EU to propose autonomous trade measures for Armenia, but relief is not immediate

By Lia Avagyan

The European Commission has confirmed it will propose autonomous trade measures for Armenia, a step that could grant Armenian exporters preferential access to the European Union market as they contend with sweeping Russian import restrictions.

Speaking at a press briefing last Wednesday, European Commission Deputy Chief Spokesperson Olof Gill said the Commission "will propose autonomous trade measures to help more Armenian businesses access new market opportunities in the European Union." The measures would support the Armenian economy where it has been hit hardest, he said, adding that the Commission was not yet ready to share specifics.

Autonomous trade measures, or ATMs, are temporary, unilateral steps the EU can take to open its market to a partner country by removing or reducing tariffs and quotas, according to Karen Azaryan, an economist specializing in trade and economic relations with the EU. Such measures are usually reserved for partners facing serious economic, political, or security pressures, he wrote in a commentary posted on Facebook.

The bloc has used the tool before. Azaryan noted that the EU extended autonomous trade measures to the Western Balkans for postwar recovery and to Ukraine and Moldova following Russia's invasion, in addition to the deep and comprehensive free trade areas (DCFTAs) already in place with those two countries.

Armenia's case is different, he wrote. Armenia and the EU have no free trade agreement. The Comprehensive and Enhanced Partnership Agreement, or CEPA, that frames much of their relationship, neither establishes a free trade regime nor grants customs preferences, and bilateral trade largely operates under World Trade Organization rules. Against that backdrop, granting Armenia such measures would be an exceptional, unilateral political decision that reflects Yerevan's drive for closer ties with Brussels.

Any relief would also take time. The process starts with a Commission proposal and then needs approval from both the European Parliament and the Council of the EU, Azaryan wrote. It usually takes anywhere from several months to about a year, depending on political priorities and the positions of member states. The measures could not take effect until those procedures are complete.

In the meantime, the Armenian government already runs a program that refunds customs duties paid on exports to the EU. The mechanism does not replace autonomous trade measures, Azaryan wrote, but its economic effect can be comparable, since it lowers the cost of entering the EU market and helps Armenian goods compete.

The proposal comes as Armenia absorbs a wave of Russian curbs on its exports. Russia, which accounts for roughly 37 percent of Armenia's foreign trade, has banned or restricted imports of Armenian flowers, mineral water, alcoholic beverages, and a wide range of fruits and vegetables in recent weeks. The Central Bank of Armenia has warned that the measures could weigh on as much as 2 percent of the country's gross domestic product under the most adverse scenario.

The EU has signaled it intends to cushion the blow. The Financial Times reported that the planned package would cover most of the roughly 20 product categories targeted by the Russian bans. The bloc has separately announced €34 million in support for affected sectors, including agri-food products and flower production, and Commissioner for Enlargement Marta Kos is due to visit Armenia on July 5 to advance the package.