Sunday, September 21, 2014


Armenia

Explainer: Can Armenia Square Its EU Goals With Joining Russia's Customs Union?

Armenian President Serzh Sarkisian (left) is going along with Russian President Vladimir Putin -- or is he?
Armenian President Serzh Sarkisian (left) is going along with Russian President Vladimir Putin -- or is he?

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News Analysis: Armenia's Choice Stirs Competition Between Moscow, EU

The Armenian president's decision to favor joining the Russian-led Customs Union at the expense of closer EU ties has raised questions about Moscow's regional ambitions.
By Rikard Jozwiak
Armenian President Serzh Sarkisian announced on September 3 that his country would join the Customs Union of Russia, Belarus, and Kazakhstan. But his administration says it still hopes to sign an Association Agreement with the European Union later this year. How does Armenia believe this could be accomplished?

By having an Association Agreement with the EU -- but without the trade part. In an interview with RFE/RL on September 4, Sarkisian's chief of staff, Vigen Sarkisian, suggested "separating the economic and political components of our cooperation with the EU."

Is this possible? Can the trade part -- the Deep and Comprehensive Free Trade Area (DCFTA) -- be separated from the Association Agreement?

It is technically possible but it won't be that straightforward. When Armenia started negotiating the Association Agreement and the DCFTA with the European Union almost four years ago, it was agreed that the trade deal is an integral part of the broader agreement.

That means that while the DCFTA is a separate entity within the Association Agreement, there are several clauses related to trade issues throughout the Association Agreement that overlap with the rest of the document. In practical terms that means that the whole text of the Association Agreement, consisting of nearly 1,000 pages, much be scanned and all trade-related references removed.

What would be left in the document if the trade bit is gone?

A very watered-down text that in many ways is more symbolic than practical. The trade part was the crown jewel in the agreement. It would grant Armenian goods unfettered access to a European market of potentially half a billion consumers and ensure that Armenian products fulfill the EU's strict regulatory criteria. Remove that part and what's left will be a political document of a more vague character.

The Association Agreement consists of four large chapters. The first one is cooperation on the EU's Common Foreign and Security Policy. The second consists of justice and home affairs issues. The third is the DCFTA part and the final one concerns alignment with EU legislation in 27 sectors, including education and culture, environment, and science and research.

If Armenia joins the Moscow-led Customs Union of Belarus, Kazakhstan, and Russia -- which isn't a foregone conclusion, given that it would need parliamentary approval -- the third chapter, on trade, is automatically deleted. Many of the sectors in Chapter 4 will also become null and void. That's not just because they have trade-related parts, but also because joining the Customs Union would require Armenia to comply with the rules and standards of that club -- and these can be vastly different from the ones set by the EU.

What is left then is the two first chapters, in both of which EU member states -- rather than supranational EU institutions such as the European Commission -- have the larger say. Armenia might cooperate with Brussels on foreign-policy issues but it will still depend on Moscow for security, and the much-coveted deal of obtaining visa-free travel to the EU for Armenian citizens falls outside Chapter 2 in any case. And the question is whether it will be possible to achieve that goal if Yerevan has snubbed the EU in favor of Russia in the first place.

Will the EU accept such a deal?

Possibly. Brussels has been cautious in its response so far to Armenia's decision. The European commissioner for European Neighborhood policy, Stefan Fuele, is keen to get a better understanding of what Yerevan intends to do and will discuss it with Armenian Foreign Minister Eduard Nalbandian in Brussels on September 5 and next week when foreign ministers from the EU and the bloc's Eastern Partnership countries -- appropriately enough -- meet in Armenia.

Has something like this happened before?

Not really. There are certain similarities with Azerbaijan, which from the very beginning indicated that it was keen on an Association Agreement without the DCFTA -- the option that Armenia now seems to be going for. But there are two crucial differences. Firstly, as noted above, Armenia's Association Agreement is full of trade references, unlike its neighbor's. And secondly, Baku has so far shown no intention of joining the Customs Union which, in the end, means that Azerbaijan's deal with the EU potentially can be more flexible and thorough than Armenia's.

Can Armenia make another U-turn and sign up to the DCFTA after all?

Armenia still hasn't signed up to anything and the EU will lobby hard to change Yerevan's mind in the run-up to the November Vilnius summit with the six post-Soviet countries grouped in the Eastern Partnership program. Even if Yerevan joins the Customs Union of Belarus, Kazakhstan, and Russia, the negotiated DCFTA text is still there ready to be initialed. But then Armenia has to change the laws and regulations it adopted to join the Customs Union, which are substantially fewer in number than EU rules. But the most likely option might in the end be to see whether the Eastern Partnership outlives the Customs Union.

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