Remarks of Charlotte Adriaen during the Press Conference on the EU's GSP+ for Uzbekistan

23 November, 2023 

Dear Deputy Minister Abidov,

Excellences,

Ladies and gentlemen

ASSALOMU ALAYKUM, HONIMLAR VA JANOBLAR,

GSP+ main message

Let me first express my gratitude to the Ministry of Investment, Industry and Trade and in particular Deputy Minister Mr. Abidov for co-organising today’s press conference.

Two and a half years ago, we jointly organised a similar event, announcing that the European Union granted to Uzbekistan the status of GSP+ beneficiary.

At that time, we, together, shared great expectations that GSP+ will boost trade between the EU and Uzbekistan, and especially give an incentive to Uzbek exporters to look closer to the European market.

Today, as we gather again, I am very happy to see that these expectations turned into reality. GSP+ has become a real success story in the everyday closer partnership between the EU and Uzbekistan.

And not only has it become a success for the past two years, but I am sure that it will become an even greater one in the four years to come.

Please let me now highlight for you few elements that make GSP+ such a special tool in our partnership, and detail why I truly believe it is a success story.

GSP+ economic benefits

As I said, the General System of Preferences (GSP) is the EU main trade policy tool to support developing countries’ exports to the EU. When granted GSP+ status, a country can export more than 6,000 types of good tax free to the European market. So far, only eight countries in the world have access to such preferential conditions, and Uzbekistan was the latest to get access to it.

On the economic side, GSP+ has given a major impetus to the private sector in your country, with easier access to the 448-milion-strong European consumer base, more cooperation between European and Uzbek companies and significant savings at the borders.

The 2020-2022 GSP Report confirms that GSP+ continues to contribute to economic stability and sustainable development in Uzbekistan, even in times of uncertainty.

Let me just stress that GSP+ proved beneficial during the series of crises that affected the global economy, such as the Covid-19 pandemic and the effects of Russia’s unprovoked and unjustified military aggression against Ukraine. 

Since Uzbekistan acceded to GSP+ its exports to the EU have seen a historic boost. Between 2019 and 2022, the value of goods imported to the EU from Uzbekistan under GSP has more than quadrupled, reaching more than 450 million euros in 2022. (Almost one euro per European consumer). Uzbek export of GSP eligible goods was 93 million euros in 2019, it was – again – 450 million in 2022. That is what we can call a success, don’t you think?

In addition, with the elimination of the import tariffs, Uzbek exporters saved more than 28 million euros in 2022. This means 28 million euros that should have been paid in taxes to enter the EU market and that should have gone to the EU budget; you could keep to develop your companies and the private sector. It is the EU’s contribution to the development of the Uzbek private sector last year. And compared to 2019, this contribution grew more than ten-fold (from 2.5 million euros to almost 28 million euros in 2022).

It is also worth mentioning that while traditionally textiles and plastics were top GSP products three years ago, in 2022 they were overtaken by a newly emerged sector, pharmaceuticals and other chemical products. GSP has thus a positive impact for the diversification of Uzbek economy and industry.

I would like to highlight one more figure. The total GSP+ utilisation rate, which shows how much of the products eligible for GSP+ used the preferences. In 2022, it reached 93%. So the great majority of exporters concerned is well aware of the scheme. It could be 100%, and for that, we need to continue our joint efforts with the Ministry of Industry, but it is already a very positive result.

Let me present to you some areas of opportunities for Uzbekistan’s exporters to improve the use of the tariff-free access to the EU market under GSP+. As we anticipate growth in production of machinery, automotive, hi-tech goods, and medical equipment, the demand will increase for various electronic subcomponents and metal parts. In this way, your country can further build on its success and expand production of electronic goods and subcomponents thanks to lower operating costs.

Moreover, as the EU is shifting to a green economy, there is another sector of opportunity that could further boost exports from Uzbekistan to the EU, including supplies of metals and critical raw materials.

GSP+ international conventions

This leads me to my second point. On the political side, through GSP+ we accompany and support Uzbekistan’s strategy to reach international standards in the domain of human and labour rights, as well as the environment, climate, and good governance. In addition, GSP+ creates space for civil society and businesses to advocate for change.

Since 2016, your country has embarked on a path of ambitious reforms, transitioning to democracy and market economy. Uzbekistan has made clear progress with respect to the implementation of 27 international conventions related to GSP+.

The progress has generally been strongest regarding legislative adjustments and relevant policies but has varied with respect to enforcement and implementation.

The EU supports Uzbekistan legislative efforts, in particular acts on the rights of women and in action against gender-based violence, improvements in economic and social rights. We commend your engagement to eradicate child and forced labour as seen in the 2020 and 2021 ILO Third Party Monitoring of the cotton harvest. Moreover, the amendment of the Labour Code allowed for the major developments in adapting national legislation to international standards.

Nonetheless, some shortcomings remain for your country to implement in full its international commitments. We witness some discrepancy between the legal framework and the enforcement of the civil and political rights. Some efforts remain to be done to ensure for instance freedom of association, including for Trade Unions. Freedom of expression is still sometimes challenged.

These issues, highlighted in the GSP+ 2020-2022 report will have to be addressed to ensure Uzbekistan continues to comply with GSP+ requirements. And we, of course, will continue to support you in your reform efforts. 

GSP+ extension

Indeed, I am very proud to announce that the European Parliament and the European Council decided yesterday to extend GSP+ until 31 December 2027, under the exact same conditions.

What does it means in practice?

It means first more predictability for the private sector and for Uzbek exporters and producers. All Uzbek exporters already working with Europe, selling there their textiles or pharmaceutical products will be able to continue benefitting from the scheme, meaning to export free of tax to Europe.

I hope that this predictability will also encourage new business people to turn their eyes towards Europe, find partners and benefit from the exemption of import duties.

This means decisive support for the development of the private sector of your country for the four years to come, and hopefully even further.

To me, this is also an additional sign of EU continuous commitment to support Uzbekistan reform process.

While the EU is extending the current GSP scheme for next four years, the legislative procedure for the adoption of a new GSP regulation is ongoing in parallel. We do not have yet the details of this new scheme, but the intention is to pursue with the same philosophy of supporting a number of developing countries in exporting to the European market, while they take the endeavour to implement internal reforms.

Indeed, as we rollover the GSP+ for the next four years, we will also have more time to work together on international standards in the domain of human rights. The EU will stay dedicated to monitor the progress on the implementation of 27 UN conventions. The next EU monitoring mission in Uzbekistan will most probably take place next year.

Moreover, two days ago, on Tuesday 21st of November, the European Commission published a Report on the Generalised Scheme of Preferences (GSP) for the period 2020-2022. This report takes stock of all the benefits provided by GSP so far, while also highlighting the progress related to the implementation of the 27 UN conventions.

Let me conclude by saying that the EU remains committed to engage closely with Uzbekistan and we are hopeful that GSP+ will continue to deliver on its objective of promoting sustainable development through trade.

Thank you for your attention, and thank you again dear Deputy Minister Abidov for all your efforts so that we can today mark this success story together.

Katta rahmat.