Azerbaijan to explore Georgian European integration’s impact on foreign trade relations

Business Materials 18 August 2014 18:26 (UTC +04:00)

Baku, Azerbaijan. Aug. 18

By Ilaha Mammadli - Trend:

Georgia's Association Agreement with the EU, which is to come into force on September 1, 2014, as well as a section on deep and comprehensive free trade area, will not lead to the suspension of the free trade agreement between this country and Azerbaijan.

Azerbaijani government told Trend Aug. 18 that for Georgia, as well as, for Moldova to become an EU associate member, it is necessary to solve many problems in the legal field.

"Georgian colleagues noted that they daily receive over 200 normative documents in English, which need to be translated, and then it is needed to align the national legislation with them, to synthesize them with local laws and unify, in order to make them work," a source in the government said.

"And who knows how long this work will take?" the source added.

Therefore, Georgia for now needs to adapt, and some steps can be taken in the future along with the country's becoming a full associate member of the EU, the source stressed.

"Prior to that, I believe it is premature to talk about termination of the free trade agreement between Azerbaijan and Georgia," he added.

Meanwhile, Georgia's Foreign Ministry appealed to Azerbaijan's Economy and Industry Ministry to study this issue.

"Any changes are possible in the foreign trade relations with Azerbaijan with the signing of the Georgia-EU agreement," another source in the government said.

"These may also be technical barriers, and issues related to product quality," the source noted.

He said that therefore, it is necessary to work on this issue, to study Georgia's Deep and Comprehensive Free Trade Agreement, and "to check what requirements are indicated there, because Georgia will have a common market with the EU."

"In this regard [with the creation of a common market] Europe may demand that products imported from third countries should not to go to European markets through Georgia," the source stressed.

He underscored that in this context, there is a problem that needs to be addressed, and Azerbaijani experts have to carefully study the terms of the free trade agreement (FTA).

Georgian Foreign Ministry said the temporary introduction of the Association Agreement's specific provisions will start on September 1, 2014, under the accepted EU procedures, in accordance with the agreement's article 431.

Meanwhile, about 80 percent of the agreement will come into force, including a component of the comprehensive free trade area.

The provisions of the agreement on partnership and cooperation between Georgia and the EU, approved on April 22, 1996, will continue to operate simultaneously during the period of a partial and provisional implementation of the Georgia-EU agreement, which has not finally entered into force.

Despite this, the Russian Economic Development Ministry has already developed a draft decree of the supreme government on the suspension of the Georgia-Russia agreement on the free trade.

Azerbaijan is still the second largest trading partner of Georgia, the first largest being Turkey.

Georgian National Statistics Office (GeoStat) said the trade turnover between Georgia and Azerbaijan in H1, 2014 was $584.3 million (10.7 percent of Georgia's total foreign trade operations).

This is 3.7 percent less than the same period of last year. For comparison, in January-June, 2013 the trade turnover between the two countries stood at $605.98 million.

Throughout the reporting period, Azerbaijan remained as the largest export market for Georgia, with a 20.4 percent specific gravity in the country's total exports.

During this period, Georgia exported to Azerbaijan goods and services worth $290.2 million, which is 12.8 percent less than in H1, 2013.

At the same time, the goods and services worth $294.1 million (7.3 percent of total imports of Georgia) were imported from Azerbaijan. This figure is 7.65 percent more than the figures for last year.

Trade surplus between Azerbaijan and Georgia was $41.1 million.

Edited by CN