Georgia Anticipates Free Trade with US
09 February, 2012
Georgia Anticipates Free Trade with US

Negotiations on Free Trade Agreement between Georgia and the US are supposed to start this year but economic analysts think Georgia can scarcely enjoy the benefits of unfettered trade with the world’s largest market if Georgian production and industrial capacity does not increase.

Next to the security cooperation, the US President Barack Obama discussed a possible Free Trade Agreement (FTA) with Georgian President Mikheil Saakashvili at a White House meeting on January 30, 2012. The latter has been touting the largest

world market to Georgian entrepreneurs ever since Russian market was closed to Georgia than 2006. Saakashvili ardently advocated Georgian exporters to focus on twice 313 million American market that is twice bigger than Russian market, more liberal, stable and free of political conjunctures. However, to hit the dream market Georgian entrepreneurs lack due exporting skills and their product - due quality. And yet the US is among top ten trade partners to Georgia it still comes after Russia that is number six trade partner by making 4.6% of entire Georgia trade turnover by latest data of 2011 while the US is number seven by 4. 2%. Although the US share in Georgian export makes 6.6% exceeding Russian by 1.7% and 3.5% of import. Meantime the EU makes 27% of Georgian foreign trade by 19% in export and 29% in import.
Therefore Georgian economic analyst think the statements on upcoming FTA with the US is of rather political than economic importance at the moment as far as Georgia has no due industrial and producing capacity to enjoy the benefits of barrier-free trade with the US. 
“This here FTA with the US is of rather political than economic importance at the moment as far as we have no such a voluminous trade with the US as with Ukraine, number two trade partner to Georgia, or the EU for example. However it is an additional stimulus to Georgian entrepreneurs to think of exporting to the US market, and yet it is just future prospect what we need to do is to start works to streamline our producing and quality skills with the US market requirements,” Davit Narmania, Executive Director of Caucasian Institute for Economic and Social Research, said.
Georgian government believes negotiations on FTA with the US will start this year however when the deal will be concluded finally one can only guess. As the past experience shows such negotiations take from 3 to even 15-25 years in some cases. However, taking into account that the US President himself accentuated on such a possibility that can be a “win-win” deal to both countries, Irakli Matkava, Deputy Minister of Economy of Georgia, presumes that very likely the FTA negotiations will go smoother to Georgia, a strategic partner to the US.
Although Georgia has not much to export to the US at the moment Georgian government expects oversee investors from countries with limited access to the US market to come to Georgia and use it as a producing country to enhance export at American market ultimately.
“How we use the FTA with the US depends on our entrepreneurs themselves, they should focus on the US market demands. Besides, there are many countries with limited market access at the US and the EU, and if we have free trade with both [FTA negotiations with the EU start this February] markets we expect investors from those countries including our neighbor countries to come to Georgia and use it as a producing country,” Matkava told Georgian Journal.
Narmania finds this kind of prospect questionable for whether or not other countries can use Georgia as a producing country depends on the agreement terms and can be clear only after the agreement is concluded. The fact is that Georgia still cannot get full benefits of GPRS+ trade regime with the EU exempting about 7200 export product from customs tariffs and exports just 30 names out of the list. And no big investors’ turnout ensued this trade regime in Georgia.  
According to George Welton, Executive Director of American Chamber of Commerce (AmCham) in Georgia, the impact of President Obama’s initiative could be massive for a country like Georgia.
“Free trade agreement is not just about the movement of goods and services. America’s willingness to enter into negotiations with Georgia on this subject is a re-statement of the strength of the relationship between the two countries and the confidence that the United States has in Georgia’s future. Georgia exported 143 million USD of goods to the United States in 2011, with significant exports of manganese, fruit juice and mineral water. A deeper trade agreement could build on that and offers Georgia considerable economic development opportunities,” Welton said in the interview with Georgian Journal.
He believes it is impossible to judge the scope of benefits that unfettered access to the world’s largest economy offers.
“In the past, developing ‘tiger’ economies like Japan, South Korea and Taiwan have seen their growth significantly enhanced by access to US Markets. At the current time Georgia’s share in US foreign trade is tiny and even if we use our full export potential it will still remain a small portion of the pie compared to other countries because of the different economies of scale. What’s important is that the increased export to the US or any other country for that matter will trigger further development of other chains of Georgian economy,” Welton elaborated.

Print
Other Stories
The most wanted fruits from Georgia
The fruit exportation has decreased in Georgia. According to Geostat (National Statistics Office of Georgia), this year, up until May Georgia exported 25 939 300 USD worth of fruit – 6 771 300 USD less than in 2018.
Investment Plan for Europe – Additional EUR 800 million for SMEs as EIF and ProCredit double support for innovative companies
The European Investment Fund (EIF) and ProCredit Group are providing an additional EUR 800 million to innovative small and medium-sized companies (SMEs),
Everything of comfortable life in one space – Second part of construction of one of the largest apartment complexes finished in Tbilisi
Apartment in ecologically clean environment, thousands of square meters of green yard, swimming pools, places for various sports activities, treks for walking and running, commercial spaces – all these available in one space is not a fantasy.
Batumi awarded Europe's Leading Emerging Tourism Destination 2019
World Travel Awards Europe Gala Ceremony 2019 took place on the 8th of June in Madeira, Portugal.
Coca Cola to open new factory in Georgia, will hire female drivers
Coca Cola is opening new factory in Georgia in December.
World's best party supply company now on the Georgian market
The largest party supply store in Georgia - MyDay is launching as the official distributor of AMSCAN from 2019.
Live as a marketing tool and an unprecedented live stream launched by Livetag
Sharing information has become smoother and more versatile in today’s technological world. Recently, live streaming, an online streaming media has become especially popular.
Theme and program of Caspian Energy Forum Tbilisi – 2019 changed
“The 8th International Caspian Energy Forum Tbilisi – 2019, scheduled for June 21, will focus on the development of the Azerbaijan-Georgia relations in the field of economy and energy”,
Misunderstanding over Poti deep sea ports
There was misunderstanding around deep sea ports in Georgia – in Poti.
High demand for dollars or the investment decline – Why Georgian Lari depreciates
$1 equals GEL 2,7470 in the official rate set by the National Bank of Georgia (NBG).
PSP Group confirms negotiations regarding purchasing of GEO Hospitals
PSP Group confirms negotiations regarding purchasing of GEO Hospitals.
New life to be given to Dashbashi Canyon
Georgia’s Agency of Protected Areas is planning to give new life to Dashbashi Canyon in Tsalka (southeastern Georgia).
Who is constructing “Khadori 3” Hydropower Plant in Pankisi Gorge?
Clashes broke out in Pankisi Gorge, Georgia’s northeastern region between special forces and residents
Business Positive – Successful radio program from Radio Positive
Starting point of radio program Business Positive is to meet interesting people, communicate with them and deliver information that is interesting for the audience.
A factory of electric vehicles to be built in Kutaisi
Prime Minister Mamuka Bakhtadze stated that a factory of electric vehicles will be built in Kutaisi at the presentation of the Aigroup business group.
Qvevri-shaped hotel complex to be built in Telavi
A Qvevri-shaped hotel complex is scheduled to be built in the village of Shalauri in Telavi, Kakheti (east part of Georgia).
Georgian designers presented at Fashion World Tokyo 2019
The products of 11 Georgian designers are showcased at Fashion World Tokyo 2019,
Silknet raises $200 million in Eurobond issue
27 March 2019 - JSC Silknet (“Silknet”), one of Georgia’s leading telecommunications operators, has successfully priced a debut $200 million 5-year 11% senior unsecured bonds issue (the “Notes”).
Pistachio trees will be planted in Georgia
Dozens of hectares of Pistachio are planned to be planted in Georgia this year.
Toyota Safety Sense and Hybrid Technology
Toyota Caucasus, has presented two new models the 5th generation RAV4 and the 12th generation Corolla at Rustavi International Motorpark, several days ago.
Bidzina Ivanishvili “became number one oppressor of businesses in Georgia” - ICC Georgia chairman Fady Asly
Mr. Ivanishvili promised the business community to protect them from harassment and pressure, unfortunately his words died with the sunset of that day
The best brands of Belarus will be exhibited on a large-scale exposition in Tbilisi
"The Belarusians like to come to Georgia to relax near the sea in Batumi as well as to stay in sunny Kakhetia."
Don’t treat business like a hooker! - Georgian businessman Vasil Soprpmadze addresses politicians
Businessman Vasil Sopromadze, founder of the company "Fresco", addresses politicians
RAV4 No Compromise and Corolla Set to Impress – Two New Cars Presented by Toyota
Toyota Caucasus, the company constantly aspiring to greatness, has presented two new models the 5th generation RAV4 and the 12th generation Corolla.
Mamuka Khazaradze quits TBC bank, does not sell the TBC Bank share
I made a decision to leave TBC bank where I spent 27 years of my life
PHOTO OF THE DAY
GEL Exchange Rate
Convertor
22.07.2019
23.07.2019
USD
1
USD
2.8845
2.8831
EUR
1
EUR
3.2410
3.2357
GBP
1
GBP
3.6177
3.5955
RUB
100
RUB
4.5787
4.5779
Other Stories
Recently Toyota rolled out Global Campaign under this slogan that reflects the Olympic and Paralympic Spirit of Encouragement,
A couple from Switzerland combines Swiss tradition and technology with Georgian products. Their cheese is made in the Georgian mountains and sold in local stores and hotels.
It has been more than five years since the residents of Lilo village, near Tbilisi, cannot open their windows.
63 000 GEL was received by the Georgian Agro Export Group which is just a small part of the European Neighbourhood Programme for Agricultural and Rural development.
Georgian entrepreneur Guka Tavberidze, who runs his own business in the UK and does it quite well, has been invited by BBC
The grand opening of 7-star The Biltmore Hotel Tbilisi took place in Georgia’s capital on July 31.
DUSHETI, Georgia – The Georgian government and the World Bank will allocate USD 5.6 million (12 million GEL) to fund
A new Georgian clothing brand named Person has emerged in Georgian market.
Georgia is in the midst of an economic maelstrom, Euronews reports.
Situation at Georgia’s mineral water market is interesting: over the last year, the volume of export has grown by 56 percent. According to “GeoStat”, over $114 million worth of mineral water was sold
GEL Exchange
USD
1
USD
2.8831
EUR
1
EUR
3.2357
GBP
1
GBP
3.5955
RUB
100
RUB
4.5779
July 2019
Mon Tue Wed Thu Fri Sat Sun
1 2 3 4 5 6 7
8 9 10 11 12 13 14
15 16 17 18 19 20 21
22 23 24 25 26 27 28
29 30 31