ANCA’S HAMPARIAN DISCUSSES US-ARMENIA TRADE
Thursday, January 10th, 2013 | Posted by Aram Suren Hamparian
ANCA Executive Director Aram Hamparian
In a telephone interview this week, Asbarez Editor Ara Khachatourian
discussed prospects of expanding US trade with Armenia with Armenian
National Committee of America Executive Director Aram Hamparian. Below
is the transcript of the interview
ARA KHACHATOURIAN: Bring us up to speed on the state of U.S.-Armenia
trade relations, and the ANCA’s efforts in this area.
ARAM HAMPARIAN: The ANCA is committed to transitioning bilateral
U.S.-Armenia ties from relations that are today, in large part,
aid-based, into a more durable relationship, driven primarily by
mutually-beneficial trade and investment.
It probably makes sense to start by putting our bilateral economic
ties into a bit of a broader perspective, in terms of the diplomatic
given and take that defines relations between America and Armenia.
A.K.: OK, where do things stand in the bigger picture?
A.H.: Yerevan, as is widely known and appreciated in Washington,
responded favorably to U.S. requests that it provide troops to Iraq to
support U.S. operations, deployed troops to help NATO in Afghanistan,
and sent peacekeepers to Kosovo. Armenia has been a constructive
partner in the Nagorno Karabakh peace process, and, at great cost,
followed Washington’s reckless lead in terms of talks with Turkey.
On the other side of the equation, President Obama broke his pledge
to recognize the Armenian Genocide. We have seen his Administration
arm-twist Armenia into the pro-Ankara Protocols and then go on
to call the Genocide a “historical debate.” Add the deeply flawed
nomination of Matt Bryza as Ambassador to Azerbaijan, cuts in aid,
reversals on Nagorno Karabakh, and the President’s refusal to keep his
personal promise to engage with the leadership of the Armenian American
community, and you basically have the opposite of what he promised back
in 2008 as a candidate actively seeking to win our community’s votes.
It’s in this context, that we find it so especially troubling that
there has been essentially no meaningful or focused efforts, much
less results, from the Obama Administration in terms of honoring
the President’s promise to foster Armenia’s economic growth through
increased trade and investment.
The President’s failure to act is a missed opportunity, one with real
human costs, here in America, but, especially, in Armenia. The good
export-driven jobs that might have been created could have helped
alleviate real hardships for families, in Yerevan, cities like Gyumri
and Kapan, and in villages large and small across the country.
A.K.: Where are U.S.-Armenia trade levels today?
A.H.: The U.S.-Armenia bilateral trade level, today, stand at only
about $200 million a year. To put this in perspective, the Obama
Administration recently proposed, without success, the transfer of
two used U.S. guided missile frigates to Turkey, which, together,
are valued at roughly $480 million.
The U.S.-Armenia trade level could well be over $1 billion a year,
had President Obama, over his first four years in office, honored
his pledge to foster Armenia’s economic growth.
A.K.: So, where exactly does President Obama stand in terms of his
promise to push U.S.-Armenia trade and investment?
A.H.: Of all the President’s promises on Armenian issues, arguably
the easiest one for him to have honored would have been his pledge
to promote trade and investment.
Let’s look at where we are. Despite all sorts of public commitments
over the years, successive Administrations, including the current
one, have failed to show the moral courage to stand up to Turkey’s
gag-rule on American recognition of the Armenian Genocide. Democratic
and Republican White Houses, under pressure from oil interests,
have compromised America’s application of our founding principles
of democracy and self-determination to the resolution of Nagorno
Karabakh. Our government has, as a result of misguided geopolitical
calculations, refused to meaningfully challenge some very brutal
efforts by Turkey and Azerbaijan to isolate and undermine the
partitioned, landlocked, and blockaded homeland of the Armenians –
a people still struggling, after nearly a century, to recover their
national viability in the wake of vast, far-reaching, yet still-denied
genocidal damage and destruction.
The President would not need to demonstrate any special political
will to honor his promise to promote U.S.-Armenia trade. There is
little risk here of antagonizing Ankara or alienating Baku. Nor
would doing so have required him to deploy new political capital,
since increasing trade is already a major part of White House agenda.
All the President needs to do is, in his own words: “help foster
Armenia’s growth and development through expanded trade and targeted
aid, and by strengthening the commercial, political, military,
developmental, and cultural relationships between the U.S. and Armenian
governments.” He’s done this with Georgia and with countless other
countries, so the basic blue-print is already out there.
The U.S. Ambassador to Armenia, John Heffern, for his part, during his
Senate confirmation process, thoughtfully and specifically expressed
interest in prioritizing U.S.-Armenia trade and investment. He’s been
in office a year now, and we look forward to seeing the practical
results soon of his efforts in this direction.
A.K.: What about the aid side of the trade equation? Can U.S.
assistance help promote economic ties?
A.H.: The Obama Administration, despite the President’s promises to
maintain aid levels to Armenia, has sought reductions in economic
assistance. Sources on Capitol Hill report that we can expect the
White House, once again, to propose further cuts in the Fiscal Year
2014 foreign aid bill.
So, basically, the President is cutting economic aid to Armenia –
including for the very technical programs needed promote and support
bilateral commerce – at the same time that he is failing to take any
meaningful steps to honor his campaign pledge to foster Armenia’s
growth and development.
It’s simply not credible when the White House talks about how
U.S.-Armenia ties have never been better, while the Administration
is cutting the very programs put in place to strengthen these ties.
A.K.: What’s on the table? What are the practical options out there
to increase U.S.-Armenia trade and investment?
A.H.: Members of Congress, the ANCA and the rest of the Armenian
American community, the American Chamber of Commerce in Armenia,
the government of Armenia, and, most recently, close to two dozen
tops U.S. firms operating in Armenia, including Microsoft and FedEx,
have called upon the Obama Administration to prioritize U.S.-Armenia
commercial ties, by negotiating a badly-needed Trade and Investment
Framework Agreement (TIFA) and a long-over-due Double Tax Treaty.
As we have seen worldwide, a TIFA can be a powerful, practical platform
to promote trade and investment, and address and resolve barriers to
increased commerce.
Among the specific areas a TIFA can help with are: Improving the
investment climate, identifying priority areas for growth, and building
trade capacity; Addressing regional trade issues, including the special
hardships faced by Armenia due to the blockades imposed on its borders
by Turkey and Azerbaijan; Streamlining customs systems, and increasing
the transparency of governmental processes related to imports and
exports; Discussing the effectiveness of current programs in Armenia of
the U.S. Export-Import Bank, Overseas Private Investment Corporation,
and U.S. Trade and Development Agency; Expanding agricultural trade and
investment; Growing the level of trade in services, including banking,
insurance, and tourism; Promoting Diasporan trade and investment, with
a special focus on expanding Armenian American trade and investment
partnerships with Armenia; Improving Armenia’s use of U.S. Generalized
System of Preferences benefits; Addressing any outstanding problems
in the area of intellectual property rights; and Exploring ways to
deepen future U.S.-Armenia trade and investment.
We would, in particular, like to see U.S. trade and investment that is
both green and sustainable. While supporting U.S. exporters and other
businesses, we are also interested in helping to create long-lasting
opportunities for as geographically broad and demographically diverse
a segment of Armenia’s population as possible.
You recently reported the unfortunate news that, this past October,
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 between the U.S. and 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 simply said: “there is no basis to consider initiating
tax treaty negotiations with Armenia.” This refusal must be revisited.
We have, in recent months, seen greater U.S. public attention to the
energy sector in Armenia, including in the nuclear power industry,
and would welcome the growth of government-backed American investment
in this field. The Overseas Private Investment Corporation and the
Export-Import Bank have, to date, underperformed with regard to
Armenia, and need to move pro-actively in this area.
A.K.: Does the U.S. have TIFA’s with other countries in Armenia’s
neighborhood?
A.H.: The U.S. has long had a TIFA in place with Georgia, among many
other countries. Leaders in Tbilisi speak highly about how this
accord has facilitated increased commerce with American firms. In
fact, President Obama, last year, expressed America’s interest in
building upon a TIFA by negotiating a full-blown Free Trade Agreement
with Georgia.
A.K.: Since there’s not a TIFA with Armenia, what bilateral dialogue
does exist on trade issues?
A.H.: There is the U.S.-Armenia Economic Task Force, which was recently
downgraded by Washington from two meetings a year to just one. Trade
issues have moved higher on its agenda, but this has historically
been an aid-focused platform.
So, now, with the White House pushing for even deeper aid cuts, it’s
not clear what resources are left to this group – outside of offering
advice – to practically promote trade and investment. At this point,
there is no high-level, ongoing institutional platform dedicated
solely to the promotion of bilateral U.S.-Armenia trade.
The Task Force is still being managed by the State Department, not as
should be the case, by the U.S. Trade Representative or the Commerce
Department. As a result, rather than being driven primarily and
properly by business and commercial priorities, this process ends up
being part of the State Department’s diplomatic dealings with Armenia
and the region. As the lack of real results over the past decade has
shown, this ends up being bad both for business and for diplomacy.
A.K.: Have any other countries shown more interest in fostering
economic ties with Armenia?
A.H.: The European Union, having already invested considerable time
and effort in forging strong economic ties with Armenia, has launched
official talks toward a Full and Comprehensive Free Trade Agreement
with Yerevan. This historic accord is on track to be finalized
this year.
It’s certainly not lost on anyone that the European Union is moving
forward with a full-scale Free Trade Agreement with Armenia, while
the Obama Administration remains unwilling to even start talks on
the most modest of bilateral economic agreements.
A.K.: The U.S. Ambassador to Armenia, John Heffern, during his recent
visit with Armenian American communities, spoke of internal governance
and corruption issues as obstacles to increased U.S.-Armenia trade
and commerce. What are your thoughts on this point?
A.H.: We welcome Ambassador Heffern’s concern. For our part, it’s
very clear that we should not measure Armenia by any other than our
absolute highest standards. And we know that Armenia today, like many
developing and even developed countries, has serious shortcomings
in terms of governance. All sincere stakeholders in Armenia’s
future have some heavy-lifting to do to in building a more fair and
prosperous future. But these problems are no excuse for U.S. government
foot-dragging and finger-pointing in failing to put in place meaningful
programs to promote U.S.-Armenia bilateral trade and investment.
Just about any reasonable reading of the history of U.S. commercial
relations abroad shows that poor governance has never prevented
American firms from doing business around the world. In fact, we do
some of our biggest trade is with some of the world’s worst offenders,
from China to Saudi Arabia.
Consider the recent ratings by Transparency International, an NGO
partially funded by USAID. Their Corruption Perception Index lists
many countries, including Angola, Cambodia, Ukraine, Pakistan, Nepal,
and Vietnam, with public sectors viewed as more corrupt than Armenia,
but that already have Trade and Investment Framework Agreements in
place with the United States. Clearly that is the result of a focused
U.S. effort to promote trade with these nations.
Over the past two decades, an array of U.S. reform efforts in Armenia
– and no shortage of public and private advice – has 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 America’s top leaders
are serious about prioritizing bilateral economic relationships.
I’ll cite again the TIFA with Georgia, and add that we, as Americans,
have a Double Tax Treaty with Slovenia that has been in force since
2002. We have full blown Free Trade Agreements with Jordan, Israel,
Morocco, Panama, and more than a dozen other countries. As noted,
Brussels is close to finalizing a major trade deal with Armenia, Moscow
is already a leading trading partner, but Washington has yet to even
get into the starting blocks on serious trade and investment promotion.
As you have have written is Asbarez: “Instead of progress, the Embassy,
White House, departments of State, and the Treasury simply talk about
process, with predictable results: U.S.-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.” Clearly, we need to reverse course,
and quickly.
The good news is that companies like Intel are investing more in
Armenia. One of the many IT companies operating in Armenia, PicsArt,
just reported that its Android app has been downloaded over 35 million
times. Firms such as Microsoft, NASDAQ, and FedEx are calling for U.S.
leadership on trade promotion, the Armenian government and American
Chamber of Commerce in Armenia are pushing Washington for progress, and
the Armenian American community, along with our friends in Congress,
are fully committed to seeing real leadership from the White House
and our U.S. Embassy to materially increase U.S.-Armenia trade and
investment in the coming months and years.
Everyone says they agree on turning this talk into reality, now we
need the Obama Administration to act.
The bottom line here is we need to see real effort – and concrete
results – from our government in promoting smart trade and sustainable
investment. We need action, from Washington and our Embassy in Yerevan,
if we are to realize our potential to foster growth, create jobs,
offer hope, and pave the way for a brighter future for America and
Armenia, and the enduring ties of friendship that have long brought
our two nations together.
http://asbarez.com/107516/anca%E2%80%99s-hamparian-discusses-us-armenia-trade/