30 years of cooperation between EU and Kazakhstan: what stands ahead
Diplomatic relations between Kazakhstan and the EU were established on February 2, 1993. In November 1994, the Delegation of the EU to Kazakhstan began its work in Almaty before relocation to Astana in 2007. Kazakhstan's vast energy resources, strategic geographical location, and ambition to become a regional leader have made it an important partner for the EU.
The relations were also strengthened by the high-level bilateral visits. President Kassym-Jomart Tokayev visited Brussels in November 2021, where he met with top European diplomats, including the President of the European Commission Ursula von der Leyen. During the visit, Tokayev emphasized Kazakhstan’s readiness to create all the necessary conditions and provide tailor-made toolkits for European investors interested in entering Kazakhstan’s market.
2022 was eventful for EU-Kazakhstan relations. Tokayev met again with Ursula von der Leyen and the President of the European Council Charles Michel, on the sidelines of the United Nations General Assembly in New York in September 2022.
One month later, Michel paid an official visit to Kazakhstan, discussing bilateral relations, including connectivity, economic ties, the green agenda and human rights and the situation in Afghanistan. The two leaders later participated in the first meeting of the heads of the Central Asian states, a milestone in the Astana-Brussels relations.
The two leaders also agreed on the full implementation of the Enhanced Partnership and Cooperation Agreement (EPCA) between Kazakhstan and the EU, the EU Strategy on Central Asia, as well as the new EU initiatives for Central Asia on connectivity and other sectors.
In November 2022, EU High Representative/Vice-President Josep Borrell visited Astana, reaffirming the EU’s strong commitment to advancing relations with Kazakhstan and the region.
Historic high trade between Kazakhstan and EU
The EU is Kazakhstan's main trade and investment partner, accounting for more than 30 percent of Kazakhstan's foreign trade and foreign investments.
In 2022, bilateral trade hit a historical record. According to the Kazakh Foreign Ministry, trade turnover trade turnover for 2022 was $39.9 billion, 27.6% higher than in 2021. Exports amounted to $32.3 billion and imports - $7.6 billion.
The main commodities exported from Kazakhstan to the EU are crude oil, petroleum products, uranium, hydrogen, inert gases and other non-metals, ferroalloys, flax seeds, titanium and titanium products, unbleached cotton fiber, copper and copper cathodes, and natural gas.
Over the last 30 years, Kazakhstan has attracted more than $170 billion in investment from the EU.
The inflow of foreign direct investment from the EU to Kazakhstan was $12.5 billion in 2022, according to the data from the Kazakh Foreign Ministry. The Netherlands, Belgium, France, Germany, Cyprus, Italy and Luxembourg accounted for the majority of FDI from EU countries.
More than 3,000 companies with European capital operate in various economic sectors, including global giants such as Shell, Eni, Total, Amazonen-Werke, Air Liquide, Alstom and Carlsberg.
«Kazakhstan is a crucial partner for the EU. Kazakhstan is also an important player on the international stage and in the region,» said Charles Michel, addressing a joint press conference with Tokayev in October.
Enhanced Partnership and Cooperation Agreement
Kazakhstan is the first country in Central Asia to sign an Enhanced Partnership and Cooperation Agreement (EPCA) with the EU. It was signed in Astana in December 2015 and entered into force in March 2020, covering 29 areas of cooperation.
The bilateral agreement serves as the framework for deepening cooperation and strengthening relations between the two parties in key policy areas such as promoting mutual trade and investment, cooperation in justice and home affairs, economic and financial cooperation, energy, transport, environment and climate change, employment and social affairs, culture, education and research.
EPCA is also expected to create a better regulatory environment for businesses in areas such as trade in services, establishment and operation of companies, capital movements, raw materials and energy, government procurement and intellectual property rights.
«The EPCA is a logical step forward in cooperation between Kazakhstan and the EU and symbolizes the evolution of bilateral cooperation following the implementation of the Partnership and Cooperation Agreement. In turn, for the European Union, the main task was to consolidate mutual obligations in the agreement in the maximum number of areas, considering the expansion of the EU's competencies,» said Europe Department Director at the Kazakh Foreign Ministry Olzhas Suleimenov in an interview for this story.
However, the sides do not limit to 29 areas of interaction.
«For example, last year, we launched cooperation in new areas for us - rare earth metals, green hydrogen, batteries, development of transport and logistics potential and diversification of supply chains of goods,» said Suleimenov.
The key project is a green hydrogen project signed with Svevind company to produce green hydrogen in the Mangystau region.
«Then, in November, at the initiative of the EU, the Prime Minister of Kazakhstan Alikhan Smailov and the President of the European Commission Ursula von der Leyen signed a memorandum of understanding on a strategic partnership in the field of value chains for sustainable raw materials, batteries and green hydrogen between Kazakhstan and the EU, which will contribute to the establishment of financial and technological cooperation between Kazakhstan and industrial alliances of the EU,» he said.
Suleimenov noted several visits of high-ranking European officials are expected in Kazakhstan this year.
«I would like to note that today and in the medium term, the interaction between Kazakhstan and the EU mainly proceeds and will be based on the maximum use of the advantages created by the current EPCA, the practical implementation of its provisions and the tasks agreed by the parties for its further development,» he added.
Further steps to implement the EPCA were discussed by Deputy Prime Minister - Minister of Foreign Affairs Murat Nurtleu and the head of the EU Delegation to Kazakhstan Ambassador Kestutis Jankauskas during their meeting in Astana on May 12.
Nurtleu underlined the effective work of the dialogue platforms provided for by the EPCA and also noted the dynamically developing dialogue at the inter-regional level.
Nurtleu paid a working visit to Brussels and held talks with senior EU diplomats to discuss the current agenda of bilateral and multilateral interaction and promising areas for its development. He met with Josep Borrell and during the meeting, the diplomats examined a wide range of multifaceted relations between Astana and Brussels, noting the regular character and increased dynamics of political dialogue at the highest levels, growth of economic cooperation and the volume of European investments.
Connectivity
Transport and connectivity are among the key areas standing on the agenda of bilateral ties, and with the ongoing geopolitical turbulence, it is becoming increasingly important.
In terms of connectivity, the EU promotes its Global Gateway strategy, a comprehensive approach to enhance the EU's engagement and cooperation with key partner countries around the world. The strategy was launched in 2021.
As part of the Global Gateway initiative, the EU has commissioned the European Bank for Reconstruction and Development (EBRD) to study the most sustainable transport corridors connecting the extended Trans-European Transport network and the five countries of Central Asia, including Kazakhstan, said Borrell in an interview with Kazinform in November 2022.
Second Central Asia - EU Economic Forum
The relations between Kazakhstan and the EU should also be looked at through the lens of a broader Central Asia - EU cooperation, which has also been gaining momentum in the past few years.
Upcoming Central Asia - EU Economic Forum, which Almaty will host on May 18-19, will be a key event focusing on the future of the relations and how they should move forward in a challenging geopolitical environment.
The forum is part of the series of events in Central Asia within the framework of the EU Strategy on Central Asia adopted in 2019, where strengthening economic ties between the EU and Central Asia is one of the priorities.
The forum serves as a platform for intra and inter-regional dialogue and is designed to support green and resilient recovery in the region and help it overcome the consequences of the COVID-19 pandemic and build back better.
The first economic forum took place in Bishkek, the Kyrgyz Republic, in November 2021.
This year’s forum will explore a green and digital transition, a better business environment, and trade and connectivity.
«One thing is sure – our relationship is strong and getting even stronger. Central Asia and Europe are coming closer together and becoming more and more connected,» said Michel during his visit to Kazakhstan in October 2022.
The EU Strategy for Central Asia was signed in 2019, updating the first strategy in 2007. It has three priorities for EU engagement in the region - partnering for resilience (human rights and democracy, security, environmental challenges); partnering for prosperity (supporting economic diversification and private sector development, promoting intra-regional trade and sustainable connectivity); and supporting regional cooperation in Central Asia.
«In such a difficult context, our partnership is essential in addressing global challenges facing us all. The objectives of EU Strategy for Central Asia are more relevant now than ever: promoting resilience, prosperity and regional cooperation,» said Borrell.
Environment
Cooperation with the EU seeks to address many environmental problems in the region. The recent agreements promote the green agenda in Kazakhstan and the region.
EU has been committed to bringing advanced environmental standards to the region, including ESG (environmental, social, and governance). The Subcommittee on Energy, Transport, Environment and Climate Change, part of the EPCA, regulates the bilateral cooperation on environment and climate change.
Kazakhstan has been an active member of the EU-Central Asia Working Group on Environment and Climate Change organized under the EU-Central Asia Platform for Environment and Water Cooperation.
The latest EU–Central Asia High-Level Conference on Environment and Water took place in Rome in February, which gathered more than 100 delegates, including ministers, deputy ministers, high-level diplomats of Central Asian countries, European Union (EU), EU member states, representatives of international financial institutions, international and regional organizations, responsible for environmental, climate change and water policies.
«I am pleased to see cooperation on our topics also continuing in Central Asia, including as a topic at last year’s Consultative Meeting of Central Asian Leaders in Cholpon-Ata, where the Regional Program on Green Agenda for Central Asia was approved. The Treaty on friendship, good neighborliness and cooperation for the development of Central Asia in the 21st century equally mentions cooperation on environment and climate change as an important are of development,» said EU Special Representative for Central Asia, Ambassador Terhi Hakala, in her opening remarks to the conference.
She stressed the importance of addressing challenges together.
Looking ahead, the EU and Kazakhstan have an opportunity to strengthen and deepen their partnership. The upcoming forum in Almaty this week will be such an opportunity for both sides to ensure their commitment translates into real actions.