Reports · Oct 17, 2026
CA-EU Forum Discusses Trade Diversification from Russia; EU Extends Tariff Preferences
The first day of the Central Asia + EU Ministerial Forum in Samarkand featured extensive discussions on trade diversification from Russia, following a 28 percent fall in Central Asian goods trade with Russia since 2022 triggered by Western sanctions risks and supply chain disruptions. The EU announced an extension and enhancement of its Generalised System of Preferences Plus arrangements for all five Central Asian states, removing tariffs on approximately 6,200 product categories. Central Asian delegations raised concerns about sanctions compliance pressure and third-party risk in their Russian trade exposure.
Contents
Key takeaways
- EU extends GSP+ to cover 6,200 product categories across all five Central Asian states
- Kazakhstan, Kyrgyzstan, Uzbekistan account for 85 percent of current EU-Central Asia trade
- Central Asian trade with Russia fell 28 percent since 2022 due to sanctions and supply disruption
- EU offers EUR 200 million for standards upgrading to help products meet EU certification requirements
- Uzbekistan commits to WTO agricultural subsidy notification transparency as condition of enhanced GSP+
The Tariff Preference Extension and Its Coverage
EU Trade Commissioner Maros Šefčovič announced on October 17 that the European Commission will propose to the Council and Parliament a regulation extending the Generalised System of Preferences Plus (GSP+) to all five Central Asian states with an expanded product coverage of approximately 6,200 tariff lines, up from the current 4,900. The additional 1,300 tariff lines include processed agricultural and food products, textiles, leather goods, and certain engineering products — categories where Central Asian production is currently competitive but faces tariff barriers that disadvantage them against other GSP+ beneficiaries. The enhancement is conditional on the beneficiary states maintaining the 27 UN conventions on human rights, labour rights, and environmental standards that GSP+ compliance requires.
The trade significance of the extension varies considerably across the five countries. Kazakhstan, which has a large oil and gas export surplus with the EU (oil already enters duty-free under GATT most-favoured-nation terms), has less marginal benefit from tariff extension than it does from logistics and standards improvement. Uzbekistan and Kyrgyzstan, which export textiles, dried fruits, and light manufactured goods to EU markets, stand to gain most directly from the tariff reduction on their primary export categories. Turkmenistan, whose exports to the EU are dominated by energy products, and Tajikistan, with a smaller but growing textile sector, benefit less immediately.
Trade Diversification Challenges and Sanctions Compliance
The Forum's working session on trade diversification addressed a challenge that has become acute since 2022: Central Asian companies that previously traded with Russia as a primary market or transit route now face the dual risk of reduced Russian demand and Western sanctions-compliance scrutiny of their Russian commercial relationships. Several Kazakh and Uzbek companies have been placed on US Treasury secondary sanctions watch lists for alleged facilitation of Russian sanctions evasion, creating reputational and correspondent banking risks for the broader private sector. Central Asian foreign ministers raised these concerns directly with EU counterparts, seeking clarity on how companies that previously had legitimate Russian commercial relationships can demonstrate good faith compliance without disrupting their entire business models.
The EU's response, delivered by the Commission's sanctions enforcement team in a closed session, committed to additional guidance documents on de-risking for Central Asian financial institutions and a bilateral compliance dialogue mechanism that allows regulators to share information before enforcement actions are taken. The EUR 200 million standards upgrading fund, announced as part of the GSP+ extension package, addresses a related barrier: even with tariff preferences, Central Asian exporters often cannot access EU markets because their products do not meet EU technical regulations and sanitary and phytosanitary standards. The fund will finance testing laboratories, certification capacity, and regulatory advisory services in each of the five countries, with Kazakhstan and Uzbekistan as priority recipients based on export volume.
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