Economy

Armenian government to support exporters to EU markets

4 minute read

Armenian government to support exporters to EU markets

YEREVAN, NOVEMBER 27, ARMENPRESS. Armenia left the EU’s Generalized System of Preferences Plus GSP+ scheme in January 2022.

The EU’s Generalized Scheme of Preferences Plus (GSP+) gives developing countries a special incentive to pursue sustainable development and good governance. Eligible countries have to implement 27 international conventions on human rights, labor rights, the environment and good governance. In return, the EU cuts its import duties to zero on more than two thirds of the tariff lines of their exports.

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.

Leaving the scheme had an impact on Armenian exports, and some companies have even experienced decreased industrial output.

As a result, the government decided to support the businesses in terms of making Armenian products competitive in the European market.

“Some time ago Armenia had a privileged exports mode with EU countries. But since as a result of improvement of economic indicators we surpassed that threshold below which countries are eligible for that scheme, Armenia is no longer considered such a country. And naturally the privilege is no longer applied. This had some impact on the exports of our products to the EU countries. Given the fact that the government’s policy is aimed at exports diversification, at this stage we envisage to apply the kind of support tools that would somewhat compensate the negative result that has emerged in conditions of not applying the customs tariffs. By applying some instruments, we will try to make Armenian products more competitive for exporting them to the European market,” Armen Yeganyan, Head of the Department of Manufacturing Policy at the Ministry of Economy has said.

The first phase will focus on target goods, particularly in process manufacturing.

The economy ministry has put into circulation a bill on compensating customs tariffs for exporters.

Businesses exporting Armenian-made products to EU countries will receive compensation for customs tariffs paid in the EU countries.

The tariff-free conditions lead to increased prices of products, and therefore EU partners try to find such products from other markets. “Naturally, this impacts both the manufacturing and exports indicators. Our manufacturing development is mostly conditioned by the development of exports,” the official said.

In January-September of 2024 Armenia exported over 444,8 million dollars’ worth of goods to EU countries, a decrease of 22,7% compared to the same period of 2023. The YoY data of the year before in turn recorded 5,1% decrease.

According to ministry of economy officials the businesses point out the GSP+ exit and logistical problems as their main obstructions for exports.

Multiple meetings with businesses have led to the development of the support bill.

The legislation is aimed at diversifying exports, ensuring Armenian product representation in international markets, promoting and developing exports.

 

AREMNPRESS

Armenia, Yerevan, 0002, Martiros Saryan 22

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