EAEU expands geography of free trade deals: Armenian products become competitive in many countries

The Eurasian Economic Union is expanding the geography of its free trade agreements with the third countries as new deals are expected to be signed next year.

EAEU expands geography of free trade deals: Armenian products become competitive in many countries

EAEU expands geography of free trade deals: Armenian products become competitive in many countries

STEPANAKERT, DECEMBER 24, ARTSAKHPRESS-ARMENPRESS: The goods of Armenian production will have a price advantage in the markets of countries that have such agreements compared to the similar goods produced in another countries, Deputy Minister of Economy of Armenia Varos Simonyan said in an interview to ARMENPRESS.

“2019, the year of Armenia’s chairmanship at the Union, was quite active. During Armenia’s chairmanship two major free trade agreements were signed with Singapore and Serbia. This year two more agreements also entered into force: the free trade deal with Iran and the agreement on economic cooperation with China. In other words, the EAEU has 4 new agreements. This, of course, means new markets. Currently negotiations are underway also with Egypt, Israel and India”, Simonyan said, adding that India is a big market with a great position in the region.

The deputy minister informed that the Eurasian Economic Commission signs an agreement with a third country only after taking into account the opinions of the EAEU member states. All decisions are made exclusively via consensus, taking into account the interests of each of the member states.

“The EAEU signs new agreements with the third countries aimed at ensuring access to new markets, affordable markets, providing privileged conditions. The EAEU is a big market, and the third countries also want to enter that market. The EAEU continues taking actions to further deepen and develop the ties with the third countries, at the same time ensuring the affordability of the market”, he said, adding that the free trade agreements suppose decline of customs duties up to 0%. After the agreement enters into force customs duties of some goods are reduced, and then a certain order is set for others. The deputy minister said the reduction of customs duty forms privileged competitive conditions for those countries which do not have a free trade deal with a concrete country. “Let’s suppose that Armenia is producing a good that is demanded in the third country with which the EAEU has a free trade agreement, and the import to that country is carried out with a zero customs duty. In that case, the goods produced in Armenia will have a price advantage in the market with the amount of the customs duty against a similar good produced in another country which doesn’t have a free trade deal with that third country. In other words, we provide a competitive advantage to our local producers”, he said.

The free trade deals, however, are not limited only to the reduction of the customs duties. These agreements also contribute to elimination of some technical barriers for trade. The Armenian deputy economy minister said in the coming years the EAEU can sign new agreements with the third countries. For instance, a memorandum of understanding was signed with Chile which is the first phase of the cooperation, and the second phase will be the signing of the free trade agreement. At the moment Chile is working with all member states of the Union for launching talks on free trade agreement. But if any of the Union’s member states opposes this, the agreement will not be signed with the third country.

Given the aforementioned we view the EAEU as an integration tool that enables Armenia to diversify the export markets by using the privileged terms granted by the free trade agreements.

As for the Iran-EAEU free trade deal, the deputy minister said the latter entered into force on October 27. After the agreement entered into force customs duties of a group of products were reduced but not to zero. “The imported goods are not for Armenia only, that is an import to the EAEU market. The crossing border is Armenia’s border, some goods can be imported, but they all are not for the economy of Armenia only or for the consumption in the Armenian market. And in this sense Armenia can be viewed as a platform for the expansion of Iran-EAEU and Iran-other countries economic cooperation”, the Armenian deputy minister said.