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Armenia may annually lose $26 mln from preferential trade agreement btw EEU and China

01.06.23 17:27

A preferential trade agreement between the Eurasian Economic Union (EEU) and China may have a negative impact on Armenia's GDP, according to a report, released by the Russian Council on Foreign Affairs.

The report notes that in view of the breakdown of Russia's trade ties, one of the steps to ensure economic growth is the reorientation of Russian exports to new markets.

However, the report adds that it is necessary to take into account how the change in trade flows will affect the economies of Russia's partners in the EEU, and what measures should be taken to compensate for possible negative consequences.

For example, in case of a preferential trade agreement between the EEU and China, Kazakhstan's GDP may grow in absolute terms by $1 billion annually (+0.56%), that of Russia – by $3.7 billion (+0.22%), but according to WABT138 estimates losses of Armenia may reach $26 million (-0.19%), those of Belarus - $410 million (-0.65%) and losses of Kyrgyzstan - $12.7 million (-0.15%).

'In view of such asymmetry, one can assume that the negative effects of "small" EEU member countries as a result of integration with third countries may be offset by the gains from the reduction of trade barriers within the EEU itself,' the report says.

"In addition, given the significant gains of Russia and Kazakhstan from integration with third countries in absolute terms, some mechanism can be provided to compensate for the losses of Armenia, Belarus and Kyrgyzstan,' the report says.

According to the official statistics, Armenia's economy grew by 12.6% in 2022, and the GDP per capita rose to $6,569 from $4,679 in 2021, ARKA reports.
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