Ambitious EU seeks to improve Middle Corridor trade route, secure position in Central Asia

Despite growing interest in the European Union for the advancement of the Middle Corridor, the bloc has much more to do in developing this trade route and securing its position in Central Asia.

The Trans-Caspian International Transport Route (TITR) project has become a priority for Kazakhstan and its neighbours, with the EU pledging €10 billion in investments during the January Investors Forum in Brussels where the EU’s transport connectivity with Central Asia was discussed.

However, an internal European Commission briefing on the global infrastructure program – known as the Global Gateway – warns that the EU must step up its efforts with the €300 billion plan and increase engagement with Central Asia among others.

The document notes that the EU “cannot take its position for granted”, urging the new Commission which will emerge after the June elections, to take the Global Gateway agenda to the next level, “further driving modernisation by engaging with strategic partners with a policy mix driven by economic interest”.

Potential to develop

A World Bank economic analysis published towards the end of 2023, highlighted the potential of the Middle Corridor to develop over the next decade. It forecast that by 2030, freight volumes will triple to 11 million tonnes, from the 2.3 million tonnes of cargo handled last year.

The World Bank also estimated that by 2030, travel times between the western border of China and Europe will halve. During the Investors Forum in January, the EU made a concrete step towards this goal by launching the development of the Trans-Caspian Corridor, a fast route which will bypass Russia, linking Europe and Central Asia within 15 days.

While the World Bank analysis also identified several bottlenecks along the Middle Corridor, participating countries are interested in clearing them and expanding its geographic reach. A five-year roadmap was signed in 2022 between Kazakhstan, Azerbaijan and Türkiye, aimed at decreasing congestion along the route.

“Game changer” in connectivity

Landlocked Kazakhstan stands at the heart of East-West trade, playing an increasingly pivotal role as a transit country and as an essential part of the corridor.

In April, the seventh Subcommittee on Energy, Transport, Environment and Climate was held in Astana, with the EU and Kazakhstan discussing key bilateral issues. The parties appreciated the progress on the Trans-Caspian Corridor, welcoming the Commission’s proposal to set up a Coordination Platform.

Discussing its development, senior EU official, Henrik Hololei, said the hope is to launch this platform before summer, as it would be a “perfect way of facilitating and monitoring the implementation of the projects”.

Hololei described the Trans-Caspian Route as a game changer in the connectivity between Asia and Europe, noting that the Middle Corridor is “a very important tool in facilitating and accelerating regional integration and economic development”.

As Kazakhstan became the first Central Asian country to sign a Memorandum of Understanding with the EU on cooperation in critical raw materials, Hololei expects this to emerge as a key area of focus in the coming years. “There is a clear connection to the TITR, as a functional corridor is essential for exporting products,” he remarked.

Securing a position in Central Asia

Before Russia’s war in Ukraine, 86 per cent of land trade between Europe and China passed along the so-called Northern Route, extending from China’s northern border to Belarus and the European mainland.

Following Western sanctions on Russia, the Middle Corridor has now become the only accessible route through which Europe can trade with Central Asia and the Caspian Sea region.

Although Russia could partly benefit from the development of this route by diverting some of its goods and circumventing sanctions, and China might use it to increase its influence in the region, the European Council on Foreign Relations (ECFR) think-tank argues that benefits of the Middle Corridor outweigh risks.

The region is already on China and Europe’s radars thanks to its strategic position, a vast array of resources, as well as renewable energy potential. Meanwhile, Central Asian countries are keen on diversifying their economies and reaching out to new trade partners. The ECFR notes this desire has intensified since Russia’s war in Ukraine.

The Central Asia Forecasting study cited in a publication of the International Politics and Society (IPS) magazine, says Central Asian experts expect EU development cooperation and its connectivity strategy to positively impact the region.

As Central Asian countries face various political, economic, and social challenges and seek to implement complex reforms, national governments favour European investments, technical assistance and expertise, which in turn can help the EU secure its position in the region.

[By Xhoi Zajmi I Edited by Brian Maguire | Euractiv’s Advocacy Lab ]

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