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Armenia And EU Agree To Create Free Trade Area

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  • Armenia And EU Agree To Create Free Trade Area

    ARMENIA AND EU AGREE TO CREATE FREE TRADE AREA

    ITAR-TASS, Russia
    July 24, 2013 Wednesday 08:04 PM GMT+4

    YEREVAN July 24

    - Armenia and the European Union have concluded their talks on Deep
    and Comprehensive Free Trade Area (DCFTA), as part of the Association
    Agreement between them.

    The final, seventh, round of talks took place in Yerevan on Wednesday,
    July 24. The sides agreed key aspects of the agreement that will
    set a new framework for trade relations between Armenia and the
    European Union.

    The DCFTA will strengthen Armenia's economic integration with the EU
    by providing better market access for European and Armenian goods and
    services to each other's markets. It will offer Armenia a framework
    for modernising its trade relations and for economic development
    on the basis of far reaching harmonisation of laws and regulations
    in various trade-related sectors. These reforms will create the
    conditions for Armenia to bring key sectors of its economy in line
    with EU standards. The improved trade opportunities brought about
    by the DCFTA are expected to bring economic benefits to both the EU
    and Armenia.

    "Today's conclusion of negotiations on a Deep and Comprehensive Free
    Trade Area between the EU and Armenia paves the way for Armenia to
    enjoy much improved access to the EU market in more than trade in
    goods, which will help the country strengthen its exports, increase
    investment and sustain growth," EU Trade Commissioner Karel De Gucht
    said. "In the end, it will contribute to the overall stability and
    prosperity of the region, and contribute to citizen's well-being. I
    congratulate and thank the negotiators on both sides for their
    successful work. I look forward to a political confirmation of this
    week's achievement at the Vilnius Summit in November this year. We
    will need to actively prepare for implementation."

    An independent study suggests that in the long run the Armenian
    economy could gain an extra 146 million euros a year, representing a
    2.3 percent increase in GDP. Removing non-tariff measures is key to
    realising these benefits. For its part, the EU is expected to gain
    by some 74 million euros.

    The DCFTA will have significant impacts on Armenia's trade. The
    forecast 15.2 percent increase in Armenian exports and 8.2 percent
    increase in its imports in the long run will lead improve Armenia's
    trade balance in relative terms.

    The EU began negotiating an Association Agreement with Armenia in
    July 2010. The aim was to replace the old Partnership and Cooperation
    Agreement with a more advanced relationship. The negotiations on
    the trade part of this agreement - the Deep and Comprehensive Free
    Trade Area (DCFTA) - were launched in May 2012. After seven rounds
    of negotiations, final agreement was reached on 24 July 2013. The
    Commission will now report to the EU Member States on the negotiated
    DCFTA text. After that, the EU and Armenia will carry out the next
    steps to formally mark the finalisation of the DCFTA as part of the
    Association Agreement.

    The EU is Armenia's biggest trading partner, covering some 32 percent
    of its trade. Bilateral trade in goods amounted to 951million euros
    in 2012.

    The country already benefits from preferential access to the EU market
    through the EU Generalised System of Preferences with additional
    incentives for sustainable development and good governance ("GSP+").

    This means that existing import duties are already very low, so the
    benefits of the DCFTA, although they also include tariff reductions,
    will lie predominantly behind the border. Regulatory reform will focus
    on areas such as sanitary and phytosanitary issues, aiming to bring
    food safety standards in Armenia up to a par with those in the EU.

    Armenia will also adapt various laws relating to industrial goods,
    with an emphasis on domestic safety and consumer protection.

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