THE ECONOMIC IMPACT OF UZBEKISTAN’S ACCESSION TO THE WTO

Abstract

Uzbekistan is expected to complete its accession to the World Trade Organization (WTO) in the near future, and the debate is shifting from whether to join to what membership will actually change in the economy. This article brings together the available quantitative estimates of the impact of accession and explains why they differ so widely: from a modest 0.4 percent increase in real GDP growth per year in a model that looks only at tariff cuts to an increase in GDP of about 17 percent in the World Bank’s broader assessment. The paper shows that Uzbekistan’s tariffs are already moderate (a simple average of 7.3 percent, with 44.5 percent of tariff lines duty-free), so the direct tariff effect is small. Most of the potential gains depend on what accompanies accession: the removal of non-tariff barriers, the opening of services markets, and the restructuring of state-owned companies. Using Kazakhstan’s commitments as a benchmark, the article discusses which sectors are likely to gain and which will face pressure, paying special attention to financial and insurance services. Recommendations are offered for managing the transition.