2023-05-03
BAKU, Azerbaijan, May 4. Today, the
partnership between Azerbaijan and the countries of Central Asia is
more flourishing than ever. At the same time, cooperation in the
area of transportation and logistics is of main focus right now.
Complex geopolitical reality has forced to reroute cargos going
from East to West. And Azerbaijan’s role in this regard has only
increased. Azerbaijan provides very valuable transportation route
for Kazakhstan, and not only for its oil exports, but also for
uranium. Azerbaijan is also a transit country for petrochemicals
and fertilizers from Turkmenistan. These cargos are primarily
important for the European countries. For instance, Uzbekistan also
strives to launch supplies of its resources, in particular,
uranium, to Europe. The country is currently in talks with France
in this regard.
As an article in the French La Gazette online newspaper reads, trade and
transport routes were the focus of Uzbek President Shavkat
Mirziyoyev’s discussions during his official visit to France on
21-22 November 2022, following a busy autumn of meetings aimed at
strengthening ties between the EU and Central Asia.
The increased engagement between these geographically distant
regions comes as Russia’s war in Ukraine prompts both sides to seek
closer partnerships and new trade routes.
Increased trade was one of the key commitments made during talks
between Mirziyoyev and French President Emmanuel Macron on 22
November 2022.
President Mirziyoyev devoted much of his visit to promoting
investment in Uzbekistan, presenting his country as a stable
investment opportunity in an unstable world.
“We are trying to ensure that Uzbekistan is associated, for the
foreign investor, above all with stability and predictability,”
President Mirziyoyev assured the French business leaders on the
sidelines of his visit to Paris..
Among the French industrial giants represented were aircraft
manufacturer Airbus, water and waste management company Suez,
rolling stock company Alstom, renewable energy company Total Eren,
French state-owned electricity generation and supply company EDF
(Électricité de France), investment bank Natixis and international
nuclear fuel cycle expert Orano.
Tashkent wants to take advantage of Uzbekistan’s participation
in the EU’s Generalised System of Preferences, which exempts
members from paying import duties.
Last year, Uzbekistan was granted enhanced GSP+ status, which
allows it to export 6,200 products duty-free to the EU in exchange
for commitments on good governance and sustainable development.
Tashkent wants to increase its exports to the EU to $700 million
next year and double the number of products exported to 600,
Uzbekistan’s foreign minister Vladimir Norov announced at the
recent EU-Central Asia connectivity conference.
Total trade between the EU and Uzbekistan amounted to 2.8
billion euros in 2021, well below the $7.5 billion and $7.4 billion
the country traded with Russia and China respectively.
According to the President Mirziyoyev ‘s office, the figure for
trade agreements signed during his visit is approximately 6 billion
euros, but no further details are given.
To achieve the goals set, it is essential to develop other trade
routes between Central Asia and Europe, now that the shortest route
through Russia is no longer feasible because of the war in
Ukraine.
Norov stressed the need to develop the Trans-Caspian
International Transport Route (TTIR), or “Middle Corridor”, which
bypasses Russia and crosses the Caspian Sea. The EU and Central
Asian countries, including Kazakhstan and Uzbekistan, are working
to eliminate bottlenecks, but this will take several years.
As Euromonitor International, a provider of market analysis,
noted in a recent report on the trade potential of the EU and
Uzbekistan, “the lack of maritime access and the long physical
distance to the EU’s main production centers could be barriers that
limit some of the growth potential”.
“This is why it is essential to further develop maritime, land
and rail links with EU markets,” the report said.
On the sidelines of his latest visit to Paris, Mirziyoyev also
signed a three-year cooperation agreement (until 2025) with the
French Development Agency for projects in agriculture, energy,
water, transport, finance and the green economy, worth a total of 1
billion euros.
However, discussions on a possible collaboration with Orano on
the construction of a nuclear power plant to solve Uzbekistan’s
rampant energy shortages were not disclosed.
Emmanuel Macron has pledged to modernize and develop the
country’s nuclear industry in a dramatic policy reversal, reversing
his predecessor’s pledge to cap the share of nuclear power
supplying France at 50 percent – down from the current 70 percent,
the highest in the world.
The French president has proposed the construction of six new
French-designed EPR2 reactors, to come on stream from 2035, with an
option for eight more. The bill aims to streamline the
administrative and bureaucratic processes required to approve and
build new plants. It also removes the 50 percent cap introduced
only eight years ago by former president François Hollande.
The bill’s main sponsor, Renaissance Party member Maud Bregeon,
said the legislation would “enable France to achieve carbon
neutrality” by increasing the share of low-carbon energy derived
from nuclear sources. She added that it would also strengthen the
country’s energy independence as European countries struggle to
cope with the war in Ukraine without Russian gas and oil.
In a report coinciding with the start of the National Assembly
debate, Greenpeace said on Saturday that France’s nuclear industry
was “under Russian influence” because of its dependence on uranium
imports from former Soviet bloc countries whose exports pass
through Russia.
In 2022, “nearly half of France’s natural uranium imports came
from Kazakhstan and Uzbekistan”, the environmental group said, with
most of them arriving at the port of St Petersburg via the Russian
nuclear company Rosatom, “which controls the transport of all
nuclear-related materials transiting Russian soil”. Indeed,
Tashkent signed an agreement with Russia’s Rosatom in 2017, but may
end up looking for other solutions in case of collateral damage
from Russia’s war in Ukraine.
Investment cooperation between Uzbekistan and France is
promising in many sectors of the economy, especially in areas where
France has a leading position in the world, e.g. mechanical
engineering, energy, chemical industry, including perfumery,
pharmaceutical industry, agriculture, especially viticulture,
production of building materials, as well as tourism and
science.
Central Asia was an important source of uranium for the former
Soviet Union. Uranium has been mined for over 50 years and uranium
ore has also been imported from other countries for processing.
Uzbekistan is the world’s fifth largest supplier of uranium with
3,500 tons of production, according to the World Nuclear
Association. The country was a major source of Russian uranium
until its independence in 1991. Joint ventures are active in the
development of the ore in the country. In December 2019, a company
called “Nurlikum Mining” was founded, 51 percent of which is owned
by the French nuclear company Orano, and 49 percent by the
Geological Committee of Uzbekistan. In November last year,
immediately after the meeting of the presidents of the two
countries, a tripartite agreement was signed between the State
Committee on Geology and Mineral Resources of Uzbekistan, the Uzbek
state enterprise “Navoiyuran” and the French company “Orano Mining”
on the expansion of cooperation in the field of uranium production
and processing.
This agreement would be the basis for an “exclusive strategic
alliance” between the two countries in the field of uranium mining.
The government of Uzbekistan plans to increase the volume of
uranium production in the coming years in the context of changing
global energy markets.
In summary, in recent years, trade and economic cooperation with
France has grown and diversified, covering more and more sectors
and directions, but despite this, it has enormous untapped
potential.
France’s vital trade links, raw material base and transport
network lie along the Trans-Caspian International Transport
Corridor. Perhaps it is time for France to take a closer look at
the region situated in the East of the South Caucasus.
