Making an EU-Georgia Free Trade Agreement work

A forum to discuss the issues surrounding an EU-Georgia Free Trade Agreement was held at the Sheraton Metechi Palace Hotel on Monday. The aim of the forum, initiated by the Eurasia Partnership Foundation, was to work out specific recommendations which would promote the signing of a Free Trade Agreement with the European Union, as discussed in Brussels on September 1. Representatives of the Georgian Government, business sector, international organizations and civil society attended the meeting.

“The goal of the forum is to assess Georgian producers’ comparative advantages and interests in the EU market in the short and long term and to promote dialogue among stakeholders,” George Zarubin, the President of Eurasia Partnership Foundation, said.

The participants of the forum discussed the current situation in respect of trade relations with the EU and future prospects for Georgian businesses on the European market. According to Revaz Sakevarishvili from the Economic Policy Research Centre, the share of EU trade in the foreign trade of Georgia is currently 26.5 %, about 2 % less than last year. Experts also pointed out that import into Georgia greatly exceeds exports to foreign markets. They mentioned several reasons for this, including the need to improve product quality to European standards and the necessity to create a better credit environment for small and medium-sized businesses. Lack of knowledge about the ways to reach out to foreign markets among Georgian businessmen was cited as another reason for the poor export record of the country.

The Romanian Ambassador to Georgia Dan Mihai Barliba, who was also present at the forum, pointed out the possible difficulties Georgia might encounter when integrating with the European market. “As we know from our own experience, it is not easy to trade within the European Union. After becoming an EU member we received tougher requirements regarding the standards of the products we offered. These standards oblige us to develop and achieve better quality. Of course this is not easy and cannot be done overnight,” Barliba said.

The Ambassador said that Romania, which has been an EU member for two years, is ready to give specific assistance to Georgia to help it overcome these problems. “Georgian-Romanian trade relations are much better than they were last year. However we are not satisfied with this. The volume of exports from Georgia to Romania should be increased, as it is much lower than imports from Romania to Georgia. We will invite Romanian businessmen not only to export their products to Georgia, but identify products which can be exported to Romania, agricultural products and so on,” the Romanian Ambassador stated.

The second part of the forum was given over to Georgian businessmen to deliver their own recommendations about how to make a free trade regime with the EU more beneficial for the Georgian economy. The representatives of Georgian wine, metal, mineral water, hazelnut and herb businesses spoke about the ups and downs of their spheres as well as their needs for further development. Varlam Bebiashvili, Director of Georgian Fresh Herbs, a Kutaisi-based firm that buys herbs from farmers and distributes them to Ukraine and Moldova, said that he had come to the forum with a pragmatic goal: to find a donor to help him expand his business. Bebiashvili said that there is a demand for Georgian herbs in European markets, however the firm is not able to sell its products there due to high transportation costs. He also said the increasing herb production is necessary.

“We have been to several exhibitions in Europe and I can say for sure that there is a demand for our product. We don’t have our own production and buy herbs from different farmers. During the cold seasons farmers produce fewer herbs, and we are not able to supply the demand. If we had our own production facility, we would be able to enter other markets as well,” Bebiashvili said.

Eurasia Partnership Foundation has already conducted a roundtable meeting with the participation of importers, exporters, producers, consumers and the Georgian Government and EU representatives. At this the various parties formulated recommendations on the establishment of a deep and comprehensive FTA, the official statement of the EPF says.