‘The business environment in Armenia is changing, and there is positive reaction by European companies’

‘The business environment in Armenia is changing, and there is positive reaction by European companies’

‘Aravot’ interviews the Head of the Delegation of the European Union to Armenia, Ambassador Piotr Antoni Switalski

– The signing of the Armenia-European Union Comprehensive and Enhanced Partnership Agreement in Brussels on November 24 was followed by some pessimistic assessments, that only some NGOs will be activated, ties with Europe will be stimulated, some processes will start, for example, regarding the certification of agricultural products in compliance with the EU norms, etc., and that the rest are just nice wordings. What do you think, how likely these Euro-pessimists predictions will become true?


– The new agreement signed on 24 of November is a landmark event which helps to solidify the basis of relations between Armenia and the European Union. The old agreement which regulated the basis to our relations, the old PCA agreement was clearly outdated by the developments and by the expectations also by the Armenian side. So it was a natural process to try to develop a new basis. It was not possible to initial and sign the Association Agreement which was ready in 2013.  But still, the desire to think about the agreement which would be modern and which would reflect the present level of expectations and possibilities was there. So the conclusion of the agreement is an act of necessity. I think it was in the interest of both sides to develop a new modern basis for our relations. 
The agreement is not a statement of intentions or wishes, the agreement is a statement of duties, obligations and commitments. And as you know the European Union is quite strict in terms of taking the law seriously, and the document is a legal document. So you can expect that the European Union will be very serious about the implementation of the agreement. And we have a mechanism including the decrement which provides a periodic review, assessment of the implementation. And mechanism which will definitely help us to turn this language of the agreement into facts, into reality. So we believe that this new agreement will result in a new quality in our relations. The European Union will do everything in order to implement the agreement in good faith.

– German Chancellor Angela Merkel noted that the EU treaties with Armenia and Azerbaijan would not bring significant changes since Russia has a great influence on these countries. Do you think such assessments are justified? Or cannot the countries within the EAEU be free to cooperate with the EU, or are they allowed to cooperate at least within the framework, within the game rules defined by Russia?.

What we should take into account are two basic parameters. The first parameter is that this agreement offers new opportunities and new possibilities. That is in the hands of Armenia and the European Union how to best use these opportunities. If we are determined to make maximal use of the obligations and commitments contained in the agreement then I believe we can be sure that new quality will arise in our relations. Of course, it is not a one-off act, it is a process, it will not happen overnight. It will require efforts, it will require determination but I am sure that this agreement offers the potential, contains the potential for a new quality. At the same time, the second consideration which has to be taken into account is that this agreement is not directed against other states. If you read the agreement and I think that the Armenian public is well acquainted with the agreement, there is nothing in the agreement which may pause any tension or any danger concerning any third party whatever is the party. So I believe that the emotional reactions are not well-grounded.
This agreement, as I said on previous occasions is an opportunity not only for the European Union, other countries may benefit from the impact of this agreement because stronger, more independent judiciary, stronger rule of law, fairer business conditions, modern regulatory framework  in different sectors of economy is something that other countries will also benefit  the European Union doesn’t want to monopolize the good benefits of this agreement. Therefore, of course, we should take a measured approach when assessing the level of ambition of this agreement and this agreement is definitely a partnership agreement not an association agreement but still, it is an ambitious document which contains a lot of good things. Therefore I also take the comments made by other European leaders as recognition of the fact that we should be sober about the potential impact of the agreement but definitely we should be mobilized by the opportunities. 

– You say the agreement does not contain any danger for a third party. However, we can see from the very beginning of the document signing how the Russian press reacts to it, comparing Armenia to an unfaithful wife, who has decided to cheat. Was such reaction expected?

What I have noticed the official comments and reactions in particular by my colleague here in Armenia, the Russian ambassador, which were, I think, based on real facts and which were referring to the sovereign decisions of Armenia which should be respected and on this basis I believe that this agreement is not perceived as something which constitutes any form of danger to any third party. Concerning other reactions including the press, the press is free to say whatever they think but this right to speak does not imply the duty to comment. Therefore I will avoid commenting upon different voices, on different comments that are circulated in different media outlets. That’s not really my responsibility.
But I believe what Armenia did in negotiating this agreement was to take all the necessary steps to ensure that the agreement negotiated with the European Union takes into account all other commitments and obligations of Armenia starting from the membership in other integration projects or international organizations. And I think as I said, that this document is firmly based on the harmony with other commitments and obligations.
– Do you sincerely assume that the Russian press, which has a highly centralized management, and the existing censorship, “blacklists” are even evidenced by their leading television commentators, is doing all this within the framework of implementing its freedom of speech? Or does the diplomatic ethics require that answer?
I am the EU ambassador in Armenia. If you want to have a comment about the media marketing in the other countries I would ask you to address my colleagues in that other country. Even in Armenia I do not comment or react to the local statements or opinions circulated by Armenian media. So why should I embark on commenting the statements by media in other countries? 
– Let us return to the agreement. Citizens can expect that the EU will increase the attention towards the trends of the cornerstones of democracy, including the implementation of free and fair elections, the right to a fair trial, and, in a broader sense, respect for human rights.In this regard, what could not the EU be able to do before the signing of the agreement that it can do now?
It is true that references to democracy and human rights and other values which are an integral part of the European identity were already contained in the previous documents, also in the previous documents that were adopted together with Armenia. What we have now is much stronger legal basis and what we have now is much stronger mutual commitments and mechanisms for overviewing the implementation of this commitments. So the basis for our dialogue and cooperation on the issue of democratic and other values is much stronger. 
But we understand that the Armenian government undertook these commitments not to please the European Union. The Armenian authorities committed themselves to these values because this is something that Armenians themselves need and from this perspective we believe that the process of building stronger democracy, an independent judiciary, the process of getting rid of corruption, the process of ensuring the protection of human rights will continue with or without this agreement. What this agreement adds to this process is a new mechanism, new opportunities and the support of the European Union – political support but also support in terms of expertise and financial resources. So that’s the opportunity created by the agreement but we believe the process towards the consolidation of European values in Armenia is inherent in the workings of bigger processes inside Armenia. 
This is not an agreement by which we want to export anything, project anything. We don’t want to treat this agreement as a leverage. We believe that simply this agreement inscribes itself into natural processes which are happening and will happen in Armenia. And what the European Union can contribute is exactly the opportunities created through this agreement. 

– The agreement envisages encouraging EU companies to establish subsidiaries in Armenia, which in its turn will promote economic growth and job creation. Will the political agreement achieved be the priority for European businessmen instead the favorable conditions for investment in the country?

– We need this agreement because this agreement sends a signal to European businesses that Armenia wants to embrace the European model of governance, that Armenia wants to adopt European regulatory model and it is very important for European businesses because they will be prepared play by the rules they know, they understand and they feel comfortable with. And it is very important for any country to be attractive in terms of foreign investments, the feeling that the rules are known, predictable, familiar is very important. And this is the signal that the agreement is sending. But also the other factor, the internal developments, the internal climate, the experiences of European companies is important. And we know very well that one bad experience can overshadow one hundred success stories.
So if  European potential investors are confronted with unfortunate developments because of one or two companies failed in the efforts to come here and to make a successful business then it will be bad and in such situations, even the signing of the agreement will be of no help. 
But I believe that Armenia is on the right track, that the business climate is changing in a good way and we have good signals from the European companies operating already in Armenia. But of course, there are sometimes problems, very pedestrian problems which have to be addressed in order to create good success stories and prevent the emergence of bad stories. So both factors are important – the legal basis and practical situations, so-called, anecdotal evidence. 
– One of the points in the agreement refers to changing the names of brandy and champagne also in the domestic market, and 25 years is set as a deadline. There are rumours that Armenia was given a lot of money for moral damage. Given the fact how important Armenian cognac brand is for us, I would like you to make additional clarifications on this.
Cognac and Champagne constitute registered French geographical indications and they are protected inside the European Union and also outside of the European Union. The European Union when embarking on the deeper relationship in particular in the field of trade makes it one of its priorities to ensure better protection of the intellectual property which includes geographical indications. From this point of view the fact that the European Union made it part of the agenda of the negotiations is quite natural. And I believe that this is something which is inevitable also for Armenia which is still using these French geographical indications although in a limited scope only in Russian and Eurasian economic market and only if I am not mistaken using Cyrillic letters. 
The experience of other countries which entered into Deep and Comprehensive Free Trade Agreement like Moldova, Georgia is abandoning these names which are protected names didn’t result in any damage, quite the contrary: the sells of these products like brandy increased. And I believe that the Armenians will be no less successful when switching to other names. Because what speaks for Armenia is long tradition, a good quality associated with the name of Armenian origin and I believe that the Armenian products – Armenian brandy, Armenian sparkling wine will be very successful not only in the Russian market. What the European Union offers is technical assistance: we will be ready to support Armenia in analyzing the impact of the switch, of the transfer to other names. We will help also in terms of financial backup – to help with the promotion of new brands, in terms of marketing, which would require financial resources, it is not done free of charge: you need to advertise, you need to publicize. 
Armenia is no exception because the other countries also had this challenge to face but the European Union is ready to help. And that’s I think speaks a lot about the European Union. The European Union is a partner which helps in terms of cooperation and assistance: we do not impose, we do not dictate, we do not leave the countries alone with their problems. So the issue of geographical indications will be solved in a cooperative way with the support of the European Union even if some other countries will benefit from it. 

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