As Armenia and the European Union (EU) 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 U.S. ambassador to Armenia, John Heffern, began his tour more than a year ago, despite his own promises to prioritize bilateral economic relations.
The European Eastern Partnership summit kicked off in Yerevan on Nov. 30, and European and Armenian leaders are on track to continue the negotiations on a comprehensive Free Trade Agreement that is 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, said the EU-Armenia talks are on track to meet the 2013 deadline.
As the European Eastern Partnership leaders convened in Yerevan, Heffern traveled to the U.S. to meet with Armenian-American leaders in Los Angeles, San Francisco, Boston, and New York. While Heffern is clearly not the administration’s decision-maker on the Armenian Genocide or Nagorno-Karabagh, and can legitimately seek to defer certain complaints regarding the U.S. government’s shortcomings in these areas to those at a higher pay-grade, he is America’s primary representative to Yerevan, and the U.S.’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 U.S. reform efforts over the past two decades have been taken 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 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 12 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 outdated 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 has said that “there is no basis to consider initiating tax treaty negotiations with Armenia.”
Instead of progress, the U.S. Embassy, White House, Departments of State and 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 Heffern’s first 12 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 certainly too early to draw complete conclusions regarding his full tenure, the trends are troubling, all the more because of the public promise that President Obama made to foster Armenia’s development through expanded trade, and 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.
Ara Khachatourian
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In this connection,i.e. to foment business between the U-S. and tiny republic of Armenia,there were some rumors that one of the two giant automakers ,namely Ford or GM would start a factory in Armenia.
I know for certain that the YERAZ Auto factory(soviet times) now closed could be a very could candidate to start Making ,no,not big U.s. cars, but like In spain or other countries these produce small cars….
Which would be lower in cost and with novelties such as half electric(hybrids) if possible , very interesting .Armenia then could export to next door Georgia and or other small countriesw.
Indeed thereare other industries such as in the line of food ,Kelog´s as an example and /or others.The Soft drinks are there already…
Free Trade? Try getting ANYTHING shipped to ANYWHERE in this country through Armenian customs without some, or several, archaic law / official getting in the way. Anywhere but Yerevan, that is. Apparently, without a bribe or the taxi of a customs official’s brother, It takes weeks to get something from outside of the country to some place other than Yerevan in this country.
Why doesn’t Armenia clean up its own act before blaming someone who has nothing to do with Armenian laws / corruption?
Perhaps we all can ask him at the town meetings coming up, as in NYC as to why no progress has been made, and we are going backwards on the issue of trade relations.
After all, last year to this year, the trade situation has deteriorated more…
Obviously, something is working against Armenia. Could be that Armenia’s enemies and their supporters may be doing more back-room politicking than recognized as they’ve accused the Armenians of such. If it is stalled in the US we cannot solely blame Armenian corruption or anything of that sort, could be US corruption, it certainly can exist as well as anywhere. Those in the US whom we might like to believe are friends, may not be as warm to Armenia as needed, otherwise there would be very different results.