Turkic cooperation: Organisation of Turkic States bets on free trade Review by Caliber.Az

The fraternal relations of the Turkic-speaking states based on cultural, historical, and spiritual commonality are based on the coincidence of views on almost all key issues of the political, defence and regional agenda. Therefore, the member countries of the Organisation of Turkic States have been recently striving to create a strategic union based on a solid economic foundation - participation in joint energy and transportation projects, and multi-billion mutual investments. The issue of expanding mutually beneficial business ties became one of the main issues during the recent ninth summit of the Organisation of Turkic States held in Uzbekistan’s Samarkand city.

Several global crises, namely, the COVID-19 pandemic, fuel, food, as well as transport and logistics after the beginning of the war in Ukraine, also affected the entire Eurasian region. This negativity prompts Türkiye and the allied states in Central Asia and the South Caucasus to build new platforms for expanding trade and investment cooperation, minimising external risks, and strengthening energy and food security. This process was initiated at the Summit of the Organisation of Turkic States in Istanbul in November 2021. The priorities of the long-term development concept of the Turkic-speaking countries were outlined and the basic document entitled "Turkic World Vision 2040" was adopted there. The document determined the main directions of the economy and the most optimal spheres for expanding business cooperation. First of all, the issue was to increase the efficiency of regional transport and logistics corridors, soften the customs barriers to expand cross-border commerce, introduce preferential trade mechanisms, and take other measures contributing to the sustainable development of the Caspian Sea and Black Sea regions as a whole.

Azerbaijani President Ilham Aliyev stated a huge potential for further cooperation among the Turkic-speaking countries. The president made these remarks at the ninth summit of the Organisation of Turkic States, dedicated to "New Era for the Turkic Civilisation: Towards Common Development and Prosperity" in Samarkand on November 11.

"The Turkic world covers a vast area with a population exceeding 200 million people and has great economic potential, energy resources, transportation routes and modern defence capabilities," the Azerbaijani president said.

The president stressed that taking into account national interests, the Turkic-speaking countries should continue supporting each other in the foreign arena, showing political solidarity by intensifying cooperation in the economic, trade, cultural, transport, energy, agricultural, tourism sectors, digital transformation, as well as in the field of security and defence.

This message was supported by all participants of the summit. Turkish President Recep Tayyip Erdogan confirmed the need for further steps to strengthen the positions of the Organisation of Turkic States in the international arena, reminding that a decision was made following the last year's summit in Istanbul to expand business cooperation within the Organisation of Turkic States, and Ankara is making every effort to implement these decisions into practice.

The basic principles of trade, economic and investment integration are being actively promoted both on a bilateral basis and within the Organisation of Turkic States through the joint efforts of Baku and Ankara. In particular, the volume of mutual Azerbaijani-Turkish trade exceeded $4.5 billion as of 2021, and exceeded $3.882 billion from January through August 2022, which is over a quarter more than in the same period of last year. The countries focused to bring the level of trade to $15 billion a year in the coming years, and to achieve this goal, the two fraternal countries have introduced a preferential trade regime since March 2021, which envisages the introduction of a zero customs duty rate on mutual supplies of several goods.

The trends which are being formed today show that the Azerbaijani-Turkish agreements on preferential trade in the foreseeable future will become the most important driver for the development of commercial ties among all Turkic-speaking states. In particular, Azerbaijan and its leading trade and economic partners in the Central Asian region, namely, Kazakhstan and Uzbekistan, are striving for this purpose, having signed a number of bilateral agreements to speed up transport logistics and simplify customs procedures. All this contributes to the growth of trade turnover. The volume of the Azerbaijani-Uzbek trade reached $131.06 million during the first nine months of 2022. For comparison, this figure was $111.9 million during the three quarters of 2021.

Baku and Tashkent are consistently increasing the cargo transportation volume. This figure amounted to 578,000 tons for the three quarters of this year, which is by over three times more than a year earlier – 172,100 tons.

Trade and transportation ties between Baku and Astana are also developing effectively. The bilateral trade volume amounted to $369 million during eight months, and the record levels of about $480 million can be reached by the end of the year.

Thus, the cargo transportation volume along the Trans-Caspian International Transport Route (TITR) for three quarters of this year increased by 2.7 times, exceeding one million tons. The lion's share of transit cargo transportation accounted for the fleet and railway transport of Kazakhstan and Azerbaijan. The two countries are successful as a result of the joint introduction of optimal cargo handling mechanisms in the ports of Alat and Aktau. A procedure for issuing transportation documents on the single window principle has been introduced to reduce the time for transshipment of ferry cargo between the Kazakh and Azerbaijani ports. As a result, the time has been reduced from 10-12 hours to four hours on average, while customs offices and border control organisations, temporary storage warehouses work around the clock.

At present, the member states of the Organisation of Turkic States are working on a free trade agreement in the field of investments and services, and also intend to complete the unification of cross-border procedures by signing an agreement on the creation of a simplified customs corridor, which will greatly facilitate and speed up the work of private trade companies and cargo carriers.

Azerbaijan and its foreign economic partners in the Organisation of Turkic States also plan to introduce a mechanism for a single electronic transit permit to expand road freight transportation in the near future. The member countries of the Organisation of Turkic States are planning to intend to introduce common mechanisms for simplified customs procedures, establish an exchange of analysis of customs risks by ensuring a preliminary exchange of information. After the risk analysis is available for all three countries, there will be no need for duplication of control measures, which will reduce time during the transportation of goods.

The need to accelerate this work on the eve of the ninth summit was reminded by Turkish Foreign Minister Mevlut Cavusoglu, who spoke at a meeting of the foreign ministers of the member countries of the Organisation of Turkic States in Samarkand.

“The modern world is going through a difficult period of development, and in the current situation, solidarity and unity of the Turkic-speaking states are especially significant. The importance of the Asian region is growing, and it is especially important to develop ties among our countries in expanding transport corridors, facilitating trade and customs procedures, introducing a preferential trade regime, etc.,” he said.

Cavusoglu added that it is planned to develop and implement five-year strategic cooperation programs within the "Turkic World Vision 2040" concept.

The Samarkand summit was remembered for a number of new conceptual proposals voiced by the leaders of Kazakhstan and Uzbekistan, aimed at expanding regional business cooperation. In particular, the President of Kazakhstan, Kassym-Jomart Tokayev proposed to establish a Council of Turkic "green" finance on the basis of the Astana Financial Centre to expand the market capitalisation of the member countries of the Organisation of Turkic States in the field of "green" energy and economy, climate issues, etc.

In turn, the Kazakh leader put forward the idea of establishing a venture fund for the Turkic-speaking states to attract investments in start-ups and creating a digitalisation centre for the member countries of the Organisation of Turkic States on the basis of the Astana Hub international technopark.

President Tokayev also called on the Turkic-speaking states to strengthen joint efforts to develop the transport and logistics industry, reminding that Kazakhstan plans to attract $20 billion in investments by 2025 to diversify transportation routes and develop logistics.

In turn, President of Uzbekistan Shavkat Mirziyoyev during the summit proposed to strengthen the foundations of trade and economic cooperation between the Turkic-speaking states, reminding that the mutual trade turnover among the countries of the organisation is only four per cent of their total trade turnover, which is extremely small.

The Uzbek president, who initiated the creation of the "Space of New Economic Opportunities" within the Organisation of Turkic States, the members of the organisation should introduce mechanisms for the free promotion of trade, investment and services, including joint entry into the markets of third countries, the creation of continuous value chains, high-tech clusters and etc.

The Samarkand Declaration was adopted as a result of the ninth summit of the Organisation of Turkic States, and the foreign ministers of the member countries of the Organisation of Turkic States signed a number of important documents on the rules and procedures of the Organisation of Turkic States for 2022-2026, as well as agreed on the basic points of the medium-term strategy of the organisation.