ARMENIA AND THE ABSENCE OF EFFECTIVE EU COMMUNICATIONS STRATEGY

Written by: Richard Giragosian (Richard Giragosian is the director of the Regional Studies Center (RSC), located in Yerevan, Armenia).

The views expressed in this document are solely those of the author and may not represent AALEP’s position.

“The surprise September 2013 decision by Armenia to abandon its planned Association Agreement with the European Union marked the beginning of an abrupt Russian move to push back and push out EU engagement in the former Soviet space. Similarly, the Armenian move to join the then-Customs Union and later the Eurasian Economic Union also signaled the start of a more serious Russian-led bid to counter the EU by confronting the increasing Western orientation among EaP states and deepening the Russian orbit.

Yet in the aftermath of that strategic setback, Armenia now has a rare second chance. Since the Vilnius and Riga Summits, both Yerevan and Brussels are committed to salvaging some sort of relationship. In the face of a resurgence of Russian power more broadly, the EU needs to recognize Armenia’s inherent limitations as a partner and devise innovative ways to engage the country. Armenian President Serzh Sarkisian’s reaffirmation of his commitment to a relationship with the European Union may trigger renewed Russian pressure on Armenia in the near term, which the EU needs to be aware of. It should stand ready to help Armenia alleviate the hardships that such pressures will generate.

Armenia offers an interesting opportunity for redefining and revamping the ENP at an essential time to bolster the Eastern Partnership for both Armenia and the EU. It is imperative to offset Armenian over-dependence on Russia, which is becoming dangerously and deeply entrenched and only further isolates Armenia. The country’s “strategic partnership” with Russia has been largely one-sided, as Armenia has most often received insufficient dividends from this asymmetrical “partnership.”

The EU needs to explore alternative means to engage Armenia, based on a more realistic awareness of the limits and liabilities of the country. There is a new sense of political will for such an opportunity, especially as the Armenian government has sought to put a brave face on its surprising decision to sacrifice its Association Agreement with the European Union in favour of joining the Russian-led Eurasian Union. This optimism has also been recently confirmed through a decision by the European Commission on May 19 to propose a new “mandate” to begin negotiations with Armenia over a new, legally binding framework agreement. This is especially significant given the delicacy of balancing Armenia’s membership in the Eurasian Economic Union (EEU).

There is an important “lesson learned” from the EU’s last engagement of Armenia, which abruptly ended in a “strategic U-turn” when the Armenian President surrendered to Russia. The Armenia model revealed the absence of any effective EU communications strategy. The practical benefits of the Association Agreement and the Deep and Comprehensive Free Trade Area (DCFTA) were never articulated, let alone defined or defended.

Only a marginal constituency was in favour of the Association Agreement itself; the deeply pro-Russian Armenian public was little swayed and less seduced by the EU. In Armenian public opinion, security and the Nagorno-Karabakh conflict tend to be the overriding factors. Although there was never any actual resentment against a pro-European move, public support was not considered by the Armenian government. Therefore, once the security argument was raised, first in a series of early implicit threats by Moscow and then by the Armenian government in defence of its policy U-turn, Armenian public opinion meekly followed.

Even the Armenian business class, including many small- and medium-sized enterprises, expressed reservations over the potential cost of conforming to higher EU standards and investing in what would be required to utilize a free trade agreement with the EU. For many businessmen, dealing with Russian and other post-Soviet markets was more comfortable and familiar.

More needs to be done to focus on the tangible economic benefits and trade opportunities of an EU Association Agreement and the two clear advantages it has over the Russian model of coercion and isolation. For Armenia, the Russian dominated Eurasian Economic Union has always been defined more by obstacles than opportunities.

Beyond the structural impediments of both the absence of a land connection or a functioning railway link to Russia or other members of the Eurasian Union, the most serious impact has been the requirement to increase its tariff rates and artificially redirect its natural trade orientation away from Western markets toward a more insular, Russian-centric stance. For the traditionally open and more liberalized Armenian economy, this adoption of the more protectionist policies of the Eurasian Union will not only spark a likely price rise, but may also mandate renegotiations over Armenia’s membership in the World Trade Organization (WTO). Several years of European oriented trade will have to be readjusted to allow for the new preference of markets in Russia, Belarus, and Kazakhstan. Perhaps most revealing, the paucity of economic benefits for Armenia is demonstrated in the allocation of customs duties and tariff revenues among the member states.

For Armenia, as well as for Belarus and even Kazakhstan, the asymmetry is obvious, having been granted a meager and minimal share of the Eurasian Union’s total customs revenue.

In the broader context, however, Armenia may be able to survive the pressure of being ever more firmly trapped in the Russian orbit. Armenia may limit its mounting over-dependence on Russia and manage the economic fallout of membership in the Eurasian Union. Yet such a survival strategy rests less on any decisive move by Armenia and on the appeal of forging or salvaging relations with the EU, but more on the inherent weakness of the Eurasian Union.

Despite the ceremonial fanfare, the launch of the Eurasian Economic Union marks the start of a very different, significantly more unattractive, and even less viable project than originally envisioned. It is rooted in the serious impact of Western sanctions on the Russian economy. In the wake of the fall in the value of the Russian ruble and the decline in world oil prices, Russia is no longer the economic powerhouse it once was, and so the supposed Russian role as the locomotive for the Eurasian Union has been greatly diminished. The inherent motivation for integration rests largely on coercion and pressure, and there is already an impressive backlash demonstrated by both Belarus and Kazakhstan. For tiny Armenia, this may offer an opportunity to hide behind these much larger deficiencies and find a way out without unnecessarily challenging Russia. Reflecting a degree of sincerity in both Brussels and Yerevan, the Armenian government has been able to rebuild much of its lost credibility and has embarked on new talks over a draft “legal framework” as a foundation for Armenian-European Union relations. At the same time, Armenia has also been cautious about presenting its reengagement with the EU, seeking to preempt any Russian pressure by highlighting (and exaggerating) its role as a “bridge” between the Eurasian Economic Union and the European Union. Given the combination of rising costs and meager benefits of the Eurasian Union, Armenia’s only real hope at this point rests on containing the fallout from the economic contagion and seeking a prudent but quiet “exit strategy” from the Eurasian Union.

There is a need to forge ties and crafting a more economic-centered engagement with the Eurasian Economic Union, which now includes both Belarus and Armenia. This would offer an alternative venue to at least try to accommodate Russian interests and could provide an avenue for anchoring reform in Belarus and Armenia while bolstering their options to develop deeper ties within the EaP. Another element would be an emphasis on greater networking within and between EaP states, forging links and cooperation between civil society organizations in a more nuanced cross-border EaP outreach policy. This is most effective as an overarching strategy based on three elements: 1) threat perception and containment, 2) threat reduction and resolution, and 3) greater engagement in both the individual ENP states and with the broader ENP region as a whole, with a supplemental application of the “neighbours of neighbours” policy.

Despite the problematic launch of the Eurasian Union, there may be an advantage in a new policy of engagement by the EU. Such engagement should be careful to not endow or extend too much legitimacy to the Eurasian Union, but it would provide a secondary avenue for engaging Armenia. Such a policy would also offer at least a potential for re-engaging Russia, while also deepening ties beyond the ENP into Central Asia.

Clearly, Moscow’s success in forcing Yerevan to sacrifice deeper ties with the EU has imposed several significant challenges on Armenia. In the short term, once Armenia reneged on its planned “initialing” of an Association Agreement and the DCFTA, it has been hard pressed to recover confidence and credibility in the eyes of the West. Such a move not only imperiled several years of difficult negotiations and reform, but also tested European patience and threatened to diminish European interest in Armenia. The danger for Armenia now stems from greater isolation and from a newly enhanced degree of insignificance. Armenia faces the very real threat of becoming little more than a “small, subservient Russian garrison state.” It now has a second chance to improve its relations with Brussels. Armenia needs to recommit to reform; the EU needs to recognize the limitations of Armenia as a partner while creatively re-engaging the country.”