Trade and economic relations between the EU and Tajikistan are governed by the Partnership and Co-operation Agreement (PCA) signed in October 2004 and which came into force on 1 January 2010. The agreement provides for a non-preferential agreement under which the parties grant each other 'most-favoured nation' (MFN) treatment with respect to tariffs whilst quantitative restrictions are prohibited in bilateral trade. The agreement also envisages progressive regulatory approximation of the national legislation and practices to the most important EU trade-related standards, including technical regulations, sanitary and phytosanitary requirements, protection of intellectual property rights, and customs issues. This should lead to better practical access to the EU markets for goods originating in Tajikistan.
Pending the ratification of the PCA with Tajikistan, bilateral trade relations were provided for since May 2005 by an Interim Agreement on trade and trade-related matters incorporating the majority of the PCA's trade-related provisions.
Tajikistan is also a beneficiary of the EU's Generalised System of Preferences (GSP) , a bilateral trade arrangement through which the EU provides preferential access to its market to developing countries and territories, in the form of reduced tariffs for their goods when entering the EU market. Preferential imports from Tajikistan are heavily concentrated in one sector only (textiles) but also include industrial products.
EU-Tajikistan bilateral trade relations are limited but have been growing in recent years. In 2008, the EU was Tajikistan's third major trade partner, after Russia and China, with a 10.3% share in its total external trade. The main EU imports were aluminium, agricultural products, and textiles and clothing. The main EU exports were machinery, transport equipment, agricultural products and chemical products.
The EU is also an important partner in Tajikistan's economic development, with assistance projects at the regional and national level.
Foreign Direct Investment (FDI) from the EU is limited. A small number of joint-ventures are active in the country.
The European Union encourages and supports Tajikistan's accession to the WTO, as WTO accession can open Tajikistan's way to integrating into the world economy by accepting and applying international trade rules and norms, which are likely to result in more intensive trade and investment relations. Tajikistan applied to join the WTO in 2001. The Government seems to be committed to finalize the WTO accession negotiations soon, but there are still a lot of pending questions to be solved.