Armenia's exit from the EAEU will reduce its exports to countries outside the union by 33.9%

The suspension of Armenia's participation in the Eurasian Economic Union (EAEU) will lead to a 33.9% decline in its total exports of goods and services to countries outside the union, and an 18.2% decline in imports from countries outside the EAEU. This is stated in a joint report by Russia, Belarus, Kazakhstan, and Kyrgyzstan, cited by the press service of the Russian government.

According to the assessments, Armenia's total exports of goods to countries outside the EAEU will decrease by $2,776.0 million, or 54.6%, from $5,086.8 million to $2,310.8 million. Imports of goods will decrease by $1,704.6 million, or 21.1%, from $8,062.9 million to $6,358.3 million. Exports of services from Armenia to countries outside the EAEU will decrease by $635.7 million, or 12.8%, from $4,973.7 million to $4,338.0 million. Imports of services will decrease by $482.9 million, or 12.1%, from $3,980.8 million to $3,497.9 million.

«The calculations make it possible to forecast a decline in the total exports of goods and services of the Republic of Armenia to countries outside the EAEU by $3.4 billion, or 33.9%, from $10.06 billion to $6.65 billion. Total imports of goods and services from countries outside the EAEU will decrease by $2.2 billion, or 18.2%, from $12.04 billion to $9.86 billion», the text says.

The report explained that Armenia's withdrawal from the EAEU will entail the suspension for the republic of trade agreements between the EAEU and third countries. As a result, goods exported from Armenia will lose their current preferential access to the markets of the EAEU's partner countries under free trade agreements, and the import duties applied to them will be raised to most favored nation (MFN) rates.

It is emphasized that a significant portion of Armenia's foreign trade operations with third countries (not only with the EAEU's free trade zone partners) is directly linked to subsequent trade operations conducted on the EAEU market. A decline in trade with the EAEU countries will inevitably entail a decline in exports and imports of certain products on the markets of third countries.

In addition, the decline in foreign trade will be driven by a general reduction in the output of goods and services, as well as an increase in their cost due to a decrease in the «economies of scale» effect, a reduction in investments from the EAEU member states, higher energy prices, and other factors, the report notes.

Source: TASS