the EU remain concentrated in a few commodities, especially crude oil, gas, metals and cotton fibre. EU exports are dominated by machinery and transport equipment. Such products accounted for more than half of EU exports in the region in 2007.

The EU central Asia strategy

The growing importance of Central Asia for the EU has been reflected in the new EU Central Asia Strategy adopted by the European Council on 22 June 2007. The Strategy aims at enhancing the EU's relations with the region as a whole and each of its particular countries. It sets priorities for cooperation in six main areas: democracy and human rights; education; trade and investment; energy and transport; the environment and combating common threats and challenges.

In the area of trade and investment the Strategy focuses on the accession of the entire Central Asian region to the World Trade Organisation (WTO). It also aims to help Central Asian countries take greater advantage of the EU's Generalised System of Preferences (GSP).

The first Progress Report on the Strategy's implementation in 2008 recognised good progress made and established priorities for the future.

Bilateral agreements with individual Central Asian countries

The EU's bilateral trade relations with Kazakhstan, Kyrgyzstan and Uzbekistan are provided for by a Partnership and Cooperation Agreement (PCA) with each country. In the area of trade the PCAs are non-preferential agreements, the parties grant each other most-favoured nation (MFN) treatment with respect to tariffs and quantitative restrictions are prohibited in bilateral trade. The PCAs envisage progressive regulatory approximation of the partner countries' legislation and practises to the most important EU trade-related standards including technical regulations, sanitary and phytosanitary requirements, intellectual property rights' protection and customs issues. This should lead to better practical access to the EU markets for goods originating in those countries.

Pending the ratification of the PCA with Tajikistan signed in October 2004 the EU-Tajikistan bilateral trade relations are provided for by an Interim Agreement on trade and trade-related matters incorporating the majority of the PCA's trade-related provisions.

As the PCA and the related Interim Agreement concluded with Turkmenistan in 1998 have never been ratified by the EU due to the political situation in Turkmenistan, the EU's bilateral trade relations with this country remain based on the Trade and Cooperation Agreement signed with the Soviet Union in 1989 and subsequently endorsed by Turkmenistan.

WTO membership

WTO membership of all the Central Asian countries is a pre-condition for closer trading and investment relations with the EU. It is also the best way for the countries to strengthen their economies and achieve a deeper integration with the global trading system. Kyrgyzstan acceded to the WTO in 1998. Turkmenistan has not applied for WTO membership. Tajikistan and Uzbekistan applied in 2001 and 1994 respectively, but their accession negotiations are still at the initial stages. Kazakhstan's accession process is significantly more advanced and the EU and Kazakhstan are making efforts to conclude a bilateral agreement on accession in the near future.