Kazakhstan

The Enhanced Partnership and Cooperation Agreement (EPCA), which entered into force on 1 March 2020, governs trade and economic relations between the European Union and Kazakhstan. Kazakhstan is the first Central Asian partner to have concluded an EPCA with the EU.

The EU is Kazakhstan’s biggest overall trading partner, as the destination for 37% of total Kazakh exports and representing 27.9% of its total trade in 2023. The EU is also the biggest foreign investor in Kazakhstan, providing €54.8 billion of total foreign direct investment (FDI) stock in 2022: a 5.5% increase compared to 2021.

Trade picture

• In 2023, the EU's trade in goods with Kazakhstan totalled €42.4 billion, a 5.6% increase on 2022. EU exports were worth €12.1 billion, a 17.2% increase on 2022, and imports from Kazakhstan reached €30.3 billion (up 1.6% vs. 2022). The trade balance in 2023 was €18.2 billion in favour of Kazakhstan, compared to €19.5 billion in favour of Kazakhstan in 2022.
• The EU's substantial trade deficit with Kazakhstan mainly results from Kazakhstan's oil and gas exports. Exports from Kazakhstan to the EU are dominated by mineral products (representing 91.5% of total Kazakh exports to the EU in 2023 – €27.7 billion). EU exports to Kazakhstan are more diverse: for example, machinery and transport equipment (52.9% of total EU exports in 2023), chemical products (16.1%), optical products (5.1%), metals (4%), plastics (3.9%), and textiles (3.2%).
• EU services exports to Kazakhstan stood at €2.1 billion in 2022, compared to €1.5 billion in 2021. Imports of services from Kazakhstan stood at €0.99 billion in 2021, vs. €0.7 billion in 2022.

The EU and Kazakhstan

The EPCA was signed in 2015 and began to be provisionally applied on 1 May 2016. After its ratification by all EU Member States, the agreement entered into force on 1 March 2020, replacing the Partnership and Cooperation Agreement of 1999.

The EPCA creates a better regulatory environment for businesses in areas such as:

• trade in services;
• establishment and operation of companies;
• capital movements;
• raw materials and energy;
• government procurement, and;
• intellectual property rights.

The full implementation of the trade part of the EPCA is an important issue, which will facilitate foreign investment and diversification. There is room for improvement in trade flows in both directions: as regards Kazakhstan's exports to the EU, mineral products (oil, gas and uranium) are over-represented and represent roughly 90% of total exports. 

This lack of diversification makes Kazakh exports very volatile and exposed to the risk of sudden shocks.  

As the EU and the world aim to cut greenhouse gas emissions in the coming decades, Kazakhstan needs to make the best possible use of the available time to reduce its dependence on fossil fuel exports. The EU is committed to cooperating with Kazakhstan in making this transition a success. 

In May 2023, the Commission received a mandate from the Council to negotiate a Protocol to the EPCA with Kazakhstan as regards the protection of Geographical Indications (GIs) for agricultural products and foodstuffs, wines and spirits.  

On raw materials, on 7 November 2022, European Commission President Ursula von der Leyen and Alikhan Smailov, prime minister of Kazakhstan, signed a Memorandum of Understanding (MoU) on Strategic Partnerships on Sustainable Raw Materials, Batteries, and Renewable Hydrogen Value Chains. The strategic partnership with Kazakhstan on raw materials is part of the EU's policy to ensure access to a secure, diversified, affordable and sustainable supply of critical raw materials.

The MoU provides a political framework for enhanced cooperation in the current geopolitical context, while aiming to ensure the development of a secure and sustainable supply of critical raw materials and refined materials vital for the green and digital transitions and for the decarbonisation of energy production. By aiming to develop renewable hydrogen and battery value chains, it will boost the green and digital transformation of both sides’ economies. A 2023-2024 roadmap setting out concrete action to achieve the MoU's goals has been agreed with Kazakhstan.

On 17 June 2019, the Council adopted Conclusions on a new EU Strategy on Central Asia, which provides a framework for strengthening regional cooperation, and for addressing new opportunities and challenges in the region.

The Strategy on Central Asia offers a broad basis for cooperation and has since been complemented by the Global Gateway Strategy and the European Green Deal, which are also relevant for the EU’s relations with the region. Russia’s military aggression against Ukraine and the ensuing challenge of preventing the circumvention of EU sanctions against Russia, while seeking even deeper and closer trade relations between the EU and Central Asian countries, will have to be handled in parallel.

Kazakhstan and the WTO

• Kazakhstan became the 162^nd member of the WTO in 2015. The EU had consistently supported Kazakhstan’s accession.

Cooperation Council

High-level discussions on progress made in implementing the EPCA take place annually in the framework of the EU-Kazakhstan Cooperation Council. Its 20th meeting was held on 23 May 2023 in Astana.

Technical dialogue on trade, investment and customs takes place regularly in the Cooperation Committee in Trade Configuration and in the Customs Sub-Committee.

In addition, in summer 2019, a high-level EU-Kazakhstan Business Platform was launched in order to make possible direct dialogue between Kazakh authorities, business representatives and EU Heads of Mission.

It brings to the attention of the Kazakh leadership concrete business climate difficulties, as well as opportunities (it helps to solve concrete cases, based on close cooperation with EU Member States and companies, in particular for addressing concerns shared by EU investors with regard to some taxation issues).

Committees and Dialogues

The EU and Kazakhstan meet regularly to discuss issues and best practices and oversee the proper functioning of the Agreement.

Technical committee meetings - agendas and reports

Trading with Kazakhstan

• Importing into the EU from Kazakhstan
  • EU trade defence measures on imports from Kazakhstan
• Exporting from the EU to Kazakhstan
  • Trade defence measures in force in Kazakhstan
• Trade relations are part of the EU's overall political and economic relations with Kazakhstan
• Kazakhstan is a member of the World Trade Organization