Regional Integration and Cross-Regional Economic Partnership in Central Asia: Strategic Choices for Trade Policy Online First

Abstract

This study analyzes the trade structures and integration strategies of Central Asian (CA) economies, focusing on both intra-regional cooperation and extra-regional partnerships. Drawing on trade data, trade cost analysis, and computable general equilibrium (CGE) simulations using the GTAP model, the study finds persistent structural imbalances and high dependence on resource-based exports. Simulation results show that trade facilitation yields stronger and more sustainable gains than tariff liberalization, both within CA and with external partners such as the Caucasus, Türkiye, Russia, China, ASEAN, the GCC, Europe, and South Asia. The largest benefits are concentrated in value-added sectors including light manufacturing, processed food, and textiles. Moreover, the most transformative outcomes arise when facilitation is paired with labour and capital mobility, enabling efficient resource reallocation and significant welfare gains. The study concludes that CA’s optimal strategy is a sequenced approach: first strengthening intra-regional facilitation and factor mobility, then pursuing carefully managed external partnerships.

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