Introduction
The geopolitical landscape in the Caucasus and Central Asia, shaped by the Second Karabakh War of 2020 and the Ukraine crisis of 2022, has opened significant opportunities for Central Asian countries to expand their economic ties globally. This shift has also attracted the attention of the European Union (EU), which is eager to explore greater trade prospects in the region due to its rapidly growing population and emerging consumer market. Over the past two years, the EU and its member states have actively sought to engage with Central Asia. Key events include the visit of the President of the European Council to Cholpon-Ata, Kyrgyzstan, on June 2, 2023, where discussions with Central Asian leaders highlighted the importance of strengthening economic ties and supporting the independence of these nations. Additional engagements include the summit hosted in Berlin in September 2023, bringing together Germany and Central Asian states, and the visit of French President Emmanuel Macron to Kazakhstan and Uzbekistan in November 2023 for meetings with regional leaders.
From August 1-3, 2024, Josep Borrell, the High Representative of the EU for Foreign Affairs and Security Policy and Vice-President of the European Commission, paid an official visit to Central Asia. On August 1-2, he visited Kazakhstan, where he met with President Kassym-Jomart Tokayev, recognizing Kazakhstan’s position as the region’s largest economy and its robust economic ties with the EU. On August 3, Borrell traveled to Kyrgyzstan to meet with President Sadyr Japarov, despite Kyrgyzstan’s smaller economy. These visits underscored the EU’s commitment to enhancing both economic and political relations, as well as its support for projects focused on local governance, judicial reforms, sustainable development, and other key areas.
Further deepening of EU-Kazakh partnership
During the meeting between Josep Borrell and Kazakhstan’s Deputy Prime Minister and Minister of Foreign Affairs, Murat Nurtleu, several important aspects for further bilateral cooperation were discussed. These included the significance of oil imports and critical raw materials, Kazakhstan’s role in connectivity projects (including the Digital Satellite connectivity project), mobility, and EU investments in water, energy, climate change, and transboundary water governance projects.
Kazakhstan is the EU’s major partner in Central Asia, as evidenced by the volume of trade and political relations between the two. Kazakhstan was also the first country in the region to sign the Enhanced Partnership and Cooperation Agreement (ECPA) with the EU on December 21, 2015. The agreement came into force on March 1, 2020, after it was ratified by all EU member states and the European Parliament. It was also approved by the 17th EU-Kazakhstan Cooperation Council, recognizing the successful implementation of the agreement in various areas. This agreement formalized cooperation beyond trade and investment, expanding into governance, judicial cooperation, environment, and climate change.
In addition to the import of fossil fuels and Kazakhstan’s importance in Eurasian connectivity, Josep Borrell emphasized the growing significance of Kazakhstan in supplying critical raw materials to the EU. Kazakhstan became the first country in the region to sign a Memorandum of Understanding with the EU on Critical Raw Materials during the COP27 Summit in Egypt. This MoU promises an increased supply of raw materials, refined materials, and renewable hydrogen, all of which are crucial for the EU’s green energy transition. Borrell highlighted this point by stating, “Oil built the civilization in which we are living, and raw materials will build the next civilization.” He also welcomed Kazakhstan’s request to join the Mineral Security Partnership Forum, signalling the country’s willingness to become a key supplier of critical materials to the EU.
Kyrgyzstan – a partnership yet to be explored
While the partnership between the EU and Kyrgyzstan is not as extensive as that with Kazakhstan, several key projects in various fields were discussed during the meeting between Josep Borrell and Kyrgyz President Sadyr Japarov. These projects cover energy, transportation, water resources, and digitalization.
Kyrgyzstan is the only country, after Kazakhstan, to have signed the EPCA with the EU. This agreement was signed during the Kyrgyz President’s visit to Brussels on June 25, 2024, marking a significant elevation of EU-Kyrgyzstan relations. The new agreement replaces the previous Partnership and Cooperation Agreement (PCA), signed in 1999. The agreement expands the scope of cooperation to encompass a wide range of areas, including trade and investment, sustainable development, connectivity, research and innovation, education, and environmental and climate action. It also reinforces joint efforts in foreign and security policy, focusing on conflict prevention, crisis management, risk reduction, cybersecurity, and regional stability, as well as disarmament, arms control, non-proliferation, and export regulation.
Kyrgyzstan has shown an increasing openness to international cooperation, with the EU emerging as one of its major partners, particularly in trade relations. The signing of the EPCA further underscores both parties’ commitment to expanding their cooperation. Given Kyrgyzstan’s smaller economy, the country is in need of significant investment projects to foster economic development, and the EU is well-positioned to play a key role in this process.
EU-Central Asia trade trends
The beginning of the Ukraine crisis in February 2022 created favourable conditions for Central Asian states to expand their trade relations globally. This shift is driven by several factors: Russia’s focus on its military and economic engagement in Ukraine, the increasing interest in the Trans-Caspian Trade Route, and the growing North-South trade corridor between Russia and India. In addition, Central Asia, with its rapidly growing population and relatively untapped trade potential, has become an attractive trade destination for the EU, China, India, and Gulf countries.
Following Brexit, the EU sought new markets to diversify its trade relationships, and Central Asia, with its expanding consumer base, emerged as a promising option. However, the COVID-19 pandemic initially disrupted trade relations between the two regions. It was the war in Ukraine that ultimately pushed the EU toward decisive action. Sanctions imposed on Russia not only impacted the Russian economy but also had significant repercussions for the EU, leading to inflation driven by rising energy and commodity prices. This, in turn, heightened the EU’s need to seek new trade partners to stabilize inflation rates. In this context, the idea of expanding trade with Central Asia has regained momentum. The region’s strategic importance and economic potential offer the EU an opportunity to both mitigate the effects of its sanctions on Russia and diversify its sources of energy and commodities, helping to ensure greater economic stability in the face of ongoing geopolitical challenges.
Figure 1 displays the changes in the trade turnover value between individual Central Asian countries and the EU over the period from 2013 to 2023. As noted by Josep Borrell in his meeting with Murat Nurtleu, Kazakhstan is by far the largest trade partner of the EU in the region. This has been the case throughout the entire period between 2013 and 2023. Figure 1 further shows that the value of trade turnover between the EU and Kazakhstan has increased, with some fluctuations in 2015, 2016, and 2020, from 30.5 billion euros to 42.4 billion euros. These fluctuations can be attributed to a drop in oil prices in 2015 and 2016, which damaged Kazakhstan’s oil output, as well as the impact of the COVID-19 pandemic and the subsequent decline in global trade. Kazakhstan is an important oil supplier for the EU, with oil flowing primarily through the Caspian Pipeline Consortium via Russian territory. The route through the Caspian Sea and Azerbaijan has gained further importance for EU oil imports from Kazakhstan amid the Ukraine Crisis to avoid potential disruptions. In 2023, the volume of Kazakh oil passing through Azerbaijan reached 1.4 million tons, with plans to increase this to 1.8 million tons in 2024 and 2.2 million tons in 2025.
The growing trade relations are also evident in the cases of Kyrgyzstan, Kazakhstan, Uzbekistan, and Tajikistan. Among these four, Kazakhstan has experienced the greatest growth in terms of the value of bilateral trade turnover with the EU since the start of the Ukraine crisis, rising from 23 billion euros in 2021 to 42.4 billion euros in 2023. However, the most significant difference is seen in Kyrgyzstan, where bilateral trade turnover with the EU grew from 0.3 billion euros to 2.8 billion euros during the same period. While both countries showed strong growth, Kazakhstan’s trade turnover with the EU doubled in just two years, whereas Kyrgyzstan’s quadrupled.
The growth in trade relations with Uzbekistan and Tajikistan, though smaller, is still notable. Between 2021 and 2023, bilateral trade turnover between the EU and Uzbekistan increased by 2.4 billion euros, from 2.7 billion euros to 5.1 billion euros. For Tajikistan, the trade turnover grew from 398 million euros to 500 million euros, reflecting a difference of 102 million euros.
Unlike other countries in the region, Turkmenistan did not experience a similar rise in trade turnover. While its trade turnover with the EU did increase from 2021 to 2023, it dropped in 2022, and the figure for 2023 is only about 300 million euros higher than in 2013. This is due to a more complex set of factors. The primary good that the EU could import from Turkmenistan is natural gas. Although an agreement was reached in August 2023 to supply Turkmen gas to Hungary, the nature of the deal limits its potential for high export volumes, as it is a swap agreement. A direct flow of Turkmen gas through a pipeline under the Caspian Sea, with eventual integration into the existing route through Azerbaijan, Georgia, and Türkiye, could fundamentally change trade relations between the EU and Turkmenistan. This possibility is especially important given that Turkmenistan holds the world’s sixth-largest natural gas reserves.
Another important aspect to consider is how the trade turnover of Central Asian countries with the EU compares to that of other actors in the region. Figure 2 displays the share of the total trade turnover of Central Asian countries held by the EU, Russia, China, and Türkiye in 2023. While the EU holds the largest trade turnover value in the region, Kazakhstan is the only country where the EU claims the largest share of total trade, accounting for nearly 28%. However, the EU’s share is significantly smaller in other countries of the region. The EU represents only 5.9% of Kyrgyzstan’s total global trade, 11.9% of Uzbekistan’s, 11.4% of Turkmenistan’s, and 7.1% of Tajikistan’s.
When comparing trade turnover shares, the EU is a significant competitor with Russia and China in only two countries: Kazakhstan and Uzbekistan. In the cases of Kyrgyzstan and Tajikistan, Russia and China clearly dominate as trade partners, with their combined shares reaching 48.1% and 41.6%, respectively, while the EU’s share does not even reach 10%. Turkmenistan presents a different scenario, reflecting its status as a major natural gas supplier. The country is China’s primary source of natural gas, with China importing $8.07 billion worth of natural gas from Turkmenistan in the first 10 months of 2023, amounting to 96.51 million tons. This makes China Turkmenistan’s largest trade partner, accounting for 57.9% of its total trade turnover. Trade with Türkiye and Azerbaijan is also driven by fuel exports. The swap agreement signed in 2021 between Turkmenistan, Iran, and Azerbaijan, brokered by Türkiye, has played a significant role in this. Additionally, Türkiye has been actively encouraging Turkmenistan to export natural gas to the EU via its territory and Azerbaijan.
This clearly indicates that the EU has substantial room for greater expansion of trade relations with these countries. It also highlights that while the EU has been improving its trade relationships in the region, Central Asian countries have been simultaneously increasing their exposure to global trade by expanding their overall trade turnover.
Conclusion
Since the onset of the Ukraine crisis, trade between the EU and Central Asian countries has been steadily increasing. However, the share of EU trade within the total trade turnover of each regional country has not seen a significant shift. This is due to the region’s economic openness, allowing various actors—including China, Türkiye, Gulf countries, and Russia—to expand their trade relations with Central Asia. Nonetheless, the EU’s presence in the region is becoming more prominent as it emerges as a key economic competitor. The EU still has substantial potential for growth in regional trade, which has been recognized in Brussels. Recent agreements focus on increasing imports of critical raw materials, energy resources such as oil from Kazakhstan, and potentially natural gas from Turkmenistan, as well as “green” energy from Kazakhstan and Uzbekistan. This is supported by the planned construction of an undersea cable through the Caspian Sea, linking to another undersea cable across the Black Sea, connecting Azerbaijan to Hungary.
The EU’s role in Central Asia extends beyond economics into the political realm, as evidenced by the signing of Enhanced Partnership and Cooperation Agreements (EPCAs) with regional countries. For example, Kazakhstan’s EPCA was ratified by the EU in 2020, and Kyrgyzstan signed its EPCA in 2024. These agreements involve EU participation in funding projects aimed at transforming local governance, reforming the judicial system, supporting small and medium-sized enterprises (SMEs), promoting sustainable development, and improving water management, among other areas. The recent visit by the High Representative to Kazakhstan and Kyrgyzstan is also symbolic, as it only included countries that have signed EPCAs with the EU.
These developments indicate that as Central Asian countries continue to open up to global trade, the EU will increasingly engage with this emerging consumer market. Given the region’s growing importance for connectivity across Eurasia and its abundance of renewable energy and critical raw materials, EU-Central Asia relations are likely to deepen. The EU is also keen to expand cooperation beyond economics, pursuing further EPCAs with other regional countries and fostering reforms across the region.