Armenian President visits Teghut copper and molybdenum mine

Armenian PM: Support of business will be a top priority for us

Well-known French filmmaker Robert Gedikian shoots film about Armenian Genocide

Newspaper: Armenian Government to shortly ease tax burden on SMEs

Newspaper: Prime Minister Hovik Abrahamyan will shortly urge officials and parliamentarians to refuse from salary increase

David Haroutiunyan appointed as Government Chief of Staff

VTB Bank (Armenia) increases corporative crediting almost by 40% in 2013

VTB Bank (Armenia) is the leader on credit portfolio in the banking sector of Armenia

VTB Bank (Armenia) increases car loan portfolio by over 70% due to retail lending facilitation

VTB Bank (Armenia) and MasterCard launch a new card campaign

VTB Bank (Armenia) among top 3 Armenian banks in terms of retail business

"I'm Against" civic initiative refuses to start negotiations with Prime Minister

Hovik Abrahamyan promises to present an acceptable solution to the pension problem before late July

Armenia not to sign agreement to access Customs Union in 29 April in Minsk

European parliamentarian sees no obstacles to signing the political component of the Association Agreement with Armenia

European Parliament condemns attack against Kessab

Areximbank-Gazprombank Group offers discounts and free of charge cards ahead of holiday season

Republican Party of Armenia to be the only party in power in Armenia

Beeline and SPB TV launch IPTV in Armenia

VTB Bank (Armenia) launches deposit action

Expert: Democratic Nagorno-Karabakh will never become part of Sultan- ruled Azerbaijan

Upgraded offices of VTB bank (Armenia) in Gegarkunik region start working in a new format

Hovik Abrahamyan: Government of Armenia intends to form a favorable tax system for development of small and medium enterprises

On Apr 29 Armenia to sign agreement on joining Customs Union

Environmentalists launch campaign to save Lake Sevan

Political expert: "Orinats Yerkir" party will soon join the "four"

Member of the parliament: RPA may alone take responsibility

ARFD not to join ruling coalition

David Babayan: Elmar Mammadyarov's last statement about Azerbaijan's readiness to grant Nagorno-Karabakh autonomy was absurd

Press-secretary: Prosperous Armenia Party will go on watching further actions by the Orinats Yerkir Party (Law Governed Country Party)

Political expert: The statement by US ambassador to Azerbaijan is a result of Armenia's voting on the Crimea

ArmenTel's subscribers to shortly enjoy IP television

Vahe Hakobyan: Investments must create jobs

Politician: "Republican Party of Armenia deporting Armenians from their motherland"

In corporate strategy for 2014 Araratbank gives special priority to activities of businesswomen

Rostelecom provides a number of educational establishments in Abovyan with free superhigh- speed Internet services starting from March 1

Areximbank-Gazprombank Group to provide customers with free non-chip MasterCards under a campaign for motorists

MasterCard holders among VTB Group's Armenian customers can withdraw cash from VTB Group's ATM network at the same tariffs as at VTB Bank (Armenia)

Orange offers an innovative solution for internet and fixed phone services

Lyova Khachatryan: Prosperous Armenia Party will not demand resignation of Armenian President

Political expert rules out an external factor in Tigran Sargsyan's resignation

Edward Nalbandian and Seyran Ohanyan reappointed

Armenian political expert skeptical about viability of "the union of the four"


Vice-Speaker of Israeli Knesset to Deliver in Tbilisi Lecture on Israeli-Arabic Relations

German Chancellor Invites Garibashvili to Visit her Country

Georgian Foreign Minister to Visit Germany

Georgian Foreign Minister Attends International Conference in Vilnius

President to Have Exclusive Right to Grant Georgian Citizenship

NATO Week in Georgia Starts Today

Discussion of the Azerbaijani-Iranian relations on Culture and Tourism

Chief of General Staff of the RF to visit Baku

Ilham Aliyev will visit NAR

Georgian Premier Starts his Regional Tour

Georgian President to Hold Talks in Poland

Georgian Prime Minister Meets with EU Special Adviser

Erdogan is arriving in Baku

Simplification of the visa regime between the EU and Azerbaijan may occur in the summer

U.S. Embassy: Any allegations that US government representatives are trying to foment a revolution in Azerbaijan are absolutely absurd

Foreign Minister of Afghanistan to Pay Official Visit to Georgia

Georgian Foreign Ministry Makes Strict Statement, Concerning Referendum in the Crimea

President Margvelashvili Meets Georgian Troops, Deployed in Afghanistan

Georgian Premier and Afghan Foreign Minister Discuss Two Countries' Relations

Georgian Premier Holds Official Dinner in Honor of Romanian Prime Minister

Analyst: The USA invested $5 billion to directly support Maidan

Georgian Ambassador to Japan Hands over Credentials to His Imperial Majesty Emperor Akihito of Japan.

Tbilisi Hosts Annual PDP Conference

NATO May Accelerate Georgia's Integration and Grant it MAP because of the Crimea Problem

Georgian Ambassador to Lithuania Addresses Seimas

Iranian Deputy Foreign Minister in Baku

Gerhard Schroeder will make a speech in Baku

Putin is unable to persuade the leader of the Crimean Tatars

Georgian Defence Minister Attends NATO Defence Ministerial

Saakashvili is Offered High Post in Kiev


Vahe Hakobyan: Investments must create jobs

Sergey Markedonov: People living in Crimea and Karabakh saw no future for the countries they were attached to

Vahram Avanesyan: It is impossible to achieve serious results by means of standard and framework reforms

Wayne Merry: Situation around Ukraine is a serious alarm that the South Caucasus political nucleus must be seriously revised

Dariusz Prasek: EBRD demands absolute transparency from companies

Sargis Hatspanyan: When it comes to the change of regime in Armenia, the West washes hands of it

Andrey Yepivantsev: Only time may show if we have opened Pandora's box in the Crimea or not

Giorgi Tarkhan-Mouravi: Confrontation around the Crimea will speed up Ukraine's European integration

Ivan Kukhta: Ukraine has received a chance to be totally reset

Vaidotas Verba: Eastern Partnership project is not directed against anybody, it is simply for open opportunities

Vladimir Yevseev: The only way out of the situation in Ukraine for the West is through negotiations with Russia

Edward Sharmazanov: The principle of peoples’ right to self-determination tends to dominate in the world

Gevorg Poghosyan: Armenia is on an explosive-timing device and may explode at any moment

Sergey Grinyayev: Armenia has just to realize its status of an essential partner for Russia

Grigory Tishchenko: Strengthening of Russia’s positions in the South Caucasus will contribute to peaceful settlement of the Nagorno-Karabakh conflict

Artak Shakaryan: Armenia and Diaspora should be ready for Turkey’s imitative policy in the matter of Armenian Genocide recognition

Hovhannes Igityan: Only reason why they 'invited' Armenia into the Customs Union was to show Europe who wears the pants in the post-Soviet area

Robert Kocharyan: I do not share the Armenian leadership's optimism over Customs Union membership

  • by Tatevik Shahunyan

  • Monday, February 24, 16:37

To assess the expediency of Armenia's accession to the Customs Union with Russia, Belarus and Kazakhstan, it is necessary to conduct a comparative analysis of the approaches to the customs policy implemented in Russia and Armenia after the collapse of the Soviet Union, second president of Armenia Robetr Kocharyan said in an interview with 

"Russia has inherited USSR's powerful industrial potential covering nearly all the sectors of economy with a strong emphasis on the military-industrial field.

However, that potential has not been integrated with the global economy and was mostly concentrated in the domestic market and the post-Soviet countries. In the Soviet Union, export of oil and gas made up 65% of total exports. To protect its industry from more competitive imports, Russia used to apply high customs duties, while domestic market was big enough to keep its industry function. Imposing export taxes on energy resources and export quotas, the government ensured low domestic tariffs, which supported the relative competitive ability of Russia's economy. This allowed Russia to avoid economic collapse, something that happened in Armenia in early 90s. Now, accessing the WTO, Russia is gradually revising foreign trade rules for full integration into the global economy. This will lead to some short-term problems, but the country will sure benefit from it in the long- term outlook," Kocharyan said.

Further, in the interview, the second president analyses the situation in Armenia: "We have inherited the industrial potential oriented at the Soviet market which no longer existed by that time. Domestic market was miserable for that industry. Having neither common border not railway communication with Russia, Armenia made vein efforts to restore its erstwhile cooperation. Some economy sectors in Russia were also in poor state in mid-90s. With the collapse of the Soviet Union, Armenia began to export the significant part of industry losing its traditional sales market and partners. Inherently, it was senseless protecting many industrial sectors, except agriculture and processing, with customs duties.  Protectionism could be expressed with application of instruments quite different from customs barriers. 

Furthermore, Armenia was in blockade that increased the transportation costs of nearly all products.  Therefore, the Government of Armenia launched foreign trade liberalization in the mid-90s and Armenia joined WTO in 2003 to speed up the process of full integration into the world economy.  Actually, Russia and Armenia have been implementing different approaches to the customs policy because of some objective circumstances and their economic realities. And the customs codes of our countries were based on those very approaches. Considering that the Customs Union's approaches are based on Russia's Customs Code, a question arises as to whether Armenia will manage to reverse its approaches painlessly and what tasks of its economy the country is settling by higher customs charges. Kocharyan said.

Robert Kocharyan said he does not share the Armenian leadership's optimism over accession to the CU, as economy is sluggish and abrupt turnabouts are counter indicated. "People have built their business on effective rules for years, and they need to time for changeover. Obviously, some businesses will improve their positions, while some others will experience decline and even collapse. A deep and open CU market analysis on all groups of products is needed to foresee possible consequences," he said.  The second president said that the EU will probably revise the Generalized System of Preferences (GSP+) for Armenia, as EU ambassadors hint at that. Some problems will probably emerge also with the WTO and the coordinated customs duties. "This will lead to response measures regarding our products. How will this influence Armenia's economy and its long-term investment attractiveness is hard to assess," Kocharyan said. 
The growing tariffs of import from the countries outside the CU are another problem, he said. Considering that such goods dominate in the consumer market and the level of trade balance deficit we have in Armenia, this import is rather large-scale. The formula is simple: the higher are customs fees, the higher is the product price in the market. There is a third option: replacement of such goods with similar ones from the CU countries, if there are such.    

For instance, meat and dairy products from Belarus may become cheaper in Armenia and our wine and brandy may become cheaper in Belarus. Time will show if our cattle breeding industry can stand such competition.  Household equipment, devices and cars imported from other countries will rise in price, unless there are relevant exceptions. Everything can be assessed and forecasted and the people must be informed of these assessments and calculations. We can prevent price hikes only by introduction of a long list of exceptions and synchronize it with gradual reduction of customs duties, which is part of Russia's commitments to the WTO.  All this depends on the results of the negotiations with the CU countries that will also make their own requirements. This is a very hard process of accommodation of interests and any hasty step may result in undesirable consequences," Kocharyan explained.  He stressed that he consciously avoid making any assessments of the damage the CU accession process has caused to Armenia's image and the EU's concerns over it.

"Nothing can be changed now. We should not have started the process of the Association with the EU in a company with the GUAM countries and with such obtrusive PR. It gave the process excessive geopolitical coloring. Russia's nature was quite predictable. Anyway, we are where we are. I'd like the country to access the CU calmly with minimum geopolitics and with maximum consideration of long-term interests of Armenia's economy. Any miscalculations will affect all the residents of Armenia," the second president said for conclusion. 

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