Minister: Share of EU countries in Azerbaijan’s turnover increases [UPDATE]

By  Trend

The European Union is the main foreign trade partner of Azerbaijan. This 28 Member States union with a total population of more than 500 million people is Azerbaijan´s biggest economic partner providing country’s 38 percent of foreign trade share.

Azerbaijan’s Minister of Economy Shahin Mustafayev stated this at the Azerbaijan-EU business forum in Baku on June 8. 

The minister noted that the EU is also the biggest investor in Azerbaijan’s fixed capital.

“Over the past time, EU investments in Azerbaijan’s fixed capital amounted to about $20 billion or 46 percent of the total volume of investments. Meanwhile, EU countries invested $3 billion in the non-oil sector of Azerbaijan’s economy, which accounts for 35 percent of total investment volume in this sector,” said Mustafayev.

Currently, more than 1,300 European companies operate in Azerbaijan, he added.

The minister said that along with the relations with the EU, Azerbaijan’s bilateral relations with various EU member states are also developing.

“Until today, Azerbaijan signed agreements on eliminating double taxation with 23 countries of the EU, agreements on expanding and protecting investments – with 17 countries,” he noted.

Mustafayev also said that Azerbaijan has joint intergovernmental commissions with 13 EU countries.

“Moreover, we have already signed agreements on strategic partnership with seven EU countries,” noted the minister adding that over the past five years, 123 business forums and business meetings were held with EU countries.

Mustafayev then spoke of the Free Trade Zone, noting that expertise of the draft law “On Free Trade Zone (FTZ)” in Azerbaijan will be completed soon.

“The master plan of the FTZ, its feasibility study, as well as the draft law “On Free Trade Zone” are ready,” he noted. “A special commission has been set up to carry out the expertise of legal framework, and the commission should soon submit a final version of the draft law to Azerbaijan’s leadership.”

The free trade zone covering the territory of the Baku International Sea Trade Port in the Alat township of Baku’s Garadagh District is being created in accordance with a presidential decree on March 17, 2016.

Mustafayev added that the volume of cargo transportation through the Baku International Sea Trade Port grew by 23 percent in January-April 2017.

“The volume of oil transportation increased by 21 percent and non-oil – by 35 percent in January-April 2017 as compared to the same period of 2016,” he said. “Moreover, the volume of road freight increased by 46 percent.”

Touching upon South Caucasus Pipeline, Mustafayev said that construction works on the pipeline progress on schedule.

The Minister emphasized that the South Caucasus Pipeline Expansion Project has been completed by 85 percent, while the Trans-Anatolian Natural Gas Pipeline (TANAP) has been constructed by 72 percent and Trans-Adriatic gas pipeline project - by 42 percent.

The work will be completed in a timely manner, according to the Minister.

“We are in close cooperation with the EU countries in the implementation of the pipeline project. Azerbaijan is a reliable partner in ensuring energy security of EU countries,” the minister added.

The minister further spoke of industrial parks of Azerbaijan, saying that as much as $800 million have been invested in five operating industrial parks of the country so far.

He said that at present, about 5,000 new jobs have been created thanks to the industrial parks.

The minister noted that 154 investment promotion documents have been issued so far, which makes it possible to invest about 1.5 billion manats in Azerbaijan’s economy.

Currently, the work is underway in Azerbaijan to establish plants and enterprises in the Sumgait Chemical Industrial Park, industrial parks in Balakhany, Garadagh, Mingachevir and Pirallakhi settlements, Sumgait and Mingachevir high technology parks, as well as Neftchala and Masalli industrial districts.

Residents of Azerbaijan’s industrial parks are exempt from taxes on real estate, land, profits and VAT on equipment imports for seven years.

Director “Neighbourhood East” in the Directorate-General for Neighbourhood and Enlargement Negotiations (DG NEAR) Lawrence Meredith speaking at the forum said that the volume of direct investments from the European Union (EU) to Azerbaijan amounted to seven billion euros, adding that EU is the biggest investor in Azerbaijani economy.

More than 2.5 billion euros out of this amount were used for the non-oil sector of the Azerbaijani economy, he said.

“We see that Azerbaijan is aimed at diversifying its economy. Despite the fact that energy is a key sector in our relations, we also welcome new directions of mutual cooperation,” noted the EU official.

Speaking with reporters Head of the EU Delegation to Azerbaijan Malena Mard said that the EU and Azerbaijan are very interested to further enhance the economic cooperation.

“We are organizing the 3rd EU-Azerbaijan business forum. As you see, we have over 400 participants from over 300 companies. Of course, I think, this is a very clear signal that there is a large interest between the EU and Azerbaijan to even further enhance trade and economic cooperation,” she said.

Mard pointed out that the EU is the largest trade partner and the major investor including in the non-oil sector in Azerbaijan.

“Of course, we want to work with Azerbaijan on the diversification and reform agenda,” she added.

Mard reminded that the EU Commissioner for Neighborhood Policy and Enlargement Negotiations Johannes Hahn will visit Azerbaijan on June 16.

She also gave information about the ongoing talks to be held on June 12-14 on the new strategic partnership agreement between the EU and Azerbaijan.

“We have talks regularly ongoing. Already next week in Baku I will have two delegations discussing the new agreement, including one delegation especially from DG Trade (Directorate General for Trade of the European Commission),” added Mard.

The European Council adopted a mandate for 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 in November 2016.

The new agreement should replace the 1996 partnership and cooperation agreement and should better take account of the shared objectives and challenges the EU and Azerbaijan face today.

The agreement will follow the principles endorsed in the 2015 review of the European Neighborhood Policy and offer a renewed basis for political dialogue and mutually beneficial cooperation between the EU and Azerbaijan.

The new agreement envisages the compliance of Azerbaijan’s legislation and procedures with the EU’s most important international trade norms and standards, which should lead to the improvement of Azerbaijani goods’ access to the EU markets.