Country Listing

Armenia Table of Contents


Foreign Trade

In the Soviet period, Armenia traded almost solely with the union's other republics. A foreign trade organization (FTO) controlled each product group, and exports by each Armenian enterprise were determined by the State Planning Committee (commonly known by its Russian acronym, Gosplan) in Moscow. Enterprises had no control over the size or destination of shipments of their products. Together with Estonia and Tajikistan, Armenia had the highest level of imports among the Soviet republics. Its exports consisted mostly of semifinished goods that needed processing in other republics.

In the years since the breakup of the Soviet Union, Armenia's economy has been hurt by the need to import much of its food and almost all of its oil and gas. In 1989 the FTO monopoly was removed, allowing enterprises to seek their own buyers and sellers abroad. In 1992 the government removed most state controls over foreign trade. Export licensing continued to protect enterprises from fraud and to enforce domestic market quotas. In the early 1990s, most of Armenia's exports went to Russia, Eastern Europe, and various developing countries (see table 8, Appendix). By January 1992, Armenia had signed bilateral trade protocols with most of the former Soviet republics. To ensure flexibility in the face of future price liberalization, prices were to be set in direct negotiation between enterprises. Enterprises were not strictly bound by protocols signed by their respective governments, although quotas remained a possibility. At this stage, all payments were to be in rubles.

In 1990 Armenia's largest sources of export income were light industrial products (mostly knit clothing, shoes, and carpets), machines and metal products, processed foods, and chemical products. The highest total expenditures on imports were for light industrial products, processed foods, chemical products, energy and fuels, and unprocessed agricultural products. In 1990 Armenia showed a trade deficit of 869 million rubles in industrial goods and a deficit of 278 million rubles in agricultural goods.

In April 1992, Armenia became the first former Soviet republic to sign a comprehensive bilateral trade agreement with the United States and the first to receive most-favored-nation status. Canada soon followed in granting Armenia similar status. In planning future trade, Armenia expected to rely heavily on foreign markets for products from its newly organized complex of chemical enterprises, for which demand was identified in the former Soviet republics, Eastern Europe, Iran, Syria, Turkey, Argentina, and Australia.

Data as of March 1994