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EU, Armenia Agree DCFTA

by Ulrika Lomas,, Brussels

29 July 2013

The European Commission has said that talks with Armenia toward a Deep and Comprehensive Free Trade Area (DCFTA) have been successfully concluded.

After seven rounds of negotiations, an agreement has been reached on the key elements of a deal intended to create a new framework for trade relations between the European Union (EU) and Armenia. The two parties have been in talks since July, 2010, when it was announced that they were seeking a replacement for the old Partnership and Cooperation Agreement. The Commission will now report to the EU member states on the proposed DCFTA text, and steps will be taken to formally mark the finalization of the DCFTA as part of a wider Association Agreement.

The EU is Armenia's biggest trading partner, with the bilateral trade in goods worth EUR951m (USD1.26bn) in 2012. The Commission claims that the DCFTA could result in a 2.3 percent boost to the Armenian economy, while the EU will gain by around EUR74m a year. Armenian exports could rise by 15.2 percent, and imports by 8.2 percent.

The Commission also argues that the deal will strengthen Armenia's economic integration with the EU, by providing better market access for goods and services. It is hoped that Armenia will be able to modernize its trade relations and harmonize the laws and regulations governing a range of trade-related sectors. This should in turn help bring key areas of the Armenian economy in line with EU standards.

The DCFTA envisages that the vast majority of customs duties on goods will be removed as soon as the Agreement enters into force. It covers intellectual property rights, rules of origin, and customs and trade facilitation, and contains provisions on sustainable development. A transparency chapter provides disciplines regarding the availability of information and minimum standards for consultations with stakeholders on DCFTA-related domestic legislation.

At present, Armenia is able to gain preferential access to the EU market through the EU's Generalized System of Preferences, and via additional incentives for sustainable development and good governance. Existing import duties are therefore low, and the Commission anticipates that the DCFTA's main benefits will lie predominantly "behind the border."

EU Trade Commissioner Karel De Gucht said that the conclusion of the talks "paves the way for Armenia to enjoy much improved access to the EU market in more than trade in goods, which will help the country strengthen its exports, increase investment and sustain growth."

He added that, "in the end, it will contribute to the overall stability and prosperity of the region, and contribute to citizen's well-being. I congratulate and thank the negotiators on both sides for their successful work. I look forward to a political confirmation of this week's achievement at the Vilnius Summit in November this year. We will need to actively prepare for implementation."

TAGS: tax | European Commission | law | intellectual property | Armenia | legislation | tax rates | standards | regulation | trade | European Union (EU) | services | Europe

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