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Rivalry between the Eastern Partnership and Eurasian Customs Union: Russia's move on Armenia.

It seems that due to Moscow's move over Yerevan the Association Agreement and the Deep and Comprehensive Free Trade Area Agreement that the EU hoped to sign on 28-29th November summit in Vilnius with Armenia failed--at least for now. As already known, the Eastern Partnership aims to improve economic relations while assuring the possible prospect of union partnership to former Soviet republics such as Belarus, Moldova, Ukraine, Azerbaijan, Armenia and Georgia. Even though each state has a different dialogue with the EU within the Eastern Partnership, it is obvious that the main aim of the project is to establish economic integration with the EU mechanism and affiliate political interests. Considering that the Eastern Partnership project would damage its interests in the former Soviet geography, Russia tries to terminate or at least to limit the project to a narrower framework before it advances.

Russia-West Dilemma

After his visit to Moscow on September 3rd, 2013, Armenian President Serzh Sargsyan decided to join the Eurasian Customs Union, which includes Belarus, Kazakhstan and the pioneer of the Union, Russia. Considering Yerevan's long-lasting hesitation on the issue, this maybe considered an unexpected development. Yerevan approached the EU's Eastern Partnership pragmatically as much as strategically and believed that together with this project, high standards would be achieved not only in the economy but also in other fields like democracy, human rights, and the fight against corruption.

However, the long-lived tense atmosphere shared with its neighbors has led Yerevan to prioritize security since its independence, and as a result, the political administration has focused on relations with Russia as they considered the country to offer a "protective umbrella". According to expert on Armenia, Kayts Minasyan, the political administration, opposition groups, local people and diaspora entrust Armenia's security to Russia and because of this approach, Armenia's geopolitical tendencies and potential geo-economic profits have been determined according to Moscow over time. In other words, Armenia's efforts that idealized itself in the context of "complementarity between two powers in foreign policy" -namely guaranteeing its security vis-a-vis Russia and articulating its economy in line with the EU and Western block-were inconclusive. According to Sargsyan, since Armenia is in the same security system with Russia, it is impossible for the country to be isolated from the geo-economic basin which is an elongation of this system. Thusly, Armenia's strategic dependency on Russia in terms of its military and economy explains Yerevan's decision to become a part of the Eurasian Customs Union.

Yerevan's Strategic Dependency

In the beginning, in terms of state security, it is essential to emphasize the importance of Armenia's membership in the Collective Security Treaty Organization (CSTO). Because the terms of the Charter of the Organization suggest mutual action in response to threats to any member states, Armenia has been relieved with regard to Azerbaijan on the Nagorno-Karabakh issue. Along with the rapid response assurances of the CSTO, Russian military bases in the Armenian cities of Gyumri, Armavir, Artashat and Meghri that house radars and provide border security are other elements that complete the picture.

Within the framework of the treaty that was signed in 2010, the operation of these military bases that also host the S-300 missile defense systems was extended until 2044. These bases that are also serving the Turkish and Iranian borders now house approximately five thousand Russian soldiers. Seeing that Armenia's security infrastructure and military capacities are fixed to Russia, instead of perceiving the Eastern Partnership as a solely economic project, it was considered in terms of its strategic implications and perceived of as a geopolitical choice.

Economic relations between Armenia and Russia also support this thesis. Receiving 23.5 percent in Armenia's total foreign trade volume, Russia is Armenia's number one foreign trade partner. Recently, swiftly increasing bilateral trade has reached 1.34 billion dollars last year. Approximately 80 percent of this number consists of exports from Russia-almost half of this is energy resources. On the other hand, another factor that is deepening Armenia's strategic dependence is the fact that Russia is the biggest investor with a 44 percent in the Armenian economy. In many sectors, from energy to telecommunications, from banking to railroad transportation, Russia's volume of investment is almost 3.3 billion dollars. Again, it should be mentioned that more than half of the foreign-owned companies in the country are of Russian origin. Russia is the state that hosts the second greatest amount of Armenian citizens outside of Armenia and considering that migrant workers remit 1.45 billion dollars annually, Russia's role has been crystallized in the Armenian economy with a GDP of 9.8 billion dollars.

In this sense, Gazprom, which has a monopoly on Armenia's natural gas imports, Inter RAO, which directs almost the entirety of Armenia's electricity production and distribution network, Rosatom, which manages Armenia's only nuclear power plant, Metzamor, and Russian Railways, which has enormous investments in the strategic pipes connecting Armenia to Russia, show that Russia does not hesitate to exploit this dependency. Just before Yerevan finalized negotiations within the Eastern Partnership, Russia, true to form, as it was experienced for Ukraine before, suddenly increased the price of natural gas for Armenia from 189 dollars to 270 dollars per thousand cubic meters. During Sargsyan's last visit to Moscow, in which Armenia's entry to the Customs Union was discussed, Russia gave signals of a possible discount on natural gas for Armenia. Since Yerevan can no longer bear Moscow's carrot and stick policy, it is looking for an opportunity to sign another treaty that will preserve just dialogue with the EU while it is on its way to acceding the Customs Union.

As a result, last July, at the end of negotiations that took 3.5 years, even though Armenia and the EU reached a consensus on signing the treaty, Russia's policy directed Armenia to take a step back and revealed the parameters within which rivalry between the Eurasian Customs Union and the Eastern Partnership is shaped. As Russian academic A. Kokoshin states, today as weight shifts in geopolitical and geo-economic balances parallel to the Transatlantic Trade and Investment Partnership Agreement and Transpacific Partnership generated by the US and to be signed with the EU and the dynamo states in the Asia-Pacific, Russia is involved in integration projects that offer regional benefits and plans to use these as important leverages. In the end, as a milestone to the Eurasian Union, Russia tries to use the Customs Union as an alternative to US - EU projects and as a way to protect its economic and geopolitical interest in the former Soviet geography as seen in the example of Armenia. For Yerevan, preferring the Customs Union seems rational considering the structural dependency in Armenia-Russia relations.

*The Turkish version of this article was first published in the November 2013 issue of USAK's monthly journal, 'Analist'.

Kerim HAS (*)

(*) PhD Candidate at Moscow State University.
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Author:Has, Kerim
Publication:USAK Yearbook of Politics and International Relations
Article Type:Reprint
Geographic Code:4EXAR
Date:Jan 1, 2013
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