Uzbek goods can now be imported into the EU duty-free. Only developing countries with high environmental and social standards qualify for the special preferences.
The EU has confirmed Uzbekistan as the ninth recipient of the Special Incentive Scheme for Sustainable Development and Good Governance (GSP+) under the Generalised System of Preferences (GSP) for developing countries. From 10 April 2021, preferential duties rules will apply to goods originating in Uzbekistan.
Preferential tariff makes shopping in Uzbekistan attractive
In the textile sector, Uzbekistan has so far only benefited from the “normal” GSP benefit of a tariff reduction of 20 percent, i.e. a reduction of one fifth in the EU third country tariff rate. For finished goods, this usually meant: 9.6 instead of 12 percent tariff. Now the customs duty is completely eliminated, provided that important work steps in Uzbekistan are proven. Since Uzbekistan can work full-time, especially in the cotton sector, but now also in other areas, the fulfillment of this condition is not a problem for many products.
Homework done on social and environmental standards
But it is not only the cheaper tariff rate that makes Uzbekistan more attractive for procurement. Relatively high environmental and social standards also speak for the country, around which buyers made a cautious bow until a few years ago. Finally, there were continued allegations of child and forced labour during the cotton harvest. In recent years, Uzbekistan has made great efforts to eliminate child labor in cotton harvesting. In its monitoring of the cotton harvest by third parties in 2018 and 2019, the ILO confirmed the abolition of the systematic or systemic use of child labour in the cotton harvest.
By joining the GSP+ agreement, low- and low-middle-income countries commit to the effective implementation of the 27 core international conventions on human and labour rights, environmental and climate action and good governance. The GSP Regulation provides for continuous monitoring of the obligations of GSP+ beneficiaries. The recognition of Uzbekistan as a beneficiary of the GSP+ reflects the recognition of the reforms implemented by the government, in particular to improve the business climate, the judicial system, security services, working conditions and the accountability and efficiency of the administration. It also testifies to a consistently positive development in the socio-economic and professional field.
The ILO third observation of the 2019 cotton harvest concluded that both the systematic use of child labour and forced labour for adults has been eliminated. These findings were confirmed by the latest ILO report on the monitoring of the 2020 cotton harvest, published in January 2021
Traditionally known as one of the leading cotton exporters, Uzbekistan has long been more than a supplier of raw materials: in total, there are around 7,500 textile and clothing companies of various sizes.
Still little noticed by Europe’s textile industry, Uzbekistan is experiencing a small revolution. Production is modern, and child and forced labour in the cotton fields has disappeared.