Armenia pays a high price for joining the Customs Union
On December 2, President of Russia Vladimir Putin will visit Yerevan at the invitation of the President of Armenia Serzh Sargsyan, informed President of the Union of Armenians of Russia Ara Abrahamyan, recently, in the interview with NEWS.am journalist. He has also informed that at the initiative of the administrative staff of Presidents of Russia and Armenia, a business forum will be held at the Sports and Music Complex after Karen Demirchyan, which will be attended by Presidents of Russia and Armenia, as well as representatives of a number of Russian and Armenian enterprises, experts and businessmen. Much work has been done and a number of agreements will be signed.
Eventually, Putin’s so expected and repeatedly delayed visit will take place. And, if Putin indeed is arriving on December 2, then this day is very symbolic. On December 2, 1920, as a result of the last operations of the independence of the Republic of Armenia, an agreement was signed between Armenia and Soviet Russia, according to which, the government of Armenia was, actually, refusing from the power.
It is apparent that the authorities of Armenia are duly preparing for Putin’s visit. On November 6, after the meeting with Prime Minister Tigran Sargsyan, Viktor Khristenko, Chairman of the Eurasian Economic Commission’s (EEC) Board, informed that they have signed a memorandum of cooperation between Armenia and the Eurasian Economic Commission, thus executing the decision of the presidents of Armenia, Russia, Belarus and Kazakhstan. This memorandum provides for the involvement of all systems of Armenia in the Customs Union processes, starting from the highest, the Eurasian Economic Board, and ending with the Eurasian Economic Commission. According to Khristenko, on that day, they conducted fruitful work towards establishing a road map for Armenia to join the Customs Union and common economic area.
In the context of the CU, in response to the question regarding Nagorno-Karabakh, Khristenko said that there are specific formats for this matter, special professionals, who are looking for ways to solve. “From my point of view, the current situation is not an obstacle for the implementation of projects in Armenia. And, the implementation of these projects will nowise complicate, but on the contrary, will improve the situation around Karabakh.” As to what “special formats” he was talking about that required “ways of solution”, he did not specify.
As for the prime minister of Armenia, he said that the main problem facing Armenia is to estimate the scope of work that needs to be performed for becoming a full member of the CU and the common economic area. The Prime Minister, however, admitted that not joining the Union initiated by the Kremlin could hinder the Armenian-Russian strategic relations, including the CSTO. Customs Union is a “new window opportunity” for the economy of Armenia, claimed Prime Minister in the interview to “Segodnya” periodical. “Long-term studies and negotiations, I believe, had a successful end, said T. Sargsyan and added, Russia is our main trading partner and investor, and it is obvious that being isolated from the integration processes in the Eurasian area will lead to loss of competitiveness.” It is interesting, however, that, at the same time, Prime Minister had stated that in addition to expected benefits, there are also clear risks. “The tariffs of the Customs Union are more than two times higher than those of our customs duties with the third countries. We will face some difficulties, but in general, we see that Armenia benefits from the membership in the Customs Union and the common economic area”.
As to what Armenia will benefit from the CU membership, of course, is a matter of the future. But, it is interesting that nowadays clear answers are not given to some questions. CU assumes common customs tariffs and procedures with respect to the third countries, and if Armenia is a CU member, accordingly Armenia will be deprived of the opportunity of independently regulating its trade terms with other countries outside of the Union. In general, how is it derived from the Constitution of Armenia?
The Constitution does not stipulate that a supra-national institution can define norms for our country, for example, on customs matters, and Armenia is obligated to abide by the decisions of this supra-national entity. Finally, the decisions of supra-national entity within the CU may be inconsistent with the Constitution of our country, how will these issues be regulated? And, most importantly, the issue of sovereignty of the states is put in the base of all of these matters.
Next, if Armenia is going to define common customs tariffs to the third countries, what about Karabakh? Will Armenia raise the rates of customs duties on goods imported from Karabakh, or Karabakh will be included in the Customs Union? Or, the issue of Georgian goods. Georgia does not intend to join the CU, and, hence, the customs duty on goods imported from thence will increase, Georgia, probably, will make its steps, for example, it will increase the customs duty on goods imported from Armenia.
In short, a whole range of unanswered questions…
It turns out that Armenia pays a high price for joining the Customs Union. For what?… This is the question. Taking into account the fact that Putin has chosen a symbolic day of his arrival in Armenia, December 2, perhaps, the price is also quite eloquent…