Caspian Energy (CE): Ambassador Kobia, how would you assess present economic cooperation between EU and Azerbaijan? 

Roland Kobia, European Union Ambassador to the Republic of Azerbaijan: The Economic cooperation between the EU and Azerbaijan is clearly centred on energy for the time being. Close to 100% of exports of Azerbaijan to the EU are about hydrocarbons and derived products. The EU is currently the biggest market for Azerbaijani’s oil exports, accounting for almost half of its sales. Azerbaijani oil volumes constitute an important role in the energy balance of a number of EU Member States while the country’s role as a gas supplier is still marginal. However in 6-7 years, the gas supply to the EU is set to significantly increase after the final investment decision for and the evacuation route for the Shah Deniz II gas field will be operational. The strong interdependence of the two partners has turned our relationship in this sector into a strategic one as reflected in the MoU of 2006 and underlined by the Joint Declaration on the Southern Gas Corridor in 2011. Our cooperation is still deepening in this sector but also widening to other sectors. To exploit the full potential of EU markets, Azerbaijan needs to swiftly and strongly diversify its economy.

Regarding EU exports to Azerbaijan it is more versatile but machinery (including cars), luxury and consumer products and processed food dominate. The high degree of diversification and competitiveness of the EU economy puts the EU in a good position to assist Azerbaijan in its plans to diversify its economy and to increase its competitiveness in the world market. The EU is offering to Azerbaijan a “Deep and Comprehensive Free Trade Agreement” to integrate the Azerbaijani economy into the Common European Market. However a major obstacle remains that Azerbaijan is not yet a member to the WTO. Membership to WTO is a precondition for the DCFTA for technical reasons. At the same time the EU is assisting Azerbaijan in its accession process and in its strife to diversify the economy through technical assistance projects.