Armenia in the Customs Union: nothing left to be given

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Baku, 11 September 2013 –

Armenian President Serzh Sargsyan paid an official visit to Russia on September 3, a trip that had been expected. A couple of days prior to this visit Russian leader Vladimir Putin traveled to Azerbaijan, where he signed several deals aimed at expanding the political, economic, military, security and cultural relations between the two countries. The Armenian media were quick to label Putin`s visit to Baku and the documents signed as pressure on official Yerevan.

During his visit to Moscow Sargsyan clarified the issues that Armenia had been hesitating about for the past few years, and demanded by Russia, he joined the Customs Union. But at the moment when Armenia was being pressed into aligning itself with the Customs Union and the Eurasian Economic Union, it already agreed a draft Deep and Comprehensive Free Trade Area (DCFTA) agreement with the European Union on July 24. So by joining the Russia-led Customs Union Armenia found itself out of the Vilnius process as official Yerevan had been expected to initial an "association agreement” with the EU at a summit in November in the Lithuanian capital.

"We have already voiced our opinion regarding the issue of European integration. I confirmed Armenia’s desire to join the Customs Union and get involved in the process of creating the Eurasian Economic Union. This decision is not a rejection of our dialogue with European institutions. Over the years, Armenia has undergone many serious infrastructure reforms with support from European partners. We are determined to continue these reforms in the future,” Sargsyan said hopelessly following his meeting with the Russian leader [1].

European diplomats were stunned by this statement of Sargsyan, and the European Union prompted to comment on the issue. "Armenia has blocked its chances of signing a free trade deal with the European Union by choosing to join the Russia-led customs union. We respect any choice of countries but they cannot enter both organizations at the same time because of different tariff requirements,” Lithuanian Foreign Minister Linas Linkevicius told AFP [2].

Swedish Foreign Minister Carl Bildt reflected the widespread frustration among European leaders in a tweet: "Armenia negotiated 4 years to get Association Agreement with EU. Now President prefers Kremlin to Brussels. It`s a 180-degree shift in Armenia`s policy” [3].

In his comments ahead of Sargsyan`s visit to Moscow, Armenian deputy foreign minister Shavarsh Kocharyan said: "Getting involved in the free trade zone with the European Union does not mean the loss of sovereignty, we will just reach consensus on tariffs. However, countries lose the opportunity of independent decision-making to a certain extent by joining the Eurasian Customs Union. But there are problems with the Union, which already includes Russia, Belarus and Kazakhstan . The main problem is that Armenia has no shared border with any of the countries of the Customs Union. There is no precedent for countries that have no shared border to create a common customs union.” The fact that after such a statement by a high-ranking official Sargsyan voices Armenia`s decision to join the Customs Union and to be involved in establishing the Eurasian Economic Union is a strong signal of disagreement inside the Armenian authorities on the country`s foreign policy.

Russia has been Armenia`s largest foreign trade partner in the past 20 years. Armenia`s joining the Customs Union and Eurasian Economic Union cements Russia`s presence in Armenia`s foreign policy, increasing Yerevan`s dependence on Moscow.

Experts forecast that Russia’s benefit from the establishment of the Customs Union may total $400 billion, while that of Belarus and Kazakhstan may amount to $16 billion in 2015 [4]. Russia`s benefit is incomparably greater that other member states of the union. But it is unclear what Armenia`s benefit will be once the country joins the Union.

By trying to draw attention to military and security agreements signed in Russia and reiterating that they guarantee Armenia`s security Sargsyan seems to be making atonement for his sins. He appears to be trying to build a positive image of himself in his country. He appears to show to European states that Russia pressed Armenia to join the Union using military and security factors. But these covert statements by Sargsyan and his attempts to make atonement to his sins will not work any longer. Armenia has fallen within Russia`s orbit, and even makes a whole as part of it.

The Armenian media`s response was quite sharp, as they characterized Sargsyan`s decision not as Armenia`s surrender to Russia, but as its occupation.

The Armenian media believe this will cause tension in official Yerevan`s relationship with the European Union, with the organization cutting off financial assistance to the country in terms of economy and politics.

Under these circumstances, some issues in the USA`s relationship with Armenia can also fade into the background, particularly affecting official Yerevan`s relations with NATO, and Washington`s funding of economic and political reforms in the country.

Armenia is now entering a new stage in terms of politics, economy and security. But even the Armenian government itself has no idea of what this stage will bring to the country. Armenia was forced to put all the eggs in one basket. This is an inevitable result of the Armenian leadership`s fault foreign policy and security strategy in the last 20 years.

Having continued to occupy the Azerbaijani lands for more than 20 years, which has given it neither economic or security dividends, Armenia prefers to arm itself rather than lift its economy out of turmoil. Compared to its neighbor, Azerbaijan`s prospering economy allows it to buy weapons worth billions of dollars. Azerbaijan is arming in order to liberate its occupied lands, while Armenia is arming to keep control of the lands it had occupied. But there is a psychological point. The so-called Nagorno-Karabakh has existed at the cost of the Armenian budget for more than 20 years, and is not capable of giving anything to the budget. The funding allocated from the Armenian budget to the so-called Nagorno-Karabakh is like a yearly tragedy. And the Armenian budget is completely powerless against it.

Armenian officials should understand that "mills don't grind if you gave them no water”. They should be aware of the importance of returning the occupied Azerbaijani lands, benefiting from the regional economic and political integration, solving the economic problems they had faced for over 20 years, and restoring their sovereignty.

Dr. Hatam Jabbarlı

[1] Серж Саргсян: Решение Армении вступить в ТС - не отказ от диалога с европейскими структурами, 03.09.2013

[2] Решением вступить в ТС Армения заблокировала шансы на подписание DCFTA - МИД Литвы, 04.09.2013

[3] Армения, видимо, разрывает переговоры по DCFTA и интегрируется с Россией - глава МИД Швеции, 03.09.2013

[4] Армения-РФ: Все упирается в ОДКБ, 4 сентября 2013

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