WT/REG405/2  
 
14 August  2020 
(20-5576) Page: 1/3 
Committee on Regional Trade Agreements  Original: English  
 
 
COMPREHENSIVE AND ENHANCED PARTNERSHIP AGREEMENT BETWEEN THE 
EUROPEAN  UNION AND  THE REPUBLIC OF ARMENIA (SERVICES)  
QUESTIONS AND REPLIES  
 The following communication, dated 13 August  2020, is being circulated at the request of the 
delegations of  the European Union and Armenia.  
 
_______________  
 
 
Questions from the delegation of China  
 
1.1.  Footnote 1, page 4 of the factual presentation report mentions that, with only 21 EU 
member States and the Republic of Armenia having ratified it, the Agreement has 
provisional ly applied since 1 June 2018. Please clarify the difference between the 
provisional application and full entry into force of the Agreement?  
Response from the delegations of the Europe an Union and Armenia  
This relates to the division of competences/responsibilities between the EU and its Member 
States. A Comprehensive and Enhanced Partnership Agreement ( "CEPA") is a so -called "mixed 
Agreement ", meaning that it contains provisions that a re in the exclusive competence of the EU, but 
also provisions relating to issues that are the competence of the Member States. For the EU, such 
"mixed Agreement " can only enter fully into force after it has been ratified by all the EU Member 
States. Howeve r, pending full ratification, the Council can decide that certain parts of the Agreement 
that are of EU competence can already be applied "provisionally ". For the EU -Armenia CEPA, the 
Council has taken such a decision on 20 November 2017 (published at: Cou ncil Decision (EU) 
2018/104, OJ L23 of 26.01.2018, page 1), clarifying, that in accordance with the Article 385 of the 
CEPA, some parts of the Agreement shall be applied on a provisional basis between the Republic of 
Armenia and the European Union, includi ng most of the Trade Title (Title VI), pending full entry into 
force of the Agreement.  
Liberalization Commitments  
 
The European Union  
 
MFN and horizontal commitments  
 
1.2.  Paragraph 3.27, page 14 of the report mentions that, all  the sectors subject to 
liberali zation are listed through the use of a negative list for establishment (Mode 3) and 
the use of a positive list for cross -border supply of services (Mode 1 and 2). Has there 
been any example  of this type of hybrid commitment s approach  in either Parties ' previous 
FTAs  practices ? Please illustrate the advantages of this hybrid approach  in terms of 
advancing liberalization of trade in services.  
Response from the delegations of the European Union and Armenia  
Trade liberalization can be advanced under any listing approach, whether positive, negative 
or hybrid, and the EU has used all of them in its recent trade agreements. For instance, the EU has 
used the same hybrid approach as for Armenia in agreements on De ep and Comprehensive Free WT/REG405/2  
 
- 2 - 
 
  Trade Areas between the EU and Ukraine, Georgia and Moldova. The EU also used a hybrid approach 
during TISA negotiations, where National Treatment commitments were scheduled using a negative 
list approach while a positive list app roach was applied for Market Access commitments. In the 
Australia -China FTA signed in 2015, Australia uses negative listing and China positive, which 
provides further evidence that the two approaches can co -exist as a hybrid approach.  
Armenia does not have  such FTAs practices.  
1.3.  To what extent is the overall liberalization of this Agreement in the area of trade in 
services as compared to other FTA practices? Are there any  future plans between  the two 
Parties  in terms of upgrading or advancing the FTA negotiat ions?  
Response from the delegations of the European Union and Armenia  
The CEPA aims to further improve EU -Armenia trade by enhancing the regulatory environment 
for businesses. This includes areas such as: services, establishment, operation of companies, ca pital 
movements, government procurement, state -owned enterprises, intellectual property rights, 
sustainable development. It also removes barriers in trade in services between the EU and Armenia.  
 
The Agreement has not yet fully entered into force and is be ing applied provisionally only since 
1 June 2018. The Parties therefore now focus on ensuring its implementation. At this time, there are 
no plans to negotiate any "upgrade " to CEPA.  
Question s from the delegation of Turkey  
 
Provisions on Trade in Services and Investment  
 
General provisions on trade in services  
 
Commercial presence  
 
1.4.  Paragraph 3.14: In Article 146 the Parties have agreed that nothing in the Chapter 
shall limit the rights of investors of the Parties to benefit from more favourable treatment 
set out in any existing or future international agreement relating to investment to which 
an EU Member State and Armenia are parties.  
 According to the factual presentation and the Article 146 Agreement, the Parties 
stated the term "investors"; h owever, in Article 142 of the Agreement which specifies the 
definitions, the term "investor" is not defined. Moreover, in the Agreement even though 
the term "investment" is mentioned for several times, the term is also not defined in the 
scope Article. For  clarification purposes, could you explain the term "investor" and 
"investment" here?  
 
Response from the delegation of the European Union  
 
The CEPA does not address investment protection as such. Turkey refers to the Article, which 
addresses relationship between the CEPA and the Bilateral Investment Treaties of EU Members 
States with Armenia. The terms are defined in those treaties.  
 
Movemen t of Natural Persons  
 
1.5.  In the paragraph 3.25 of the Secretariat report, as for the EU, it is mentioned that 
while under the GATS, intra -corporate transferees are subject to a range of maximum stay 
periods, under the Agreement the maximum stay granted to int ra corporate transferees 
is reduced. Accordingly, it seems that under the GATS the maximum possible stay for 
natural persons in the ICT category is 5  years for some EU Member States whereas under 
the Agreement, Article 154, the maximum stay is reduced to t hree years.  
 Besides, according to the same Article of the Agreement, as for the business visitors 
for establishment purposes even though in the Agreement, the EU grants 90 days in any 
12 month period for business visitors, under the GATS schedules of the  EU, the maximum WT/REG405/2  
 
- 3 - 
 
  stay period is inscribed as 90 days per 6 months period or 90 days with no period 
limitation for some EU Member States, which represents a limitation in the permitted 
maximum stay.  
 As known, Article 5 of GATS allows its Members to enter i nto agreements liberalizing 
trade in services if such agreements provides prohibition of new or more discriminatory 
measures.  
 
 In this sense, please explain that whether the EU has taken GATS minus 
commitments with regard to the permitted maximum stay in  this Article and therefore 
whether the EU considers that this is consistent with Article 5 of GATS.  
 
Response from the delegation of the European Union  
 
With regard to intra corporate transferees, for two Member States indeed a maximum length 
of stay of five years is indicated in the EU -25 GATS schedule. For the majority of Member States, no 
period of stay is indicated but reference is made to Community laws and regulations where they 
exist. Those laws harmonise the maximum length of stay to three years ( like in the Agreement). For 
five Member States, the period of stay committed in GATS is even less ambitious than in the 
EU-Armenia agreement. Concerning business visitors for establishment purposes, the situation is 
similar. In the EU -25 GATS Schedule, onl y one Member State commits to 90 days within a six -month 
period whereas other Member States are unbound or have lower commitments than in the 
Agreement. As a consequence, the Agreement represents an overall improvement in commitments 
for both categories.  
 
__________