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Eurasian Union Entry ‘Good For Armenian Economy’


Belarus- Armenian President Serzh Sarkisian signs an accession treaty with the Eurasian Economic Union, Minsk, 10Oct2014.

Belarus- Armenian President Serzh Sarkisian signs an accession treaty with the Eurasian Economic Union, Minsk, 10Oct2014.

Membership in the Eurasian Economic Union (EEU) will greatly benefit Armenia’s economy, the Armenian government insisted on Monday as it sought parliamentary approval of its controversial accession treaty with the Russian-led bloc.

While predicting a major boost to economic growth and exports, a senior government official also acknowledged that Armenia will face “sanctions” by the World Trade Organization (WTO) after adopting the EEU’s more protectionist policies.

Deputy Finance Minister Suren Karayan pointed to the fact that many import duties jointly enforced by Russia, Belarus and Kazakhstan are considerably higher than the existing Armenian trade tariffs that had been agreed with the WTO in 2003.

“Armenia and EEU member states will jointly hold new negotiations with the World Trade Organization, and responsibility for those sanctions, which will be applied for the violation of our [WTO] obligations, will fall not only on Armenia but also on the other EEU member states,” Karayan told the National Assembly. He did not specify whether this means that Russia, Belarus and Kazakhstan would necessarily compensate Armenia for penalties imposed by the WTO.

Russia’s First Deputy Prime Minister Igor Shuvalov spoke of Armenian “compensations” to the WTO in June. He said that Yerevan will have to renegotiate the terms of its membership in the global trade body after joining the EEU. Armenian officials have been reticent about the subject until now.

Speaking at the start of parliament debates on the accession treaty, Karayan insisted that EEU membership will boost Armenia’s economic prospects by improving its manufacturers’ access to a vast common market. “Joining this union is extremely important for the Republic of Armenia as we will able to considerably boost our exports and thereby ensure higher living standards for our population,” he said. “I not only believe in that but am extremely optimistic. Having been involved in the whole [accession] process, I can assure you that this will earn Armenia very positive and serious results.”

Citing government estimates, the official said that entry to the Russian-led bloc will translate into an extra growth rate of between 1.2 percent and 2.5 percent annually for the Armenian economy in the short term.

In recent months the Armenian government has actually lowered its growth projections for the next few years amid a worsening macroeconomic situation in Russia. With the Russian economy seemingly sliding into recession due to Western sanctions and falling oil prices, government critics say that Yerevan could hardly choose a worse moment to join the EEU.

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