EU names relevant areas for future bilateral economic cooperation

Azerbaijan’s position as a transport hub presents a lot of opportunities for businesses, European Commission's spokesperson told Trend.

The spokesperson noted that the EU has over 300 companies doing business in Azerbaijan coming from over 20 member states.

"The EU accounts for around 50 percent of Azerbaijan's total foreign trade, with bilateral trade flows amounting to over 11 billion euros in 2017 (1.7 billion eurosin EU exports to Azerbaijan; 9.4 billion euros in imports from Azerbaijan into the EU). EU imports from Azerbaijan are mostly (98 percent) fuels and mining products, while EU main exports to Azerbaijan are machinery and chemical products (nearly 45 percent)," said the European commission’s representative.

The spokesperson went on to add that the EU is also the biggest investor in Azerbaijan: the EU has invested over $20 billion in the country (representing 46 percent of total foreign direct investments) over the past 11 years and it is the largest foreign investor both in the oil and non-oil sector.

"Though these figures are encouraging, much more could be done as regards the Azerbaijani investment climate. In particular, the country's position as a transport hub presents a lot of opportunities for businesses. Industry, transport, agriculture, information technology, tourism, education and health are some examples of areas that are relevant for future EUAzerbaijan economic cooperation," said the European Commission’s representative.

The spokesperson pointed out that to achieve such progress, Azerbaijan should move towards the diversification of its economy to ensure the country's transition to a sustainable private sector-led nonoil growth model.

"The Azerbaijan government has undertaken certain actions in this direction and reforms in various sectors are envisaged. The EU stands ready to support Azerbaijan in this endeavour through the provision of EU expertise and best practices accompanying those reforms," added the European Commission’s representative.

In this regard, the spokesperson believes that the launch of negotiations in February 2017 on a new bilateral comprehensive agreement has given new impetus to the cooperation between the EU and Azerbaijan.

"The new agreement will replace the current Partnership and Cooperation Agreement. The main objective for the trade negotiations is to create a more solid basis for economic convergence of Azerbaijan with the EU and with international standards as well as for its longawaited future membership in the World Trade Organization. The agreement should result in a reduction of barriers to trade, improve the business environment and encourage sustainable development for the benefit of citizens," added the spokesperson.

In November 2016, the EU Council issued a mandate to the European Commission and the High Representative for Foreign Affairs and Security Policy to negotiate on behalf of the EU and its Member States a comprehensive agreement with Azerbaijan.

The new agreement should replace the partnership and cooperation agreement of 1996, which would make it possible to take greater account of the common goals and challenges facing the EU and Azerbaijan today.

The agreement will comply with the principles approved in 2015 in the document of the European Neighborhood Policy and will offer an updated basis for political dialogue and mutually beneficial cooperation between the EU and Azerbaijan.

At present, bilateral relations between the EU and Azerbaijan are regulated on the basis of the partnership and cooperation agreement, which was signed in 1996 and entered into force in 1999.

The new agreement provides for the approximation of Azerbaijan's legislation and procedures to the most important international and trade norms and standards of the EU, which should lead to improved access of Azerbaijani products to the EU markets.