Does Georgia exploit the

advantages of DCFTA ? 

International School of
Economics at TSU

Supervisor: Nikoloz Pkhakadze

Project Description

• Measuring current results

• Compared to a similar country – the Republic of Moldova

• Further Development

2
What is DCFTA?
• Deep and Comprehensive Free Trade Area

• Part of Association Agreement

• Reduced import duties on all product

• Access to 27 countries and 500m potential customers

3
 DCFTA Beneficiaries

• About 43m • About 4m • About 4m

• GDP – 155b • GDP – 15.85b • GDP – 12b
• Frozen Conflicts – nowadays • Frozen Conflicts • Frozen Conflicts
victim of Russian aggression

4
Background for Georgia

• Post soviet country – specialized in agriculture sector

• GSP+
• 7200 products
• Simplified conditions and import duties

• Depended on Russian and CIS market

5
 Export development of Georgia

Total Export of Georgia 1995-2021 Georgian export to EU and CIS countries 1995-2021
4,500,000.0
4,000,000.0 2,500,000.0
3,500,000.0 2,000,000.0
3,000,000.0 1,500,000.0
2,500,000.0
1,000,000.0
2,000,000.0
500,000.0
1,500,000.0
0.0
1,000,000.0
95 97 99 01 03 05 07 09 11 13 15 17 19 21
500,000.0 19 19 19 20 20 20 20 20 20 20 20 20 20 20
0.0
European Union countries (EU)
95 97 99 01 03 05 07 09 11 13 15 17 19 21
19 19 19 20 20 20 20 20 20 20 20 20 20 20 Commonwealth of Independent States countries (CIS)

• 2 major recession in export

• 2008 embargo
• 2015 regulations on ferroalloys and car export
• EU market did not completely filled the loss
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• Still increasing dependance on Russian and CIS market
 Export development of Moldova

Total Export of Moldova Total Export of Moldova to CIS and EU countries 1997-2020
3000000.00 2000000.00
1800000.00
2500000.00 1600000.00
1400000.00
2000000.00 1200000.00
1000000.00
1500000.00 800000.00
600000.00
1000000.00 400000.00
200000.00
500000.00 0.00
97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20
0.00 19 19 19 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20
97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 1 8 19 20
1 9 1 9 1 9 2 0 20 20 20 20 2 0 2 0 2 0 2 0 20 20 20 2 0 20 20 20 20 20 20 2 0 2 0 CIS countries EU countries

• Increasing export to EU countries

• Major increase after the DCFTA

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Main markets for Georgia and Moldova

2012 2020

Georgia
EU countries EU countries
Others Others

2012 2020

Republic of Moldova
EU countries EU countries
Others Others
8
 Obstacles to business operators

• Access to finance and Political instability

• In case of Moldova - Corruption
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Further development

• Adopt reforms meant by Association Agreement

• Projects financed by EBRD, ADB, etc.

• Enterprise Georgia

• Free Trade Agreement with China

• In force from 2017
• Unusual combination – only 7 countries
• Attractive environment for FDIs
• Quadrupled in last 2 years

• Market Diversity

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Thank You