YEREVAN — Andrea Wiktorin, the head of the EU Delegation in Yerevan has confirmed that Armenian manufacturers no longer have tariff-free access to the EU’s common market because Armenia is now regarded as an “upper middle income” country.
Armenia was covered by the EU’s Generalized System of Preferences (GSP+) from 2009 through the end of last year. Thanks to this preferential trade regime, the EU collected no import duties from 3,300 types of Armenian products and applied reduced tariffs to 3,900 others.
In an interview with the Armenpress news agency published on Monday, Wiktorin said that Armenia is not eligible for GSP+ anymore because World Bank upgraded its status from a “lower middle income” to an “upper middle income” nation in 2017.
“According to the EU’s GSP regulations, the moment you are an upper middle income country for three [consecutive] years, plus a transition period of one year, you lose the status of a GSP+ beneficiary … and this means that starting from January of this year Armenia can no longer benefit from these preferential import tariffs,” she said.
Wiktorin suggested that the loss of that status could be offset by Armenia’s Comprehensive and Enhanced Partnership Agreement (CEPA) with the EU signed in late 2017. She argued that the CEPA, which has no free-trade component, could benefit the Armenian economy through its provisions calling for an improved business environment in the country.
The diplomat also argued that the wide-ranging agreement allows Armenian companies to participate in EU procurement tenders and will make it easier for them to provide financial, transport and other services in the 27-nation bloc.
Russia replaced the EU as Armenia’s number one trading partner after the South Caucasus country joined the Russian-led Eurasian Economic Union in 2015. It has solidified that status in the last few years.
According to Armenian government data, Russian-Armenian trade surged by 50 percent, to $1.65 billion, and accounted for almost one-third of Armenia’s overall foreign trade in the first half of this year. By comparison, Armenia’s trade with EU member states totaled over $980 million.
Despite the end of the trade preferences, Armenian exports to the EU, dominated by copper and other metals, reached $426 million in this period, up by 43 percent year on year.