Armenia benefits a little from accession to CU, but loses trade sovereignty: expert

YEREVAN, October 10. /ARKA/. Public hearings on strategic challenges of Armenia’s socioeconomic development in relation to Armenia’s accession to Russia-led Customs Union were held Wednesday in Yerevan initiated by Partnership for Open Society Initiative.

Independent experts made reports describing differences between the association agreement and the accession to the Customs Union and Armenia’s main challenges in the context of the agreements.

“We are starting with economic discussions to reveal achievements and losses we may encounter if we don’t take the European integration path”, said Larisa Minasyan, founding director of Partnership for Open Society Initiative.

Expert Vahagn Ghazaryan said in his speech main differences between the two documents are on the customs duties. According to him, the association agreement would open up for Armenia the opportunity of free trade and harmonization of mechanisms of duty-free regulations with EU countries.

“Armenian goods would then be exported to the European market on duty-free basis, would comply with the technical requirements Europe sets at its borders and hence, would freely  move in the market”, the expert said. This, according to Ghazaryan, would enable Armenia conducting its sovereign economic policy while maintaining all the agreements made in the country’s interests before.

Whereas the Customs Union (CU), according to the expert, is dictating Armenia to harmonize foreign trade in line with the CU-approved standards and procedures.

It means we should set, for the third countries, customs duties used by Russia, Ghazaryan said adding that 70% of the CU customs duties are higher than the Armenian ones. This may make it difficult for Armenia to trade with third countries and import goods produced outside the CU border.

The expert also said the GSP+ preference granted to Armenia by Europe is going to expire in 2013. Europe could probably give Armenia some other preferences as well, he said.

Ghazaryan also stressed that buying capacity of the European market is five times as much as that of the CU market and its share in the global economy is about 6 times higher than that of CU-countries.

The studies show no single customs union in the world has among its members a country with no land boundary with other members of the union. Armenia has no common border with other CU-countries, which means it will have to carry out customs procedures via territory of other countries while importing goods from the CU.

“Our main aim in turning from free trade area to the Customs Union is free movement of goods, but Armenia’s problem is not solved because of our geographical situation”, Ghazaryan said. 

This means, according to the expert, Armenia benefits a little in economic terms, but loses its sovereignty in economic trade policies.

According to the official statistics, Armenia’s exports to the Russian Federation amounted to $817.2 million, to Kazakhstan - $4.3 million and to Belarus - $32.8 million, in January-August 2013. The country’s foreign trade turnover with the EU was $1.059 billion in the same period.–0--