YEREVAN, March 15 – Donald Tusk, the president of the European Council announced, last month, that the European Union and Armenia had finally reached an agreement on deepening ties. This development comes a little over three years after Armenia abruptly abandoned plans to ratify a political and economic integration agreement with the EU in favour of membership in the Moscow-led Eurasian Economic Union (EEU). It is expected to be signed in May of this year.
This new Association Agreement, though not as far-reaching as the previously-negotiated integration agreement, has been tailored to encompass most aspects of European integration without compromising Armenia’s newfound commitments to the EEU. When ratified, it will effectively replace the Partnership and Cooperation Agreement in effect since 1999.
Previous attempts at European Integration
Armenia, like most Eastern-European countries officially stated its goal of European Integration almost immediately after regaining its independence from the Soviet Union. This view was echoed by the then-EU envoy to Armenia, Torben Holtze who declared: “As a matter of principle, Armenia is a European Country and like other European states it has a right to be a EU member provided it meets necessary standards and criteria”. The country embarked on this path by negotiating a legal framework for cooperation with the European Union as far back as 1996, and becoming a full member of the Council of Europe in 2001.
Armenia deepened cooperation with the EU in 2004 as part of the European Neighbourhood Policy (ENP), and took its first step into further European Integration when it signed the Eastern Partnership Agreement (EaP), along with 6 other post-soviet states on the EU’s eastern frontier. As a precursor to full membership in the European Union, applicant states must adhere to the Copenhagen Criteria, which evaluates commitment to democracy, good governance, human rights, and market reforms.
The EaP grouping was intended as a platform to help member-states comply with the Copenhagen Criteria in preparation for further integration. This EU policy borrowed from the similar Stabilisation and Association Process which was implemented with mixed success in the Western-Balkans. Armenia, along with Georgia, Moldova, and Ukraine began a four-year negotiation process to strengthen political and economic ties with the EU, culminating in an Association-Agreement and Deep and Comprehensive Free Trade Agreement (AA/DCFTA). These negotiations were conducted with the knowledge and tacit consent of Russia.
This agreement would entitle Armenia to favoured treatment by the EU in both the political and economic spheres. The EU would also be committed to offering financial and technical assistance for streamlining the country’s regulatory framework with the rest of Europe. Armenian manufacturers and consumers would have privileged access to the entire European common market, significantly reducing import and export costs. Given that the EU is already Armenia’s largest trade partner, the lifting of customs fees would come with great benefit for consumers.
Geopolitical fault lines: EU vs EEU
President Sargsyan shocked Europe on the 3rd of September 2013 when he announced, from Moscow, that Armenia would not be signing the DCFTA with the European Union, opting instead to join the newly-formed Eurasian Economic Union. This, despite years of promises by Prime Minister Tigran Sargsyan that Armenia was committed to its european aspirations.
This about-face, which came only 2 months before the planned ratification, should be seen within the larger context of cooling relations between Russia and the West in general. The Kremlin, alarmed by perceived encroachment by NATO into the former-soviet space, has taken drastic steps in recent years. Russia’s president Putin, who had previously lamented the loss of Russian global prestige upon the dissolution of the Soviet Union, has used an effective combination of soft and hard power to reign in its former satellite states.
The Armenian president later announced that his decision was made in exchange for a security guarantee that Russia would strengthen its support for Armenia in the event of renewed fighting in Nagorno-Karabakh. Seeking to mitigate the fallout of this geopolitical shift, pro-government Armenian politicians and economists stressed other reasons for the move, claiming that Armenia’s economy was better-suited for competition in the Eurasian, rather than European common market. Backpeddling on comments made a mere 3 weeks before, economics began publishing projections showing dubious economic growth potential within the Eurasian Union.
A Shift in EU policy allows for a new Agreement
Štefan Füle, serving as the European Commissioner for Enlargement and European Neighbourhood Policy at the time, was extremely disappointed with both Armenia and Ukraine’s last-minute change of heart, resulting in strained relations between the two entities. Armenian diplomats, for their part, insisted that their European colleagues should have been aware of Armenia’s geopolitical predicament, and should not have ‘forced’ the country to choose between Europe and Russia.
As the Ukrainian crisis dragged on, and only 2 out of the 6 EaP nations initially ratifying the DCFTA, European diplomats were hard pressed to save what they could of their Eastern policy. In an effort to reset relations, the EU and Armenia announced the start of negotiations for a new framework in December 2015. This new comprehensive agreement would serve to deepen Armenia’s European commitment by focusing on areas of environmental policy, transport, energy, investment and trade. The European Union has also pledged its support for governance reform, bureaucratic streamlining and more in Armenia.
Temporary setbacks and the future of Armenia-EU relations
The complicated relationship between Russia and the European Union has forced European policymakers to take on a more pragmatic approach towards Armenia. Yerevan has hailed this shift in European policy as a way to continue its policy of complementarity, balancing relations with Brussels and Moscow.
Two years since Armenia’s formal admittance into the Eurasian Economic Union, the trade bloc’s future remains uncertain. Virtually none of the promised gains for Yerevan have materialised. Rattled by trade disputes, corruption, sluggish economic performance and the Ruble’s abrupt loss of value, trade between Eurasian states has actually dropped by 25%. Observers have cast doubt over the trade bloc’s stated intent to facilitate regional trade, seeing it more as a method for the Kremlin to institutionalise its dominance over former soviet republics. With most of its much-touted projects still on the drawing-board, the Eurasian Economic Union remains an empty shell organisation. The European Union has faced existential problems of its own: the ongoing Euro-crisis, Brexit negotiations, and the rise of populist parties throughout the continent has lead to ‘enlargement fatigue’.
Armenia, meanwhile, has sped up negotiations with the European Union on various levels, including visa liberalisation, common airspace, education reform and more. The two parties remain open to the possibility of revisiting the aborted free-trade agreement in the event of Armenia being freed from its Eurasian commitments. The future of Armenia’s European-integration now lies on Yerevan’s ability to implement real democratic and structural reform in the country. April’s parliamentary elections will serve as a litmus test. Raffi Elliott
