Monday, 21 December 2015 00:00

Kazakhstan and Europe: Towards a New Partnership

By Michael Emerson

ISDP Policy Brief no. 190

December 21, 2015

Click here for the PDF version of the Policy Brief


On December 21, 2015, the European Union and the Republic of Kazakhstan signed the new Enhanced Partnership and Cooperation Agreement in the Kazakh capital, Astana. The new agreement replaced the original one that has been in force since 1999 and it is considered as a significant step for both sides to advance relations and strengthen political and economic cooperation. This development took place in a year when Kazakhstan joined to the World Trade Organization (WTO). In fact, the two agreements are deeply inter-locked: the Enhanced Partnership and Cooperation Agreement was signed only on condition and after Kazakhstan's accession on WTO. However, Kazakhstan is also a full member of the Eurasian Economic Union, which complicates its relationship with the European Union.


On December 21, 2015, the European Union and the Republic of Kazakhstan signed their new Enhanced Partnership and Cooperation Agreement (EPCA) in the Kazakh capital, Astana. The new agreement replaced the original one that has been in force since 1999, and it is considered as a significant step for both sides to advance relations and strengthen political and economic cooperation. This development took place in a year when Kazakhstan joined to the World Trade Organization (WTO). In fact, the two agreements are deeply inter-locked: the EPCA was signed only on condition and after Kazakhstan's accession on WTO. However, Kazakhstan is also a full member of the Eurasian Economic Union, which complicates its relationship with the European Union.

The New Enhanced Partnership and Cooperation Agreement
The European Union has many forms and shapes of partnership, cooperation and association agreements with third countries. Although they differ in content depending on the partner country, the structure of the chapters of these agreements are much the same, and they usually provide for the progressive liberalization of the trade. The EPCA concluded with Kazakhstan aims to strengthen political dialogue and to promote mutual trade and investments. However, it differs from other agreements in three aspects. First of all, it could be considered a relatively short agreement compared to recent Association Agreements: for example, the EPCA is 350 pages in length, while the Association Agreement with Ukraine is about 2,000 pages long. Secondly, the EPCA is not a free trade agreement. Since Kazakhstan is a member of the Eurasian Economic Union (EEU), it is not in a position to conclude a free trade agreement with the EU. Lastly, the content of the EPCA is largely concentrated on Kazakhstan’s international agreement with the WTO for trade in general but also on services (WTO GATS), international property rights (WTO TRIPS), energy (ECT) and labor affairs (ILO conventions). In other words, in the agreement there are a whole series of references to Kazakhstan's international treaties, which are taken as the basis upon which the EU and Kazakhstan could further enrich their relationship if they wish to do so.

The EPCA does not offer anything dramatically novel. It repeats Kazakhstan's international agreements and its obligations, which the European Union approves of and sympathies with. The point is that the agreement is an open agenda, and given that the EU and Kazakhstan are significant trade and investment partners, there is certainly ground to think there will be developments that enrich the application of the agreement. Furthermore, the EPCA puts a strong emphasis on democracy and the rule of law, human rights, justice and home affairs and other key policy sectors. Regarding human rights, there is a concern within Europe: in particular, some human rights activists and NGOs in Europe are very skeptical, questioning the worth of opening a human rights dialogue with Central Asian countries, including Kazakhstan.

The EPCA is important also for EU-Central Asian relations, as it is the first agreement of its kind signed by the European Union and a Central Asian country. As such, it may well have positive impacts on the EU’s relations with other Central Asian countries. Interestingly, the signing event of the EPCA in Astana on December 21 was held alongside a meeting between the EU Foreign Policy High Representative and the foreign ministers of all five Central Asian republics (Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan). From the EU perspective, it is possible to envisage observe a broadening of the agenda from a Kazakhstan-focused one to a wider Central Asian agenda. This is related to the fact that the EU has recently decided to update its Central Asian strategy, which offers support and assistance to Central Asian countries on regional sustainable development (cooperation on energy, environment/water and socio-economic development) and regional security for development (integrated border management, the fight against drugs and crime, regional security).

Kazakhstan and the Eurasian Economic Union
In 2015, Kazakhstan did not only become a member of the WTO, as the Eurasian Economic Union (EEU) of which it is a member states came into force at the beginning of the year. The EEU, consisting of Armenia, the Russian Federation, Belarus, Kazakhstan and Kyrgyzstan, provides for freedom of movement of goods, services, capital and labor in sectors determined within the Union. However, being a member of both the WTO and the EEU can cause problems, especially regarding external tariff levels. When Kazakhstan negotiated with the WTO, it agreed on a relatively liberal tariff regime. Nevertheless, after the introduction of the EEU, it is now obliged to raise its tariff levels to the higher level largely set by Russia. As Kazakhstan comes operationally into the WTO as a full member (since November 2015), it must still respect the lower tariff levels negotiated earlier with the WTO, which is inconsistent with the higher EEU levels. This conflict is to be resolved by Kazakhstan gradually reverting to the EEU levels, but this then raises issues of claims for compensation by other WTO members which are not yet resolved.
Meanwhile, there is a debate going on in Brussels regarding the EU's potential relationship with the EEU. However, Vladimir Putin's decision to use the customs union as the emblematic instrument hampers progress. From the legal and technical point of view, the idea of a free trade agreement between the EU and the EEU remains controversial due first of all to WTO law, which the EU takes the WTO law seriously (whereas Russia does not). As the WTO law states, a country shall not have free-trade agreement with another customs union or any non-WTO member, unless it is willing to extend that preferential agreement to the whole of the WTO. This is a very serious WTO constraint. The fact the Kazakhstan has now acceded to the WTO helps a lot on this point, but the question of Belarus remains, and it is not evident that Minsk takes its possible WTO accession seriously. From the political view, some suggest that an official relationship with the EEU could be a useful diplomatic gesture to facilitate Russian cooperation over Ukraine. However, it seems highly unlikely that this could be drive a basic change in Russia's position on Ukraine, and notably whether it would be really ready to go the whole way with implementation of the Minsk-II agreement (i.e. for Ukraine to regain full control of its external border with Russia).
Nevertheless, this is an ongoing debate over the ideas that Russia and the other EEU countries might negotiate their own bilateral EPCAs with the EU, thus following Kazakhstan, but going further in allowing for free trade. The choice of the customs union instrument for the EEU has excluded this possibility, tragically forcing Ukraine into an either-or choice. Economists can agree that it would be natural for Ukraine to have free-trade arrangements with both the EU and the EEU. The case of Armenia is a further glaring example, since it was dragged by the Kremlin into the EEU for political and security reasons, and forced as a result to drop its draft free trade agreement with the EU, whereas its clear economic interests are to have free trade with both the EU and EEU.
In reflecting on these different theoretical options, it is instructive to look at developments in Georgia. There is considerable enthusiasm in Georgia about growing Chinese business interest in the country as a location for investments to market sufficiently manufactured Chinese-origin products intended for the EU market. This is similar to the Kazakh argument for investments into Kazakhstan to access the Russian market. However it is unfortunate that because Kazakhstan is locked into the Eurasian customs union instead of a good free trade agreement with Russia, it is unable to make itself – like Georgia – an attractive destination for investments to benefit from free trade with the EU.
Finally, there are some interesting new developments regarding the Silk Road – the efforts to revive the east-west trade corridor across Eurasia. First of all, China has applied to join the European Bank for Reconstruction and Development (EBRD). This is likely to happen, and it could be a very helpful initiative to link transportation routes between Europe and China. Secondly, what do China, Afghanistan, Iran, Turkey and the European Union have in common? They all have the same width of railway gauge. Kazakhstan, which is in the middle of it, occupying one third of the way between Beijing and Berlin, has the narrower Soviet gauge, and if Kazakhstan could find a way to avoid the need to change gauges or at least find less time-consuming ways of switching cargoes at its borders between the different rail gauges, its position could give Kazakhstan an enormous advantage regarding the facilitation of trade between China and the EU. Third, the international sanctions on Iran are expected to be lifted soon, and for the EU’s planning of transport corridors the idea of a land route across Kazakhstan, Turkmenistan, and Iran to Europe now becomes a real option. The strategy of multiple Silk Roads is certainly preferable from the EU point of view.

Kazakhstan is the key partner of the European Union in Central Asia. Now that the EPCA instrument is in place, both sides will work on strengthening their cooperation, not only on trade and investments, but in many areas. However, the fact that Kazakhstan is locked into Eurasian Economic Union blocks any commitment regarding further liberalization of trade and puts Kazakhstan in a complicated position. In this context, EU and Kazakh leaders could work on several issues. A first priority is to seek to respect the tariff levels negotiated with the WTO and show Kazakhstan’s commitment to that. Although Kazakhstan borders China and Russia, the EU is its biggest trading partner. Therefore, it is important that Astana respect WTO laws, which the EU takes seriously. Secondly, Kazakhstan could contribute to the EU's Central Asian strategy by helping Brussels broaden its agenda to other Central Asian Republics. The EPCA could open the way for new enhanced PCAs with other countries in the region. Third, the EU could help Kazakhstan in its efforts to balance its relationship with both the EU and the EEU. As the second most important member of the EEU, it is obviously beneficial for Kazakhstan to have decent economic relations both with the European Union and the Eurasian Economic Union. Finally, both sides could work to use Kazakhstan’s geographical advantage to become an essential part of the transcontinental transportation routes. Being in the middle of the transit route between China and Europe could help Kazakhstan's aim to be a key actor in global trade.

Michael Emerson, a former EU Ambassador to Moscow, is Associate Senior Research Fellow with the Center for European Policy Studies in Brussels.


Read 13918 times Last modified on Monday, 11 January 2016 15:57





  • ASIA Spotlight with Prof. S. Frederick Starr on Unveiling Central Asia's Hidden Legacy
    Thursday, 28 December 2023 00:00

    On December 19th, 2023, at 7:30 PM IST, ASIA Spotlight Session has invited the renowned Prof. S Fredrick Starr, who elaborated on his acclaimed book, "The Lost Enlightenment: Central Asia's Golden Age from the Arab Conquest to Tamerlane." Moderated by Prof. Amogh Rai, Research Director at ASIA, the discussion unveiled the fascinating, yet lesser-known narrative of Central Asia's medieval enlightenment.

    The book sheds light on the remarkable minds from the Persianate and Turkic peoples, spanning from Kazakhstan to Xinjiang, China. "Lost Enlightenment" narrates how, between 800 and 1200, Central Asia pioneered global trade, economic development, urban sophistication, artistic refinement, and, most importantly, knowledge advancement across various fields. Explore the captivating journey that built a bridge to the modern world.

    To know watch the full conversation: #centralasia #goldenage #arabconquest #tamerlane #medievalenlightment #turkish #economicdevelopment #globaltrade

    Click here to watch on YouTube or scroll down to watch the full panel discussion.

  • Some Lessons for Putin from Ancient Rome
    Thursday, 04 January 2024 17:01
    By S. Frederick Starr 
    American Purpose
    January 4, 2024
    Vladimir Putin, having sidelined or destroyed all his domestic opponents, real or imagined, now surrounds himself with Romano-Byzantine pomp and grandeur. The theatrical civic festivals, processions of venerable prelates, cult of statues, embarrassing shows of piety, endless laying of wreaths, and choreographed entrances down halls lined with soldiers standing at attention—all trace directly back to czarism, to Byzantine Constantinople, and ultimately to imperial Rome. Indeed, Putin considers himself as Russia’s new “czar,” the Russified form of the Latin “Caesar.”
    But besides all the parallel heroics, Roman history offers profound lessons for today’s world. All of America’s Founders saw the Roman Republic as the best model for their own constitution. Napoleon, Mussolini, and Hitler, by contrast, found in imperial Rome a stunning model for their own grandeur. True, some of Rome’s ancient chroniclers, including the celebrated Livy, so admired specific politicians that they saw only their good sides and ignored the problems and failures. Yet there were others, notably the pessimistic Sallust, who not only wrote bluntly of history’s painful issues but delved deep into their causes and consequences.
    Is Putin likely to delve into the history of Rome for insights on his own situation? Unfortunately for Russia, Putin is not a reader, preferring instead to engage in exhibitionist athletic activities, preside at solemn ceremonies, or offer avuncular obiter dicta. However, if he would study the Roman past, he might come to realize that that model presents more than a few chilling prospects that he will ignore at his peril.
    To take but one example, a glance at Roman history would remind Putin that self-declared victories may not be as victorious as he and Kremlin publicists want to think. Back in the 3rd century B.C., when Rome was still a small state in central Italy, it was attacked by a certain King Pyrrhus, a rival ruler from Epirus, a region along today’s border between Greece and Albania. In his first battles Pyrrhus routed the Roman legions, and celebrated accordingly. But matters did not end there.
    Like Pyrrhus, Putin’s army scored some early victories in its war on Ukraine. As recently as December 1, Putin’s Minister of Defense Sergei Shoigu was still claiming, in spite of all evidence to the contrary, that Russian forces “were advancing on all fronts.” Pyrrhus made similar false claims, only to discover that his own soldiers were no match for the determined Romans. As the Romans drove Pyrrhus’ army from the field, he groused, “If we win one more such victory against the Romans we will be utterly ruined,” which is exactly what happened. Pyrrhus’ statement gave Romans the term “Pyrrhic victory,” which we still use today. Putin should apply it to his “victories” at Bakhmut and Avdiivka.
    Another crisis in Rome’s early formation as a nation occurred when a peasant uprising threatened Rome itself and, according to the historian Livy, caused panic in the Roman capital. In desperation, the elders turned to Lucius Cincinnatus, who was neither a military man nor a professional politician, but who had earned respect as an effective leader. It took Cincinnatus only fifteen days to turn the tide, after which he returned to his farm. George Washington rightly admired Cincinnatus and consciously emulated him, returning after the Battle of Yorktown to Mount Vernon. By contrast, Putin’s “special military operation,” planned as a three-day romp, is now approaching the end of its second year. Putin, no Cincinnatus, doomed himself to being a lifer.
    Roman history is a millennium-long showcase of motivation or its absence. In this context, Putin might gain further insights by examining Rome’s centuries-long battle against the diverse tribes pressing the empire from the north. For centuries Rome’s legionnaires were well trained, disciplined, and committed. The list of their early victories is long. Both Julius Caesar and the philosopher-emperor-general Marcus Aurelius succeeded because they motivated and inspired their troops. But over time the Roman army was increasingly comprised of hirelings, déclassé men who fought not to save the empire but for money or a small piece of the bounty. Inflation and rising costs outpaced pay increases. Punishment was severe, in some cases including even crucifixion. In the end, Rome’s army eroded from within.
    This is what is happening to the Russian army today. Putin attacked Ukraine in February 2022 with what was then an army of several hundred thousand trained professional soldiers. But after the Ukrainians killed more than 320,000 Russian troops, their replacements were unwilling and surly conscripts and even criminals dragooned from Russia’s jails. Putin quite understandably fears such soldiers. Putin’s army, like that of the late Roman Empire, is collapsing from within.
    By contrast, Ukraine’s army at the time of the invasion was small and comprised mainly Soviet-trained holdovers. Both officers and troops of the line had to be quickly recruited from civilian professions and trained. Yet they quickly proved themselves to be disciplined and resourceful patriots, not tired time-servers. True, Ukraine is now conscripting troops, but these newcomers share their predecessors’ commitment to the nation and to their future lives in a free country.
    Sheer spite and a passion for avenging past failures figured prominently in Putin’s decisions to invade both Georgia and Ukraine. Roman history suggests that this isn’t smart. Back in 220 B.C., Rome defeated its great enemy, the North African state of Carthage. Anticipating Putin, the Carthaginian general Hannibal sought revenge. Acting out of spite, he assembled 700,000 foot soldiers, 78,000 mounted calvary, and a force of war elephants, and crossed the Alps. Though he was a brilliant general, Hannibal’s war of spite turned into a disaster.
    Why did Hannibal lose? Partly because of his sheer hubris and the spite that fed it, and also because the Romans avoided frontal battles and simply ground him down. They were prudently led by a general named Fabius Maximus, whom later Romans fondly remembered as “the Delayer.” Today it is the Ukrainians who are the Delayers. By grinding down Putin’s army and destroying its logistics they have positioned themselves for victory.
    The Roman Republic fell not because of any mass uprising but because of the machinations of Julius Caesar. A victorious general, Caesar looked the hero as he was installed as imperator. As was customary at such ceremonies, an official retainer placed behind the inductee solemnly repeated over and over the admonition to “Look behind you!” Caesar failed to do so and underestimated the opposition of a handful of officials and generals who feared the rise of a dictator perpetuus. Even if Putin chooses not to read Cicero, Plutarch, or Cassius Dio, he could productively spend an evening watching a Moscow production of Shakespeare’s The Tragedy of Julius Caesar.
    Turning to a very different issue, Putin seems blithely to assume that whenever Russia defeats a neighboring country it can easily win the hearts and minds of the conquered, whether by persuasion or force. This is what many Roman generals and governors thought as well, but they were wrong—fatally so. Speaking of the impact of corrupt officials sent by Rome to the provinces, the great orator-politician Cicero declared to the Roman Senate, “You cannot imagine how deeply they hate us.” Does Putin understand this?
    Finally, it is no secret that Russia today, like ancient Rome, is increasingly a land of immigrants; its economy depends on impoverished newcomers from Kyrgyzstan, Tajikistan, and elsewhere in Central Asia who fled to Russia in search of work. Yet Moscow treats them as third-class citizens and dragoons them as cannon fodder or “meat” to die by the thousands on the Ukrainian front. Rome faced a similar problem and wrestled with it unsuccessfully over several centuries. Over time the despised immigrants who poured across the Alps from Gaul demanded a voice in Roman affairs, and eventually took control of the western Roman Empire.
    Sad to say, neither Putin himself nor any others of Russia’s core group of leaders show the slightest interest in learning from relevant examples from Roman history or, for that matter, from any other useable past. Together they provide living proof of American philosopher George Santayana’s adage that, “Those who forget history are condemned to repeat it.” In Putin’s case, though, he seems never to have known it. 

    ABOUT THE AUTHORSS. Frederick Starr, is a distinguished fellow specializing in Central Asia and the Caucasus at the American Foreign Policy Council and founding chairman of the Central Asia Caucasus Institute.

    Additional Info
    • Author S. Frederick Starr
    • Publication Type Analysis
    • Published in/by American Purpose
    • Publishing date January 4, 2024
  • CACI Chairman S. Frederick Starr comments on "Preparing Now for a Post-Putin Russia"
    Friday, 03 November 2023 18:30

    Whether Russian President Vladimir Putin dies in office, is ousted in a palace coup, or relinquishes power for some unforeseen reason, the United States and its allies would face a radically different Russia with the Kremlin under new management. The geopolitical stakes mean that policymakers would be negligent not to plan for the consequences of a post-Putin Russia. On November 2, 2023, CACI Chairman S. Frederick Starr joined a panel organized by the Hudson Institute’s Center on Europe and Eurasia for a discussion on how US and allied policymakers can prepare for a Russia after Putin.

    Click here to watch on YouTube or scroll down to watch the full panel discussion.

  • Central Asia Diplomats Call for Closer Ties With US
    Monday, 26 June 2023 00:00

    REPRINTED with permission from Voice of America News
    By Navbahor Imamova

    WASHINGTON -- U.S.-based diplomats from Central Asia, a region long dominated by Russia and more recently China, say they are eager for more engagement with the United States.

    Many American foreign policy experts agree that a more robust relationship would be mutually beneficial, though U.S.-based nongovernmental organizations express deep concerns about human rights and authoritarian rule in the five countries: Uzbekistan, Kazakhstan, Kyrgyzstan, Tajikistan and Turkmenistan.

    Michael Delaney, a former U.S. trade official, argued in favor of greater engagement this week at a webinar organized by the American-Uzbekistan Chamber of Commerce.

    He noted that three of the five republics are World Trade Organization members and the other two are in the accession process — a goal actively encouraged by the U.S. government.

    "I've always believed that this is a geographically disadvantaged area. There are relatively small national economies," he said. But, he said, collectively the region represents a potentially more connected market, about 80 million people.

    Key issues

    In this virtual gathering, all five Central Asian ambassadors to Washington expressed eagerness to work on issues the U.S. has long pushed for, such as water and energy sustainability, security cooperation, environmental protection and climate, and connectivity.

    Kazakhstan's Ambassador Yerzhan Ashikbayev said that despite all factors, the United States does not want to leave the field to China, its global competitor, which actively invests in the region.

    "Recent visit by 20 companies to Kazakhstan as a part of certified U.S. trade mission, including technology giants like Apple, Microsoft, Google, but also other partners like Boeing, have shown a growing interest," Ashikbayev said.

    The Kazakh diplomat described a "synergy" of economies and diplomatic efforts. All Central Asian states are committed to dialogue, trade and multilateralism, he said. "As we are witnessing the return of the divisive bloc mentalities almost unseen for 30 years, it's in our best interest to prevent Central Asia from turning into another battleground of global powers."

    During his first tour of Central Asia earlier this year, Secretary of State Antony Blinken visited Kazakhstan and Uzbekistan, meeting separately with the foreign ministers of all five countries.

    That was deeply appreciated, said Meret Orazov, Turkmenistan's longtime ambassador, who also praised the regular bilateral consultations the U.S. holds with these countries.

    Uzbek Ambassador Furqat Sidiqov sees the U.S. as an important partner, with "long-standing friendship and cooperation which have only grown stronger over the years."

    "The U.S. has played a significant role in promoting dialogue and cooperation among the Central Asian nations through initiatives such as the C5+1," he said, referring to a diplomatic platform comprising Washington and the region's five governments.

    "This is where we address common concerns and enhance integration," said Sidiqov. "We encourage the U.S. to bolster this mechanism."

    Tashkent regards Afghanistan as key to Central Asia's development, potentially linking the landlocked region to the markets and seaports of South Asia. Sidiqov said his country counts on American assistance.

    'Possibility of positive change'

    Fred Starr, chairman of the Central Asia-Caucasus Institute in Washington, ardently advocates for the U.S. to adopt closer political, economic and people-to-people ties with the region.

    In a recent paper, he wrote that among dozens of officials, diplomats, entrepreneurs, experts, journalists and civil society leaders interviewed in Central Asia, "even those most critical of American positions saw the possibility of positive change and … all acknowledged that the need for change is on both sides, theirs as well as ours."

    This is the only region that doesn't have its own organization, said Starr, arguing that the U.S. could support this effort. "We have not done so, probably because we think that this is somehow going to interfere with their relations with their other big neighbors, the north and east, but it's not going to. It's not against anyone."

    "Easy to do, low cost, very big outcome," he added, also underscoring that "there is a feeling the U.S. should be much more attentive to security."

    "Japan, the European Union, Russia, China, their top leaders have visited. … No U.S. president has ever set foot in Central Asia," he said. He added that regional officials are left to wonder, "Are we so insignificant that they can't take the time to visit?"

    Starr urges U.S. President Joe Biden to convene the C5+1 in New York during the 78th session of the U.N. General Assembly in September. "This would not be a big drain on the president's time, but it would be symbolically extremely important," he said. "All of them want this to happen."

    Read at VOA News

  • Read CACI Chairman S. Frederick Starr's recent interview on the resurgence of Imperial Russia with The American Purpose
    Tuesday, 23 May 2023 00:00

    Why Russians Support the War: Jeffrey Gedmin interviews S. Frederick Starr on the resurgence of Imperial Russia.

    The American Purpose, May 23, 2023

    Jeffrey Gedmin: Do we have a Putin problem or a Russia problem today?

    S. Frederick Starr: We have a Putin problem because we have a Russia problem. Bluntly, the mass of Russians are passive and easily manipulated—down to the moment they aren’t. Two decades ago they made a deal with Vladimir Putin, as they have done with many of his predecessors: You give us a basic income, prospects for a better future, and a country we can take pride in, and we will give you a free hand. This is the same formula for autocracy that prevailed in Soviet times, and, before that, under the czars. The difference is that this time Russia’s leader—Putin—and his entourage have adopted a bizarre and dangerous ideology, “Eurasianism,” that empowers them to expand Russian power at will over the entire former territory of the USSR and even beyond. It is a grand and awful vision that puffs up ruler and ruled alike.

    What do most Russians think of this deal? It leaves them bereft of the normal rights of citizenship but free from its day-to-day responsibilities. So instead of debating, voting, and demonstrating, Russians store up their frustrations and then release them in elemental, often destructive, and usually futile acts of rebellion. This “Russia problem” leaves the prospect of change in Russia today in the hands of alienated members of Putin’s immediate entourage, many of whom share his vision of Russia’s destiny and are anyway subject to Putin’s ample levers for control. Thus, our “Putin problem” arises from our “Russia problem.”

    Click to continue reading...