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RAINER LINDNER: ARMENIA SHOULD HAVE AIMED FOR FREE TRADE AGREEMENTS BOTH WITH THE CUSTOMS UNION AND THE EU
19:05 02/10/2013 " COMMENTS
Panorama.am presents an interview with Dr. Rainer Lindner, Executive
Director of German Committee on Eastern European Economic Relations,
Berlin. Dr. Lindner comments on Armenia's accession to the Customs
Union and on future prospects of cooperation between Armenia and
Europe.
Dr. Lindner, as you know the Republic of Armenia has announced about
her decision to join the Russia-led Customs Union. How do you as a
German expert evaluate this decision given the choice Armenia was
faced with? What do you think was Armenia mostly motivated by and do
you find this motivation reasonable?
Lindner: Russia is the most important partner for Armenia in terms of
the economy and security policy. In the long run, however, we believe
that the Free Trade Agreement with the European Union would provide
Armenia with greater benefits - economically, as well as socially.
With more than 500 million consumers, the European market is very
attractive for the Armenian economy.
What do you see as a driving force behind the Customs Union? Can we
draw any parallel between the Customs Union and the European Coal
and Steal Community?
Lindner: The unification process in Western Europe started in 1951
with the European Coal and Steel Community. Almost equal in size and
influence, there were three countries - France, Germany and Italy
that were involved in the process. Russia, in contrast, due to its
size, will take an outstanding role in the Customs Union. However,
it remains to be seen whether this situation can be balanced to the
satisfaction of all members. Economically speaking, the creation of
a greater, unified domestic market is reasonable. Nevertheless, it
is important, that the domestic market does not isolate itself, by
means of higher customs, separate norms and certification regulations.
Thereby, investors might be irritated. Therefore, the German economy
would appreciate initial talks about a common, greater free trade
zone between the European Union and the Customs Union.
EU Commissioner for Enlargement and Neighborhood Policy Stefan Fule
has stated that the political association and economic integration
are integral parts of the EU Association Agreement and cannot be
decoupled. What exactly made it impossible to decouple the agreement
so that Armenia as a CU member could still pre-sign it?
Lindner: The Eastern Partnership programme of the EU promotes a
harmonization of the law systems and the introduction of EU standards.
Armenia is a partner of the programme. As a member of the Customs
Union, which is to be eventually developed into the Eurasian Union,
Armenia would adapt the law and standards of the Customs Union. In
this context, we face a competitive situation. A closer look is
needed to conclude, which elements of the Association Agreement
would harmonize with the membership of the Customs Union. As member
of the Customs Union, Armenia would join a common market with Russia,
Kazakhstan and Belarus. Internally, the market is distinctive of common
standards and legal procedures. Externally, the market sets up common
customs. Armenia would have to adapt these customs. Moreover, Armenia
would not be able to conclude bilateral Association Agreements with
other states or the European Union respectively. Only the Customs
Union as a whole could do so. Instead of a full membership, it would
be easier for Armenia to aim for a Free Trade Agreement with the
Customs Union. This would be compatible with an Association and Free
Trade Agreement with the European Union.
In your latest interview you said that the way out of the dilemma
between Russia and the EU is the dialogue between the two on the
creation of common economic space. How do you think this can be
achieved? What steps can or should be taken by the officials in Russia
and in the EU to find the compromise option in this situation?
Lindner: The idea of a common European Economic Space with common
rules for the traffic of goods, persons, services and capital has
existed since the EU-Russia summit in Rome in 2003. From an economic
point of view, it would be a success for Europe as a whole. The German
economy actively promotes this solution and advocates a common European
economic conference, which could elaborate a roadmap to this economic
space. One precondition is, that the politicians in charge in Moscow
and Brussels overcome political differences and gain mutual trust in
each other.
Some commentators have expressed an opinion that the European partners
abandoned Armenia (unlike Ukraine) when the latter was faced with what
some termed as "brutal pressure by Russia". Could you comment on this?
Lindner: In contrast to Ukraine, Georgia and Moldova, that aim for an
Association Agreement with the European Union, the Armenian President
has declared, that his country wants to join the Customs Union. In
the EU this statement was taken with surprise. At the same time, if
Armenia wishes to do so, we have to accept it. The consequences of
this step for the future collaboration with the European Union will
be discussed at the summit of the Eastern Partnership at the end of
November in Vilnius.
Armenia presently has a facilitated tariff regime with the EU. As a
member of Customs Union how will this impact Armenia's trade (both
import and export) with Europe? Will the tariffs be increased?
Lindner: Armenia has to adopt the customs of the Customs Union. It
might be reasonably assumed, that in most cases the custom tariffs
are above the Armenian customs level, which would certainly affect the
Armenian trade with the EU negatively. In this respect, similarities
can be drawn to Kazakhstan. After joining the Customs Union, Kazakhstan
had to raise their custom tariffs to the Russian tariff level.
We know that the Armenian market is not very attractive for Europe
but that investment opportunities are. Could you please specify
particularly in what spheres the German companies are eager to invest?
What are the prospects of these investments and of future cooperation
now?
Lindner: The last delegation visit of the Committee on Eastern
European Economic relations was held in May 2013. We had talks with
Prime Minister Tigran Sargsyan and the Secretary of Commerce, Vahram
Avanesyan. Above all, the participating companies were interested
in the telecommunications industry, IT services, tourism, fruit
cultivation and projects in the field of renewable energies. Regarding
the mining sector, the German company Cronimet represents an investor
with great commitment. In association with Prime Minister Sargsyan,
we agreed on further joint projects. Due to the planned membership
of the Customs Union, Armenia attracts investors that aim for trade
with the countries of the Customs Union. This could affect most of
the German investors.
Interview by Nvard Chalikyan
Source: Panorama.am
From: A. Papazian
19:05 02/10/2013 " COMMENTS
Panorama.am presents an interview with Dr. Rainer Lindner, Executive
Director of German Committee on Eastern European Economic Relations,
Berlin. Dr. Lindner comments on Armenia's accession to the Customs
Union and on future prospects of cooperation between Armenia and
Europe.
Dr. Lindner, as you know the Republic of Armenia has announced about
her decision to join the Russia-led Customs Union. How do you as a
German expert evaluate this decision given the choice Armenia was
faced with? What do you think was Armenia mostly motivated by and do
you find this motivation reasonable?
Lindner: Russia is the most important partner for Armenia in terms of
the economy and security policy. In the long run, however, we believe
that the Free Trade Agreement with the European Union would provide
Armenia with greater benefits - economically, as well as socially.
With more than 500 million consumers, the European market is very
attractive for the Armenian economy.
What do you see as a driving force behind the Customs Union? Can we
draw any parallel between the Customs Union and the European Coal
and Steal Community?
Lindner: The unification process in Western Europe started in 1951
with the European Coal and Steel Community. Almost equal in size and
influence, there were three countries - France, Germany and Italy
that were involved in the process. Russia, in contrast, due to its
size, will take an outstanding role in the Customs Union. However,
it remains to be seen whether this situation can be balanced to the
satisfaction of all members. Economically speaking, the creation of
a greater, unified domestic market is reasonable. Nevertheless, it
is important, that the domestic market does not isolate itself, by
means of higher customs, separate norms and certification regulations.
Thereby, investors might be irritated. Therefore, the German economy
would appreciate initial talks about a common, greater free trade
zone between the European Union and the Customs Union.
EU Commissioner for Enlargement and Neighborhood Policy Stefan Fule
has stated that the political association and economic integration
are integral parts of the EU Association Agreement and cannot be
decoupled. What exactly made it impossible to decouple the agreement
so that Armenia as a CU member could still pre-sign it?
Lindner: The Eastern Partnership programme of the EU promotes a
harmonization of the law systems and the introduction of EU standards.
Armenia is a partner of the programme. As a member of the Customs
Union, which is to be eventually developed into the Eurasian Union,
Armenia would adapt the law and standards of the Customs Union. In
this context, we face a competitive situation. A closer look is
needed to conclude, which elements of the Association Agreement
would harmonize with the membership of the Customs Union. As member
of the Customs Union, Armenia would join a common market with Russia,
Kazakhstan and Belarus. Internally, the market is distinctive of common
standards and legal procedures. Externally, the market sets up common
customs. Armenia would have to adapt these customs. Moreover, Armenia
would not be able to conclude bilateral Association Agreements with
other states or the European Union respectively. Only the Customs
Union as a whole could do so. Instead of a full membership, it would
be easier for Armenia to aim for a Free Trade Agreement with the
Customs Union. This would be compatible with an Association and Free
Trade Agreement with the European Union.
In your latest interview you said that the way out of the dilemma
between Russia and the EU is the dialogue between the two on the
creation of common economic space. How do you think this can be
achieved? What steps can or should be taken by the officials in Russia
and in the EU to find the compromise option in this situation?
Lindner: The idea of a common European Economic Space with common
rules for the traffic of goods, persons, services and capital has
existed since the EU-Russia summit in Rome in 2003. From an economic
point of view, it would be a success for Europe as a whole. The German
economy actively promotes this solution and advocates a common European
economic conference, which could elaborate a roadmap to this economic
space. One precondition is, that the politicians in charge in Moscow
and Brussels overcome political differences and gain mutual trust in
each other.
Some commentators have expressed an opinion that the European partners
abandoned Armenia (unlike Ukraine) when the latter was faced with what
some termed as "brutal pressure by Russia". Could you comment on this?
Lindner: In contrast to Ukraine, Georgia and Moldova, that aim for an
Association Agreement with the European Union, the Armenian President
has declared, that his country wants to join the Customs Union. In
the EU this statement was taken with surprise. At the same time, if
Armenia wishes to do so, we have to accept it. The consequences of
this step for the future collaboration with the European Union will
be discussed at the summit of the Eastern Partnership at the end of
November in Vilnius.
Armenia presently has a facilitated tariff regime with the EU. As a
member of Customs Union how will this impact Armenia's trade (both
import and export) with Europe? Will the tariffs be increased?
Lindner: Armenia has to adopt the customs of the Customs Union. It
might be reasonably assumed, that in most cases the custom tariffs
are above the Armenian customs level, which would certainly affect the
Armenian trade with the EU negatively. In this respect, similarities
can be drawn to Kazakhstan. After joining the Customs Union, Kazakhstan
had to raise their custom tariffs to the Russian tariff level.
We know that the Armenian market is not very attractive for Europe
but that investment opportunities are. Could you please specify
particularly in what spheres the German companies are eager to invest?
What are the prospects of these investments and of future cooperation
now?
Lindner: The last delegation visit of the Committee on Eastern
European Economic relations was held in May 2013. We had talks with
Prime Minister Tigran Sargsyan and the Secretary of Commerce, Vahram
Avanesyan. Above all, the participating companies were interested
in the telecommunications industry, IT services, tourism, fruit
cultivation and projects in the field of renewable energies. Regarding
the mining sector, the German company Cronimet represents an investor
with great commitment. In association with Prime Minister Sargsyan,
we agreed on further joint projects. Due to the planned membership
of the Customs Union, Armenia attracts investors that aim for trade
with the countries of the Customs Union. This could affect most of
the German investors.
Interview by Nvard Chalikyan
Source: Panorama.am
From: A. Papazian