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Armenia-Georgia Trade Relations: Getting close or Distant?

PMC Research together with the Konrad-Adenauer-Foundation (KAS), hosted a presentation and public discussion of the research findings “Armenia-Georgia Trade Relations: Getting close or distant?”.

Armenia’s decision to join the Eurasian Economic Union (EEU) exempted traders from union member countries from paying value added tax (VAT) and excise tax, thus putting Georgian traders in a disadvantaged position and breaking the main principles of the Free Trade Agreement between Georgia and Armenia.  This change has already resulted in economic loss for Georgia. For example, the re-export of cars from Georgia to Armenia decreased by roughly 60% in 2015, compared to 2013 prior to Armenia’s EEU move.

The research aimed to support policy makers to make informed decisions, taking into consideration the potential challenges and benefits for Georgia emerging from Armenia’s integration into the EEU. Clearly, Georgia should take steps to minimize potential losses.

More specifically, the study addresses the following topics:

  • Importance of monitoring the process of Armenia’s integration in the EEU
  • Strict enforcement of core pillars of FTA between Georgia and Armenia
  • Importance of designing detailed agenda towards introducing changes to existing laws related to foreign trade
  • Importance of information campaigns to raise awareness of businesses and their unions about existing rules for trade across borders and of potential changes as a result of changes to Armenia’s trade regulations

Shushanik Safaryan, Researcher at PMC Research, presented the study outcomes. Representatives of the public and private sectors, as well as non-governmental organizations, will attend the event.

The study was conducted under the project “Policy Research for Sustainable Economic Development”, by PMC Research in collaboration with KAS.