No Effort or Progress on US-Armenia Trade
asbarez
Friday, November 30th, 2012 | Posted by Ara Khachatourian
US Ambassador John Heffern during the US-Armenia Task Force meeting in
Yerevan in October
BY ARA KHACHATOURIAN
As Armenia and the European Union inch closer to a comprehensive free
trade agreement, pledges by the Obama Administration to foster
expanded U.S.-Armenia trade remain unfulfilled. No meaningful movement
in this realm has been made since the new US Ambassador to Armenia
John Heffern began his tour more than a year ago, despite his own
promises to prioritize bilateral economic relations.
As the European Eastern Partnership summit kicked off in Yerevan
Friday, European and Armenian leaders are on track to continue the
negotiations on a comprehensive Free Trade Agreement that are expected
to conclude by November 2013 when the same summit convenes in Vilnius,
Lithuania.
European Commission President Jose Manuel Barosso, ahead of his visit
to Armenia Friday, said that the EU-Armenia talks are on track to meet
the 2013 deadline.
As the European Eastern Partnership leaders convene in Yerevan,
Ambassador Heffern travels to the US and is scheduled to meet with
Armenian-American leaders in Los Angeles, San Francisco, Boston and
New York.
While Ambassador Heffern is clearly not the Administration’s
decision-maker on the Armenian Genocide or the Nagorno Karabakh
issues, and can legitimately seek to defer certain complaints
regarding the US government’s shortcomings in these areas to those at
a higher pay-grade, he is America’s primary representative to Yerevan,
and the US’s point-person on the growth of U.S.-Armenia bilateral
relations.
As a developing democracy, Armenia certainly has its share of
shortcomings in terms of corruption and governance. An array of US
reform efforts over the past two decades have been undertaken through
both technical aid programs and bilateral dialogue. This engagement,
however much needed and appreciated, is no substitute for bilateral
accords and the types of focused leadership that the U.S. government
prominently and publicly employs when seeking to prioritize bilateral
economic relationships. Examples include the Trade and Investment
Framework Agreement (TIFA) negotiated with the Republic of Georgia in
2007, the Double Tax Treaty with Slovenia that has been in force since
2002, and U.S. Free Trade Agreements with Jordan, Israel, Morocco,
Panama, and more than a dozen other countries.
In fact, the Obama Administration has said that the U.S. is
considering a Free Trade Agreement with Georgia. Yet Armenia, despite
having met Brussels’ economic and governance tests for a full-fledged
free trade partnership, is not even being considered by Washington for
relatively modest agreements, such as a TIFA or a Double Tax Treaty.
The public record shows that, despite consistent public calls by
members of Congress, the Armenian American community, the Republic of
Armenia, and the American Chamber of Commerce in Armenia, we have not
seen any meaningful action on the part of the U.S. Embassy to put in
place relatively easy-to-negotiate trade, tax, and investment
agreements with Armenia, including a badly-needed TIFA, a
long-over-due Double Tax Treaty, or a Free Trade Agreement. The
U.S.-Armenia Economic Task Force, which used to hold meetings twice a
year, now only meets once every twelve months.
As recently as October of this year, the Department of Treasury
officially refused Armenia’s offer to start negotiations on a Double
Tax Treaty, despite the fact that Yerevan does not consider itself
legally a party to the out-dated and inoperative 1973 treaty signed
with the now-defunct Soviet Union. Dismissing persuasive arguments
that such an accord would facilitate stability, predictability, and
transparency, and materially encourage American investors to invest in
Armenia, the Administration’s said: `there is no basis to consider
initiating tax treaty negotiations with Armenia.’
Instead of progress, the Embassy, White House, departments of State,
and the Treasury simply talk about process, with predictable results:
US-Armenia trade levels are on the decline. According to U.S.
government figures from the Census Bureau, while the bilateral
U.S.-Armenia trade level in goods was $194.1 million in FY2010 and
$183.6 million in FY2011, over the course of Ambassador Heffern’s
first twelve months in office, it dropped to $160.7 million, roughly a
12.5 percent decrease, despite a generally improving U.S. economy.
While it is too certainly early to draw complete conclusions regarding
his full tenure, the trends are troubling. All the more so because of
the public promise that President Obama made to foster Armenia’s
development through expanded trade, and Ambassador Heffern’s own
commitments, during his confirmation process, to prioritize the growth
of U.S.-Armenia economic relations.
Hence, the Armenian-American community must encourage Heffern to take
concerted steps to realize the full potential of his office to grow
U.S.-Armenia ties.
The good news is that there’s still time to reverse course, and get
back on the right track. Ambassador Heffern can and should take
advantage of his visits with Armenian American communities this
December to announce practical policies that will prioritize
U.S.-Armenia economic relations and materially and quantifiably expand
bilateral commercial cooperation between our two friendly nations.
From: A. Papazian