YEREVAN. – Any real reduction in financial aid by State Department is not the most important element of Armenia’s economic and trade relations with the United States, Director of the Regional Studies Center (RSC) Richard Giragosian told Armenian News-NEWS.am.

His response came in response to the request to comment on a leaked document that indicates Trump administration’s intention to drastically cut State Department’s assistance to developing countries. According to the document, in fiscal year 2018 aid to Armenia will be cut for 77%.

The expert believes that although the Trump Administration’s plan to reduce U.S. foreign assistance to Armenia does raise concern over U.S. support for reform and economic development, this possible reduction in aid is not very significant, for several reasons.

“First, such a move by President Trump to cut aid to Armenia is neither a surprise nor a strategy.  In other words, Trump is seeking to reduce a large number of U.S. foreign aid programs and this is not directed at Armenia specifically.  But second, any such move to reduce aid to Armenia by the Trump White House will face opposition by powerful pro-Armenian members of the U.S. Congress, and they may actually force the president to back down,” he said.

According to him, there is an even more important factor that means that such a reduction in aid will not necessarily be serious for Armenia. The important programs are related to the U.S.-Armenia agreements on trade and investment, including a Trade and Investment Framework Agreement (TIFA) an agreement on trade relations, an Agreement on Trade Relations, an Investment Incentive Agreement, and a Bilateral Investment Treaty (BIT).

“And these ties are not only important for Armenia, but they are also significant for the United States.  This is evident in the meetings of the U.S.-Armenia Joint Economic Task Force (USATF), for example, which covers mutual areas of cooperation in energy, trade, and investment,” the analyst said.

Armenia and the United States have also signed a Memorandum of Understanding on unconventional and conventional energy resources, which aims to enhance cooperation between U.S. and Armenian experts to assess Armenia’s potential energy resources, including shale gas. And Armenia has been designated as a beneficiary country under the Generalized System of Preferences (GSP) program, under which a range of products that Armenia might seek to export are eligible for duty-free entry to the United States. The GSP program provides an incentive for investors to produce in Armenia and export selected products duty-free to the U.S. market.

“Therefore, these factors actually show that any real reduction in aid is less serious as it seems, and also that such aid is not the most important element of Armenia’s economic and trade relations with the United States,” Giragosian explained.