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YEREVAN, NOVEMBER 12, ARMENPRESS: “Armenpress” News Agency interviewed the Chairman of the Eurasian Economic Commission's (EEC) Board Victor Khristenko. Within the framework of his visit to Armenia on November 6 the Prime Minister of the Republic of Armenia Tigran Sargsyan and Victor Khristenko signed a memorandum on expansion of the cooperation and strengthening the legal-contractual base. The activities aimed at the development of the “Roadmap” for the country’s accession to the Customs Union were launched.
- Mr. Khristenko, what are the goals of the Customs Union?
- Our main goal is to create a Common Economic Space based on the four freedoms: movement of goods, services, capital, and the labor. Several years ago the Presidents of Belarus, Kazakhstan and Russia adopted a fundamental decision – on the background of the global crisis they strongly intensified the process of economic integration within the Eurasian area. As a result, the Customs Union (CU) stated full fledged activity in 2011. This is the format of the economic union of three countries and the first phase of the integration development.
What does it mean? On the territory of the three countries we have the introduced norms of the unified Customs Code, the united Customs Tariff, the united system of the foreign trade and customs regulations and the united legal field in technical regulation. First, the Customs Union provides for the free movement of goods. Quite much work has been done also for the free movement of labor.
Since January 1 2012, we got to the next stage – the formation of the Common Economic Space. The system work has been done on this track. New authorities are gradually transferred to the supranational level. The Eurasian Economic Commission had been established for their implementation. For key positions, the Commission is an unprecedented structure and by status, it is a supranational body. In terms of authority and the given work pace we have to move forward much faster the way, which our colleagues from the EU did earlier.
We continue working on the freedom of movement of services, capital and labor, building up the legal base (in accordance with the decisions of the Presidents of the three countries), forming such a furnished and advanced integration format as the Eurasian Economic Union is. It must come into force from January 1 2015. For the businesses of our countries (the key audience of our work ), that all means creation of 170 million consumers strong market with a unified legislation, harmonized from the point of view of the macroeconomic policy, competition rules, technical regulations system, transport, natural monopoly tariffs, agricultural and industrial subsidies.
We evaluate the realization of the Eurasian economic project from the viewpoint of those possibilities, which it creates for the acceleration of the economic growth and modernization of the economies of the member states.
- You were one of the first to state that the absence of the common borders cannot hinder the membership of Armenia to the Customs Union. How do you envisage the cooperation under the conditions of having no borders?
- The absence of common borders is not an obstacle for the economic integration. And that can be explained variously. On the one hand, there are simple examples taken from life. When Greece entered the EU, it had no border with the EU (having recently joined the EU, Bulgaria provides common borders). Cyprus, being an island, also does not have common borders with the EU. And that does not prevent the countries from being EU members.
On the other hand, to understand the importance of the talk about the borders, one should understand what the border, in the economic sense, is. Border is a cost for the business participants. When crossing borders one should execute documents for import and export of goods, bear the costs of customs regulations. At present for the export of goods from Armenia it is necessary, for example, to make a transit declaration on shipping the cargo through Georgia, and in case of entering the CU, for example, Russia, it is necessary to submit all the necessary documents for import of goods, perform all of the procedures of customs clearance, warehouse, brokers, fees. In case of Armenia's full-fledged entry into the CU, the necessity of the second part of the procedure will disappear. The goods, sent to the CU territory, should get a “free transit” mark in the Customs of Armenia to cross the territory of Georgia. In case of entering Russia, the Russian customs officers just will check for the seals safety and the mentioned Armenian Customs’ mark, after they will pass the cargo for the movement into the CU territory, free of customs warehouses, brokers, etc. That will essentially reduce the pressure on the businesses and will decrease costs, and that is very important, when we talk about goods.
But, today the services make the major part of the economy and not the goods. These are large sectors of the economy – communication, transport, construction, financial services, etc. And these sectors are less sensitive to the border issue. The border in this case does not emerge any costs. Higher costs for businesses emerge from different systems of regulation of these sectors in different countries.
Now, as we are moving to the unification of the service regulation in our Customs Union and the Common Economic Space, Armenia, joining the CU, will also join the process of the realization and use the freedom of movement of services on practice. It is very important and essential, as in the economies of the CU countries the share of the services is on the level of 60%, that means – the services run the show, not the goods. They are less sensitive to the borders and the participation in the CU for those sectors will be a serious privilege.
- What, in Your opinion, will Armenia gain from the membership in the Customs Union and how the Customs Union will benefit from the cooperation with Armenia?
- I have already partially answered that question. In general it provides a free access for Armenia to the market with 170 million consumers and becomes an extra source for development. But in my opinion, free circulation of labor force is as important for Armenia, as the free circulation of products and services. Taking into consideration the size of the Armenian Diaspora working and living in the territory of the Customs Union, it is also of a certain importance. I wouldn’t even try to calculate the amount of the effects, their cost in various currencies and years, and when and how the members will benefit, or even calculate how the Customs Union will benefit! I guess the most important benefit from the membership in the project is the understanding of the long-term perspectives, and whom you will minimize your economic risks with and promote your interest not merely inside this group of four (including Armenia), but also the way this group will promote its interests in the external world. And, of course, in this respect the establishment of a sustainable system of priorities according to the perspectives gives confidence. Everybody will gain confidence from the realization of this big project; people in their lives, and investors in their investments. This is the most important thing.
- When will the “Road map” connecting Armenia to the Customs Union and the Common Economic Space be ready? What terms do You consider taking into account the fact that the President of the Republic of Armenia Serzh Sargsyan announced at the session of the Supreme Eurasian Economic Council in Minsk that Armenia is willing to move forward via accelerated procedure?
- The President of the Republic of Armenia Serzh Sargsyan applied to the Presidents of Belarus, Kazakhstan, and Russia asking them for a maximum accelerated procedure for Armenia to join the Customs Union and the Common Economic Space. The Presidents of the three countries supported his appeal. It means that all the experts want to conduct the relevant activity, but, by all means, not at the price of quality.
It’s hard to foretell when “the Road Map” will be accomplished. An official working group will be established at the course of the current month, including the representatives of the governments of the four countries and the Commission. We have already started to work out the basis for the “the Road Map” on the experts’ level, which gives us confidence. On one hand we have had relevant experience with Kyrgyzstan, and the directions of the activities are clear for us. On another hand, taking into consideration the results of my visit to Yerevan, I can state with all responsibility, that the qualification and level of involvement of the Armenian experts in the issues regarding the Customs Union and the Common Economic Space is very high and qualitative. This gives us the hope that “the Road Map” will be accomplished in quite short period of time. I cannot say, that I am superstitious, but, I don’t want to mention distinct time. We are considering making a report on the progress of work at the Summit of the Presidents, which is scheduled to be held in December in Moscow. I am hopeful that the upcoming report will be more than optimistic.
- It’s natural that the formation of the customs unions is a complicated process and You bear a truly huge responsibility. Meanwhile, how long does it take to eliminate the customs and trade barriers and how long does it take to adapt the current regulations of the member-states and those, who want to become a member of the Customs Union?
- There are no customs barriers between the three countries of the Customs Union. If a country joins the Customs Union all the customs barriers vanish by passing into the norms of the Customs Union. So, what's the question? In principle it’s possible that Armenia joins the Customs Union, and at the same time, asks to keep a special access to the market for certain goods. But that will mean maintaining full-fledged customs control for all the Armenian products for that period. The shorter is the list of exceptions and the relevant time Armenia may request, the faster the barriers will be eliminated in tote.
- How would you comment on the statement of the President of Belarus, saying that Armenia cannot become a member of the Customs Union until the Karabakh conflict is not settled? Is it acceptable to associate the membership in the Customs Union with the Karabakh issue?
- I am not authorized to comment on the statement of the President of a sovereign country. I can answer your question regarding the construction of the Customs Union. There is no any direct connection between the Nagorno Karabakh issue and Armenia's accession to the Customs Union. The Customs Union and Common Economic Space are exclusively economic subjects and their competence has exclusively economic character.
And in this regard, the realization of cross-border movement freedoms in accordance with the norms of the Customs Union is of a certain importance for us, so that we could understand through what checkpoints products pass, and leave no space for any unregulated "gray" zone. As per the political situation around Nagorno-Karabakh, then it is being regulated in other formats, which are meant particularly for that. There is the special OSCE Minsk Group engaged in the issue, there are certain countries controlling this process. Let God grant everyone success and sound health to find the swift resolution of the problem!
-The President of Kazakhstan Nursultan Nazarbayev voiced Turkey's intention to join the Customs Union at the Minsk Summit. How realistic do you think it is?
- I think that Nursultan Nazarbayev meant that Turkey is extremely interested in establishing cooperation and enhancing ties with the CU, and not much of the concrete format of the participation of Turkey. No official statement has been made by the country for the membership of the CU. But, at the same time, Turkey is extremely interested in the CU market in all respects. There are many countries which are interested in deepening cooperation with the CU format - not as a participant, but through the implementation of the format of zones of free trade (ZFT). At present, they are already 36. This does not mean that CU will establish ZFT with all those countries. But three rounds of talks on forming a full-fledged zone of free trade with Vietnam have already been carried out. Today, active work is under processing with the European Free Trade Association and New Zealand. The study of the issue begins with Israel. India has a great interest. This interest in the deepening of cooperation with the CU through a comprehensive agreement on the zones of free trade can be realized, but only when it is mutually interesting both for all the Members of the CU and the countries that asked CU for it.
-Do you consider the cooperation with Turkey to be efficient, having closed its border with Armenia?
- I would not try to assess this question in a subjunctive mood. If only ... It is very difficult to prescribe such scenarios . But, I can say that from my point of view, deepening economic cooperation, which leads to increased competitiveness and, finally, increase of human well-being and quality of life, is always a positive factor for the solution of any difficult questions, whatever they are. Because those economic, business relationships, supported by cultural and humanitarian ties, are always good. This allows not only to resolve conflicts, but also to avoid them. Therefore, I think that the success of the project implementation of the Customs Union will, to a great extent, provide (you name it) a therapeutic, positive impact on the situation of the region as a whole.
- What opportunities for cooperation do you see between the European Union and the Customs Union?
- A good question! I think that, with all the difficulties, that sometimes arise on the track of the Customs Union and the European Union cooperation, the importance of an efficient dialogue between these structures is quite obvious. I am sure it will find its formalization through bilateral contacts of the CU countries and the relevant agreements. And, in the end, through the organization of multilateral dialogue, I have no doubt. I am absolutely convinced that the formation and strengthening of the Eurasian Union will lead to occurrence of the dialogue between the Eurasian and European Unions. I am also absolutely confident that it is equally significant both for the Eurasian Union, and the European Union. The model, which once was called the model of general economic space from Lisbon to Vladivostok, is relevant up to day. Probably, it is not yet time for all these big and bold ideas, but, as practice shows, good ideas never disappear, and they are returned to by all means.
-You met the President of Armenia Serzh Sargsyan on November 7. Please tell us about the details of the meeting. And, in conclusion, summarize, please - whether your current visit to Yerevan was successful or not?
- I can stress that the political will of the President of the Republic of Armenia (I told it to Serzh Sargsyan too) was quite accurately reflected in the actions of the Government and all those who are involved in the preparation of the legal framework for Armenia's joining the Customs Union and the Common Economic Space on expert level. This is, of course , the main result of the last few months. First of all, there is an absolutely clear and precise political will and control over the situation by the leadership of Armenia. And this is the most important thing you need in this kind of work, in such a complex project as accession to the Customs Union and its further development. In this regard, the whole visit, and the whole trip were more than successful and fruitful. With mood and pace, the Presidents expected from us, the number of working visits of specialists and experts will grow rapidly. We hope this work will soon give its results.