“The EU Should Be More Realistic and Armenia More Precise, While Presenting Their Own Interests”

Policy paper

This policy paper is based on the opinions expressed during the round-table discussion “Common Grounds and Contradictions between the EU DCFTA and the EEU CU: Suggestions for their Compatibility”, held on March 26, 2015. The round-table discussion was attended by Parliamentarians, representatives of the RA executive body, embassies, international organisations in the RA, and independent experts from civil society organisations. The discussion was organised within the framework of the EU-funded “Civil Society: Dialogue for Progress” project.

This Policy Paper outlines the opinions, suggestions and concerns expressed during the discussion, which could be of some practical use and thereby contribute to the development of EU-Armenia economic relations.

Armenia and the EU have defined their scope of cooperation, and it is expected that in the upcoming Eastern Partnership (EaP) summit scheduled in Riga, the EU team will receive a mandate to start negotiations on a new cooperation document. Both the EU and Armenia have declared at the highest levels that they will endeavour to render the new document as comprehensive as possible, while including provisions aimed at boosting economic cooperation. Before the Riga summit therefore, each party must conduct some preparatory work. Moreover, the revisions carried out by Brussels may refer not only to relations with Armenia, but to the entire EaP region.

The developments of the recent year – and particularly the situation in Ukraine – have made it clear that the “one fits all” approach adopted by the EU towards its partners is not justified. As a result, we have witnessed a constructive approach among EU officials in Brussels, in which they have indicated that the EU should be more willing to listen to the concerns of its partners and the societies of those countries and professionals working in them. Such an approach would provide EU partners with a greater amount of realism when assessing the impact of leverage and the interests of other actors in the EaP regions. This realism would apply not only to refraining from cooperation or “sharing” zones of influence, but also to assessing the actual effectiveness (and in some cases also the risks) of its initiatives for other partner countries. The afore-mentioned trends in EU policy create opportunities for Armenia as well.

Though it is a member of the Eurasian Economic Union (EEU), there is no doubt that it is in the interests of the RA to strengthen its economic relations with the EU. However, we must seek out the correct cooperation format that would enable the RA to maintain its commitments in the EEU while still allowing for economic cooperation between the EU and the RA.

In this context, it would be effective for the RA team in Riga to have the results of the analysis of different economists’ groups at their disposal: analysis on the EEU (corresponding tools)-DCFTA maximum capacity of compatibility, as well as the controversial provisions and contradictions.

Research should be carried out simultaneously by several groups – including professional bodies outside of Armenia – who can provide an “outsider’s perspective.” One of the state bodies could consider offering a grant to economist-experts to carry out comprehensive analysis and develop recommendations. Failure to do so could potentially result in negotiations with the EU not leading to the best possible outcome or expectations.

Taking into consideration the RA accession to the EEU, there is at least one obvious opportunity for deepening its economic relations with the EU: by becoming a member of the EEU, Armenia has limited its chances to carry out different activities on the border with regard to customs taxes (this may later refer to common standards, technical regulations, etc.). However, carrying out an economic policy within the country is not limited to the RA. In this regard, we are not forced to have a differentiated approach in terms of the conditions of the economic activities within our country. In connection with this, the experience of China is of particular interest. There are two types of economic areas in China – one is economies under the auspices of the state, the other areas that fall within the realm of the market economy. Organisations operating under free market relations have fair access to other markets, while in the case of those organisations that operate under the auspices of the state, other measures are used – anti-dumping, compensation, etc.. The latter imposes restrictions on access to other markets.

This model can also be applied to Armenia: an alternative approach could be used for those economies that are willing or able to be represented in a third country. In other words, in order to work in the EEU, there are common procedures to be followed. If the organisation is willing to work with others, for example the EU, then it should have such mechanisms of non-tariff regulations accepted in the EU. Russia, Belarus and Kazakhstan are working with a modern model corresponding to state standards, while Armenia has adopted compulsory and voluntary certification systems. These two models should be equally available for our entrepreneurs so that they can be easily represented in their preferred foreign markets, should they so wish.

Economic relations and trade turnover with the EEU and the EU are distributed proportionally. To some extent there is a diversification of both import and export, and as such in addition to building our trade-economic relations, we should henceforth endeavour to maintain the already established balance and find such models of cooperation that allow the development of those relations. It is in the interests of the RA to have diversified foreign trade-economic relations: it already has established and solid economic ties with European countries, which should not only be maintained but also expanded.

While implementing initiatives that derive from your own interests, it is also important that these be perceived by all partners – both in the EU and the EEU. Before the Riga summit it is important to make the Russian Federation understand why Armenia wants to deepen its relations with the EU and to what extent. EU partners should also have a proper understanding of our possible scope of manoeuvre.

We should present our position to our partners by all possible means. All institutions – the government, parliament, civil society institutions, analytical centres, the media, etc. – must have a rile to play in ensuring our activities are perceived correctly.

Of course, the correct perception can only be arrived at when there is a clear understanding of one’s own needs, interests and potential. We need to be more self-confident and rather than wondering what someone else wants from us, ask what we want for ourselves and what we can offer others.

The content of this paper does not reflect the official opinion of the European Union nor the Konrad Adenauer Foundation as lead of the consortium. Responsibility for the information and views expressed therein lies entirely with the author(s).