CESD Research Paper: Feasibility study on the Deep and Comprehensive Free Trade Area (DCFTA) between Azerbaijan and the European Union

CESD Research Paper: Feasibility study on the Deep and Comprehensive Free Trade Area (DCFTA) between Azerbaijan and the European Union

The trade relations between Azerbaijan and the European Union are a substantial part of enhancing economic and political relations among both parties. Recent years have been characterized by an expansion of the trade volume between two parties; the EU turned out to be Azerbaijan’s biggest trade partner, in terms of both imports and exports. Moreover, trade in services and foreign direct investment relations were also on rise. On the other hand, Azerbaijan is one of the main energy suppliers of the European Union among European Neighborhood countries and is a key partner to guarantee energy security.

The political ties of Azerbaijan with other commercial partners are diminishing the full expansion of its trade with the EU, for instance the Euro-Asian Union. Besides of political ties, also there are several barriers for the development of trade between Azerbaijan and the EU, for example, the tariff and non-tariff barriers. The latest ones refer to sanitary measures, production process, packaging, labor regulations, quotas, etc.

Additionally, this research paper analyzes the potential benefits of joining the Deep and Comprehensive Free Trade Area (DCFTA) of the EU, showing specific data with the support of the Computable General Equilibrium (CGE) model.

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