The Potential Impact of the Ukraine Conflict on Eurasian Trade
The war in Ukraine has reshaped overland trade routes between China and the European Union, with the Middle Corridor emerging as a key player in the new trade landscape.
Before the conflict, the majority of overland trade between China and the EU passed through Russia’s extensive rail network, offering a reliable and cost-effective route for cargo companies. However, the invasion of Ukraine disrupted this route, leading companies to seek alternative paths that bypass Russia.
“The transit between Europe and Asia is becoming more complicated and expensive by the day,” remarked Romana Vlahutin, a German Marshall Fund fellow and former EU ambassador-at-large for connectivity.
As a result, the Middle Corridor, which had previously been underutilized due to various challenges, has seen a surge in activity. Cargo volume along the corridor jumped from 350,000 tons in 2020 to 3.2 million tons in 2022, with projections indicating a potential tripling in trade volume by 2030.
Despite this growth, the Middle Corridor still faces obstacles such as inadequate infrastructure and lengthy wait times at ports and border crossings. The key to the corridor’s success, according to experts, lies in China’s involvement.
“The future of the Middle Corridor will largely depend on China’s interest in utilizing the route,” noted Emil Avdaliani, an international relations professor.
In response to the shift in trade routes, the EU and other countries have ramped up efforts to develop infrastructure in Central Asia and the Caucasus. Georgia, Azerbaijan, Turkey, and Kazakhstan have formed a partnership to enhance coordination and reduce trade barriers, attracting billions of euros in investments.
As the world adapts to new geopolitical realities, the Middle Corridor is poised to play a crucial role in connecting two of the largest markets in the world, offering a promising future for overland trade between Europe and China.
