Prior to joining the Eurasian Union, Armenia did its own study and compared what kind of economic effect it would get after having DCFTA (Deep and Comprehensive Free Trade Agreement) with the EU and joining the EEU, Armenian Finance Minister Vardan Aramyan said in an interview with editor-in-chief of emerging-europe.com, Andrew Wrobel.
“Actually, there’s a good saying, “If you want to gain your own benefits, do not blame your counterpart for not having to taking that opportunity.” Instead of blaming others, you need to think about what you need to do in order to gain your own benefits.
Frankly speaking, prior to joining this Eurasian Union, we did our own study and compared what kind of economic effect we would get after having DCFTA (Deep and Comprehensive Free Trade Agreement) with the EU and joining the EEU. The economic short-term effect of an EU DCFTA membership was estimated to be around, hopefully, 1.06 percentage points of our GDP. For a long-term period it was about two percentage points, without the multiplier effect,” the minister said.
Referring to the benefits of the EEU membership, he noted: “Well, we did this study, with support from the World Bank, about joining the ECU. We estimated that we were going to get at least 2.4 percentage points, annually, because of it. Today, people are critical because exports to Russia declined in 2015 but that was because of the depreciation of the Russian exchange rate vis-a-vis the U.S. dollar and appreciation of our currency vis-a-vis Russian rouble in real terms, as well as a dramatic decline in local demand in Russia.
If we only count the impact of gas prices, which we buy from Russia, the 30 per cent export tariff does not apply here because we are a member of the EEU. The nominal effect is around $140 million per year. $140 million is almost 1.4 percentage points of our GDP and I am not talking about the second round effect of energy tariffs. The price of gas translates into energy prices, which have an effect on the cost of supply that is covered by Armenian companies, and for sure, it could harm their competitiveness.”
In Aramyan’s words, there is also the political aspect of the EEU membership.
“Yes, many politicians say that being part of the EU could foster reforms, as the EU is more advanced, but we are working closely with both the EU and the EEU. Actually, the EEU is a custom union at this stage. However, we have a much broader aspect of cooperation with the EU. We are seeing reforms in good governance, reforms in our human rights; judiciary and business environment and we are going to continue that,” he said.
