EU would like new EPCA to enhance bilateral relations in Central Asia

By Trend

The EU would like the new Enhanced Partnership and Cooperation Agreement to significantly enhance bilateral relations in many areas, including regional cooperation in Central Asia, a representative of the EU Delegation in Kazakhstan told Trend.

The delegation official said that the Enhanced Partnership and Cooperation Agreement (EPCA) has been ratified by all EU Member States and entered into force on 1 March 2020.

"EPCA is a so-called new generation agreement, which can also serve as a model of future cooperation for other countries. It is worth to know that the EPCA with Kazakhstan has been provisionally implemented already since May 2016 – so already for four years, it has provided a significant boost to economic and political ties between the EU and Kazakhstan. For example, in 1999 total trade amounted to $2.2 billion; while in 2018 it was more than 26 billion euro worth of goods. This trend continues, despite some temporary slowdowns related to the COVID-19 pandemic," the representative said.

The official noted that the EPCA is not only about trade; it provides a reinforced and updated legal framework for the further development of bilateral relations in 29 key policy areas, including political dialogue, human rights, energy, transport, environment, and climate change, employment, and social affairs, culture, education, and research.

"Therefore, the EU would like the new Enhanced Partnership and Cooperation Agreement to significantly enhance bilateral relations in many areas, including regional cooperation in Central Asia (also taking into account the stability of Afghanistan). There is much potential for developing more EU involvement in Kazakhstan and the region. It is now high time to focus on its practical implementation and the new opportunities it will bring to citizens and economic actors. It is necessary to translate those ambitious economic and political commitments into something concrete that people of the region can see and feel. This is also our top priority in responding to the economic impact of the current coronavirus pandemic," the official added.

Apart from the EU-Kazakhstan EPCA, also wider EU-Central Asia relations are undergoing the most dynamic and unprecedented period in its history, the official said, having added that a new EU Strategy for Central Asia was adopted last year.

"Uzbekistan and Kyrgyzstan also initiated negotiations on an Enhanced PCA with the EU, following the example of Kazakhstan. The EU is engaged in supporting independent, peaceful, resilient, and prosperous Central Asian countries. The new strategy is fully in line with overall EU policies, underpins joint cooperation efforts within the OSCE, and also takes into account the United Nations 2030 Agenda for Sustainable Development," the official said.

"First we have what we call Partnering for Resilience. This means that the EU works with the Central Asian countries for sustained stability in anticipating and addressing challenges affecting their socio-economic goals and security in order to enhance their ability to embrace reform and modernization. We wish to support democracy, human rights, and the rule of law, step up cooperation on migration, intensify cooperation on climate change and tackle other trans-regional environmental challenges to turn them into opportunities," the official said.

"The second focus is on Partnering for Prosperity. It aims to unlock the region's significant growth potential by fostering the development of a competitive private sector and promoting a sound and open investment environment. The EU will cooperate in the development of skills, research, and innovation, with special attention to youth. It will work to address structural constraints in intra-regional trade and investment, support remaining Central Asian states' accession to the World Trade Organisation (WTO), and promote sustainable connectivity," the official said.

The EU Delegation official also noted that EU intends to introduce energy efficiency certifications in Micro Small Medium Enterprises across different sectors in Kazakhstan and Central Asia.

The delegation representative said that the EU is the larger contributor to the EBRD’s investment projects in the area of sustainable and renewable energy, (e.g.: more than 598 MW of financed solar generation capacity through Kazakhstan Renewables Framework).

"The EU together with its European Financing Institutions pursues a strong engagement on energy efficiency and refurbishment of outdated energy supply infrastructure. For example, thanks to the EU contribution of 45.6 million euros the EU managed to leverage 594.5 million euros in private investments in Central Asia countries’ energy sectors," the official said.

The official added that EU-supported "Central Asia-South Asia connectivity" project provides a loan of 140 million euros to develop electricity interconnections within Central Asia.

"It is a part of an important regional WB-led electricity scheme boosting sustainable regional trade in clean hydroelectricity,’ the official added.

The EU enhances its financial support though providing tailored technical assistance and capitalizing on the existing linkages with such areas as water or food) and experience in other sub-regions, such as EU neighborhood, the representative noted.

"Examples of such projects include the ‘Water-Food-Energy Nexus’, EU-Central Asia Water, Environment and Climate Change Cooperation (WECOOP), the ‘Central Asia Water and Energy Programme’ (CAWEP), and Nexus," the official said.

Starting from 2021, the representative noted, the EU will implement a new regional ‘EU Support to Sustainable Energy Connectivity in Central Asia’ (SECCA).

"Capitalizing on the achievements of previous 5 years long EU-funded program aiming at improving energy statistics and policy dialogue, SECCA will promote a more sustainable energy mix using the best EU practices, strengthen public capacity in the energy sector and boost regional cooperation, eventually setting the seed for energy connectivity," the official explained.

"The EU extended to Central Asia a global initiative ‘SWITCH’, through which the EU intends to introduce energy efficiency certifications in Micro Small Medium Enterprises across different sectors in Kazakhstan and Central Asia," the official said.

Talking the impact of the COVID-19 pandemic on the EU-financed projects in Kazakhstan the official said that it has remained relatively limited.

Talking about the COVID-19 pandemic affecting the EU-Kazakhstan relations, the official said that obviously, EU-Kazakhstan cooperation in many areas suffered, reflecting a global trend.

"Quite often, this was unavoidable, as, for example, tourism suffered due to lack of air connections, difficult COVID testing procedures, and suspension of visa-free access to Kazakhstan for EU citizens. It is clear that such limitations have to happen for the reasons of pandemic control policies," the delegation member said.

However, the official said, there are also examples of limitations that perhaps could have been avoided.

"For example, as opposed to Kazakh truck drivers, the EU truck drivers with destination Kazakhstan cannot have their COVID tests done at the border. This of course adds time and cost to the delivery of EU goods to Kazakhstan, which finally is borne by the consumers," the official said.

On the other hand, the official noted, the impact of the COVID pandemic on the EU-financed projects, generally speaking, remained relatively limited.

"The biggest part of the EU-funded programs in Kazakhstan and in Central Asia were flexible enough to quickly adjust their implementation plans and embrace digital technologies to provide expert advice and training. Even a number of on-site activities (e.g. historical sites rehabilitation works) have been carried out during the pandemic," the official said.

Besides, there have also been new initiatives.

For example, the EU allocated EUR 3 million for the Central Asia Covid-19 Crisis Response program (CACCR). It is a part of a larger EUR 124 "Team Europe" solidarity package for Central Asia mobilized by the EU earlier in 2020. Although the CACCR is a regional program, it specifically targets Kazakhstan.

"The value-added of this program is the assistance it provides to strengthen the overall capacities of the national health system to fight the COVID-19 pandemic and to be better prepared to manage similar crises in the future. For example, thanks to this program, Kazakhstan recently become the first country in Central Asia to comprehensively implement the major WHO’s case management protocols. In addition, Kazakhstan is constantly benefitting from the knowledge, accumulated in the region, to increase the level of preparedness of the national health system. To implement the CACCR the EU partnered with the WHO because of the organization’s experience with managing similar pandemics in the past (e.g. EBOLA) and its unparalleled access to the latest scientific knowledge," the official said.

The official also noted that Kazakhstan could contribute significantly towards diversification of sources for the European market.

The delegation official said that with over 70 percent of oil exports going to the EU (representing approximately 6 percent of total EU imports), Kazakhstan is the third-largest non-OPEC supplier for the EU, after Russia and Norway.

"As the export of Kazakhstan’s oil is set to increase, with the re-launch of production at gigantic offshore oilfield Kashagan, Kazakhstan could contribute significantly towards diversification of sources for the European market and diminishing the share of dominant players, including Russia," the official said.

The official explained that energy co-operation with the EU is on a solid basis: an MoU was signed in 2006 between the EU and the Republic of Kazakhstan, there are also several co-operation agreements in the field of nuclear energy.

"Energy dialogue between the EU and Kazakhstan is expected to intensify in light of the adoption of the new EU energy security strategy and following the recent entering into force of the Enhanced Partnership and Cooperation Agreement, which contains a dedicated chapter on energy," the official said.

EU-based oil and gas industry has a significant commercial presence in Kazakhstan, including in two of its (three) major oil fields, respectively Karachaganak and Kashagan, the official added.

"The EU, in a close cooperation with its Member States and European Financing Institutions (EBRD, EIB) also supports several initiatives in the areas of energy efficiency, renewable energies, and reforms of national energy policies," the official noted.