Tajikistan is currently a beneficiary of the EU's Standard GSP but showed interest in joining the GSP+ regime in the near future. With a per capita income of $897 (2021), the World Bank considers the country a lower-middle income economy. In 2021, total EU imports from Tajikistan amounted to €162 million. Tajikistan makes considerable use of the preferences granted under the GSP. About 98% of eligible are imported using reduced tariffs.
The Standard GSP targets developing countries that are classified by the World Bank as lower or lower-middle income countries and which do not have equal preferential access to the EU market through any other arrangement. Standard GSP beneficiary countries can benefit from duty suspension for non-sensitive products as well as duty reductions for sensitive products across approximately 66% of all EU tariff lines.
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Tajikistan is a landlocked country in Central Asia, for which aluminium production is of high economic importance. The aluminium plant owned by the Tajik Aluminum Company is the largest in Central Asia and is also considered one of the largest aluminium plants in the world.
Tajikistan’s main export products are aluminium, raw cotton, and metallic ores (for example lead, zinc, antimony, and copper). Electricity from the country's hydropower plants is being exported particularly in the summer months.
Tajikistan mainly trades with regional trading partners. Russia is by far the most important partner and accounts for about 25.8% of Tajikistan’s overall trade. Kazakhstan and China together account for another 36.8%.
Agriculture (22%) and services are important pillars of Tajikistan's economy, these sectors employ about 90% of the population. Regarding the agricultural sector, the cultivation of cotton accounts for the largest share of Tajikistan's limited cultivation areas. Wheat, barley, and rice as well as the raising of livestock are additional agricultural activities. Processing the cotton and producing silk are pillars of the manufacturing sector, which is complemented by food processing and metal working industries. About 30% of the country's GDP is made of remittances, mostly sent by Tajiks working in Russia.
Tajikistan uses trade preferences granted under the GSP for about 30% of its total EU exports. The preference utilisation rate, which represents the ratio of preferential imports to GSP eligible imports, currently stands at 97.6%. This implies that the vast majority of eligible products are imported using reduced tariffs. Together with India, Tajikistan has the highest preference utilisation rate of all Standard GSP beneficiary countries.
Total trade with the EU summed up to € 401 million in 2021. With a share of 6,7% the EU is Tajikistan's fifth most important trading partner. About 8.4% of exports go to the European market.
About one third of Tajikistan's exports are eligible for GSP preferences
With 98%, Tajikistan has the highest preference utilisation rate among all beneficiaries of the Standard GSP.
Tajikistan’s preference utilisation rate showed quite some fluctuations until 2015 and remained relatively stable at about 90% thereafter. Base metals dominate overall EU imports from Tajikistan, however, only about 1% of these are eligible for duty reductions. Apparel and clothing account for about 94% of preferential imports. More than 99% of these imports use the preference granted under the GSP. Some product sections, including for instance machinery as well as fruits and vegetables could make better use of the duty reductions.
Preferential imports from Tajikistan are highly concentrated on apparel and clothing products. Textile articles and fruits and vegetables play only a minor role. Between 2016 and 2018 overall imports of cereal and grains, mineral products and pearls and stones increased substantially, however, none of these are eligible for preferential market access. Overall, imports from Tajikistan still leave room for further diversification.
As a beneficiary of the Standard GSP, Tajikistan is not obligated to ratify any conventions to be able to benefit from preferential access to the European market. Nonetheless, Tajikistan has ratified all 15 core international conventions on human and labour rights. This includes 7 UN human rights conventions and 8 ILO conventions on labour standards. Additionally, Tajikistan has ratified 8 conventions on environmental protection and 4 conventions on good governance aspects. Recently, Tajikistan has expressed interest in joining the EU's GSP+ scheme for sustainable development, which requires beneficiaries to ratify 27 international conventions on human and labour rights, environmental protection and good governance. With the current status of ratifications, Tajikistan already fulfills this admission criteria.
The EU supported Tajikistan with about € 231 million between 2014 and 2020, which was about half of the overall assistance Tajikistan received. The EU assistance focused predominantly on the areas health, education, and rural development.
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