CPC - Caspian Policy Center


traceca to be integrated into china’s belt and road initiative

TRACECA to Be Integrated into China’s Belt and Road Initiative


Jul 27, 2018

The Transport Corridor Europe Caucasus Asia (TRACECA) representation in Azerbaijan hopes for further cooperation and integration with China’s Belt and Road Initiative (BRI). The importance of TRACECA lies in its ability to facilitate the development of railway transportation and boost the regional economy. It implicitly promotes the growth of private business sectors by attracting investments, initiating infrastructure projects, and implementing the latest technologies aimed at developing communications systems. Merging with BRI would have a crucial impact on the currently existing TRACECA route. TRACECA to fulfill expectations regarding trans-regional logistics Bypassing 5 European countries, 3 South-Caucasian countries, and 5 Asian countries, TRACECA is a network of overland and sea routes that ensure a direct connection between Asia and Europe. Trade among TRACECA members surpassed $40 billion by 2007, while their combined trade with the EU reached $290 billion; most of the transportation occurred along the Azerbaijani-Georgian segment of the corridor. By 2010, 78 infrastructure projects were created, including 64 technical assistance projects and 14 investment projects. In January 2015, an agreement to intensify container service on the China-Kazakhstan-Azerbaijan-Georgia-Turkey route was reached. Azerbaijani authorities believe that by 2020 around 300,000-400,000 containers can be transported via this route; consequently, billions of profits will be brought to its participants. Further development of TRACECA is certainly going to provide its landlocked Eurasian member-states with more access to the East-West and North-South trade routes. BRI’s impact on TRACECA China’s interest in TRACECA mainly lies in lowering transportation costs. The main flow of container cargo from China is now transported through Russia and Belarus. Although the TRACECA route is longer, it provides certain benefits for shippers from China due to lower customs tariffs. The integration of TRACECA into China’s BRI is likely to increase transportation volume along the route since a large amount of Chinese consumption goods can balance the limited non-energy export base of most member-states within the transport corridor. The BRI can also help upgrade the existing infrastructure, such as renovating the power supply facilities and the railway's electrification. However, technical challenges also exist in the BRI-TRACECA integration. Most of the former USSR countries have been using wider rail gauge than that of the European countries, as well as Iran, India, and China. Unification of vehicle standards is needed for the smooth interlink of BRI and TRACECA projects. Difficulties in “soft infrastructure” also need to be conquered, such as the simplification of the border-crossing procedures, development of the tariff policy, and institutional strengthening; consequently, these all require multilateral and cross-sector negotiations. (Source: Railway Pro, PONARS Eurasia, and Trend.az.)

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