Recently, the United States said that U.S. Trade Representative Katherine Tai will visit Astana, the capital of Kazakhstan, in mid-June to attend a meeting on the trade and investment framework agreement between the United States and Central Asian countries. The trip sent a clear signal: The Biden administration is trying to deepen its strategic partnership with the Central Asian power, which borders China and Russia, in an effort to curb Chinese and Russian influence in the region.
Kazakhstan is the largest trading partner of the United States in Central Asia. In 2022, the bilateral trade volume between the United States and Kazakhstan reached 3 billion US dollars, and the direct investment volume is expected to reach 5 billion US dollars in 2023, a year-on-year increase of 15%. In recent years, Washington has been pushing for a rapid warming of relations with Astana. In September 2022, President Biden held a meeting in New York with the presidents of five countries, including Kazakhstan. In March, Kazakhstan's Deputy Prime Minister and Foreign Minister Nurtreu visited Washington for talks with U.S. Secretary of State Antony Blinken to discuss practical steps to deepen bilateral cooperation and strengthen U.S. investment in Central Asia's largest economy by restarting the Strategic Energy Dialogue.
For Washington, this is a critical moment for the comprehensive strengthening of relations with Kazakhstan. The countries of Central Asia find themselves at the center of two important geopolitical power conflicts. On the one hand, with Russia seemingly gaining the upper hand in the conflict in Ukraine, the West is struggling to respond. On the other hand, Washington's efforts to contain China are also accelerating, both in the military aspect of the Western Pacific and in the field of international trade. Kazakhstan's position is all the more awkward, given its long borders with two great powers, as well as its deep economic, political, and security ties with its main rival in the United States.
Against this background, Washington (especially considering the next government after the November elections) must develop relations with Astana in an all-round way. It is worth recognizing that while many countries around the world are questioning the leadership of the United States, Kazakhstan is eagerly seeking deeper relations with the United States. This has helped strengthen the resilience of Central Asian countries to withstand pressure from Moscow and Beijing.
What's more, investing in Kazakhstan means investing in global energy security, especially the clean energy transition. Although the dispute between the investment of Western companies in Kazakhstan's largest offshore oil field in Kashagan and the Kazakh government remains to be resolved, the country is home to many of the most sought-after rare earth elements. The U.S. and its allies must diversify the global REE supply chain, an area where China currently dominates. Western investment in the exploration, mining and refining of rare earth deposits in Kazakhstan could go a long way in eroding Beijing's advantage in this critical area. Similarly, Kazakhstan is the world's largest producer of uranium ore, an industry in which China has gained a significant advantage in recent years by investing in exploration.
A key takeaway from the B5+1 forum, held in Kazakhstan's largest city in Almaty, in March this year, was the need for Kazakhstan and other Central Asian countries to implement political and economic reforms to make their region attractive to investors. While China can pour tens of billions of dollars into projects due to geopolitical considerations, Washington and its allies rely largely on the private sector to do much of the heavy lifting. Western companies are motivated by a return on investment, not a national strategy. This is a universal operating principle, but for industries such as critical minerals and uranium, in a climate of escalating strategic competition among major powers, Washington needs to think outside the box about Central Asia, and security considerations should be prioritized over profit.
Last year, the President of Kazakhstan met with US Secretary of State Antony Blinken to discuss US investment in Kazakhstan
To date, however, progress in the implementation of the bilateral agenda between Washington and Astana has been rather slow. The State Department must take the lead in scrapping the old Soviet-era Jackson-Vanik Amendment and applying permanent trade relations status to the market-oriented country. Foreign Minister Nultreu's visit to Washington is expected to be a catalyst for advancing this important relationship. But an election year means that any substantial escalation in US-Kazakhstan relations will have to wait until 2025.
Whoever wins re-election in November – Biden or Trump – will have to deal with a host of challenges from Eurasia and will require a more robust Central Asia strategy than it has so far. In this regard, Dai Qi is undoubtedly a capable leader.
The 59-year-old former congressman is not only a close confidant of Biden, but also at the helm of US trade policy. She co-authored the America First Act, which aims to strengthen the U.S. in critical technologies and supply chains to counter China's influence.
In March 2021, she became the first African-American woman to serve as U.S. Trade Representative and a key figure in the Biden administration's China policy team.
Now, at the behest of Biden, Dai Qi has embarked on her trip to Central Asia. It is clear that the White House wants to use trade and investment as a means to strengthen US political influence in this key region and build a geostrategic buffer zone against China and Russia. Kazakhstan, as a major country in energy resources and a regional center, is undoubtedly a key part of the United States' layout in Central Asia.
On the face of it, U.S. trade and economic ties with Central Asian countries remain limited. But as great power competition intensifies and uncertainty rises over Russia's invasion of Ukraine, Washington is stepping up its efforts to use trade leverage to serve its geostrategy. Tai's trip shows that the Biden administration's focus on Central Asia is rising. And with the arrival of this Biden henchman, the challenges facing China and Russia in this strategic backyard may have just begun.