Uzbekistan will participate in drafting the Agreement on the Free Trade Zone of Services within the CIS
Uzbekistan will participate in activities of the working group on development of the Agreement on free trade zone of services between the countries of the Commonwealth of Independent States (CIS). In this regard, an interdepartmental working group headed by the Minister for Foreign Trade of the Republic of Uzbekistan Jamshid Khodjaev was established in the country. The working group includes the Ministries of Finance, Economy, Justice, Foreign Affairs, Public Education, Higher and Secondary Special Education of the Republic of Uzbekistan, the State Committee for Investments, the Central Bank, the Agency of Automobile Transport, Uzbekistan Railways and Uzbekistan Airways.
As reported by the Press Service of the Ministry for Foreign Trade, the draft Agreement envisages provision of free access for organizations, companies and institutions of the CIS member states to their service markets in accordance with conditions specified in the Agreement.
The document covers all sectors of services, including financial, banking, transportation, education, insurance and other services, except for services provided in public procurement. In addition, the draft Agreement determines the terms of creation, the procedure for opening branches (representative offices) of legal entities and their investment activities.
It should be noted that work on the draft Agreement has been ongoing since 2012, and the CIS Executive Committee has formed a working group consisting of representatives of the member-states to the Free Trade Zone Agreement of October 18, 2011 (Russia, Belarus, Kazakhstan, Kyrgyzstan, Moldova, Tajikistan and Armenia).
“The Agreement on the free trade zone of services within the CIS facilitates not only the free exchange of labor resources, but also creates favorable conditions for investment by citizens of some CIS countries in the territory of other CIS countries, and will ensure protection of these investments”, – comments the Minister for Foreign Trade of Uzbekistan Jamshid Khodjaev.
The importance of the service sector is very high. Share of service sector in the GDP of CIS states range from 50 to 65 percent. It is also important that trade in services is much less exposed to external influences than trade in goods. For example, during the crisis, trade in goods falls, while trade in services only slows down its growth.
According to the State Statistics Committee of Uzbekistan, services account for about a quarter of the country’s GDP. In 2017, exports of services amounted to 3.5 billion dollars, while for the first half of 2018 – 2.4 billion dollars. At the same time, in 2017, non-residents of the Republic of Uzbekistan rendered services worth 978.2 thousand dollars, and in the first half of 2018 – 2.4 billion dollars (an increase of 2.4 times).
The study of the draft Agreement has shown that there are several important issues that require more detailed consideration in accordance with the national legislation.
In particular, the establishment and activities of legal entities in the areas of investment, financial services, education, insurance market, transport services and logistics require a comprehensive review by industry agencies and companies.
In general, the document will facilitate the organization of two trade zones in the CIS: trade in goods and trade in services, which will expand capabilities of the Commonwealth member countries in free trade.