Relations of the European Union with Azerbaijan are based on the principles of equality. Notwithstanding bilateral relations with the EU taking precedence over the course of history, the EaP Multilateral Platform expanded the scope of relations enabling Azerbaijan to exchange views on issues of mutual interests and launch various initiatives.
1.1. Together for resilient, sustainable and integrated economies
1.2. Together for accountable institutions, the rule of law and security
1.3. Together towards environmental and climate resilience
1.4. Together for a resilient digital transformation
1.5. Together for resilient, fair and inclusive societies
Thematic Summary of implementation of 5 key EaP priorities across the region.
Analysis for other states:
Armenia
Azerbaijan
Georgia
Moldova
Ukraine
Current perception of the EaP policy in Azerbaijan
The EU remains Azerbaijan’s largest trade partner and second-biggest import market. The victory of Azerbaijan in 2020, liberating its illegally occupied territories, and the Russia-Ukraine war completely changed the geopolitical situation in the region and laid down new realities opening new perspectives of collaboration, in particular in the spheres of energy and transportation.
During the ongoing Russia-Ukraine war, Azerbaijan has striven to maintain positive relations with both countries simultaneously, which is in line with Baku’s multidimensional and independent foreign policy. Azerbaijan seems to intentionally remain on the sidelines of the Russia-Ukraine conflict to avoid antagonizing either Ukraine or Russia and to realize its independent policy targets while the world is concerned with Russian aggression.
The EU and Azerbaijan have a high level of transport dialogue in the continuation of productive cooperation due to intercontinental and geo-economic maps of Azerbaijan that were boosted with the rise of China, India, and other regional actors. The realization of the Zangazur Corridor, which is envisaged to include both railway and highway connecting of the regional countries through the territory of Armenia, could be of exceptional importance in a way towards accelerating the regional economic integration and increasing the geoeconomics importance of the South Caucasus. Kazakhstan, Azerbaijan, and Georgia are to establish a ”Eurasian Railway Alliance” joint venture with a qualitative multimodal, unified IT system that will smooth transit cargo and logistics services between Europe and Asia through the Trans Caspian International Transport Route, bypassingRussia’s transportation capabilities to the EU from Eastern Asia, while increasing the emerging potential of the Middle Corridor with Russia and sanctioned Iran. This new venture can certainly be a part of the East-West and North-South transport corridors, expanding their scope that can enable all the interconnected countries as well as the EU to enjoy a more diversified network and to have access to alternative options.
Along with this, a Russian invasion of Ukraine has far-reaching implications for the Azerbaijan-EU energy partnership. Bearing in mindenvironmental concerns, the EU is unfolding its holistic approach to the diversification of energy supply sources and shift to renewables. Due to the insecure environment that Russia created in Eastern Europe, the Union increasingly imposes a ban on energy imports from Russia, including gas and oil. In the context of the aforementioned factors, the role of Azerbaijan in the energy security of Europe is highly likely to increase as the EU already seeks to reinforce energy cooperation.
As part of the energy diversification strategies of Europe, Baku-Tbilisi-Ceyhan, Baku-Tbilisi-Erzurum, and the Southern Gas Corridor projects with Azerbaijan are of particular importance, playing a significant role in the current upheaval of the European energy market. The new gas pipeline is supplying Italy, Bulgaria, and Greece. On the other hand, the EU agrees to block most Russian oil imports by the end of 2022, which can create new rooms for oil delivery initiatives from Azerbaijan to Europe. It should be noted that Azerbaijan, especially newly liberated mountainous regions, have an immense potential for renewable energy investments. It is also relevant for the Caspian Sea, according to World Bank. The technical potential of offshore wind energy in Azerbaijan is estimated to account for 157 gigawatts. Therefore Azerbaijan could be a new location for the EU investments in renewable energy, and there is a wide range of opportunities to strike in this field.
Following the renewal of the European Neighborhood Policy, a new package of new partnership priorities was adopted in 2018, which include strengthening institutions, good governance, economic development including market opportunities, people-to-people contacts, environment, energy efficiency, and environmental issues. In February 2017, the EU and Azerbaijan began negotiations on a new framework agreement with Azerbaijan designed to give new momentum to political dialogue and mutually beneficial cooperation, which is planned to be finalized by the end of 2022.
Azerbaijan is an important energy partner for the EU and plays a pivotal role in bringing Caspian energy resources to the EU market.
EU is also Azerbaijan’s largest foreign investor, both in the oil and non-oil sector. The EU-Azerbaijan Partnership and Cooperation Agreement enable gradually bringing in line Azerbaijan’s legislation and procedures with the EU’s and international trade-related regulations, laws and standards. It can’t be denied that the EU productively assists business and investment climate and economic diversification strategies particularly notably through the support to education and regional development.
Azerbaijan’srelations with the EU are based on the principles of pragmatism and realistic content. At least in the short and medium-term, no perspective for membership exists.
Azerbaijan, given the globalization and its inter-wined location between regional powers, has no other choice but to implement a multi-vectored foreign policy maintaining positive relations with all sides. Cooperation with the EU is successfully developing in economic terms with an emphasis on the transportation and energy sector, although it doesnot mean deep political integration of Azerbaijan into the Union. The EU wants stability on the verge of its borders. From this perspective, the geopolitical relevance of the South Caucasus for the EU increasingly gains momentum. Following the liberation of the illegally occupied territories, it stipulated the moral and infrastructural need for Azerbaijan to restore and revive the districts. The mines and other explosive devices in the liberated territories of Azerbaijan pose a serious threat to the life and safety of the Azerbaijani military and civilians in the post-conflict period. Massive mine contamination of the liberated territories also seriously impedes the realization of wide-ranging rehabilitation and reconstruction. In this vein, the role of the EU is expected to come into play. Apart from economic investments, Azerbaijan can undeniably benefit from the EU’s deep experience in post-war recovery and reconstruction processes as a role model. However, Azerbaijan expects a single-standard approach and the same amount of grants as provided to Ukraine and Armenia for the same purposes.
Azerbaijan’s vision of the updated EaP policy by the independent expert community
Recommendations:
- Ensuring the banking sector’s long-term viability and improving access to funding through Azerbaijani banks is vital.
- While Azerbaijan’s institutional and regulatory environment for SME policy has improved, boosting policy implementation might assure the sector’s continued development.
- Joining the Deep and Comprehensive Free Trade Area (DCFTA) would modernize Azerbaijan’s economy by improving technology and infrastructure, as well as introducing new regulations aligned with international standards, allowing products to be exported not only to the EU countries but also to the rest of the world.
- Speeding up WTO negotiations in order to promote economic liberalization in the country by implementing WTO rules, which will be required to begin an application for EU association and establish free trade with the EU.
- Promoting economic diversification and the development of a comprehensive and strong manufacturing sector in order to create a long-term development path that allows for free trade participation.
- Modernization of energy infrastructure and effective use of energy resources must be done to ensure adherence to energy supply security standards.
- Adopt robust energy efficiency regulations that take a long-term strategy in order to maintain the country on a sustainable energy path. Increased energy efficiency could help the economy, reduce pollution, and create more jobs.
- Accept short-, medium-, and long-term renewable energy targets, with legislation and policies in place to ensure their execution.
- Long-term transportation and urban development policies must include climate concerns. The country will need to create additional urban infrastructure as the population continues to increase, urbanize, and become affluent.
- Raising awareness of digital transformation and associated instruments among public officials and relevant legislative bodies, as well as executing specific training programs.
- To secure the engagement of youth and other interested parties from the perspective of long-term growth, the government must encourage innovation and digital transformation projects.
- Maintain its efforts to promote freedom of expression, media independence, and journalistic professionalism, as well as their social protection.
- Taking the National Action Plan 1325 to support the Women, Peace, and Security agenda and promoting awareness campaigns in the field of women’s rights and gender equality.
Accelerating the process of revising/approving important documents that obstruct the application of many essential policies regarding cyber strategy, information security, and personal data protection at the national level.