DEMARCHE DELIVERED: WTO/DOHA TALKING POINTS

UNCLAS YEREVAN 001806

SIPDIS

SENSITIVE

E.O. 12958: N/A
TAGS: ECON ETRD EINV PREL AM WTRO
SUBJECT: DEMARCHE DELIVERED: WTO/DOHA TALKING POINTS

REF: STATE 180336

Sensitive but unclassified. Please protect accordingly.


1. (SBU) On October 4 we delivered reftel points to Deputy
Minister of Trade and Economic Development Tigran Davtyan.
Davtyan said free trade is a GOAM priority and that the
average tariff rate in Armenia is three percent. This
average reflects the total amount collected under a
streamlined tariff system whereby the GOAM collects no tariff
on capital goods and a ten percent tariff on consumer goods.
Davtyan pointed out that a proportional reduction in tariffs
collected by WTO member states would be particularly
burdensome on countries, like Armenia, which already have low
rates. He argued that the WTO should put pressure on
countries with high tariff rates before asking countries with
low rates to further reduce tariffs.


2. (SBU) On the issue of subsidies, Davtyan told us that
Armenia has no export subsidies for any products, including
agricultural products. He said the GOAM provides between
five and ten million USD annually to the country's
agricultural sector primarily through irrigation projects and
micro-loans. According to Davtyan, in order to meet its
obligations under the WTO, the GOAM must begin collecting VAT
on agricultural products in 2009. Davtyan expects that
subsidies to farmers will increase when VAT collections
begin, because the GOAM will want to minimize the burden on
local farmers. He said that any such increase would not
exceed the amount permissible under current WTO regulations.
EVANS