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Trade Facilitation
In wrestling with the reality that independence created, the Central Asian governments have moved, though unevenly, through privatization and the introduction of market-based incentives to foster trade liberalization. Prices have been freed on most goods and services. Production, trade and demand are recovering, though complaints on the dearth of goods have been replaced with cries against the high cost of items. Strides also are being made to establish the legal and regulatory framework necessary for the smooth functioning of market-based economies. The same is true in Xinjiang, where, unlike the Central Asian Republics, there has been economic growth in the past decade and structural reform has been solidly underway since the 1980s. Opportunities for Intra-regional Trade
Though regional trade has clearly developed in the decade of independence for Central Asia, its growth has been uneven at best. If this experience does not improve, there will be no basis for the region to truly grow and prosper. The potential for expanding intra-regional trade in products ranging from natural gas to shoes, from melons to electricity, remains considerable. Intra-regional trade benefits all: the buying country meets its demand for consumption/production without having to ship in goods from great distance; the selling country gains without incurring large transport costs and by enlarging the scale of its production, which drives down costs further. Indeed, the trade between Xinjiang and the Central Asian republics shows just this pattern with skins and hides, steel, and cotton moving east and Chinese consumer goods moving west. Energy is another obvious candidate for expanded trade. Expanded trade of one country's energy resources for that of its neighbors would benefit all. 
Barriers to TradeDespite the common interest toward increasing trade, all the countries in the region have trade-restricting policies and practices. Country by country, there are the barriers of tariffs, public policies, procedures and regulations, and weak financial systems. Tariff constraints to trade may be relatively minimal. But in some cases the Central Asian governments impose export taxes on goods shipped from one country to the next, resulting in a double taxation that discourages exports and depresses trade volumes. In 1999, Kazakhstan also temporarily imposed a 200 percent tariff on selected goods from the Kyrgyz Republic and Uzbekistan. This measure was a response to the Russian financial crisis and the sharply devalued ruble that threatened to inundate the region with suddenly cheap Russian goods. The episode passed without major disruption to ongoing trade but renewed the sense of fragility in regional relations. Policy-related constraints to trade include import quotas, export licensing requirements and transport restrictions. The use of import quotas by the PRC, for example, limits trade between Xinjiang and the Central Asian republics. In all countries, there remains a tendency to view trade as a zero-sum game in which someone wins and someone looses. This misconception supports laws and regulations encouraging exports and discouraging imports-a situation that cannot help but discourage trade in general. Procedural and operational barriers to trade include a variety of impediments. Cumbersome, arbitrary and often corrupt bureaucracies throughout the region administer regulations that are archaic and frequently conflicting. Regulations change often, usually without notice. There are slow, difficult border procedures, multiple cargo inspections within a single country and prohibitions that prevent vehicles from transporting goods between countries. Increasingly visa procedures limit travel and private trading. Other barriers to trade include transit fees and the costs of dealing with corrupt border officials and local police. Trade is also restricted by such practices as requiring importers to register contracts and currency conversion restrictions. In no country is there a healthy financial system that provides modern services to facilitate trade. Indeed, much trade is supported by inefficient cash transfers or barter. Trade Exports
ADB is currently undertaking Regional Trade and Trade Facilitation Review (TTFR) Country Studies. The first of the series of country studies is Uzbekistan: Trade and Trade Facilitation Review. The Study aims to:
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