Will the EU replace the Russian market for Armenia?

Since June 2, Russia has refused to allow Armenia to import another type of goods - fruits with pits. Namely: grapes, apricots, cherries, cherries, plums, peaches and nectarines.

Since the same day, according to the Rosselkhoznadzor's decision, restrictions have been imposed on the supply of live fish and fish products from Armenia. Only two manufacturers received permission, and inspections were carried out at their enterprises at the end of May.

These decisions are a continuation of the measures taken by Russia regarding Armenian imports in connection with Yerevan's statements about the European choice. Of course, the Rosselkhoznadzor's steps are not motivated politically, but are explained by the presence of quarantine facilities in Armenian products that are prohibited in the EAEU space. However, the political motivation of the steps taken towards Yerevan in the run-up to the elections leaves no doubt in anyone's mind.

It seems that Moscow has only recently learned about Armenia's pro-European intentions, although Yerevan has been talking about this for a long time. In May, Russia abruptly began to impose restrictions on the products of Armenian manufacturers. Since May 22, the import of flowers from Armenia to Russia has been restricted, as well as the supply and sale of imported batches of Jermuk mineral water. Since May 23, the sale of alcoholic beverages from several leading Armenian companies in Russia has been banned, and since May 30, the import of tomatoes, cucumbers, greens and strawberries from Armenia has been banned. In all cases, the ban was explained by a violation of phytosanitary standards and safety requirements.

Armenian Prime Minister Nikol Pashinyan commented on the restrictions imposed by the Russian side. He stated that he considers these steps to be wrong and inciting Armenian citizens against the EAEU. For him, as prime minister, all this is a problem. "But we will solve all these problems," Pashinyan said.

The Armenian prime minister promised to support local companies affected by the restrictions imposed by Russia. He said this during a meeting with residents of the village of Lchashen, Gegharkunik region. "The government has already decided that in all cases where unfair obstacles to exports arise, we will implement support programs, we will implement programs to subsidize these goods so that there will be no casualties in our economy," he said at a meeting with voters. Pashinyan also promised to find new markets for Armenian farmers. According to him, several business delegations have left for negotiations and there are already concrete proposals for the purchase of roses, fruits and vegetables.

European countries also expressed their support for Armenia in the current situation. According to European media, European Commission representative Anouar El-Anouni stated that "we are a reliable partner for Armenia, and our partnership is stronger than ever."

Armenia does not hide that it counts on the support of its European partners. If the European course has put the country in front of such problems, it is the European Union that should help the republic get out of them. 

Armenian Economy Minister Gevorg Papoyan announced that the Armenian government is launching a program to support agricultural exporters to enter the European Union market. According to him, Armenian products meet European requirements, and high logistical costs remain the only obstacle. Nevertheless, the Government of Armenia is optimistic. Papoyan stated that Armenia's export fruits and vegetables have a Global G.A.P certificate (an international standard confirming the environmental friendliness, safety and high quality of agricultural products), meaning Armenian apricots and tomatoes can be sold in European supermarkets.

As a way out, the government has developed a compensation program for manufacturers. Papoyan said that compensation, for example, for flower exporters by the end of the year will amount to about $ 5.5 million, for tomato and pepper producers - $ 3.5 million each.

But at the same time, logistics issues remain. Armenia ran into the consequences of the long-term conflict with Azerbaijan when it did not expect it. The moment has come when Armenia's thirty-year isolation has become a real obstacle to solving a problem of strategic importance. Europe, against the background of Yerevan's loud "divorce" from Moscow, can to some extent support the country aspiring to its embrace. But what to do if there are no well-established logistics routes?

Armenian exports to Europe have never been large-scale. Traditionally, it is carried out through Georgia, as the border with Turkey is closed. Goods are transported by road or rail to the Black Sea ports of Georgia, and from there they are ferried to Europe. Or they move overland through Turkey. Due to the opening of the Akhalkalaki-Kars railway line, which is part of the Baku-Tbilisi-Kars corridor, Armenia has the opportunity to use this logistical route, as it was already announced recently.

Since logistics for Armenian products will not be cheap, its price competitiveness in the European market will be lower than local goods. It is impossible to solve the logistics problem quickly. Armenia has always been focused mainly on the European and post-Soviet markets. The preferences provided to it as a member of the Eurasian Economic Union have so far allowed it to make a profit without serious costs and losses. Yerevan understands this. It is no coincidence that Nikol Pashinyan stated that Armenia will remain in the EAEU as long as it does not contradict the reforms carried out within the framework of the country's European integration.

But Moscow is not going to wait for this moment. They believe that the very formulation of the issue contradicts the interests and rules of the EAEU. The restrictive measures taken against Armenia are not caused by the presence of fruit flies or California scabies in vegetables and fruits from Armenia. They are caused by Yerevan's plans that violate the traditional Russian monopoly on this South Caucasian country.

Anyway, the loss of the Russian market and the market of other EAEU countries, of course, will be a serious blow to the Armenian economy. It will be very difficult for Armenia to make up for this loss quickly and at the same level. Its economy has been oriented in only one direction for a very long time. Reorienting the economy is much more difficult than making political decisions.

Why the Russian side decided to vent its discontent right now hardly requires explanation. In the run-up to the elections, Russia wants to show the Armenian society what a change of course threatens it with. But will all this have the expected effect? It may turn out that tightening the "noose", on the contrary, will play in favor of the current government and reduce the ranks of opponents of integration with the EU. There are not many of the latter in Armenia as it is.

P.S. The Rosselkhoznadzor has restricted the import of sunflower seeds, eggplants, potatoes and dried fruits from Armenia since June 3. We can say that Russia has completely abandoned Armenian imports.