Deep and Comprehensive Free Trade Area

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DCFTA is the acronym for deep and comprehensive free trade area. It refers to an agreement between the European Union and six former Soviet countries to form a free trade zone. This would integrate the European Union economy with those of Armenia, Azerbaijan, Belarus, Georgia, Moldova and Ukraine. Armenia was scheduled to sign the agreement with the EU in November 2013, after years of negotiations, but instead in September 2013 the Armenian president announced Armenia would sign a free trade agreement with Russia's Eurasian Economic Union which the EU had said was not compatible with DCFTA, and therefore Armenia would not be able to join the pact.

In December 2015, the EU began new negotiations with Armenia for a "Comprehensive Accord" that would incorporate all of the components of the DCFTA that were not incompatible with Armenia's membership in the Eurasian Economic Union.

Date Set For Free Trade Talks Between Armenia, EU

Sargis Harutyunyan

Հրապարակված է՝ 30.05.2012

The European Union will officially open on June 19 negotiations with Armenia on a far-reaching free trade agreement that should significantly deepen the South Caucasus nation’s integration with the 27-nation bloc, it was announced on Wednesday.

Armenian and EU officials made the announcement after a regular session of a joint body dealing with commerce and other economic affairs.

The two sides plan to create a Deep and Comprehensive Free Trade Area (DCFTA) as part of an “association agreement” currently being negotiated by them. The agreement stems from the EU’s Eastern Partnership program covering six former Soviet republics.

The EU member states gave the final green light to formal talks with Yerevan on the DCFTA in February. The launch of those talks was delayed last year because of EU objections to a controversial mechanism for import valuation and taxation of imported alcoholic beverages applied by Armenia’s customs service. The Armenian government scrambled to meet relevant preconditions set by the EU’s executive body, the European Commission.

Luc Devigne, a senior official from the Commission’s Directorate General for Trade, said the government still needs to do “a lot” to secure a permanent free trade regime with the world’s largest and most affluent single market. “We will keep monitoring this during the negotiations,” he told reporters in Yerevan after the meeting of the EU-Armenia Subcommittee on Trade, Economic and Related Legal Issues.

“In the meeting the EU side welcomed the progress achieved so far and encouraged the Armenian side to further intensify its reform efforts,” the EU Delegation in Yerevan said in a separate statement. It said the subcommittee members “shared their assessment of the latest developments” in Armenia’s business environment.

The DCFTA envisages not only mutual lifting of all trade barriers but also harmonization of Armenian economic laws and regulations with those existing in the EU. Garegin Melkonian, a deputy minister of economy who led the Armenian side at the subcommittee meeting, emphasized this fact.

“In contrast to simple free trade that we have with a number of countries, we are talking about a more comprehensive and complete package which will not only serve as a serious basis for the development of Armenia-EU ties but also stimulate processes of internal development and reforms in Armenia,” Melkonian told a joint news briefing with Devigne.

“In other words, this will eventually lead us to improved economic administration and conformity with European standards,” he said.

Devigne declined to speculate how long the impending DCFTA talks will last. “I’m not into the forecast business,” he said. “Otherwise, I would be in a different job.”

The EU official added that progress in the talks will primarily depend on Yerevan.

Yerevan Announces Dates For Free-Trade, Visa Talks With EU

Emil Danielyan 26.01.2012 Official Yerevan announced on Thursday the impending start of formal negotiations that should lead to a far-reaching free-trade deal and a more liberal visa regime between Armenia and the European Union.

The announcement came after the eighth round of talks held by Armenian and EU officials in Brussels on an “association agreement” that will significantly upgrade Armenia’s relationship with the 27-nation bloc.

The Armenian Foreign Ministry reported further “substantial progress” towards the signing of such an agreement. It said that during the two-day talks the two sides increased from 19 to 22 the number of negotiating “chapters” concluded by them.

“The parties expressed confidence that within the framework of their next plenary meeting it will be possible to also open negotiations on sections of the association agreement relating to the creation of a deep and comprehensive free trade area (DCFTA) between Armenia and the EU,” the ministry said in a statement. That meeting will be held in Yerevan in late March, it said.

The DCFTA envisages not only mutual lifting of all trade barriers but also harmonization of Armenian economic laws and regulations with those existing in the EU.

The EU’s executive body, the European Commission, has made the start of the free-trade talks conditional on the elimination of a controversial mechanism for import valuation applied by Armenia’s customs service. It also wants Yerevan to stop discriminating against importers of alcoholic beverages.

Visiting Brussels in early December, Prime Minister Tigran Sarkisian told top EU officials that his government has complied with these preconditions and expects them to speed up the official launch of DCFTA negotiations.

The EU is already Armenia’s largest trading partner. Official Armenian statistics show trade with the EU rising by 21 percent to $1.46 billion and accounting for almost one-third of the country’s overall foreign trade in January-October 2011.

Another major component of the association agreement is the simplification of stringent visa requirements for Armenians planning to visit EU countries. The two sides are to sign a separate visa facilitation and “readmission” agreement as part of the EU’s Eastern Partnership program covering six former Soviet republics.

Late last month, the EU’s supreme decision-making body, the Council, gave the formal green light for visa facilitation talks with Yerevan. According to the Foreign Ministry statement, they will start at the end of February.

EU Foreign Policy Chief ‘Pleased’ With Progress In Armenia Ties

17.11.2011 Elina Chilingarian

Catherine Ashton, the European Union’s top foreign and security policy official, praised “real progress” in the expansion of the EU’s relations with Armenia as she wrapped up a visit to Yerevan on Thursday.

Ashton met with President Serzh Sarkisian and other Armenian officials on the final leg of her tour of the three South Caucasus states.

“I want to express my pleasure at the progress that is being made in the bilateral relations between the European Union and Armenia,” she told a joint news conference with Foreign Minister Edward Nalbandian.

“As I described it earlier to you [Nalbandian,] I think we have made real progress in developing the strength of this relationship,” she said. “And as you rightly say, it’s a relationship based on values that we share, the values of support for the people of this country and support for democracy and human rights and the rule of law.”

Ashton appeared to refer to ongoing negotiations on a wide-ranging “association agreement” between the EU and Armenia stemming from the bloc’s Eastern Partnership program for six former Soviet republics.

Senior Armenian and EU officials reported further progress towards the signing of such an accord after a fresh round of talks held in Yerevan late last month. In particular, they said the Armenian government has pledged to address by the end of this year EU concerns preventing the official launch of separate talks on the creation of a “deep and comprehensive free trade area,” or DCFTA.

The DCFTA is a key element of the association agreement proposed to Yerevan. It envisages not only mutual lifting of customs duties but also harmonization of Armenia’s economic laws and regulations with those existing in the EU.

Ashton singled out the future free trade regime, saying that it will “make a huge difference” for Armenian and EU businesses. “I think progress now made on moving towards a free trade agreement will come to fruition in the next few months,” she said.

​​The Armenian leaders, meanwhile, reaffirmed their strong commitment to the Eastern Partnership and Armenia’s broader European integration. Meeting with Ashton late on Wednesday, President Sarkisian said, “Our goal is precise and we have stated on many occasions that we see Armenia’s future as a prosperous country built according to European standards, and we are following that path steadfastly.”

Prime Minister Tigran Sarkisian (no relation) gave the chief EU diplomat similar assurances the next morning. “Our relations with the EU have entered a new phase of development lately,” he said, according to his press office. “As a result of that, we have given new impetus to reforms implemented by us.”

Tigran Sarkisian detailed those reforms during two recent visits to Brussels. He said they cover 33 specific areas of state policy, including human rights protection, judicial reform, tax and customs administration as well as food safety.

The premier also told European politicians last week that the Armenian parliamentary elections scheduled for next May will be the most democratic in the country’s history.

Armenian opposition leaders dismissed that pledge, however, saying that the authorities are in fact planning to rig the vote. Some of them have repeatedly accused the EU and other European structures of turning a blind eye to electoral fraud and human rights abuses in Armenia.

Speaking at the news conference, Ashton also insisted that Brussels has not delayed the start of formal negotiations on simplifying visa requirements for Armenian citizens travelling to EU countries. The EU’s top decision-making body, the European Council, has yet to give the green light for such talks.

According to Ashton, “many issues of technical nature” still need to be resolved by the two sides. “Once you have done all the technical work then the process of negotiation moves much more quickly,” she said. “So you shouldn’t see this as being about delay. It’s about making sure that everything is actually in place.”

Armenia-EU Accord Off Table

Elina Chilingarian

The European Union has no plans to finalize an Association Agreement with Armenia at an upcoming EU summit in Lithuania, Sweden’s Foreign Minister Carl Bildt said on Monday.

Writing on his Twitter account, Bildt said he and his visiting Slovak counterpart Miroslav Lajcak agreed at a meeting in Stockholm that the deal with Yerevan is “now off the table.” “We work with Ukraine, Moldova and Georgia,” he added.

The comment is a further sign that the EU will reject the Armenian government’s proposal to initial a significantly watered-down version of the Association Agreement that would exclude its most important component envisaging the creation of a “deep and comprehensive free trade area,” or DCFTA.

President Serzh Sarkisian offered this solution after unexpectedly pledging to make Armenia part of a Russian-led customs union on September 3. EU officials had repeatedly told him that the DCFTA is “not compatible” membership in the union.

Foreign Minister Edward Nalbandian flew to Brussels last week in an effort to convince EU officials to accept the idea. EU Enlargement Commissioner Stefan Fuele said after their talks, however, that he finds it “difficult to imagine” this happening at the EU’s November summit in Lithuania’s capital Vilnius.

Nalbandian proceeded to Lithuania, the current holder of the EU presidency, at the weekend to discuss the issue with his Lithuanian counterpart Linas Linkevicius. “We respect Armenia’s will, but we must emphasize that the decision to join the Customs Union diminishes Armenia’s ambitions of integration in and cooperation with the EU,” Linkevicius was quoted by the Lithuanian Foreign Ministry as telling Nalbandian.