Uzbekistan Quality Job Creation as a Cornerstone for Sustainable Economic Growth

Trade and Foreign Direct Investment in Uzbekistan
181
The Economic Cooperation Organization involves all Central Asian economies, 
including Uzbekistan, however its preferential trade agreements do not apply 
to all members. For example, the organization’s trade cooperation agreement 
has been ratified only by Kazakhstan, the Kyrgyz Republic, and Tajikistan. 
The Eurasian Economic Union, founded in 2015, was formed to establish 
a single market, involving a lower number of participant countries than the 
CIS. However, the treaty has recently received substantial criticism due to its 
inability to stimulate integration and economic modernization (Ferrari 2016). 
Table 5.1: Trade and Economic Organization Memberships, Uzbekistan
Organization/Agreement
Membership
Notes
World Trade Organization
No
Observer country.
Commonwealth of Independent 
States
Yes
Joined in 1992, ratified in 1994.
Eurasian Economic Union
No
Founded in 2015. Current members are 
Armenia, Belarus, Kazakhstan, the Kyrgyz 
Republic, and the Russian Federation.
Economic Cooperation Organization
Yes
Preferential trade agreements do not 
involve Uzbekistan.
Partnership and Cooperation 
Agreement
Yes
Bilateral trade agreements with the 
European Union.
Source: Batsaikhan and Dabrowski (2017). 
Recently the role of trade and investment between Uzbekistan and the 
European Union (EU) has been increasing, as shown in the next section. This 
has been triggered by the signing of the bilateral Partnership and Cooperation 
Agreement in 1996, which offered the Generalized System of Preferences to 
Uzbekistan. Other Central Asian economies, including the Kyrgyz Republic 
and Tajikistan also benefit from bilateral agreements with the EU. Uzbekistan 
benefits less than others under the free trade agreements with the EU 
because it is not a WTO member and has not completed its market reforms. 
The incomplete reforms include restructuring state-owned enterprises and 
privatization; increasing banking competition and interest rate liberalization; 
eliminating barriers to entry and exit; and reducing subsidies for food, energy, 
and water.
One form of integration for Uzbekistan is through the gas pipelines from 
Turkmenistan to the PRC and the Russian Federation via Uzbekistan and 
Kazakhstan. The World Energy Council ranks Uzbekistan among the top 
natural gas producers in the world—at 14th largest in 2014. The construction 

---