Termination of GSP + trade preferences in Armenia-EU relations is a step backward- ex deputy minister
YEREVAN, December 24. /ARKA/. The termination of the GSP+ trade preferences, which Armenia has enjoyed in trading with the European Union member states since 2009 is a "step backward" in Armenia-EU cooperation, former Deputy Economy Minister Garegin Melkonyan said today.
"This is definitely a step backward in terms of trade and economic relations between Armenia and the EU, because the conditions in the bilateral trade will be tightened," he said Friday during a press conference.
According to him, the incumbent authorities, who knew that the GSP+ trade preferences regime was going to end in 2021, should have paid more attention to working in other areas of the economy and trade to ensure some kind of compensation.
Melkonyan noted that not only the GSP + regime is terminating but also its predecessor –the GSP regime and it means that from January 1, 2022 Armenia will have such a package of trade settlements and the customs rate with EU that it has with other World Trade Organization (WTO) member countries.
"That means all the basic customs duties will come into effect on January 1," he explained.
Karen Azaryan, who is responsible for trade issues at the EU Delegation to Armenia, drew attention to the positive role that the GSP+ regime has had on the Armenian economy and the diversification of its exports.
"In 2014 Armenian exports which were covered by the GSP+ were $42 million when the system was put into operation, while in 2019, five years later, they have increased almost fivefold," he said. Azaryan characterized this as serious progress, which can be sustained by different methods.
According to economist Haykaz Fanyan, Armenian exports to EU will drop by about 20% or about $114 million. He said according to the Asian Development Bank forecast, the reduction is likely to amount to about $146 million.
Previously, the Armenian Ministry of Economy reported that the GSP + trade preferences regime will continue to operate in trade with Switzerland and Norway.
GSP+ regime and its features
In 2014, due to changes in the WB assessment standards, Armenia became an upper-middle-income country, so the GSP+ program could operate in Armenia for 4 years.
From January 1, 2022 the regime of trade preferences with the European Union GSP+, which provides for the duty-free exports of more than 6 thousand commodity items, will be terminated for Armenian exporters, as Armenia is listed in the group of middle-income countries. -0-
