RusData Dialine – BizEkon News, Russia
April 30, 2010 Friday

A customs project for Armenia

Yury Simonyan
Nezavisimaya Gazeta

In Yerevan they consider joining the Customs Union

Moscow and Yerevan are considering Armenia’s possible accession into
the Customs Union. Representatives of Armenia’s government told
Nezavisimaya Gazeta that no concrete decisions have been made, for now
"this is only an idea, which has already been heard several years
ago." "It was stated that if the Customs Union were to be created,
then Armenia might join the organization. But, at that time, there was
no organization to join," an source told the paper.

Despite the fact that everything continues to be in its conceptual
stages, supported by the optimistic statements made by Armenia’s Prime
Minister Tigran Sarkisyan and Russia’s Deputy Prime Minister Igor
Shuvalov, it is time to ask the question: how probable is the
"distant", as it is called by some, membership of Yerevan in the
Customs Union. Armenia does not share a border with Russia,
Kazakhstan, or Belarus. Positioned between Azerbaijan and Turkey, not
counting the transfers made by air, it conducts its foreign trade
through Georgia and does some minor transactions through Iran.
Moreover, it cannot be said that Kazakhstan and Belarus are Armenia’s
leading economic partners.

Head of the research center Politekonomiya, Andranik Tevanyan,
expressed confidence that the idea is a Catch-22. "Armenia’s accession
into the Customs Union is just as much of a senseless act as it is an
unrealistic idea. Under what pretenses will it join the CU? Does it
plan to become an equivalent of the Kaliningrad Oblast? Of course,
Armenia’s authorities will not agree to this," Tevanyan told NG.
According to him, such unproductive ideas arise out of the policies,
implemented by Armenia’s authorities, who cannot refuse their foreign
partners; "no" is something they can only say on a local level. "The
plan to join the CU is equivalent to the idea of having a shared
currency with Russia, which was almost discussed in parliament, but
quickly faded. The reason for joining the CU is unclear, even if a
real, specific mechanism is created. If the reason is to avoid
double-taxation, we have a bilateral agreement with Russia, and could
finalize a similar agreement with other countries. If it is to
regulate custom duties, in this case, we need to consider the WTO.
They cannot be altered based on our wishes alone," says Tevanyan.

Editor-in-Chief of the business magazine Bazis, Ashot Aramyan, is
equally skeptical of the idea of Armenia’s accession into the CU. He,
too, acknowledged that this is not the first time the authorities are
considering this scenario, and said that "the plans will most likely
be halted" this time around as well. "There are no premises for, or
sense in accepting Armenia into the Customs Union. I believe that this
could only be possible if some politically-motivated decision is made,
when political principles are put ahead of economic interests,"
Aramyan told NG. According to him, the first critical question
regarding these plans worries him: Russia and Kazakhstan have serious
economies; are they prepared for the "freeloading" of Armenia, which
lacks its own natural resources? This is a scenario in which an equal
partnership is impossible: with Armenia’s accession into the CU, the
losing party will either be the organization itself, which will have
to tune into Yerevan’s economic needs, or Armenia will have to play by
the rules of the CU, thus incurring losses in the export of energy,
for example. Most importantly, Armenia is a member of the WTO, and I
simply don’t see a way of making the republic’s obligations to the WTO
and the CU not contradict one-another. One cannot have their cake and
eat it too," says Aramyan.