Armenia

Armenia was granted GSP+ status in 2009 and has ratified all 27 core international conventions on human rights, labour standards, environmental protection, and good governance. Since 2018, Armenia is considered an upper-middle income economy with a per-capita income of $4,680 (2019). EU imports from Armenia amounted to about €336 million in 2019, a 60% increase compared to the previous year. About two thirds of Armenia's cumulative imports enter the EU market under GSP+ duties.

What is GSP+?

The GSP+ is a special incentive arrangement for Sustainable Development and Good Governance that supports vulnerable developing countries. Next to fulfilling the eligibility requirements of the General GSP, GSP+ countries are required to ratify 27 international conventions on human rights, labour rights, environmental protection and climate change, and good governance. In order to ensure effective implementation of the conventions as well as compliance with reporting obligations, the EU engages in monitoring activities with the GSP+ countries. GSP+ beneficiaries can benefit from complete duty suspensions for products across approximately 66% of all EU tariff lines.

At a glance: GSP+ beneficiaries' preferential imports to the EU

group

2.95 million

Population

account_balance
Parliamentary democracy

Government

trending_up

7.6%

GDP Growth

equalizer

1.4%

Inflation

money

$ 13.7 bn

GDP

Facts about the Armenian economy

Landlocked Economy

Geographically, Armenia is a landlocked country and has borders with four countries, though the borders to two of its neighbours, Turkey, and Azerbaijan, have closed since the early 90s due to political conflict. This leaves Armenia with rather slim regional export opportunities.

Export Products

Armenia's main export products are copper ores, cigarettes, spirits and gold.

Ties with Russia

Armenia's historical ties with Russia are still reflected in the trade relation between these two countries. Russia is the most important destination for Armenian products and at the same time the most important source of imports. This renders the economy dependent on volatilities on the Russian markets.

Economic Structure

The service sector accounts for more than 50% of Armenia's GDP, followed by industry with almost 30%. Agriculture accounts for approximately 17% of the GDP. Almost equally important for the economy are remittances from Armenians living abroad (roughly 14% of the GDP).

Usage Of GSP+ Preferences

Armenia uses trade preferences granted under the GSP+ for about 33% of its total EU exports. The preference utilisation rate stands at 91% and represents the share of exports using GSP+ duties in overall GSP+ eligible exports.

Trade with the EU

Total trade with Armenia summed up to € 1,192 million in 2019. The EU is Armenia's second most important trading partner with a share of 20% of total trade, just behind Russia which accounts for approximately 27% of overall trade.

Armenia and the EU

Imports from Armenia by product section

Imports from Armenia over time (in € m)

ARMENIA AND THE EU’s GSP

Economic Impact

Armenia's economy can be considered vulnerable and is, with a score of 0.1%, considerably below the threshold of 7.4%. Armenia's economy is mostly concentrated on a small bandwidth of products. The country's diversification percentage stands at 93.4% with the minimum diversification threshold standing at 75%.

60%

About two thirds of Armenia's current exports to the EU are eligible for tariff reductions under the GSP.

98%

Armenia currently has a high preference utilisation rate of 98%.

Preference utilisation and export diversification

Armenia's imports to the EU

Preference Utilisation vs. total eligible imports

Over the years, the preference utilisation rate has shown considerable fluctuations. The rate dropped by 10 percentage points between 2011 and 2015 and shows another slump in 2018. Overall, Armenia makes comparatively high use of the preferential tariffs granted under the GSP+, with an average of 92% (2011-2018) of eligible imports being imported at reduced rates. Looking at individual product sections, Armenia makes good use of preferences for its dominant import groups like base metals and food and beverages. Overall, imports under the GSP have decreased quite substantially between 2016-2018. However, this be attributed to a substantial share of confidential EU imports from Armenia which are not part of this statistic.

Five largest product sections under GSP+

The utilisation of preferential tariffs remains highly concentrated on base metals, including aluminium, iron, and steel, which is a sector with relatively low value added. Other product groups remain rather insignificant, indicating a lot of room for further diversification particularly also for sectors with higher value addition. Preference utilisation for apparel imports has increased constantly in recent years, however, more than 20% of imports still do not make use of the reduced duties. Likewise, only about 25% of optical and musical instruments currently make use of the preferential market access

SUSTAINABLE DEVELOPMENT AND MONITORING PRIORITIES

Armenia ratified 27 core conventions on human rights, labour rights, environmental protection, and good governance. The Velvet Revolution in 2018 set of a number of democratic changes and commitments by the new government to strengthen the situation related to human rights and good governance. First legislative initiatives were taken to implement some of these commitments, including for example improvements related to the freedom of assembly and gender equality. The actual results of the regime transition with regard to international values remain to be seen.

Monitoring priorities during the reporting period 2018-2019

Judicial and criminal law

Law against domestic violence

Anti-corruption

Draft law on ensuring equality

Alignment of domestic legislation with environmental legislations

For the reporting period 2018-2019, the EU has identified five focus areas for its monitoring activities in Armenia. The new government which followed the Velvet Revolution in 2018 is committed to human rights and good governance and as initiated legislative procedures to strengthen the effective implementation of relevant conventions.

1. HUMAN RIGHTS

Armenia maintains a high level of ratification of international human rights conventions and has ratified or signed all ten fundamental UN conventions, of which seven are covered under the GSP+ regulation. Notable progress has been made in ensuring freedom of assembly and in strengthening legislation on domestic violence and gender equality. In addition, Armenia is in the process of adopting a new Criminal Code and an anti-discrimination law and has passed a new Judicial Code in 2018. These legislative efforts aim to improve the independence and accountability of the judiciary and address reports of harassment and hate speech against the LGBTQI community.

Ratified

2. LABOUR RIGHTS

Armenia has ratified all eight fundamental labour rights conventions which are required by GSP+ and has additionally ratified three of the four ILO priority conventions. These include the Labour Inspection Convention, the Employment Policy Convention, and the Tripartite Consultation Convention. The government has taken steps to improve the effective implementation of these conventions, for example by establishing a labour inspection system and initiating the revision of the Labour Code. The revision includes an official prohibition of discrimination, although a stand-alone law on discrimination is still pending. Despite these efforts, concerns remain in the area of child labour, where existing legislation remains insufficient.

Ratified

3. ENVIRONMENTAL PROTECTION

Armenia has ratified all environmental protection conventions covered under GSP+ and shows additional commitment through the ratification of the Kigali Amendment to the Montreal Protocol and the Paris Agreement as well as the acceptance of the Doha Amendment. However, the effective implementation as well as the alignment of national legislation with the provisions under the conventions remains a challenge. Progress has been noted regarding the effective implementation on the convention on illegal wildlife trade (CITES), although penalties for violations remain rather low. In order to protect the country's biodiversity, the government has set up protected areas which cover about 70% of the country's flora and fauna. In addition, laws have been passed that regulate chemicals and genetically modified organisms.

Ratified

4. GOOD GOVERNANCE

Armenia cooperates closely with international bodies on drug control and was able to seize increasing amounts of cannabis, cocaine, opium, and methamphetamine which mainly originate from Iran. The new government is strongly committed to tackling corruption and has recently introduced measures to address corruption in the judiciary and established a platform for whistle-blowers.

Ratified

EU-Armenia Bilateral Development Assistance

between €144 million and €176 million

The EU is Armenia's largest donor and committed to assist with €144 million to €176 million for the period 2017-2020. Priorities include the support of the reform agenda, infrastructure as well as private sector development. Sector wise most funds go to energy, agriculture, and the transport sector.

Opportunities in Armenia

  • Well developed IT-Sector with further potential in developping and exporting application software
  • Growing interest in and high potential for renewable energies, solar, hydro and wind energy in particular
  • Further market potential in the mining sector
  • High level of investment freedom which provides favourable conditions particularly for foreign investment
  • Strong and growing agricultural and food processing sector with high-quality export products
  • Armenia belongs to the best 50 countries worldwide to do business in

Most recent events

Date Event
2020‑06‑11 Video conference of the Eastern Partnership foreign affairs ministers, chaired by High Representative Josep Borrell
2020‑03‑10 Sixth EU-Armenia Subcommittee on energy, transport, environment, climate action and civil protection
2020‑03‑09 Meeting between High Representative Josep Borrell and Armenian Prime Minister Nikol Pashinyan

By submitting a comment I confirm to have read the Terms and Conditions. Users should be aware that if in breach of the Terms and Conditions that their comments, replies and contributions can be removed from the website.

Loading...
Loading...

By submitting a comment I confirm to have read the Terms and Conditions. Users should be aware that if in breach of the Terms and Conditions that their comments, replies and contributions can be removed from the website.

Loading...
Loading...

By submitting a comment I confirm to have read the Terms and Conditions. Users should be aware that if in breach of the Terms and Conditions that their comments, replies and contributions can be removed from the website.

Loading...
Loading...

By submitting a comment I confirm to have read the Terms and Conditions. Users should be aware that if in breach of the Terms and Conditions that their comments, replies and contributions can be removed from the website.

Loading...
Loading...