Trilateral Cooperation Between Azerbaijan, Turkey, and Georgia

Since the breakup of the So­viet Union, Azerbaijan, Turkey, and Georgia have achieved unprecedented levels of economic and security collabo­ration. Through this expanding cooperation, the three countries have established themselves as a collective hub of Eurasian energy extraction and multi‑model trans­portation. Their growing ties have accelerated since the opening of the Baku‑Tbilisi‑Ceyhan (BTC) oil pipeline in 2006 to extend to the construction of additional pipe­lines, the launching in 2017 of the Baku‑Tbilisi‑Kars (BTK) railway, the holding of regular trilateral mil­itary exercises, and the convening of frequent high‑level leadership meetings. The South Caucasus remains one of the world’s most complex geopolitical regions, with several external powers competing for regional influ­ence.

By pooling their capabil­ities Azerbaijan, Turkey, and Georgia aim to en­hance their autonomy, security, and prosperity— though they could ben­efit by receiving greater support from the United States and its European allies.

By pooling their capabilities Azerbaijan, Turkey, and Georgia aim to enhance their autonomy, security, and prosperity—though they could benefit by receiving greater support from the United States and its European allies.

National Perspectives

Since regaining indepen­dence, Azerbaijan’s economy has grown at an astounding rate. The country’s hydrocarbon ex­ports, marked by the discovery of the massive Shah Deniz field in 1999, benefited from the extensive construction of new east‑west oil and gas pipelines to supplement the mainly north‑south conduits built during the Soviet period between Russia and the other Soviet repub­lics, which all too often subordinated these states to Moscow. The new east‑west hydrocarbon pipelines, rail and road links, and fiberoptic cables have proved critical in sustaining Azerbaijan’s economic autonomy and strategic significance. Whereas Azerbaijan’s foreign economic policy initially concen­trated on attracting foreign investment, Azerbaijani capital has since gained a significant foot­hold in neigh­boring countries, including Georgia and Turkey. To complement these economic ties, Azerbaijani diplo­macy has pursued better diplomatic ties with its neighbors to enhance its foreign‑policy flexibility.

Though Turkey’s “Zero Prob­lems with Neighbors” policy has generally failed, Ankara’s troubled ties with many European and Asian countries may have increased its in­terest in deepening relations with Azerbaijan and Georgia. In addi­tion to its strained ties with some European and Middle Eastern countries, the souring of Russian‑ Turkish relations following the downing of a Russian warplane in 2015, and the subsequent imposition of Russian sanctions on Turkey, called into question the wisdom of Turkey’s energy dependence on Russia. The major Russian‑Turkish energy proj­ects have included energy pipelines and a nuclear power plant, and the overall relationship has also seen sub­stantial increases in trade and tourism. Through various initiatives, Turkey has amplified its regional economic and security influ­ence in the South Caucasus and the Caspian Basin, be­coming an essential transit corridor and energy hub between these regions and Europe. In addition to becoming a key transit zone and hub for Azerbaijani gas flowing to Europe, Turkey’s good relations with Georgia have increased re­gional stability while reducing Turkey’s reliance on Russia and other states.

Relations between Azerbaijan and Turkey have traditionally been close due to shared ethnic, cultural, linguistic, and religious ties. The consistent and warm official discourse between Ankara and Baku highlights their special relationship: observers sometimes characterize their people “one na­tion, two states”—a phrase coined by Heydar Aliyev and repeated often ever since. In September 2020, Turkey’s trade minister, Ruhsar Pekcan, announced that Ankara plans to sign a free trade agree­ment with Azerbaijan, noting the importance of the “Georgia‑Azer­baijan‑Caspian direction” that links Turkey and Central Asia and em­phasizing the importance of pre­viously undeveloped trade routes amidst the economic disruptions caused by COVID‑19 pandemic.

In addition to receiving and trans­porting Azerbaijani oil and gas, Turkey has become a major partner in Azerbaijan’s other hydrocarbon projects. Thousands of Turkish companies operate in Azerbaijan, many in Azerbaijan’s energy sector, which attracts the bulk of Turkish foreign direct investment. Azerbai­jani entities also have invested bil­lions of dollars in Turkey’s economy. Recent Azerbaijani investment proj­ects in Turkey include the building of the new oil refinery in Izmir, which will produce millions of tons of diesel each year, saving Turkey the costs of importing petroleum and making the country more energy independent. Future Azerbaijani projects in Turkey will feature the construction of a new petrochem­ical complex and urea (carbamide) plant. The two states have also agreed to construct rail and pipeline links between Turkey and Azerbaijan’s Nakhchivan Autonomous Republic, whose main international links until now have been through Iran.

Well before the Second Karabakh War that was fought in late 2020, Azerbaijan has received substantial military training and capacity building from Turkey. The 1996 Azerbaijani‑Turkish Agree­ment on Cooperation in the Fields of Military Technology and Military Training provided a foundational framework for deep security col­laboration. The 2010 Agreement on Strategic Partnership and Mutual Support between Azerbaijan and Turkey furthered this bilateral de­fense cooperation through a commit­ment to render mutual assistance in the case of armed aggression towards one or both parties. The agreement also provides for joint military exer­cises, joint training, and defense in­dustrial cooperation. These security ties with Turkey have over several decades helped Azerbaijan deter mil­itary threats from Russia and Iran as well as, most recently, recover occu­pied territories from Armenia.

In recent years, companies in both states have jointly manu­factured defense systems. Both countries have also hosted joint mil­itary exercises to show solidarity and rehearse protec­tion of critical in­frastructure, such as the BTC pipe­line. Turkey has regularly backed Azerbaijan in its conflict with Armenia, providing critical diplomatic, economic, and military support (though almost all of Azerbaijan’s major weapons systems come from Russia).

In earlier years, Turkish dip­lomats unsuccessfully attempted to encourage Armenia to return Azerbaijani‑occupied territory in exchange for economic and dip­lomatic concessions from Turkey, including resumed trade and offi­cial diplomatic ties. The failure of these overtures contributed to the April 2016 border clash between Azerbaijan and Armenia as well as the 2020 war, when the benefits of previous Azerbaijani‑Turkish security cooperation were evident.

Previously, Moscow had ex­ploited tensions between Azer­baijan and Armenia to sell weapons to both states and generate leverage for Russian diplomatic efforts to push Baku toward Moscow‑led regional integration structures. Russia’s goal of pre­serving its balance of interests across multiple states is the major reason why Moscow de­clined to inter­vene militarily on Armenia’s behalf, despite their shared membership in the Collective Security Treaty Organization (CSTO).

In the Second Karabakh War, Russian President Vladimir Putin chose to throw Russia’s formal ally Armenia under the bus to sustain influence with Azerbaijan and Turkey. By refusing to intervene militarily on Yerevan’s behalf and pressing Armenia into an agree­ment that consolidated Azerbai­jan’s gains, Putin secured another Russian military foothold in a South Caucasian statelet carved out of Nagorno Karabakh, while pun­ishing a stubborn Armenian leader for failing to heed Russian recom­mendations to compromise on the dispute before the onset of the war.

The enhanced Turkish security role in the South Caucasus helped thwart Moscow’s strategy of ma­nipulating tensions to control escalation dy­namics in its favor.

Yet, the enhanced Turkish se­curity role in the South Caucasus helped thwart Moscow’s strategy of manipulating tensions to con­trol escalation dynamics in its favor. Ankara tenaciously backed Baku in its successful recovery of Armenian‑occupied territories and has a guaranteed role in the post‑conflict diplomacy thanks to the joint Russian‑Turkish mon­itoring center in Azerbaijan and Turkey’s continuing participation in regional diplomatic dialogues.

Azerbaijan and Turkey have also become two of Georgia’s largest trading partners. Thanks to its comprehensive post‑Soviet economic and political reforms, Georgia has become a top regional economic performer. Authorities in Tbilisi have worked diligently to re­duce barriers to trade and improve their country’s foreign investment climate, contributing to a substan­tial expansion in Georgia’s export revenues, inward capital flows, and economic growth. Georgia’s free trade agreement (FTA) with Turkey came into effect in 2008, while its FTA with Azerbaijan has been in force since 1996.

Azerbaijani and Turkish inves­tors have thus assumed leading positions in key Georgian eco­nomic sectors such as transporta­tion and energy. For example, the State Oil Company of the Azer­baijan Republic (SOCAR)—represented in the country by SOCAR Georgia Gas LLC—has become a leading investor in the Georgian economy. Among other benefits, Azerbaijani gas shipments and Turkish investments provide Georgia with attractive alterna­tives to Russian imports and cap­ital, decreasing Georgia’s economic dependence on Russia. Of note, Azerbaijan continued to deliver gas and electricity even during Georgia’s 2008 war with Russia. Since then, Baku and Ankara have resolutely supported Georgia’s sov­ereignty and territorial integrity despite the risks of challenging the Russian occupation.

Trilateral Economic and Energy Ties

The ties that Azerbaijan, Georgia, and Turkey have built over the years have enhanced their collective clout with other states and boosted the overall global importance of the South Caucasus.

The ties that Azerbaijan, Georgia, and Turkey have built over the years have enhanced their collective clout with other states and boosted the overall global importance of the South Caucasus. Bilateral partnerships are mutually beneficial, but they can be enhanced through tri­lateral economic, energy, secu­rity, and diplomatic ties. In 2017, Turkey’s Foreign Economic Relations Board member Rona Yircali noted, “We, as three neigh­boring countries, should work together for the continuation of economic development in our re­gion. Development of economy will bring peace and prosperity to the region. [...] The effective coop­eration among Turkey, Azerbaijan, and Georgia can be an example for other countries.”

This trilateral partnership has boosted employment, investment, and revenue for the participating states, making them more im­portant partners to Europe and af­fording them greater leverage with Euro‑Atlantic ac­tors. Their cooper­ation also attracts external invest­ment to the region and contributes to greater global energy security through the diver­sification of world export routes. Lastly, their trilat­eral energy collab­oration is rooted in the comple­mentary geographic location and resource endowments of the three countries. For example, geographic considerations allow for the oil and gas riches of the Caspian Basin to reach European markets through the South Caucasus.

Various projects have ad­vanced mutual investment in energy, transportation, and other infrastructure. The 1,800km BTC oil pipeline (with about 450km in Azerbaijan, 250km in Georgia, and 1,100km in Turkey) has be­come the most prominent example of the advantage of routing energy trade through the region. It trans­ships oil from the Azeri‑Chirag‑ Deepwater Gunashli field in Azerbaijan, as well as from fields in Kazakhstan and Turkmenistan, to the Turkish Mediterranean sea­port of Ceyhan. A parallel 1,000km South Caucasus Pipeline (SCP, aka the Baku‑Tbilisi‑ Erzurum Pipeline) moves natural gas from the Shah Deniz field through Baku and Tbilisi before flowing to­wards Erzurum in eastern Turkey. The Trans‑Anato­lian Natural Gas Pipeline also draws from the Shah Deniz field, connecting with the SCP on the border of Georgia and Turkey, and extends to the Tur­key‑Greece boundary. The recently completed Trans‑Adriatic Pipeline (TAP), which connects with the Trans‑Anatolian Pipeline and the SCP, sends these energy exports further, into Southern Europe.

These conduits together feed into the newly launched 3,500km Southern Gas Corridor (SGC), which has begun transporting enor­mous volumes of gas from the Cas­pian Sea region to Europe (including several EU member states) through Georgia and Turkey. As produc­tion increases from Kazakhstan’s Kashagan field, hydrocarbon shipments to Europe through Azerbaijan, Georgia, and Turkey could grow even further. The Memorandum on Joint Exploration and Development of the Dostuk natural gas field situated between the two countries in the Caspian Sea (ratified in February 2021) has increased the prospects that Turkmenistan may supply gas through an Azerbaijan‑Georgia‑Ro­mania Interconnector project, though a separate gas pipeline must be built under the Caspian Sea to the coast of Azerbaijan—or lique­fied natural gas (LNG) must be de­livered through the sea via tankers for this plan to be realized.

The South Caucasus also functions as a gateway for non‑energy trade and transit be­tween the Caspian Basin region and Europe. Azerbaijan, Georgia, and Turkey continue to build con­duits connecting these two regions through their territories. They have followed BTC and TANAP with the BTK railway that connects Azer­baijan to Turkey’s much larger rail network through Georgia. Unlike the pipelines, though, the railway can also convey manufactured and other non‑energy goods, including petrochemicals, to additional mar­kets. Although it presently provides mainly freight services, the BTK line may eventually convey a sub­stantial number of passengers and significantly more cargo. Azerbaijan and Turkey largely paid for the rail line themselves, lending money to Georgia, as the World Bank, Asian Development Bank, and European Bank for Reconstruction and Development each declined to fund the route. The three countries also established a permanent commis­sion to oversee cooperation be­tween their respective customs bodies.

With additional partners and capacity, the BTK railway could eventual­ly rival Russia’s Trans‑Siberian Railway.

With additional partners and ca­pacity, the BTK railway could even­tually rival Russia’s Trans‑Siberian Railway. In the interim, however, the partners need to encourage and cultivate increased demand for the railway. One of the new transport line’s main uses will be the shipment of oil exports from Kazakhstan’s Kashagan oil field, whose discovery was the largest of its kind in the past forty years. Azerbaijan and Turkey are plan­ning to expand the system to connect Azerbai­jan’s Nakhichevan Autonomous Re­public exclave to the Aegean port of Izmir in Turkey. Neighboring countries such as Iran, Uzbekistan, and Turkmeni­stan have all ex­pressed interest in joining the project. The railway can help reduce the China‑to‑Europe overland transit time to approximately two weeks. Several other initiatives to con­nect Asia with Europe are already in progress, including China’s Belt and Road Initiative (BRI), which encompasses all three states as well as most of their neighbors. The Trans‑Asia‑Europe fiber‑optic communications line also travels through these countries and con­nects Shanghai to Frankfurt.

Due to the impact of the global COVID‑19 pandemic, the South Caucasus suffered a major economic slowdown in 2020 fol­lowing the collapse of global trade and tourism, lockdowns, curtailed remittance flows, and a fall in global energy prices. The governments had to raise their debt‑to‑GDP ratios to cushion labor markets and enter­prises from the slowdown, even at the risk of renewed inflation, a rise in non‑performing loans, and currency depreciations.

Nonetheless, the three states weathered the crisis better than many other coun­tries. For example, Georgia achieved some success in limiting the spread of COVID‑19 among its pop­ulation. The IMF’s most recent Regional Economic Outlook fore­casts renewed growth for the South Caucasus in 2021, especially if their leaders focus on renewing human capital, promoting innovative dig­ital information industries, creating more space for the private sector to compensate for their state‑heavy interventions in 2020, and fur­ther boosting regional economic cooperation.

Diplomatic and Security Coordination

The foreign, defense, and other ministers of Azerbaijan, Georgia, and Turkey now confer regu­larly to discuss trade, se­curity, sovereignty, and transportation issues.

Reflecting their better rela­tions, the foreign, defense, and other ministers of Azerbaijan, Georgia, and Turkey now confer regularly to discuss trade, security, sovereignty, and transportation is­sues. In these high‑level meetings, the three governments have repeat­edly reaffirmed their territorial in­tegrity, growing security ties, and European connections. In 2014, the presidents of Azerbaijan, Turkey, and Georgia met for the first time in a trilateral format; they have held half‑a‑dozen joint meetings since then. Their foreign minis­ters have also met approximately annually since 2012, in rotating locations among the three states (the latest meeting took place in February 2021). Their agenda typically includes managing re­gional conflicts, boosting eco­nomic collaboration, catalyzing new business‑to‑business coop­eration, and extending collabora­tion to science, culture, and other humanitarian areas.

In their 2012 Trabzon Declaration, reaffirmed in their 2018 Istanbul Declaration, each country pledged mutual support for the others’ territorial integ­rity, increasing the volume of passenger and cargo transpor­tation along the Trans‑Caspian East‑West Corridor, and collec­tively endorsed their aspirations for memberships in international organizations. During the eighth trilateral meeting of foreign min­isters in 2019, Turkey, Azerbaijan and Georgia signed the Tbilisi Statement and adapted a trilateral sectoral cooperation action plan for 2020‑2022 that encompassed such areas as agriculture, culture, education, environment transpor­tation, trade, and tourism.

Defense and security coop­eration among the three countries has also been growing. At their November 2018 session in Is­tanbul, the ministers signed a joint cooperation protocol addressing their intent to provide security for their multinational economic proj­ects. Zakir Hasanov, Azerbaijan’s Defense Minister, stated that “Azerbaijan, Georgia, and Turkey share the same views in particular on the regional stability, mutual cooperation, finding peaceful solu­tions to the problems and protecting the territorial integrity of countries. [...] The aim of our meeting is to ensure the security of strategic en­ergy projects realized by the three countries and to support peace and stability in the region.”

Military exercises involving Azerbaijan, Turkey, and Georgia also regularly occur, either as part of larger multilateral drills (some­times with the United States mil­itary as a participant) or on a three‑nation basis, with the drills focusing on defending their trans­border gas pipelines. For example, in November 2018, the three coun­tries’ armed forces rehearsed how they plan to protect the BTC oil pipeline.

The Azerbaijani, Georgian, and Turkish defense commu­nities also aim to expand ties in professional military education. Another emerging area of collabo­ration has been decreasing the vul­nerability of their information sys­tems to cyberattacks and malware.

Thanks to Ankara’s being a member of NATO and the EU Customs Union, Turkey offers Azerbaijan and Georgia connec­tions with these Euro‑Atlantic institutions. Georgia, a member of NATO’s Partnership for Peace program, has a particularly strong relationship with the Trans‑ Atlantic alliance and regularly hosts joint military exercises that project NATO capabilities toward Russia. Georgia’s prospective membership in NATO was affirmed at the 2008 Bucharest Summit prior to the 2008 Russo‑Georgian war. Azerbaijan is also a NATO Partner for Peace, has contributed forces to both NATO missions in Kosovo and Afghanistan under Turkish military command, and cooperates with the Alliance on counterterrorism and natural disaster response.

Concluding Observations

The three countries’ mutual cooperation has been mu­tually beneficial on several fronts. Azerbaijan has traditionally been a driver of trilateral efforts to foster energy ties between Europe and Eurasia and has benefitted enor­mously from the larger role the region has taken in global energy commerce. Turkey has long sought additional energy imports to sat­isfy domestic demand, but also has used its relations with the South Caucasus region to expand its role as a leading economic bridge be­tween Asia and Europe. Georgia’s economic managers want their country to become more attrac­tive to foreign partners, especially as Tbilisi seeks further integration with Western institutions like the European Union and NATO. The trilateral format pursued by Baku, Tbilisi, and Ankara has helped in­stigate broader Eurasian‑European energy collaboration and foreign policy coordination in a region traditionally lacking both.

Notwithstanding their vigorous diplomacy, impressive economic growth, and other achievements, these countries remain relatively weak compared with their great power neighbors.

Azerbaijan, Turkey, and Georgia have been objects of rivalry between the Persian, Ottoman, and Russian empires for cen­turies. Their leaders un­derstand that by pooling resources, they can better manage the constraints of their being situated at the crossroads of great‑power competition.

The nations of Azerbaijan, Turkey, and Georgia have been objects of rivalry between the Persian, Ottoman, and Russian empires for centuries. Their leaders understand that by pooling re­sources, they can better manage the constraints of their being situated at the crossroads of great‑power competition. Though none of these three governments characterize the nature of their alignment as directed against any other country, their mu­tual support has helped compen­sate for their exclusion from many Euro‑Atlantic projects as well as helped them navigate the Moscow‑led Eurasian integration projects (such as the CSTO and the Eur­asian Economic Union) and Chi­na’s BRI. Moscow’s and Beijing’s re­gional integration frameworks offer opportunities for Azerbaijan, Turkey, and Georgia but at the risk of decreased independence. These trilateral ties also have helped them manage long­standing regional security issues, such as the so‑called frozen conflicts in the occupied re­gions of Azerbaijan and Georgia and the tensions sur­rounding Iran. The Russian‑Ukraine conflict has highlighted the security dilemmas of all Eurasian countries that find themselves outside of NATO or other regional security blocs.

The United States and its European allies need to render more support for this un­precedented trilateral partnership between Azerbaijan, Turkey, and Georgia. Their cooperation can enhance Western energy secu­rity, balance Russian and Chinese predatory behavior, and promote stability in a perennially troubled region.

Although the signing of the Convention on the Legal Status of the Caspian Sea in August 2018 has potentially paved the way for projects that tra­verse that sea, the prospects of a Trans‑Caspian energy pipeline in the future remain unclear. Though all the countries with shorelines bordering the Cas­pian Sea—Russia, Iran, Kazakhstan, Azerbaijan, and Turkmenistan— signed the Con­vention, dividing the body’s natural resources will re­quire further negotiations (not­withstanding the recent agreement in principle between Turkmenistan and Azerbaijan on exploiting and trans­porting Caspian gas to the West).

For example, the Caspian gas pipeline between Turkmenistan, Kazakhstan, and Russia has made little concrete progress. Russia will continue to possess a strategic in­terest in blocking the construction of competing energy pipelines that cir­cumvent Russian territory. From the east, China beckons all three states with promises of vast economic aide, but actual assistance and concrete projects have been far fewer than pledged. Furthermore, the growing presence of China in their national economies has the potential to serve as a Trojan Horse and impede Azerbaijan, Turkey, and Georgia from integration with Euro‑ Atlantic partners. Meanwhile, influential players in Georgia are be­coming frustrated by the obstacles placed along the route to greater Euro‑Atlantic orientation. The 2016 Association Agreement as well as the Deep and Comprehen­sive Free Trade Agreement between the European Union and Georgia represent a promising start but needs more consistent execution. In 2018, NATO Chief Secretary General Jens Stoltenberg reiterated that Georgia will one day join the Alliance and restated “full support for Georgia’s sovereignty, security, and territorial integrity,” but Georgian patience for indefinitely extended time­lines for ascension is wearing thin.

All three South Caucasus countries have contributed to the NATO mission in Afghani­stan and supported realization of other Western security objectives. Most notably, Georgia became the largest non‑NATO contributor of forces to the International Security Assistance Force.

The United States and its allies should recognize the commitment of these states to Western political and security institutions and affirm that these states’ sovereignty and their economic integration with the West remain foreign‑policy priorities. They should pursue more vigorous public information campaigns, exchange programs, and cultural diplomacy to more clearly emphasize appreciation of the trilateral partnership’s importance. Aside from traditional military exercises and missions to counter terrorism, NATO members should also engage with these states more on non‑traditional missions that are rele­vant to their security such as refugee management, countering regional trafficking, managing natural disasters and other major crises, responding to cyber‑attacks, and thwarting hybrid political‑military subversion. Western diplomats need to work with their re­gional counterparts to secure the end of illegal territorial occupations, which create ungoverned spaces for tran­sitional criminal groups and WMD proliferators.

As former U.S. Ambassador to Azerbaijan Matthew Bryza observed in the previous issue of Baku Dialogues, the ceasefire arrangement that ended the Second Karabakh War offers these states a historic opportunity for long‑term reconciliation, to their mutual ben­efit as well as that of the West.

Armenia and Azerbaijan can build on their November 2020 tripar­tite declaration and their Moscow meeting of January 2021 by concentrating on regional economic develop­ment and reconstruction.

Armenia and Azerbaijan can build on their November 2020 tripartite declaration and their Moscow meeting of January 2021 by concentrating on regional eco­nomic development and recon­struction. Armenia in particular would benefit from the dismantling of prewar trade bar­riers, which largely excluded Armenia from the benefits of the Azerbaijan‑ Turkey‑Georgia regional integra­tion processes for overcoming its constraining land­locked status. Azerbaijan has helpfully pledged to facilitate this process, as well as ensure the protection and integra­tion of its Armenian minority in the recovered territories.

Western countries can do their part to assist this process, especially by providing economic and diplo­matic support. For example, they can encourage mutual strategic restraint between Armenia and Azerbaijan and keep them focused on future opportunities rather than past grievances. Regarding the latter, they can aide in the return of Azerbaijani refugees into the newly liberated territories and, as the current population chooses, the preservation of the Armenian pop­ulation in Nagorno‑Karabakh or its movement back into Armenia’s internationally recognized terri­tory. Western governments should also oppose military revanchism and challenges to civilian control in Armenia while encouraging the Armenian armed forces to identify the location of the many land­mines scattered throughout the former occupied territories, which will impede re­gional development opportunities. Western help may also be needed to circumvent Russian and Ira­nian impediments to trans‑Cas­pian energy projects and secure the departure of Russian peace­keepers from Nagorno‑Karabakh according to the agreed timetable. These and similar measures could help avert renewed conflict in this increasingly critical geopolitical crossroad.