Kazakhstan became the fırst Central Asian country which upgraded its relations with the European Union (EU) to a new level of cooperation after signing the Enhanced Partnership and Cooperation Agreement (EPCA) on December 21, 2015. However, the agreement has not come into force yet since it requires the ratification by all members of the EU, while Kazakhstan ratified it on the 25th of March, 2016. Despite this, some parts of the EPCA started its provisional application on the 1st of May, 2016. The agreement intends to enhance the relations between the European countries and Kazakhstan by covering 29 areas of cooperation including finance and economy, energy, transport, environment and climate change, employment and social affairs, education and research.[1] Moreover, the agreement puts a strong emphasis on democracy, the rule of law, human rights, sustainable development, and cooperation in civil society. In foreign and security policy, the EPCA focuses on regional stability, weapons of mass destruction (WMD), international cooperation in fight against terrorism, crisis management and conflict prevention. In trade field, the new agreement intends to provide a better regulatory environment for the economic operators in areas such as trade in services, the establishment and operation of companies, capital movements, raw materials and energy, government procurement and intellectual property rights. [2]
The new agreement replaced the Partnership and Cooperation Agreement (PCA) which was signed in 1995, but came into force in 1999, while the PCA itself appeared to be the replacement for an Agreement on Trade and Economic and Commercial Cooperation signed in 1989 between the European Commission and the Soviet Union. The PCA was signed by Kazakhstan and the EU in order to create the framework for mutual cooperation since Kazakhstan was a newly independent country at that time. Since the EPCA came to replace the old agreement from 1999, it can be argued that in fact Kazakhstan and the EU established a solid foundation for cooperation, and their next step is to develop and enhance the bilateral relations even further. Thus, the EPCA was initiated to bring their cooperation to a new level.
In order to understand what kind of level the EU and Kazakhstan aim to achieve by the EPCA, we should know what they have achieved by now. Despite being geographically distant from each other, it can be argued that the bilateral relations between the EU and Kazakhstan have reached an unprecedented level of cooperation. The most importantly is the fact that the EU is the main trade and investment partner for Kazakhstan by leaving behind Kazakhstan’s great neighbors such as Russia and China. In other words, in recent days the EU is the first trade partner of Kazakhstan with almost 40% share in its total external trade. Kazakhstan exports to the EU mostly oil and gas which account for more than 80% of the country’s total exports, whereas exports from the EU are dominated by machinery and transport equipment, as well as products within the manufacturing and chemicals sectors. [3] Moreover, imports from Kazakhstan substantially exceed EU exports to Kazakhstan. For example, in 2015, Kazakhstan’s foreign trade turnover amounted to $ 31 billion in 2015 (import – $ 3, 8 billion, export – $ 24, 3 billion). [4] Additionally, the EU has provided very strong Foreign Direct Investment (FDI) inflow for Kazakhstan, specifically in the fields of oil and gas, and almost half of the FDI inflow originates from the EU. During the period from 2005 to September, 2015 the flow of FDI from the European countries to Kazakhstan’s economy constituted $ 107, 4 billion, and the main investors appeared to be Netherlands, France, the United Kingdom and Italy.
Whereas the EU presents a significant importance for Kazakhstan in terms of export market and investments, Kazakhstan plays a crucial role in the EU’s energy security. Namely, Kazakhstan is the third largest supplier of energy to Europe among non-members of OPEC – after Norway and Russia. The share of Kazakhstan’s oil supply to the European countries is significantly high since 25% goes to Austria, 30% goes to Romania, and also Kazakhstan is the fourth energy supplier to Germany. [5] What we can infer from here is the fact that the cooperation between Kazakhstan and the EU is mutual beneficial, therefore, it can be claimed that the framework for the bilateral relations have been established by now. Particularly, given the fact that both Kazakhstan and the European countries found each other as partners demonstrate the way that their diplomatic relations have considerably developed in parallel with the economic relations. Thus, the framework that was aimed to be established by the PCA in Kazakhstan-EU relations have been successfully completed, so the next question can be raised – what kind of relationship is going to be established by the EPCA?
According to Federica Mogherini who is the current High Representative of the European Union for Foreign Affairs and Security Policy and Vice-President of the European Commission, the EPCA is distinct from the previous agreement in a sense that it covers new areas of cooperation such as justice, freedom and security. And the ‘rule of law’ is a crucial tool to attract firms and investments since a country needs a strong and reliable legal system in order to stimulate FDI flows. It should be noted that ‘the rule of law’ is a core principle in the functioning of the EU, and the main factors are the absence of corruption, open government, fundamental rights and civil justice. One of the positive impacts of the rule of law on country’s economy is the ability to increase FDI flow since it is able to guarantee political stability which is highly important for investors. Consequently, an enhanced legal basis for economic and political cooperation will be the next step to advance Kazakhstan-EU relations to an upper level.
From the EU perspective, the new level of cooperation with Kazakhstan is seen as a stepping stone in implementation of its Central Asian strategy. It should be mentioned that the European Union Strategy for Central Asia was adopted in 2007, and it was reviewed for the fourth time in 2015. [5] According to this, the EU plans to develop bilateral relations with Central Asian countries in the fields such as education, the rule of law, energy and transport, environment and water, trade and economic relations. From 2007 to 2013 the EU’s development assistance to Central Asia amounted to about €750 million – of which one-third was allocated to regional programmes and two-thirds to bilateral initiatives. From 2014 to 2020, the EU plans to spend about €1 billion in Central Asia. [6] In recent days, among Central Asian countries, only Kazakhstan has the closest relationship with the European countries, while others such as Uzbekistan, Kyrgyzstan, Turkmenistan and Tajikistan have relatively low level of cooperation with the EU. Thus, the main target of the EU is to build closer relations with these countries by developing the strategy. As far as the EU intends to realize its strategy by building bilateral relations with every country in the region, the EPCA can be seen as the progress in implementation of Central Asian strategy. Accordingly, the EPCA for the EU is seen in a broader way, namely, as a step towards realization of its regional vision.
To sum up, although the EU and Kazakhstan are not located in a common geographical area, their relations are rapidly developing with a long-term perspective. Moving to a new level of enhanced cooperation demonstrates that the relations between the EU and Kazakhstan are developing step by step. Now, both sides are trying to make their relations even stronger by implementing a common principle such as ‘the rule of law’. With the EU’s cooperation in developing the rule of law, Kazakhstan will feel closer to the European countries, as long as ‘implementing shared values’ stays as a key factor in building strong bilateral relations. Accordingly, it can be concluded that the relations between Kazakhstan and the EU have become mature since they started to focus not only on economic relations but also to share common moral perspectives.
References:
[1] http://eeas.europa.eu/statements-eeas/2015/151221_02_en.htm
[6] http://www.inform.kz/eng/article/2892037
[7] http://www.europarl.europa.eu/RegData/etudes/IDAN/2016/535019/EXPO_IDA(2016)535019_EN.pdf
[8] http://www.europarl.europa.eu/RegData/etudes/IDAN/2016/535019/EXPO_IDA(2016)535019_EN.pdf