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Azerbaijan and the European Union

Cooperation instead of integration.

July 25, 2019 - Rusif Huseynov - Articles and Commentary

The then EU High Representative Federica Mogherin meets with Azeri President Ilham Aliyev in Vienna on May 16 2016. Photo: European External Action Service (cc) flickr.com

According to recent news, the European Union and Azerbaijan are negotiating to finally sign a historic agreement within the framework of the Eastern Partnership. The talks kicked off in February 2017 and are allegedly in the final stage.

Azerbaijan holds a unique position among the six Eastern Partnership countries. Unlike Georgia, Moldova and Ukraine, which have prioritised a set of pro-western policies and Armenia and Belarus, which are officially in the pro-Russian camp, Azerbaijan has become totally neutral without any sign or hint of joining any bloc.

In the beginning, Azerbaijan was more optimistic about its pro-western policy and designated the European path as a priority in the 1990s. Since then, the country has joined various European institutions. When Azerbaijan became admitted to the Council of Europe (CoE) in 2001, it was celebrated in the country as a big and historic event. En route to the Council of Europe membership, Azerbaijani authorities had to re-adjust its national legislation to CoE standards. I myself remember how membership in the CoE was cheered on by the local public, who saw this accomplishment as a first step towards ultimately joining the European family.

Azerbaijan’s relations with the European Union was first formalised with the Partnership and Cooperation Agreement, which came into force in 1999. It was at this time, the turn of the century, when Azerbaijan, together with Georgia, Moldova and Ukraine created the international organization known as the Organization for Democracy and Economic Development (GUAM), to signal the trans-Atlantic community about their pro-western aspirations.

Up until the mid-2000s, Azerbaijan’s westward integration was considered and discussed in the country as something natural, historically necessary and irreversible. I personally remember the narrative prevalent in the first half of the 2000s. First as a schoolboy I would hear, watch and read extensively about Azerbaijan’s European integration on the mass media. Later, at university, the topic was again dominant among the faculty and students, with myself having dedicated my 2008 bachelor’s thesis to the European integration processes of the South Caucasus states.

In recent years, however, Azerbaijan’s pro-European course was reversed and replaced by the so-called balancing policy. As a result, the negotiation of the Association Agreement, launched in 2010, was stopped in 2013 when the Azerbaijani authorities stated that they were no longer interested in the deal, and instead offered agreements to individual European Union states on policies like energy cooperation and strategic partnership. Unlike Ukraine, Georgia and Moldova, all of which have signed association agreements, comprehensive free trade agreements and reached visa-free regimes with the European Union, Azerbaijan seems more interested in cooperation rather than integration, thus stopping short of regulatory alignment.

So what happened to Azerbaijan’s European Union policy? Why did Baku decide to distance itself from the European integrationist projects unlike its partners in GUAM?

There are several reasons for this policy change. The overall policy of balancing was implemented by required the Azerbaijani authorities to alienate Baku themselves from any political and military blocs. By avoiding commitments international and supranational organizations, the Azerbaijani authorities Baku desires to maintain an independent foreign policy and not get involved in confrontations between large powers.

According to the vision in Baku, strategic cooperation should take place in the form of energy security — such an energy cooperation agreement was signed in 2006. It has also created a certain dissatisfaction as some critics reiterate that the European Union’s energy agenda has always shadowed its policies on human rights and democracy, despite the European Union’s claims of representing a value-driven identity, democratic principles and its claim to support democracy in other countries. These values and norms can be assessed to be obstacles that keeps the Azerbaijani authorities out of the European Union’s framework.

Russia also plays a key role in the careful position of the Azerbaijani government: most Eastern Partnership members had to face Russia’s harsh reaction because of their relationship with trans-Atlantic organizations. Many understood that the 2008 Russian-Georgian war was Moscow’s response to Tbilisi’s enthusiastic pro-EU and pro-NATO policies. In a similar manner, Ukraine, after the pro-Western Euromaidan revolution, was punished with the occupation of Crimea and the Donbas. Moldova has repeatedly been subject to Russia’s economic sanctions. Under Russian pressure, the former Armenian President, Serzh Sarkisian, refused to sign the 2015 agreement. Utilising coercive policy while exerting different types of pressure on the Eastern Partnership countries, Moscow repeatedly underlines that they belong to the near abroad, the strategic and exclusive area of Russian interests. The start of harsh Russian policy coincided with when Azerbaijan began losing its interest in integration projects.

On the other hand, from the mid-2000s onwards, Azerbaijan became the recipient of huge dividends generated by its petroleum industry. It boosted resource nationalism in Azerbaijan: the government became less interested in any type of integration in order to not share its control over national resources. This factor led to and financially enabled Azerbaijan to pursue a relatively independent and neutral policy by avoiding the integration frameworks of any blocs and resisting the need for financial aid from them.

Pragmatic approach

Europe’s unclear position toward the Karabakh issue also contributes to downgrading its relations with Azerbaijan. At the Munich Security Conference in 2017, Azerbaijani President Ilham Aliyev summarised the government’s reasons for the rejection of the Association Agreement, which he called a “unilateral instruction”. The main reason he cited was the lack of “a very precise wording about resolution of the conflict between Armenia and Azerbaijan based on territorial integrity of Azerbaijan”. Similar agreements, as well as other documents by European institutions, “regularly highlight the occupation of Georgian, Moldovan and Ukrainian territories, but simultaneously neglect the case of Azerbaijan”.

Parallel to the government’s reluctance, the Azerbaijani society over the years has become disillusioned with the prospect of integration with the west. While the popular narrative among the Azerbaijani public still sees Azerbaijan as a secular and European country, it also asserts that not all European values and norms (namely, gay rights) may comply with Islamic and Caucasian elements of the local values. You can now hear among ordinary Azerbaijanis, sometimes even among the intelligentsia, that by pushing Turkey aside the European Union demonstrated that it prefers to be a Christian club that would not welcome Azerbaijan.

Additionally, how Georgia and Ukraine were left alone vis-à-vis Russia in 2008 and 2014 respectively influenced people’s minds in Azerbaijan. As a result of a direct confrontation with Russia, Georgia’s territorial problems were sharpened, while Ukraine was also dismembered. Avoiding any direct confrontation with Russia appears to be the more expedient policy.

One should underline the Karabakh issue again: the public has been disappointed with the so-called double standards the European Union has demonstrated. More actions and tangible results are obviously expected from the European Union. In recent years, Brussels has shown clear support for the territorial integrity of Georgia and Ukraine, with some European countries targeting Russia, the aggressor, with sanctions for the occupation of Ukraine. The European Union’s position regarding the Nagorno-Karabakh conflict looks rather vague with no measures being employed against another invading state, Armenia.

Therefore, it is no coincidence that skepticism about European integration both at governmental and societal level strengthened in Azerbaijan in the late 2000s and early 2010s, when oil revenues to the country increased and geopolitical confrontation in Eastern Europe escalated.
Nevertheless, the EU-Azerbaijani relations are well developed, especially when it comes to trade. The European Union currently represents almost half of Azerbaijan’s trade, accounting for 48.6 per cent of turnover and remains the largest foreign direct investor in the country’s oil and non-oil sectors. Over the past six years, European countries have invested about 16 billion US dollars in Azerbaijan’s economy.

To formalise the framework of the relationship, the current negotiations on the partnership agreement were launched in February 2017 and are allegedly progressing well. With the new agreement — which will replace the obsolete Partnership and Cooperation Agreement of 1996 — Azerbaijan will assimilate certain legislation to European Union norms and standards. This agreement is very similar to the agreements it has signed with the countries within the European Union Eastern Partnership Program; the document is believed to encompass political, economic, commercial, regional and energy security. Meanwhile, for the first time, the European Union is preparing an agreement with a country that is not a member of the World Trade Organization (WTO). In other words, the parties have to fill in the gap and find mechanisms until Azerbaijan joined the WTO and it is necessary to negotiate on all issues relating to trade and economy.

The Azerbaijani side always seems eager to prioritise the energy cooperation with the European Union, as the latter is an important destination for Azerbaijan’s oil and gas exports. As one of the promoters and architects of the Southern Gas Corridor, Azerbaijan is currently turning into a vital actor in oil and gas supply and transport communications between the European Union and Central Asia (as well as the Middle East). As a strategic initiative to deliver brings Caspian, Central Asian and Middle Eastern gas resources to the European market, the Southern Gas Corridor can be instrumental in the European Union’s energy security in terms of diversifying its energy supplies. An important link within this framework is the Trans-Anatolian Pipeline (TANAP), which is designed to deliver Azerbaijani gas into European markets through Turkey and is expected to be commissioned in 2020.

Since starting talks, Baku has mainly focused on the quality of this framework agreement with Europe rather than its quick completion. But it has also led to the uncertainty regarding the timeline. The European and Azerbaijani sources expected early April and then mid-May as the time when the strategic partnership agreement between Azerbaijan and the European Union would be finished. The Azerbaijan Foreign Ministry indicated that the sides were close to completing their talks on the agreement, with over 90 percent of the issues in question already decided. When answering a relevant question, the European Union foreign affairs chief Federica Mogherini said: “Whenever there is a strong political will, things become realistic, so inshallah, we might get there”. In any case, it is obvious that the document is going to be signed after the new European authorities will be installed.

Expectations and understanding 

Azerbaijan’s current government is definitely interested in keeping itself out of closer integration with the EU and instead is strengthening cooperation through energy and transport projects. It suits the Azerbaijani government more in terms of keeping tight control over the country and its resources.

Baku expects an unambiguous stance from the European Union on the Nagorno-Karabakh conflict instead of its current double standard. In return, Brussels looks forward to more activity from Baku on political and economic reforms.

One thing is clear, regardless of the present developments, many experts in Azerbaijan affirm the country’s destiny is connected to the European Union. It is Azerbaijan’s key trade partner and destination for Azerbaijan’s oil and gas exports. In turn, Azerbaijan should definitely absorb European values like good governance and a more active civil society.

Rusif Huseynov is the co-founder of the Topchubashov Center, Azerbaijan. His main interest is in peace and conflict studies, while his focus areas mainly cover Eastern Europe, the Middle East, the Caucasus and Central Asia.

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