In a sign of its expanding international influence, Kazakhstan late last year entered into an historic agreement with the European Union, marking the first time a Central Asian nation has formally aligned economically and strategically with Europe to such an extent.
The Enhanced Partnership and Cooperation Agreement – signed December 21 during a ceremony in the Kazakh capital of Astana – covers 29 areas of cooperation, ranging from politics to investment, trade, infrastructure, innovation, culture, sports, tourism, law enforcement and more. The large parts of the agreement provisionally entered into effect May 1, with its full entry into force dependent on the ratifications by national parliaments of the 28 EU member states.
Astana, capital of Kazakhstan where Kazakhstan and the EU signed their Enhanced Partnership and Cooperation Agreement on Dec. 21.
“Kazakhstan has become the first of our Central Asian partners to conclude a new generation agreement with the EU,” EU High Representative Federica Mogherini said in announcing the deal. “The new agreement will give a significant boost to economic and political ties between the EU and Kazakhstan.”
Leaders in Astana and Brussels, where the EU is headquartered, certainly hope so. Kazakh Foreign Minister Erlan Idrissov noted during the signing ceremony that virtually every European ambassador to Kazakhstan was present in the room.
“I think that signifies the strength of the European Union’s commitment not only to the signature, but also to the follow-up of the agreement,” Idrissov said. “The fact that Kazakhstan is the first of our Central Asian partners having this new generation agreement with the European Union is… leading the way for possible developments in the future in the region.”
International observers told EdgeKz that the agreement between the EU
and Kazakhstan strengthens Kazakhstan’s already significant position in Central Asia and reflects the country’s sophisticated, multi-vectored foreign policy strategy.
“Obviously, the policy of Astana is to make sure that the country’s foreign policy is not limited to one or a few options, but to have multiple options,” said Alex Vatanka, a senior fellow and expert on Central Asia at the Middle East Institute, a leading foreign policy think tank in Washington, D.C. “You’ve got the Russian track and the Chinese track, which are both unavoidable – and at at the same time increasingly attractive for the Kazakhs.”
“And then you have the other two tracks – the European Union and the South, or the Islamic world,” Vatanka added. “What you see here [with the new agreement] is a continuation of that policy. It makes a lot of sense, both as a trading partner, but also increasingly as the Kazakhs place themselves as a bridge between East Asia and the European Union market – two of the biggest economic blocs on a global scale. Kazakhstan is right in the middle; the European market is there for them.”
The European Union Council, in a statement released to coincide with the signing of the agreement, has called for strengthening trade and energy links between the EU and Central Asian countries and reinforcing cooperation on security and stability, including sustainable management of natural resources. The statement also stressed the importance of Kazakhstan’s continued democratic development.
“It emphasizes the fundamental importance of democratization, respect for human rights and the rule of law, and socio-economic development, all of which are essential elements of the strategy,” the statement said.
In many respects, the formal agreement is the natural outgrowth of a long-steady relationship between Kazakhstan and the EU. After all, bilateral trade and economic relations between them have been growing steadily since 2002.The EU has progressively become Kazakhstan’s leading trade partner (eclipsing even neighboring Russia) with an almost 40% share in its total external trade. Kazakhstan’s exports to the EU are heavily dominated by oil and gas, which account for more than 80 percent of the country’s total exports.
Exports from the EU are dominated by machinery and transport equipment, as well as products of the manufacturing and chemicals sectors. As of today, more than five thousand joint ventures are underway in Kazakhstan. Imports from Kazakhstan substantially exceed EU exports to Kazakhstan and Kazakhstan’s importance as an oil and gas supplier to the EU also continues to grow, despite sagging prices.
Vatanka said the agreement is an outgrowth of Kazakhstan’s ambitious diplomatic agenda.
“The Kazakhs want to be a country that has good relations across the board, and they would like to use their good offices and good reputation – which they have in many capitals – to mediate international disputes,” Vatanka said. “President Nazarbayev carried that message when he came to Washington recently.”
Paul Stronski, an analyst with the Carnegie Endowment for International Peace, maintains that the European Union still has some work to do in determining the best way for its member countries to benefit from the agreement.
“The EU still lacks a clear vision for its relationship with Kazakhstan, despite the fact that the EU is Kazakhstan’s largest source of foreign direct investment,” Stronski wrote on the Carnegie website in April.
But Stronski also noted that Brussels indicated in July 2015 that it “was reviewing its Central Asia strategy,” and that could lead to a more intensive focus on Central Asia and Kazakhstan.
In fact, such a review did take place towards the end of 2015, and the EU adopted a revised Central Asia strategy emphasizing
more nuanced approaches to interacting with the five regional countries. The EU will also double the amount it spends on the implementation of this strategy, to one billion euros, over the next five years. Kazakhstan, along with four other countries in Central Asia, were invitied to contribute to the review of the strategy, advocating for more country-specific approaches.
Kazakhstan and the EU first established diplomatic relations in 1992, after which Kazakhstan opened a liaison office in Brussels and the European Commission set up a delegation in Almaty. Kazakhstan and the EU signed a Partnership and Cooperation Agreement in 1995, shortly after the EU entered into a similar agreement with Russia. According to the Central Asia Caucusus Institute in Washington, in 2013, only Russia, Moldova, and Azerbaijan had a higher share of EU trade in their total foreign trade among the non-Baltic ex-Soviet countries. It is noteworthy that – with the exception of Kazakhstan, Moldova, and Azerbaijan – the EU’s share in total trade among all members of this group of 12 countries declined from 2005 to 2013. In other words, not onl
y is Kazakhstan one of the most economically EU-oriented but together with Moldova and Azerbaijan it is becoming increasingly so.
As mentioned earlier, the EU-Kazakh agreement is wide-ranging, incorporating many different aspects of governance and public policy. Kairat Umarov, Kazakhstan’s ambassador to Washington told EdgeKz that the deal goes well beyond economics. He said counter-terrorism and the fight against international crime are also top priorities.
“Astana and Brussels recognize that in the past decade new challenges and threats occurred and successful resistance can only be achieved by joining our efforts,” Umarov said. “Such challenges – like the fight against terrorism, international crime and illicit trade – as well as promoting international security and stability are priority issues on which the EU and Kazakhstan will strengthen political bilateral cooperation.”
Umarov also said the agreement will give Kazakhstan a chance to showcase its upcoming international specialized EXPO 2017, whose theme is “Future Energy.” The EXPO 2017 Astana is expected to attract more than 5 million visits from more than 100 countries. The expo will showcase energy solutions and innovations to secure a sustainable energy future for all the nations.
“For companies (in Europe or elsewhere) that do not have experience working in Kazakhstan, the EXPO 2017 is a low-risk opportunity to ‘test’ the Kazakh market,” Umarov said. “We are confident that American companies will enjoy doing business with Kazakhstan and take advantage of numerous opportunities for beneficial partnerships. Through Kazakhstan, they will have an access to a wider market of Eurasia and neighboring regions.”