New agreement with EU will have direct impact on economic growth and job creation in Armenia – Chief EU negotiator
YEREVAN, DECEMBER 25, ARMENPRESS. The implementation of the Comprehensive and Enhanced Partnership Agreement (CEPA) between Armenia and the European Union is crucial. Due to the implementation of actions deriving from the Agreement the EU companies will be more willing to invest in Armenia, Luc Devigne - Director for Eastern Partnership, Russia, Central Asia and OSCE at European External Action Service, said in an interview to ARMENPRESS.
- Mr. Devigne, please, present to us what prospects does the CEPA open from the perspective of Armenia-European Union economic relations?
- From the economic point of view, CEPA opens the possibility of substantial benefits. In particular: thanks to the approximation of Armenian laws to EU laws on the regulation of economic activity, as stipulated by CEPA, the business environment in Armenia will improve and EU companies will be more willing to invest in Armenia. This will have a direct impact on economic growth and job creation.
The adoption of EU standards as provided by CEPA will facilitate Armenian exports to the EU, including exports of manufactured products. CEPA provides for the opening-up of markets in services in Armenia and in the EU, which means that EU companies will be able to provide services in the EU and vice versa. CEPA also provides for mutual market access to public procurement markets, which means that EU companies will be able to bid for public procurement tenders in Armenia and vice versa.
- You were the chief EU negotiator of the previous DCFTA (Deep and Comprehensive Free Trade Areas) agreement and CEPA, please mention the main differences between these two agreements – taking into account that Armenia is a member of the Eurasian Economic Union (EEU), and CEPA doesn’t contain free trade elements.
-The main difference between a DCFTA and CEPA is that CEPA does not include any provisions on preferential trade in goods. However, as I mentioned, CEPA contains many substantial provisions that have a positive effect on trade and investment, including going beyond WTO rules. And Armenia already benefits from the GSP+ scheme of trade preferences, a generous unilateral EU regulation that allows over one third of Armenia's exports to the EU to be free of EU customs duties.
-During negotiations around any document there are points which are very difficult to reach compromise or agreement around, can you mention the biggest disagreement which happened during the negotiations and how you overcame it?
-Of course some parts of the agreement were more difficult to negotiate than others. For instance, the wording on mobility of people was a difficult point. The respect for EU Geographical Indications (such as Cognac) as well. However we managed to overcome all differences successfully thanks to the constructive approach by the Armenian team under the leadership of Minister of Economy Suren Karayan. I am convinced that both the EU and Armenia got the best possible deal out of CEPA.
-Concerns over the agreement are mainly related to its implementation issues, i.e. – they say that its realization is more important than its signing. Do you see any obstacles in terms of implementation of the agreement?
-Indeed implementation will be crucial. All the potential benefits and opportunities offered by CEPA, including the economic benefits linked to market opening and to a better business environment, depend on actual implementation of CEPA. In particular, this means the adoption and enforcement of new Armenian legislation based on EU standards as stipulated by CEPA. I hope Armenia and the EU can agree a roadmap on initial implementation of CEPA, including an indicative timetable for the drafting of priority legislation in each field, already in the first half of 2018. Legislative work can then start as soon as the Armenian National Assembly ratifies the agreement. The EU will be offering Armenia technical assistance for this work, and will be monitoring progress regularly, together with the Armenian authorities.
-Does the EU plan to provide special financial assistance to Armenia as part of the agreement for the implementation of the assumed commitments, if we don’t take into account Single Support Framework 2?
-The EU Single Support Framework for Armenia earmarks € 160 million for 2017-2020 in three main areas that are central for CEPA: 1) Economic development and market opportunities; 2) Strengthening institutions and good governance, and 3) Connectivity, energy efficiency, environment and climate change. In addition, the Single Support Framework includes a special provision for capacity development and institution building activities that will address the implementation of priority commitments deriving from CEPA, should these commitments not be supported directly under one of the three main areas. On top of this substantial allocation, there exists the possibility of further funding in recognition of Armenia's commitment to reforms.
Improving energy efficiency and fostering renewable energy with capacity building and a clear prioritisation of investments are key to ensuring energy safety and security in Armenia. The EU has allocated around EUR 24 million in grants for Armenia in the areas of connectivity, energy efficiency, environment and climate change for 2017-2020. The EU also offers investment funding in these areas.
Interview by Ani Nazaryan