Armenia will Join Russian Customs Union (9/17)     Print Email

armensahakyanphotoBy Armen Sahakyan,  European Affairs Editorial Assistant 

In a move last week that came as surprise to many, the Armenian president signed a joint statement with Russia, confirming Armenia’s decision to join the Customs Union (CU) and readiness to participate in the formation of the Russian sponsored Eurasian Union (EAU).  Bringing Armenia into Russia’s Custom Union is a something of coup for Putin since Armenia had been recently negotiating for an association and customs pact with the EU.

putinarmenia92013From left to right: President of Armenia S. Sargsyan and President of Russia V. Putin in Moscow

Mr. Putin’s remarks stressed Russia’s leading role in Armenia’s economy and welcomed the latter’s choice to join the CU.

Armenia, together with other Eastern Partnership states, was due to sign Association as well as Deep and Comprehensive Free Trade Agreements (AA/DCFTA) with the EU in November in Vilnius. The DCFTA with the EU is now impossible and the status of the Association Agreemtent, where negotiations were concluded on July 24 of this year after three years of discussion, is now in question. .  

President Sargsyan explained the decision to join the CU by pointing at Armenia’s membership in CSTO (a regional military alliance led by Russia) and claiming that “it was a rational decision based on Armenia’s national interests.” He further added, that "this decision does not preclude our dialogue with the European structures…"

The following day, the spokesman of Armenian President Vigen Sargsyan stated that “signing the Association Agreement still remains on the Armenian agenda.”

On September 5, the Foreign Minister of Armenia Edward Nalbandian met with Štefan Füle, European Commissioner on Enlargement and European Neighborhood Policy. The communiqué published on Armenian Foreign Ministry’s website notes that “Minister Nalbandian reiterated Armenia’s readiness to continue the broad cooperation with the European Union…

Armenia’s wish to continue its relations with the EU should be viewed in light of its policy of complementarity in foreign affairs. See more detail in recent European Affairs article.

The statement released by the European Commission following the CU news took a rather mild tone. It highlighted the need for consultations with the Armenian side and discussion on the compatibility between Armenia’s membership in Customs Union and the signing of agreements with the EU.  

EU has in the past indicated incompatibility between the CU and DCFTA. Catherine Ashton's spokeswoman Maja Kocijancic stated earlier in the year   that “if Armenia were to join any customs union, this would not be compatible with concluding a bilateral Deep and Comprehensive Free Trade Agreement between the European Union and Armenia, because a customs union has a common external-trade policy and an individual member country no longer has sovereign control over its external-trade policies.”

Simultaneous membership in the EU’s DCFTA and Russia’s CU is not possible since membership in CU would transfer its sovereign external trade powers to a central CU entity, thus preventing Armenia to pursue an independent external trade policy with EU. .

Assuming DCFTA is offf the agenda, it is still possible that Armenia would be able to sign a watered down version of the Association Agreement in November.

“In light of Armenia's declared choice to join the Customs Union it is however difficult to imagine the initialing at Vilnius summit in November of the Association Agreement with Armenia as it had been negotiated,” EU’s Štefan Füle said yesterday.

Armenia is set to host an informal Foreign Ministerial meeting of Eastern Partnership states in Yerevan, September 12-13.   Minister Nalbandian and Commissioner Füle have agreed to “continue the intensive consultations between Armenia and the European Union.”