Uzbekistan to participate in drafting of agreement on free trade zone of services within the CIS

Tashkent, Uzbekistan (UzDaily.com) -- Uzbekistan will participate in the work on development of the Agreement on free trade zone of services between the countries of the Commonwealth of Independent States (CIS), the press-service of Ministry for Foreign Trade.

In this regard, an interdepartmental working group headed by the Minister of Foreign Trade of the Republic of Uzbekistan, Jamshid Khodjaev, was established in Uzbekistan.

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.

The draft Agreement includes providing free access to CIS countries for organizations, companies and institutions of the CIS member states in accordance with the 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 States parties to the Free Trade Area Treaty of 18 October 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 one CIS countries in the territory of other CIS countries, and will ensure the protection of these investments," - comments the Minister of 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 per cent. 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 the year 2018 - 2.4 billion dollars (an increase of 2.4 times).

The study of the draft Agreement has shown that there remain several important points that require more detailed consideration in accordance with 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 departments and companies.

In general, the document being worked out will facilitate the organization of two trade zones within the CIS: trade in goods and trade in services, which will expand the capabilities of the Commonwealth member countries in free trade.