BAKU, Azerbaijan, November 2. It is to appreciate that during Azerbaijan's chairmanship of the Economic Cooperation Organization (ECO) in 2023, the focus on trade facilitation has been fruitful, ECO Secretary General Ambassador Khusrav Noziri said in an exclusive interview with Trend.
He noted that the 9th meeting of the ECO Council of Heads of Customs Administration (CHCHA) was held after five years in Baku successfully and progress was made on following areas:
- ‘The ECO Agreement on Smuggling and Customs Offences Data Bank’, which is ready for operationalization by completing pending actions by the signatory parties.
- Setting up an Electronic Data Interchange (EDI) for which input is awaited from Member States (Azerbaijan still to share their existing EDI Work Flow model, as agreed in the meeting)
- Completing pending actions by the Member States to finalize the ‘ECO Agreement on Mutual Administrative Assistance in Customs Matters”
- Identification of Capacity Building needs in the areas of customs cooperation.
Noziri went on to add that the cooperation in taxation matters to harmonize policies and procedures at regional level can boost investor’s confidence in the region to avoid multiple taxes, predictability and uniformity of the tax laws etc.
"The Secretariat is pursuing some legal documents for developing agreements in this area and the 2nd Meeting of the Heads of Tax Administrations of the ECO Countries’ has been scheduled in 2023. In order to prepare the said meeting, a Preliminary Discussion Meeting to review/develop consensus on the drafts of three tax related cooperation agreement was hosted by the Secretariat in Virtual Format and it was chaired by Azerbaijan as Chair of the ECO for 2023. The Meeting was chaired in a very amicable and professional manner by the chair, and it resulted in substantial progress/ way forward," he explained.
Moreover, ECO Secretary General noted that so far two Meetings of the ‘Heads of SEZs/FTZs of the ECO Member States’ have been held in 2021, 1st Meeting in January 2021 and the 2nd Meeting in August 2021, hosted by the Islamic Republics of Iran and Afghanistan, respectively.
"The meetings agreed on setting up a network of selected SEZs/ FTZs to create Regional Value Chains. In this regard a study on preparation of the guidelines for the establishment of ECO Regional Network of SEZs in the ECO Member States' is being pursued by the Secretariat," he explained.
As for the establishment of ECO Research Center in Baku, Noziri pointed out that the proposal belongs to the Republic of Azerbaijan and this was reflected in the Baku Declaration of the 9th Summit of ECO (May 5, 2006, Baku).
"During subsequent gatherings of the Economic Cooperation Organization (ECO) this idea was further elaborated. The Charter of the ECO Research Centre was ready for signing by the Member States at the 14th Summit of Heads of State and Government of ECO countries held in March 2021 in virtual format. Currently three countries have signed the said Charter (Azerbaijan, Türkiye and Pakistan). The ECO Research Center will be located in Baku," he said.
Noziri noted that the main goal of the Centre is conduct of economic research and development of proposals and recommendations on relevant issues in sustainable socio-economic development that serve the interests of ECO member states as well as contribute to increased cooperation among these states.
"The existing ECO Economic Journal (EEJ) is expected to be part of the ECO Research Center. 26th meeting of the Ministers of Foreign Affairs of the ECO countries held in Tashkent on January 24, 2023 unequivocally supported the continuation of activities aimed at transforming the ECO Economic Journal borne by the Chief Editor’s office into an internationally recognized, widely disseminated and reputable publication and called on the Secretariat to accelerate the procedure for financing of the project proposal for the new concept of the Journal. Currently the ECO Secretariat in cooperation with the ECO Trade and Development Bank (ETDB) arranged allocation of a substantial amount for the transformation of the Journal. After several years of pause the Journal resumed its work, publishing its editions for the years 2022 and 2023," said ECO Secretary General.
Noziri noted that there are plans to place the results of the work done by the ECO Research Center at the website of the ECO Economic Journal along with publications by the Member States and ECO Secretariat.
"It is anticipated that the work of the ECO Research Center and ECO Economic Journal will be focused around the current priorities of the Member States such as transit and transport, energy, water, food security, diversification of economy, green economy, climate change and others," he said.
Talking about the progress in trade in ECO region, the secretary general pointed out that the share of the ECO in the world trade over the last five years has increased by 42.6 percent from $797.7 billion in 2018 to $1.138 trillion in 2022.
"On a yearly basis, it declined by 6.1 percent to $748.7 billion in 2019 due to exogenous factors like US-China trade tensions. In 2020 it further registered a decline by 5.7 percent to $706 billion due to the pandemic. However, in 2021 ECO’s share in world trade was recorded at $930 billion showing an Increase of 31.7 percent year-on-year. In 2022 it increased to $1.138 trillion, showing an increase of 22.3 percent. The ECO region's contribution to world trade, at around 4.4 percent, clearly falls below its commensurate potential for a region that is strategically located on important trade routes with a share of more than 6 percent of world population and abundance of endowments in natural and human resource," he explained.
Noziri noted that the ECO region has registered an increase in its Intra-Regional Trade during the last three years with following details:
The intra-regional trade was recorded at $56.86 billion in 2020 making only 8 percent of region’s world trade.
The intra-regional trade was recorded at $79.51 billion in 2021 making only 8.5 percent of region’s world trade.
The intra-regional trade was recorded at $106.5 billion in 2022 making only 9.3 percent of region’s world trade.
"Seen under the above context, the trade has been growing despite that fact that at present, there is no preferential trade arrangement operating at the regional level and all trade is taking place on bilateral arrangements or MFN arrangements under the WTO (among 6 WTO Member countries) in the ECO Region," the secretary general added.
On the front of removal of Non-Tariff Barriers (NTBs), Noziri said the ECO has initiated certain trade facilitation measures for reduction of Non-Tariff Costs in regional Trade and in this regard the following are the main areas of achievements/activities:
- The Secretariat has carried out study on the NTBS and shared the list of Non-Tariff Measures employed by the ECO Member States to remove them as soon as possible.
- The Secretariat has pursued Trade Facilitation Strategy for the region and drafted a trade facilitation agreement which is being considered by the Member States. In June 2023 the ‘5th ECO Customs Committee Meeting (ECCC)’ the 1st Working Group Meeting on Trade Facilitation Strategy/ Trade Facilitation Agreement” and in July 2023 the 9th Council of Heads of Customs Authorities (CHCA) Meeting (Baku, 20TH July 2023) have made considerable progress to finalize these documents for trade facilitation in the region.
- In 2022 the ‘Agreement on Protection and Promotion of Investment in the ECO’ was operatioanalized after ratification by four Member States. The said agreement will boost investor confidence in the regulatory framework in the region for FDI.
- The Articles of Association of the ECO Reinsurance Company (ERC) have been ratified by three parties i.e. Iran, Pakistan and Türkiye. The company will ensure safe trade in the region awaiting operationalization. The signing of new Members to the ERC could not be achieved.
- The ECO Trade and Development Bank (ETDB) has been established for financing priority projects, with six ECO Member States as parties to the bank. However, the membership of the bank could not be increased to the remaining four ECO Member States in 2023.
Furthermore, Khusrav Noziri noted that the Secretariat is pursuing projects in different areas and Trade & Investment has also been focused.
He said that the Secretariat has carried out studies on various trade topics and capacity building projects in various areas. These include:
- Capacity Building Projects with the help of UN bodies/ development partners. The ECO-UNIOD Joint Trade Capacity Building Project in Standardization, metallurgy and Statistics, with focus on regional quality policy and quality bodies, has been pursued and its three phases have been completed in 2017. The Project has been appreciated by the UNGA.
- ECO-ITC Project on creating a ECO Web Portal and Workshops on E-Trade.
- ECO Seminars on Trade Policy Reviews of the ECO Member States awaiting accession to WTO, conducted by the Secretariat and ECO Trade Development Bank.
- ECO carried out studies on ‘trading patterns in the ECO Region’.
- ECO carried out studies on ‘ECO Regional Payment System’ and shared its recommendations for their consideration to set up a robust trade related payment system that can account the needs of business community by facilitating trade and lower financial and time costs to regional trade, make it transparent, predictable and uniform.
Follow the author on X: @Lyaman_Zeyn