Why Trump is trying to put his seal on an Armenia-Azerbaijan peace deal

Middle East Eye

3 days ago

The US is using "magic" to bring Armenia and Azerbaijan together for a peace deal, US President Donald Trump says.
As the two historic foes appear to inch closer to an agreement, the Trump administration is conjuring diplomacy in the South Caucasus - fairly uncharted waters for the US.
In May, Trump's billionaire Middle East envoy, Steve Witkoff, said that Armenia and Azerbaijan could both join the Abraham Accords - the normalisation agreement that Israel signed with Bahrain, the UAE and Morocco in 2020 - after a deal between the two. Trump considers the accords a signature part of his foreign policy.
Then, in July, Trump's other good friend and billionaire envoy, Tom Barrack, said the US was ready to sign a 100-year lease on a strategic transit corridor on Armenia's border with Iran.
Baku wants to use the sliver of land, referred to as the Zangezur Corridor by Turkey and Azerbaijan, to connect with its exclave, called Nakhchivan, and eventually Turkey, where Barrack is also the US ambassador.
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Trump's bid to put his stamp on a peace agreement through economic deals and the Abraham Accords comes as the South Caucasus is in flux.
Trump, Turkey and a diplomatic win
Russia, the region's historic great power, is tied down on the battlefields of Ukraine. Its prestige as a security guarantor was undermined in 2023 when Azerbaijan wrested back control of Nagorno-Karabakh from Armenia in a lightning offensive. Christian Armenia had long relied on Russia for support against Turkic Azerbaijan.
To the south, Iran - which has deepened its ties with Armenia and is wary of Israel's security links to Baku - is trying to regroup after a blistering 12-day conflict with Israel. Tehran's ability to project power abroad was clipped by Israel's takedown of its ally Hezbollah in Lebanon and the collapse of Bashar al-Assad's government in Syria late last year.
'The status quo benefits Iran a lot. Right now it is the only connector between Azerbaijan and Nakhchivan'
- Alen Shadunts, American University of Armenia
With Russia distracted in Ukraine and Iran on the back foot, Turkey's power in the region is growing.
The US itself is signalling that it can work with Turkey as the predominant external power in Syria.
Barrack's role in the Armenia-Azerbaijan peace talks, experts say, is further evidence that Washington sees Ankara as a new regional power in the South Caucasus.
"Trump doesn't have a stake in either Armenia or Azerbaijan. But he sees that a deal is possible. A win," George Meneshian, an Athens-based expert on the Middle East and Caucasus, told Middle East Eye.
The US's foray into the region is led by Barack, who has been well received in Ankara. That has fueled concerns that Trump sees the region as an extension of Turkey's neighbourhood, Meneshian added.
"The US is already giving Turkey its own zone of influence in Syria. That is clear. The same is happening in the South Caucasus," he said.
The goodwill was visible on Tuesday when Trump shared a social media post of Azerbaijan's President Ilham Aliyev thanking him for his "aspiration" to end the dispute with Armenia. Aliyev praised Trump's "fundamental values, including family values" that he said mirror Azerbaijan's.
From Syria and Gaza to Ukraine and the Caucasus
The idea of the US leasing the corridor is in keeping with the Trump administration giving primacy to economic dealmaking, including with US control over physical assets, in conflict zones. It has had mixed results.
Earlier this year, Trump said the US would take over the Gaza Strip, evict Palestinians and turn it into the Middle East's "Riviera". That proposal was widely slammed as calling for the ethnic cleansing of Palestinians.
Israel continues to invoke the "Trump plan" to insist on the forced displacement of Palestinians. The US backed off after resistance from its Arab allies.
'Trump doesn't care about the European Union. In the Caucasus, that is especially obvious'
- George Meneshian, Caucasus expert
Trump's penchant for business deals in countries where sectarian and regional tensions are rife has been better received by Turkey and Gulf states in Syria, where he has pushed through the speedy lifting of sanctions.
The Zangezur Corridor idea seems to fall closer to the minerals deal Trump signed with Ukraine in April. That agreement set up a joint fund to monetise Ukraine's mineral wealth. Earlier this year, Trump also said EU states would purchase air-defence systems from the US on Ukraine's behalf.
Azerbaijan, a major gas exporter, flaunts the sort of energy riches that Trump prizes, but Armenia is poor. The South Caucasus's value to the US is that the region is crisscrossed by trade routes, including the Middle Corridor that aims to link Asia and Europe, bypassing both Russia and Iran.
Peter Frankopan, an expert on trade routes at the University of Oxford, told MEE that having a third party operate the corridor "is not a bad idea in principle", but faces obstacles.
"First, the US proposal is that it is a commercial endeavour – which means it needs to be run for profit. So an operator needs to be clear and certain that it can make a return on investments," he said.
In January, Armenia replaced Russian troops at its southern border crossing to Iran with its own forces. Moscow continued to oversee the crossing after the collapse of the Soviet Union.
"Russia is likely to react badly to any US presence [in the corridor], whether commercial or notionally benign," Frankopan, the author of Silk Roads, added.
A US presence would also unnerve Iran.
'If the border opens, Iran loses'
The Islamic Republic of Iran and Armenia enjoy good ties. Iran's parliament allocates three seats for members of its Armenian minority. Earlier this year, the two conducted joint military drills. Both countries are wary of Turkey and Azerbaijan's growing power in the region.
"The status quo benefits Iran a lot," Alen Shadunts, an Iran specialist at the American University of Armenia, told MEE. "Iran right now is the only connector between Azerbaijan and Nakhchivan."
With no direct land link now, Azerbaijani trucks have to pass through Iran to reach the exclave. Azerbaijan also relies on Iran to help supply electricity to Nakchivan. That has been a source of leverage for Iran to use against Azerbaijan since the end of the Cold War.
"If the border opens, Iran is going to lose," Shadunts said. "There are suspicions of an Israeli presence in Azerbaijan already. If an American company comes in and leases the corridor, Iran may see that as encirclement."
Iran's President Masoud Pezeshkian (R) shaking hands with Armenia's Prime Minister Nikol Pashinyan (L) during a meeting in Tehran on 30 July 2024 (ARMENIAN PRESIDENTIAL PRESS SERVICE / AFP)
Iran has also received a $1.4bn loan from Russia to complete a rail link for the International North-South Transport Corridor that will run from Russia through Azerbaijan to Iran's coast.
The route is intended to cut travel time between India and Russia. Trade between the two hit $68bn in 2024 - more than four times the amount it stood at before western sanctions were slapped on Russia in response to the Ukraine war.
Azerbaijan already has deep security ties with Israel. Baku has been hosting talks between Syria and Israel. The city is so swarming with Israeli spies that Iranian officials have accidentally bumped into them at the same restaurant, MEE has reported.
Armenia also has diplomatic relations with Israel. But Steve Witkoff said in May that the US was looking to bring both countries into the Abraham Accords.
Regional analysts say that could mean more economic ties.
"Armenia is interested in connectivity with Israel. Any regional project could be a lifeline for resource-poor Armenia," Shadunts said.
Will the US manage the Zangezur Corridor?
Barrack's offer to lease the Zangezur Corridor faced backlash in Armenia.
Experts say the idea for a 100-year lease that Barrack floated in public would go against Armenia's constitution. Armenian President Nikol Pashinyan is already under pressure from an escalating feud with Armenia's Catholic Apostolic Church and faces resentment from pro-Russian voters who are wary of the country's tilt to the US.
'The US proposal is a commercial endeavour – which means it needs to be run for profit'
Peter Frankopan, author Silk Roads
Pashinyan's bid to reach a peace deal with Azerbaijan, with an eye towards normalising with Armenia's bigger neighbour, Turkey, has been met with wariness.
Resentment and anger over Ottoman atrocities against Armenian Christians in the final years of WWI, which many historians label a genocide, still feel warm to the touch.
Armenia is still reeling from its 2023 military loss to Azerbaijan, and is worried its neighbour harbours territorial designs on its southern Syunik province, where the corridor sits. For its part, Azerbaijan does not want the corridor to be controlled strictly by Armenia.
"They're arguing over 32 kilometres of road, but this is no joke. It's been going on for a decade – 32 kilometres of road," Barrack said earlier this month in a press briefing. "So what happens is America comes in and says, 'Okay, we'll take it over. Give us the 32 kilometres of road on a hundred-year lease, and you can all share it'."
Azerbaijani President Ilham Aliyev at a military parade, 8 November 2023 (AFP)
Pashinyan confirmed in July that the US gave "proposals" to manage the corridor.
The idea has been around for years, Olesya Vartanyan, a conflict analyst in the South Caucasus, told MEE: "Before the Americans, the Europeans were floating this."
She said it drew inspiration from projects in Georgia, Armenia and Azerbaijan's northern neighbour. More than a decade ago, Switzerland mediated a US-backed deal that saw corridors established through two breakaway Georgian regions controlled by Russia to enable trade. European powers floated a corridor deal based on that model to Armenia and Azerbaijan.
"People in the region were waiting for Trump to come in. There is an interest to engage with the administration. It's not like they have a well-crafted plan, but the Americans are willing to adjust."
Barrack's comments caught many US diplomats off guard, one former US official briefed by colleagues told MEE.
"This is very top-down. Barrack is a one-man show. He has a relationship with Erdogan and Trump. He feels that is all he needs," the official said.
The Trump administration's language, as well as those involved in the diplomacy efforts, seem to suggest that this US government sees the South Caucasus as closer to the Arab Middle East than Europe.
"Trump doesn't care about the European Union. In the Caucasus, that is especially obvious," Meneshian told MEE.
'Turkey is in the middle of all of it, just like Azerbaijan and Armenia'
Tom Barrack, US envoy and Ambassador to Turkey
Meneshian said the focus on the Abraham Accords "says something" about the true balance of power on the ground.
In 2023, the UAE emerged as the largest source of Foreign Direct Investment in Armenia. The Emirates state-owned renewable energy company Masdar is working on construction of Armenia's largest solar energy plant. It already has a plant in Azerbaijan.
Latching onto that trade would help Witkoff package a deal to Trump with his seal on it. But the US does face real economic competition. Last week, Armenia applied to join the Shanghai Cooperation Organization (SCO), a Chinese-led regional security and trade club.
"It's dealing and trading with everybody," Barrack said. "Where East meets West with the Bosphorus and Dardanelles; with the Black Sea, the Aegean Sea, the Mediterranean Sea, the Spice Road – everything comes through there.
"Turkey is in the middle of all of it, just like Azerbaijan and Armenia."