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Rainer Lindner: Armenia Should Have Aimed For Free Trade Agreements

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  • Rainer Lindner: Armenia Should Have Aimed For Free Trade Agreements

    RAINER LINDNER: ARMENIA SHOULD HAVE AIMED FOR FREE TRADE AGREEMENTS BOTH WITH THE CUSTOMS UNION AND THE EU

    19:05 02/10/2013 " COMMENTS

    Panorama.am presents an interview with Dr. Rainer Lindner, Executive
    Director of German Committee on Eastern European Economic Relations,
    Berlin. Dr. Lindner comments on Armenia's accession to the Customs
    Union and on future prospects of cooperation between Armenia and
    Europe.

    Dr. Lindner, as you know the Republic of Armenia has announced about
    her decision to join the Russia-led Customs Union. How do you as a
    German expert evaluate this decision given the choice Armenia was
    faced with? What do you think was Armenia mostly motivated by and do
    you find this motivation reasonable?

    Lindner: Russia is the most important partner for Armenia in terms of
    the economy and security policy. In the long run, however, we believe
    that the Free Trade Agreement with the European Union would provide
    Armenia with greater benefits - economically, as well as socially.

    With more than 500 million consumers, the European market is very
    attractive for the Armenian economy.

    What do you see as a driving force behind the Customs Union? Can we
    draw any parallel between the Customs Union and the European Coal
    and Steal Community?

    Lindner: The unification process in Western Europe started in 1951
    with the European Coal and Steel Community. Almost equal in size and
    influence, there were three countries - France, Germany and Italy
    that were involved in the process. Russia, in contrast, due to its
    size, will take an outstanding role in the Customs Union. However,
    it remains to be seen whether this situation can be balanced to the
    satisfaction of all members. Economically speaking, the creation of
    a greater, unified domestic market is reasonable. Nevertheless, it
    is important, that the domestic market does not isolate itself, by
    means of higher customs, separate norms and certification regulations.

    Thereby, investors might be irritated. Therefore, the German economy
    would appreciate initial talks about a common, greater free trade
    zone between the European Union and the Customs Union.

    EU Commissioner for Enlargement and Neighborhood Policy Stefan Fule
    has stated that the political association and economic integration
    are integral parts of the EU Association Agreement and cannot be
    decoupled. What exactly made it impossible to decouple the agreement
    so that Armenia as a CU member could still pre-sign it?

    Lindner: The Eastern Partnership programme of the EU promotes a
    harmonization of the law systems and the introduction of EU standards.

    Armenia is a partner of the programme. As a member of the Customs
    Union, which is to be eventually developed into the Eurasian Union,
    Armenia would adapt the law and standards of the Customs Union. In
    this context, we face a competitive situation. A closer look is
    needed to conclude, which elements of the Association Agreement
    would harmonize with the membership of the Customs Union. As member
    of the Customs Union, Armenia would join a common market with Russia,
    Kazakhstan and Belarus. Internally, the market is distinctive of common
    standards and legal procedures. Externally, the market sets up common
    customs. Armenia would have to adapt these customs. Moreover, Armenia
    would not be able to conclude bilateral Association Agreements with
    other states or the European Union respectively. Only the Customs
    Union as a whole could do so. Instead of a full membership, it would
    be easier for Armenia to aim for a Free Trade Agreement with the
    Customs Union. This would be compatible with an Association and Free
    Trade Agreement with the European Union.

    In your latest interview you said that the way out of the dilemma
    between Russia and the EU is the dialogue between the two on the
    creation of common economic space. How do you think this can be
    achieved? What steps can or should be taken by the officials in Russia
    and in the EU to find the compromise option in this situation?

    Lindner: The idea of a common European Economic Space with common
    rules for the traffic of goods, persons, services and capital has
    existed since the EU-Russia summit in Rome in 2003. From an economic
    point of view, it would be a success for Europe as a whole. The German
    economy actively promotes this solution and advocates a common European
    economic conference, which could elaborate a roadmap to this economic
    space. One precondition is, that the politicians in charge in Moscow
    and Brussels overcome political differences and gain mutual trust in
    each other.

    Some commentators have expressed an opinion that the European partners
    abandoned Armenia (unlike Ukraine) when the latter was faced with what
    some termed as "brutal pressure by Russia". Could you comment on this?

    Lindner: In contrast to Ukraine, Georgia and Moldova, that aim for an
    Association Agreement with the European Union, the Armenian President
    has declared, that his country wants to join the Customs Union. In
    the EU this statement was taken with surprise. At the same time, if
    Armenia wishes to do so, we have to accept it. The consequences of
    this step for the future collaboration with the European Union will
    be discussed at the summit of the Eastern Partnership at the end of
    November in Vilnius.

    Armenia presently has a facilitated tariff regime with the EU. As a
    member of Customs Union how will this impact Armenia's trade (both
    import and export) with Europe? Will the tariffs be increased?

    Lindner: Armenia has to adopt the customs of the Customs Union. It
    might be reasonably assumed, that in most cases the custom tariffs
    are above the Armenian customs level, which would certainly affect the
    Armenian trade with the EU negatively. In this respect, similarities
    can be drawn to Kazakhstan. After joining the Customs Union, Kazakhstan
    had to raise their custom tariffs to the Russian tariff level.

    We know that the Armenian market is not very attractive for Europe
    but that investment opportunities are. Could you please specify
    particularly in what spheres the German companies are eager to invest?

    What are the prospects of these investments and of future cooperation
    now?

    Lindner: The last delegation visit of the Committee on Eastern
    European Economic relations was held in May 2013. We had talks with
    Prime Minister Tigran Sargsyan and the Secretary of Commerce, Vahram
    Avanesyan. Above all, the participating companies were interested
    in the telecommunications industry, IT services, tourism, fruit
    cultivation and projects in the field of renewable energies. Regarding
    the mining sector, the German company Cronimet represents an investor
    with great commitment. In association with Prime Minister Sargsyan,
    we agreed on further joint projects. Due to the planned membership
    of the Customs Union, Armenia attracts investors that aim for trade
    with the countries of the Customs Union. This could affect most of
    the German investors.

    Interview by Nvard Chalikyan

    Source: Panorama.am




    From: A. Papazian
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