CAREC launching trade, investment facilitation talks with Azerbaijan

The Central Asia Regional Economic Cooperation (CAREC) program plans to launch negotiations on a CAREC Trade and Investment Facilitation (CARTIF) Partnership in early 2026. This agreement aims to establish a legal framework for the movement of goods, services, and capital across the borders of countries in the region, including Azerbaijan, Report informs referring to an article on the Asian Development Bank (ADB) website.

CARTIF aims to establish an inclusive, transparent, and flexible regional economic partnership to facilitate cross-border trade and investment.

Between 2015 and 2024, intraregional merchandise exports more than doubled in absolute terms. However, intraregional trade remained roughly unchanged at around 6% as a share of CAREC countries' total merchandise trade with the world.

Trends in cross-border investment flows have varied across the countries. Between 2015 and 2024, net foreign direct investment inflows increased in Mongolia, Pakistan, and Uzbekistan but declined in most other CAREC countries.

Complementary evidence from the CAREC study on transit trade facilitation in Azerbaijan, Kazakhstan, and Uzbekistan, and from the ADB study on trade and transport facilitation along CAREC corridors, highlights persistent legal, regulatory, institutional, and infrastructure-related barriers that impede transit trade in the three countries and constrain international shipments along the corridors.

Together, these findings point to the need for increased efforts by CAREC countries to reduce remaining barriers to cross-border trade and investment. The empirical assessment of different configurations of a CAREC free trade agreement further indicates that enhanced facilitation of cross-border trade and investment can generate considerable economic gains for CAREC countries, particularly for landlocked economies.

CARTIF is intended to serve as a legal framework for closer cooperation among CAREC countries in cross-border trade and investment facilitation. It covers a broad range of policy areas related to the movement of goods, services, and capital across borders.

CARTIF has both WTO-plus features-enhanced collaboration in areas already covered by the WTO agreements, such as trade facilitation, sanitary and phytosanitary measures, technical barriers to trade, and trade in services-and WTO-extra elements that involve topics not comprehensively covered under the current WTO agreements, such as investment facilitation, digital trade, and supply chain connectivity. By bringing this broad agenda into a single framework, CARTIF reflects the growing nexus between cross-border trade and investment and the need for coherent, mutually reinforcing reforms.

A key feature of CARTIF is its flexible, modular design. Under the draft text, a binding Framework Agreement, together with a set of Initial Protocols, is to form a single undertaking that applies to all participating countries once in force. Additional protocols may be negotiated later by interested parties, allowing cooperation to deepen gradually.

CARTIF is to develop an institutional mechanism, which will be agreed by the CAREC governments. The preliminary proposed structure includes a Ministerial Council, a Senior Officials Council, a Regional Trade and Investment Committee, and a Secretariat. These bodies are intended to support the implementation, administration, facilitation, monitoring and evaluation, and further development of CARTIF.

CARTIF is also to have a transparent, rule-based dispute settlement mechanism, emphasizing consultation and mutual agreement, with additional procedures available if issues remain unresolved. Decisions issued under this mechanism are to be binding on the parties concerned.

On November 20, 2025, the 24th CAREC Ministerial Conference adopted the Bishkek Declaration, formally launching the CARTIF negotiation process.