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July 27 2013
EU-Armenia Deep and Comprehensive Free Trade Area
Scope
The Deep and Comprehensive Free Trade Area (DCFTA) between the EU and
Armenia is a further step in developing Armenia's economic relations
with the EU.
In the framework of the Eastern Partnership, the EU started
negotiations on an Association Agreement with Armenia in July 2010 and
on the DCFTA in May 2012. The DCFTA, which will form part of the
Association Agreement, aims at strengthening the trade and investment
performance of both economies, while facilitating Armenia's
progressive integration with the EU economy of 500 million consumers.
In accordance with the basic rules of a WTO-compatible free trade
area, the DCFTA envisages that the vast majority of customs duties on
goods will be removed as soon as the Agreement enters into force. As
regards services, the DCFTA provides for a broad set of commitments
that go beyond the EU and Armenia WTO General Agreement on Trade in
Services (GATS) schedules. This will serve to create trade
opportunities between EU and Armenia to the benefit of both economies.
Intended as an ambitious upgrade of current trade relations, the DCFTA
also covers rules that frame trade, such as intellectual property
rights, rules of origin as well as customs and trade facilitation. It
embraces provisions on sustainable development, making sure that
growth in trade does not come at the expense of the environment or
social and labour rights. A transparency chapter provides disciplines
regarding the availability of information and minimum standards for
consultations with stakeholders on DCFTA-related domestic legislation
Furthermore, the DCFTA offers Armenia a framework for modernising its
trade relations and for economic development. An extensive
harmonisation of laws, norms and regulations in various trade-related
sectors will create the conditions for aligning key sectors of the
Armenian economy to EU standards. Especially sanitary and
phytosanitary standards will be targeted, in a move to create an
Armenian food safety environment that is similar to EU standards.
Moreover, Armenia will adapt several laws of concern for industrial
goods, focusing on areas that are central for domestic safety and
consumer protection.
Economic impact
A Trade Sustainability Impact Assessment study, conducted by an
independent consultant, laid out the likely impact of the DCFTA and
the necessary flanking measures that could be required to accompany
the reforms in Armenia. The study predicts that both Armenia and the
EU can expect to gain from a closer bilateral trade relationship. In
the long run the national income gains for Armenia are estimated at
146 million. These gains imply a 2.3 per cent increase in Armenia's
GDP. Key to reaping the positive effects is the reduction of
non-tariff measures.
The national income gains for the EU are estimated at 74 million.
Looking at the trade impact of the DCFTA, the effects on trade are
significant, with a 15.2 per cent increase in Armenian total exports
and an 8.2 per cent increase in Armenian total imports in the long
run. The DCFTA will thus lead to an improvement in Armenia's trade
balance in relative terms.
Link to the study: http://tsia.ecorys.com/armenia/
Reform-related assistance
The implementation of the DCFTA and related reforms will require
adequate financial support by the EU and sharing of know-how with
Armenia. The EU has already been assisting Armenia in this regard
before the launch of negotiations in the framework of a special
Comprehensive Institution Building programme (2011-2013) within the
European Neighbourhood and Partnership Instrument. It included
financial assistance as well as trainings and advisory activities
(e.g. twinning, TAIEX).
Bilateral assistance of EU Member States also takes place in
coordination with EU efforts. Further significant assistance, devoted
specifically to the implementation of the DCFTA, is planned in the new
European Neighbourhood Instrument (2014-20).
http://www.investineu.com/content/eu-armenia-deep-and-comprehensive-free-trade-area-12c3
July 27 2013
EU-Armenia Deep and Comprehensive Free Trade Area
Scope
The Deep and Comprehensive Free Trade Area (DCFTA) between the EU and
Armenia is a further step in developing Armenia's economic relations
with the EU.
In the framework of the Eastern Partnership, the EU started
negotiations on an Association Agreement with Armenia in July 2010 and
on the DCFTA in May 2012. The DCFTA, which will form part of the
Association Agreement, aims at strengthening the trade and investment
performance of both economies, while facilitating Armenia's
progressive integration with the EU economy of 500 million consumers.
In accordance with the basic rules of a WTO-compatible free trade
area, the DCFTA envisages that the vast majority of customs duties on
goods will be removed as soon as the Agreement enters into force. As
regards services, the DCFTA provides for a broad set of commitments
that go beyond the EU and Armenia WTO General Agreement on Trade in
Services (GATS) schedules. This will serve to create trade
opportunities between EU and Armenia to the benefit of both economies.
Intended as an ambitious upgrade of current trade relations, the DCFTA
also covers rules that frame trade, such as intellectual property
rights, rules of origin as well as customs and trade facilitation. It
embraces provisions on sustainable development, making sure that
growth in trade does not come at the expense of the environment or
social and labour rights. A transparency chapter provides disciplines
regarding the availability of information and minimum standards for
consultations with stakeholders on DCFTA-related domestic legislation
Furthermore, the DCFTA offers Armenia a framework for modernising its
trade relations and for economic development. An extensive
harmonisation of laws, norms and regulations in various trade-related
sectors will create the conditions for aligning key sectors of the
Armenian economy to EU standards. Especially sanitary and
phytosanitary standards will be targeted, in a move to create an
Armenian food safety environment that is similar to EU standards.
Moreover, Armenia will adapt several laws of concern for industrial
goods, focusing on areas that are central for domestic safety and
consumer protection.
Economic impact
A Trade Sustainability Impact Assessment study, conducted by an
independent consultant, laid out the likely impact of the DCFTA and
the necessary flanking measures that could be required to accompany
the reforms in Armenia. The study predicts that both Armenia and the
EU can expect to gain from a closer bilateral trade relationship. In
the long run the national income gains for Armenia are estimated at
146 million. These gains imply a 2.3 per cent increase in Armenia's
GDP. Key to reaping the positive effects is the reduction of
non-tariff measures.
The national income gains for the EU are estimated at 74 million.
Looking at the trade impact of the DCFTA, the effects on trade are
significant, with a 15.2 per cent increase in Armenian total exports
and an 8.2 per cent increase in Armenian total imports in the long
run. The DCFTA will thus lead to an improvement in Armenia's trade
balance in relative terms.
Link to the study: http://tsia.ecorys.com/armenia/
Reform-related assistance
The implementation of the DCFTA and related reforms will require
adequate financial support by the EU and sharing of know-how with
Armenia. The EU has already been assisting Armenia in this regard
before the launch of negotiations in the framework of a special
Comprehensive Institution Building programme (2011-2013) within the
European Neighbourhood and Partnership Instrument. It included
financial assistance as well as trainings and advisory activities
(e.g. twinning, TAIEX).
Bilateral assistance of EU Member States also takes place in
coordination with EU efforts. Further significant assistance, devoted
specifically to the implementation of the DCFTA, is planned in the new
European Neighbourhood Instrument (2014-20).
http://www.investineu.com/content/eu-armenia-deep-and-comprehensive-free-trade-area-12c3