The upcoming adoption by Armenia of higher import duties set by the Eurasian Economic Union (EEU) will not significantly push up the prices of some key foodstuffs, a senior government official insisted on Friday.
Membership in the Russian-led trade bloc requires Armenia, which has traditionally had a liberal foreign trade regime, to enforce the EEU’s uniform tax rates for virtually all goods and commodities imported from third countries. The Armenian government secured temporary exemptions for about 900 items when it joined the EEU in January 2015. Customs duties levied from them have to be gradually raised to EEU levels by 2024.
Around 40 types of imported goods -- notably cooking oil, butter, poultry and tea -- will be taxed in accordance with EEU rates starting next month.This has raised fears of price hikes that would hit hard many Armenians struggling to make ends meet. Butter prices in the country have already soared by 40 percent this year due to what government officials call external factors.
Deputy Minister for Economic Development Hovannes Azizian sought to allay those fears, saying that retail prices of the products in question could only rise by up to 2 percent on average. He also claimed that the higher duties will boost Armenian manufacturers and translate into more jobs.
In an interview with RFE/RL’s Armenian service (Azatutyun.am), Azizian singled out the Armenian poultry industry which has struggled in recent years to compete with cheaper fowl imported from non-EEU countries. “Many think that our local products are better than imported ones,” he said.
Artak Manukian, an independent economist, countered that trade barriers are a wrong way to boost the Armenian economy. “Domestic manufacturers should be stimulated but there are quite a few indirect tools for doing that: flexible loans, more flexible conditions for loan collaterals and many other things,” he said. “The worst thing to do is to artificially hamper the emergence of competitors in your market.”
Manukian also pointed out that the EEU is planning to increase excise taxes collected in its member states from fuel, alcohol and tobacco.
According to official Armenian statistics, Russia and other EEU member states accounted for about 28 percent of Armenia’s foreign trade in January-October 2017. By comparison, the European Union’s share in the total stood at just over 24 percent.