Armenia’s possible issues with respect to applying Common Customs Tariff and Prospects on the Amounts of Transferred Customs Duties upon Accession to the Eurasian Economic Union

Аннотация

Purpose: to identify the possible issues with respect to applying Common Customs Tariff (CCT) and prospects on the amounts of the transferred Customs Duties upon Armenia’s accession to the Eurasian Economic Union (EAEU). Design/Methodological approach: Based on the literature review, analysis of the statistical data to identify those factors that would explain the growth reported in the amounts of transferred customs duties from the authorized authorities of Member states of the EAEU and what are the possible issues related to switching to the CCT. Findings: Armenia attempted to substitute imported goods from third counties with products originating within EAEU borders during the period 2015-2017. However, the strong growth of the economy could result in an increase in imports as well, especially from third countries. Therefore, Armenian companies could somehow suffer from applying of CCT over the medium term and in the long run. Applying CCT “is not likely to create problems for Armenian commitments to the WTO” (Tarr, 2016:7-8). The pattern of the transferred customs duties over the period 2015-2017 pinpointed the vulnerability of amounts received to currency crises in other member states, thus leading to poor economic performance and decline in imports from third countries. Conclusion: There is some uncertainty on how soon the progress in integrating the EAEU markets could be made, and specialization would take place to allow Armenian companies to fully substitute the supplies of third country origin with products originating within the EAEU markets. Meanwhile, Armenian companies would either opt for new suppliers or cooperate with old suppliers from third countries at least in the medium term. If Russia is successful and reports huge progress in implementing import substitution policies, Russian imports from third countries could drastically decrease, thus entailing a decline in amounts transferred as customs duties in the long-run. The vulnerability of the economies of Belarus, Kazakhstan, and Russia to currency crises would affect the amounts received as customs duties by Armenia. Practical Implications: The findings could be used by the Ministries of Finance, and Economic Development and Investments of Armenia in making their forecasts and building scenarios on budget revenues, economic growth, and in assisting Armenian companies to find new suppliers, especially in the EAEU member-states in the long-run.