US Denies Linking Armenia’s WTO Entry to Azerbaijan

Despite having one of the most liberal trade regimes in the FSU–Armenia has so far failed to secure WTO membership–though Georgia and Kyrgyzstan have

YEREVAN (RFE/RL)–The United States denied on Wednesday claims by a top Armenian government official that it opposed Armenia’s long-awaited entry into the World Trade Organization (WTO) ahead of neighboring Azerbaijan.

The US embassy in Yerevan told RFE/RL that Washington sees no connection between the two arch-rivals’ efforts to join the influential body–and setting the rules of global trade. The embassy said the US government remains committed to helping Armenia complete its membership talks as quickly as possible.

Finance and Economy Minister Vartan Khachatrian said last week that Armenia’s accession to the WTO was again delayed late last month because the US sought simultaneous membership for Armenia and Azerbaijan. He claimed that the Americans set additional conditions for Yerevan at the most recent meeting of the intergovernmental US-Armenia Task Force which took place in Washington in late September.

Khachatrian–who headed the Armenian delegation at the meeting–added that US officials eventually agreed to drop their alleged linkage to Azerbaijan’s WTO bid and that "the problem should be solved by next December."

Armenian officials have been expecting an imminent WTO membership since 2000 and are increasingly frustrated by the continuing snags in the six-year accession process. The Ministry of Industry and Economic Development–which has represented the government in the membership talks–had earlier announced that Armenia will at last be admitted into the organization at the October meeting of its General Council.

But the latest developmen’s show that this forecast too will fail to materialize and that Yerevan should now focus on the WTO governing body’s next meeting scheduled for December. Its desired outcome depends on the success of the final US-Armenian trade talks.

A source familiar with the process revealed to RFE/RL this week that the latest delay results from a serious misunderstanding of US position on the issue at a July meeting in Geneva of a WTO "working party" examining Armenia’s membership bid. "The Armenian side and even its Canadian consultant–who was also there–came out of the meeting thinking that the US side had presented final WTO requiremen’s to Armenia," the source said. "The problem is that those weren’t the final requiremen’s."

The Armenian government was therefore caught off guard when it received additional deman’s from the office of the US Trade Representative (USTR) last week. As recently as on September 25 it promptly pushed through the parliament what it described as final amendmen’s to Armenia’s economic legislation demanded by US trade officials. The amendmen’s primarily concerned valuation of imported goods and taxation of alcohol and agricultural produce.

The most important of the new conditions set by the US trading agency has to do with the protection of domestic and foreign intellectual property in Armenia–which still leaves much to be desired. "That’s the area where they are most unhappy with Armenia," said one informed source. "Although Armenia acceded to the international copyright conventions–everybody knows that sales of pirated products are widespread here."

The USTR is expected to finalize the list of its membership requiremen’s within a week. Those might require additional legislative changes.

Serious problems with the copyright law enforcement did not prevent ex-Soviet states like Georgia and Kyrgyzstan from joining the WTO two years ago. As one Western diplomat dealing with the issue explained–the United States–its most powerful member country–is demanding stricter compliance with WTO rules now that the organization prepares to discuss Russia’s membership application. "The USTR doesn’t want to set any precedents of letting Armenia get away with something which in the Russian case will be very big. That’s part of Armenia’s bad luck," he told RFE/RL.

"It’s not an equal negotiation among the parties," the diplomat said. "If the WTO or USTR says that a particular legal provision violates the WTO charter–that’s it. Either you change it–or you don’t get in."

Armenia has so far failed to secure WTO membership despite having one of the most liberal trade regimes in the former Soviet Union and Eastern Europe. A joint study conducted by The Wall Street Journal and the Washington-based Heritage Foundation last year rated its struggling economy as the most open and investor-friendly in the Commonwealth of Independent States. The study put a particular emphasis on a "very low level of protectionism" in Armenia’s external trade and "low barriers" to foreign investment.

The accession to the WTO will give Armenian businesses better access to foreign markets and an effective international mechanism for adjudicating trade disputes. It could also enable the country to attract more foreign investmen’s–a necessary condition for its economic development. Exclusion from the WTO–which unites the overwhelmingly majority of the world’s countries–is seen as a bad signal to potential investors.

But economists caution that the positive impact of WTO membership on the Armenian economy will hardly be felt in the short run. Still–they say that Armenia could successfully challenge its economic blockade by neighboring Turkey once it becomes a full member of the global organization. The WTO rules ban member states from imposing economic embargos on each other.

Turkey–which is affiliated with the trade body–made no attempts to block Armenia’s accession until recently. But sources revealed that during the July meeting in Geneva Turkish officials sought explicit written guarantees that Armenia will not oppose Azerbaijan’s membership after it becomes a WTO member. In an apparent bid to uphold Azerbaijani sovereignty over Nagorno-Karabakh–they also demanded that the WTO nations formally reaffirm the internationally recognized borders of Armenia.

"The general feeling was that these are nonsense points and nobody took them seriously," said one diplomat.

Azerbaijan’s accession talks with the WTO are still in the beginning stages and may takes months–if not years.


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