Unified Tariff Agreement for the Trans-Caspian Middle Corridor: The Evolution of the Eurasian Land Transport Landscape

On October 22, 2025, Azerbaijani Prime Minister Ali Asadov announced at the 5th Tbilisi Silk Road Forum that Azerbaijan, Georgia, and Kazakhstan had reached an agreement on a unified long-term tariff policy for the Middle Corridor transport route. This move marks a deepening of the Eurasian connectivity strategy from "hard connectivity" of infrastructure to "soft connectivity" of institutional coordination, and may have profound implications for global trade flows and regional economic cooperation.

I. Geoeconomic Background: The Rise and Challenges of the Middle Corridor

The Middle Corridor (Trans-Caspian International Transport Route) is a Eurasian land transport route that bypasses Russia. It originates in China, passes through Kazakhstan, the Caspian Sea, Azerbaijan, Georgia, and extends to Turkey and Europe. Its strategic value has significantly increased in recent years. On the one hand, the Russia-Ukraine conflict has increased uncertainty along the traditional "Northern Corridor" route through Russia. On the other hand, amid the restructuring of global supply chains, emerging economies are increasingly in need of diversified logistics routes.

II. Core Content of the Agreement and Implementation Path

According to Asadov's statement, the new policy focuses on three key areas:

1. Unified Long-Term Tariff Mechanism: Railway operators in Azerbaijan, Georgia, and Kazakhstan have signed an agreement to replace the previous short-term, segment-based pricing and frequently negotiated schemes with a "stable and predictable" pricing model. For example, Kazakhstan Railways plans to launch a three- to five-year fixed-rate product for container transport, alleviating shippers' concerns about cost fluctuations.

2. Simplified Administrative Procedures: The three countries will promote the interconnection and interoperability of customs data and pilot a "single window" system, with the goal of reducing border detention times from an average of 48 hours to under 12 hours. The European Union has expressed support for this initiative, allocating €2 million under its "Global Gateway" program for related technical assistance.

3. Standardized Intermodal Transport: To address the issue of losses in the sea-rail connection along the Caspian Sea, the three countries have agreed to standardize freight documentation and introduce blockchain technology for cargo tracking to reduce transshipment errors.

This collaborative mechanism is not an isolated initiative. It complements regional initiatives such as the Central Asia Regional Economic Cooperation (CAREC) and the EU-Eastern Partnership, reflecting the trend of small and medium-sized countries enhancing their collective bargaining power through institutional integration.

III. Strategic Significance in the Global Trade Landscape

The impact of unified tariffs in the Middle Corridor extends beyond the regional context and manifests itself on three levels:

First, it enhances the resilience of the Eurasian supply chain. Currently, shipping routes through the Suez Canal account for 90% of China-Europe trade, but events such as the Red Sea crisis and canal congestion have exposed its vulnerability. While the Middle Corridor cannot replace maritime transport, it provides a safe haven for time-sensitive goods such as electronics and auto parts. The Danish Maritime Authority analysis indicates that if transportation costs along the Middle Corridor fall by 20%, it is expected to divert 3%-5% of total Asia-Europe freight traffic.

Second, it reshapes the model of regional economic cooperation. Through the "soft integration" of a customs union, the three countries have avoided deeper integration, which is politically sensitive, and instead focused on project-driven cooperation. This creates a differentiated competitive advantage over the Russia-led Eurasian Economic Union (EAEU), which faces logistical constraints due to sanctions. Kazakhstan's participation in the Middle Corridor construction, as a member of the EAEU, highlights the country's strategy of seeking a balance within multiple mechanisms.

Finally, it impacts the geo-economic game between major powers. China's Belt and Road Initiative considers the Middle Corridor a component of the westward route. Chinese companies have participated in the expansion of the ports of Poti in Georgia and Alat in Azerbaijan. The EU, through its "Global Gateway" strategy, is providing standards and funding, attempting to guide rule-making. A unified tariff policy could serve as a platform for coordinating interests among all parties, but it also poses the risk of standards competition.

IV. Challenges and Uncertainties

While the agreement holds positive significance, implementation obstacles cannot be ignored:

- Infrastructure gap: The port of Aktau on the eastern coast of the Caspian Sea has an annual handling capacity of 25 million tons, while the port of Baku on the western coast only handles 12 million tons, requiring further investment to balance the two. The Asian Development Bank estimates that a full upgrade of the Middle Corridor would require over $18 billion in investment.

- External dependence: External factors such as Turkey's policy orientation as a terminal hub and changes in the situation in Iran may affect the stability of the route. - Pressure from competing projects: Russia is promoting the Arctic Route, while India and Iran are collaborating on the International North-South Transport Corridor (INSTC). This creates uncertainty in the future regional logistics landscape.

V. Outlook: Institutional Innovation and Systemic Competitiveness

The unified tariff agreement for the Middle Corridor is a key step in the transition of the Eurasian transport corridor from "physical connectivity" to "systemic integration." Its success will depend on three factors:

1. Technological adaptability: Can digital tools (such as AI-powered customs systems) truly reduce compliance costs?

2. Depth of international cooperation: Can it attract major trading partners such as the EU and China to incorporate the rules into their supply chain systems?

3. Risk-sharing mechanisms: How can supporting services such as insurance and arbitration enhance commercial viability?

If the three countries can continue to promote institutional synergy, the Middle Corridor has the potential to become a key fulcrum in Eurasia's "multipolar logistics network," providing a new paradigm for regional cooperation under the reshaping of globalization. However, its ultimate effectiveness must be viewed within the complex web of global trade flows, technological change, and geopolitical interactions; no single initiative alone can reshape the landscape.