And do you know that Armenia exports two times more goods to the EU than Russia? And a total number of 6.000 commodities can be imported into the EU duty-free or at a reduced customs duty. I think that the listed privileges are among the reasons by which the EU and particularly its member state Germany are classified to the number of key economic partners for Armenia. Almost one-third of the goods of 366 million euros exported from Armenia to the EU, the target of 121 million euros commodities was Germany. But how did it turn out that the trade with Armenia is so important for the European Union?
The main reason can be found in the trading strategy of “Trade for all” published in 2015 by the European Commission, which reads states that 90% of global economic growth is expected to be generated outside Europe. Hence, to demonstrate its support to this growth, the EU needs open markets. At the same time, we need also transparency and value-based approaches in the trade and investment policy. What is meant by “value-based” phrase associated with a trade? The place where the trade obstacles are eliminated, a wide range of products and services become more accessible for the consumers in the whole world, at a favorable price. New trade agreements, including the agreement currently under negotiation between the EU and Armenia, can further expand this choice and reduce the prices. All consumers want to know the conditions in which their consumed products are produced. Whether the producers were consistent with local legislation and the rights of employees in compliance with the international standards, healthcare fact, and ecological norms. What standards are used in general? As an example, let’s take the Armenian honey – a genuine quality product. As an animal origin product, it is exposed to very strict standards of inspection for importing to the EU. The manufacturers are required to submit certificates of laboratories with international accreditation. They must also prove that no unauthorized and hazardous or harmful to the environment chemical substances are used in the production. At the same time, in the case of value-based approach, it is important for us that the apiarist produces honey in proper conditions. Once upon a time, fifty years ago, the thriving trade relations were the main motivation for the creation of the European Economic Cooperation, which today is known to us as the European Union. Since then and until today, a simple rule operates: good trade relations create a basis for the peaceful neighborhood and exchange of experience in other spheres.
Therefore, trade promotion is and will remain the key topic of the European Union not only in the context of member states but also in the foreign relations thereof with the third countries. This also applies to Armenia. Since last year, we have taken some important steps towards the progress in this field. The establishment of the European Business Association, as well as a couple of weeks ago, the establishment of the German Economic Union, are important milestones in Armenia. Their goal is further to advance the bilateral trade relations between the two economic areas by offering services to their member companies and organizing a lobby to the benefit of favorable framework legislation conditions for the EU and the government actions. I would like to present two examples to be clear to what we can pay attention to direct Armenia’s economy more towards to export and be more competitive. Germany’s export backbone is the medium industrial and handicraft factories. I believe that small- and medium-sized enterprises should attend the global competition more intensively than hitherto. The data of the European Bank for Reconstruction and Development (EBRD) for 2014 allow assuming that only 7% of Armenia’s small- and medium-sized enterprises implement any export in general. This is too little. Secondly, it is necessary to further improve customs and trade regulations. I would like to see Armenia rapidly rank higher than the 110th in the World Bank scale (World Bank report 2015. Doing Business scale, “Trading across borders” section) and register a significant progress in this area.
If truly the companies are required five different certificates and the process of export takes 16 days an average, then this is really too much to withstand the international competition. I am confident that Armenia with its well-educated population has all the chances to rank a better than the hitherto position in the international markets. The European Union so as Germany will continue to provide consultancy to Armenia and assist in the further process of reforms.
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Matthias KIESLER, Ambassador of the Federal Republic of Germany
