A new U.S.-Armenian intergovernmental body held its first meeting in Yerevan on Tuesday, discussing the implementation of a recent agreement aimed at boosting economic ties between the United States and Armenia.
The U.S.-Armenia Council on Trade and Investment was set up shortly after the two governments signed the Trade and Investment Framework Agreement (TIFA) in Washington in May. The council is supposed to meet at least once a year to address obstacles to bilateral trade and U.S. investments in the Armenian economy.
Its inaugural session co-chaired by Economy Minister Karen Chshmaritian and U.S. Deputy Assistant Trade Representative Betsy Hafner touched upon a wide range of trade-related issues. Those reportedly included customs administration, intellectual property rights, non-tariff trade barriers, food safety standards and government procurement.
Speaking to reporters after the meeting, Richard Mills, the U.S. ambassador in Yerevan, indicated that Armenia needs to improve its investment climate if it is to attract more U.S. investors. He said that while there are “real opportunities” in the country for American firms they need a stronger rule of law and a level playing field in order to set up shop there.
Mills made the same point when he addressed the American Chamber of Commerce in Armenia (AmCham) last week. “The U.S. Embassy cannot force U.S. businesses to invest in Armenia,” he said. “It is up to Armenia to attract that investment … Fundamentally, companies invest where there is predictability and transparency, in everything from taxation to customs regulations to court proceedings.”
In his opening remarks at the meeting, Chshmaritian reaffirmed the Armenian government’s declared commitment to improving the domestic business environment blighted by corruption and tax authorities’ unequal treatment of businesses. “Many programs of improving Armenia’s investment climate are now being implemented and they will produce results soon,” he said.
Chshmaritian argued that Armenia has already markedly improved its position in the World Bank’s global Doing Business rankings over the past five years.
According to Armenian government data, the U.S. is currently Armenia’s sixth leading trading partner, having accounted for 3.4 percent of its foreign trade in the first nine months of this year. U.S.-Armenian trade stood at $119 million during that period.
The Armenian government hopes that bilateral trade will be boosted not only by the TIFA but also a U.S.-Armenian agreement on the avoidance of double taxation sought by Yerevan. Chshmaritian said such an agreement would specifically benefit Armenia’s burgeoning information technology sector dominated by the U.S. hi-tech giants.
Mills noted in that regard that the U.S. government has asked Yerevan to come up with more detailed justifications for the proposed tax deal. He said the U.S.-Armenia Task Force, another intergovernmental body, will discuss the matter at its annual meeting that will take place in the Armenian capital on Thursday. “We are looking forward to that discussion,” added the U.S. envoy.
The signing of the TIFA -- at a ceremony attended by President Serzh Sarkisian -- underlined Armenia’s desire to continue deepening its relations with the U.S. and the European Union even after its recent accession to the Russian-led Eurasian Economic Union (EEU). Mills backed this policy in his AmCham speech, saying that membership in the EEU and closer ties with the West are not “mutually exclusive.”