On behalf of the European Union I would like to welcome the Armenian Delegation, led by H.E. Mr. Avag Avanesyan - Deputy Minister of Economic Development and Investment, and the Discussant, H.E. Mr Michael Gaffey (Ireland), for his salient introductory remarks.
Mr Chairman, the EU would like to start by highlighting some of the positive developments that have emerged during the period under review.
Since Armenia's last TPR in 2010, macroeconomic stability has been significantly enhanced. We commend Armenia for its average GDP growth of 4.0% during the period 2010-2017. The EU supports the implementation of reforms in Armenia focusing on enhanced democracy, transparency, accountability and the rule of law, which should contribute to a better business environment.
We also welcome the encouraging statements and objectives of the new Armenian Cabinet to improve the business and investment climate. The EU is ready to support Armenia in its reform agenda. We look forward to see these political commitments being translated into action in the near future.
We encourage Armenia to continue its constructive engagement with the WTO. In particular, we would commend Armenia for acceding to the Government Procurement Agreement (GPA) in 2011, as well as having signed the revised GPA. Likewise, we welcome Armenia's ratification of the Trade Facilitation Agreement (TFA).
Since Armenia's last TPR, there have been significant changes in the legal framework governing EU-Armenia trade relations. Since 1 June 2018, the EU-Armenia Comprehensive and Enhanced Partnership Agreement (CEPA) entered into provisional application. This agreement provides for a deepening of the political, economic and trade relations between Armenia and the EU. We expect the agreement to play an important role in further improving the business climate in Armenia, as well as creating a level playing field conducive to foreign investment and jobs growth. We welcome Armenia’s commitment to implement the Agreement effectively and to pursue an ambitious reform agenda.
The overall long-term trend in EU-Armenia bilateral trade is equally positive. Bilateral trade is increasing, and since the last TPR, the total amount of trade between the two sides increased from 816 million in 2010 to about 1.1 billion euros in 2017.
The EU assists Armenia's continued economic development. Armenia benefits from the EU's General Scheme of Preferences plus (GSP+) arrangement, and has a very high utilization rate of this scheme (around 93%). As a member of our Eastern Partnership, Armenia has also benefited from EU financial support, such as the €70 million of grants disbursed from the Neighborhood Investment Facility since 2014.
Mr Chairman, we also would like to underline some topics on which we encourage Armenia to improve the current situation, or to pay special attention to.
First, and whilst acknowledging that Armenia has been taking certain actions in this area since the last TPR, we encourage Armenia to continue diversifying its export base. For example, we note that Armenia's exports continue to be concentrated in the mining sector (in case of goods) and tourism (as far as services are concerned).
Secondly, we have some specific concerns regarding government procurement. We are concerned about some legislative changes as a result of Armenia's EAEU accession, such as some harmonised EAEU blacklisting provisions, and their compatibility with the GPA. Likewise, we are afraid that legislative changes in 2018 might have weakened the independence of Armenia's Procurement Review Board.
Thirdly, the protection of intellectual property rights remains an important issue. We would like to see more effective enforcement and progress in Armenia's capacity-building in the protection of IPRs.
Finally, we note that cigarettes and other tobacco products manufacturing is becoming increasingly important for Armenian government revenue. In EU-Armenia trade relations, we have seen an important rise in cigarette exports. We encourage Armenia to continue its efforts to control and fight against illicit trade of tobacco products.
In conclusion, the EU encourages Armenia to proceed with its positive engagement with the multilateral trading system, and to further concretize initiatives that will improve its business and investment climate.
On behalf of the EU, I look forward to a constructive exchange of views during this review and I wish the delegation of Armenia the utmost success during its 2nd Trade Policy Review since joining the WTO in 2003.