Saturday, 10 August 2024

Trans-Caspian International Transport Route

Reflecting new geopolitical and economic realities

The ongoing Russian-Ukrainian conflict and security issues in the Red Sea due to Houthi attacks have pushed European countries to seek alternative trade routes to China, avoiding Russia, the Red Sea, and the Suez Canal.

The focus has shifted to the Middle Corridor, or Trans-Caspian International Transport Route (TITR), a key land-sea-rail trade route linking China with Europe.

In 2023, China was the EU's third-largest export partner and a major source of imports. Germany, France, and the Netherlands lead in EU exports to China.

The Middle Corridor spans 4,256 kilometers and includes both land and sea routes. It starts in Kashgar, China, travels through Kyrgyzstan and Uzbekistan to Türkmenbaşy on the Caspian Sea, and then moves through Azerbaijan, Georgia, and Turkey before reaching Europe.

This route is faster compared to the Northern Corridor through Russia, which covers about 10,000 kilometers and takes 15 days, whereas the Southern maritime route via the Red Sea and the Suez Canal is around 20,000 kilometers and takes 45-60 days.

The World Bank reported an 88% increase in cargo volume on the TITR in early 2023, highlighting its growing importance.

Central Asia, a geostrategic hub, has been bolstering infrastructure and aligning with China and the West for investment and development.

The region's significance has grown, especially after the United States withdrawal from Afghanistan and increased competition among Russia, China, the United States, and the European Union. President Biden's meeting with Central Asian leaders in September 2023 underscored this shift.

The US is promoting the C5+1 Dialogue to exploit the region’s mineral wealth, while Japan is also increasing its engagement, with plans for a summit in August 2024 and potential projects in renewable energy.

The EU, a major donor and investor in Central Asia, has intensified its involvement as the region seeks to diversify from Russia and China.

In June 2023, EU President Charles Michel visited Kyrgyzstan for the Second EU-Central Asia Summit, and in June 2024, Kyrgyzstan signed the Enhanced Partnership and Cooperation Agreement (EPCA) with the EU.

This agreement, replacing the old Partnership and Cooperation Agreement, aims to deepen ties in trade, investment, and various sectors, reflecting new geopolitical and economic realities.

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