What Will DCFTA Bring?

What Will DCFTA Bring?

Story from Lragir.am News:

Published: 22:01:55 – 09/06/2012

Interview with Gagik Makaryan, president of the Armenian Association
of Employers

What will DCFTA bring to Armenia?

Free and comprehensive trade involves some other principles. Under a
free trade agreement we will use certain regulations, approximate our
legislation with the EU legislation, carry out democratic and other

I think, in the long run, the purpose of Europe is to develop its own
economy. It will first of all think for itself, not for us. First, it
will foster trade and production in the EU. Second, the EU has its own
global economic development policy, and production and import of raw
materials will naturally be done at the expense of countries like ours
because they remove from their countries every industry that harms the
environment and people’s health. It will try to use the capacity of
developing countries as a supplier of raw materials. There is a risk
that we will be a raw material supplier. Third, Europe has a labor
shortage. Their population is not enough, they will import labor from
countries like ours. In other words, there is a risk that this
cooperation will empty us of brains and labor. There is also a risk
that our imports will be affected by the EU because it will become
more powerful and will export to our countries, both for the money it
will pay and by means of its political influence.

Although I am against the signing of a free trade agreement among the
CIS countries, I also said that it is something temporary. This
agreement has a shortcoming. We can sell our non-competitive goods to
one another in the CIS but as life develops, Europe will join us, we
will not be competitive with Europe, we will be importers of European
stuff. The upcoming 3-4 years will be a crucial period. We will need
to carry out fundamental reforms and boost the economy otherwise we
will become an appendix which supplies labor and raw materials and
receive manufactured goods. If we fail to carry out reforms, the
economy of our country will be based on raw materials, the country’s
independence and industries will weaken.

But the members of government note that the DCFTA will help the
Armenian producers to produce better products, the Armenian production
will be competitive in the world. Don’t you think so?

However, several important issues need to be solved to raise the
quality of production. First, one needs to enable a businessman to
make investments. In other words, the political and economic reforms
should enable a favorable investment climate. It is necessary to
encourage modernization through loaning or other means. The greatest
problem is modernization, enterprises do not have enough money for
that, while interest rates are high. The extension of payment of VAT
granted by the government mainly affect major business. Small
enterprises will be left out, remain ignorant, weak and with low
productiveness. Meanwhile, the bigger ones will be able to modernize
to some extent. The big companies are in mining, jewelry and diamond
and telecommunication businesses. We must face small enterprises, loan
programs must be reviewed, cheaper and long-term loan offers must be
available. It is necessary to focus on food production and other

So is the government taking the move of deepening trade with Europe
without taking into account the importance of the following reforms?

It takes this move together with Europe because there are also
political interests. Let’s not forget that Europe is a major donor. We
must make concessions, whether we want it or not. We must face Europe
because it is a guarantee of our security, the markets there are more
stable. If we try to develop our economy through this move, we must
carry out reforms now, understand what is right, help and boost our
economy. But reforms must be part of a package. We can’t do one thing
this way today and that way the next day.


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