TRADE POLICIES and Export Promotion Opportunities In Georgia

OUTLINE
Foreign Trade Policy of Georgia Foreign Trade Statistics Main Trade Partners Georgias Exports According to Countries Georgias Exports According to Product Groups Foreign Trade Trends in 2009 New Export Positions Export Promotion Georgian National Investment Agency Main Instruments of Export Promotion Strategic Partnership with HSBC Bank Partners

Foreign Trade Policy of Georgia

Competitive Trade Regimes

Free Trade Regime with CIS countries and Turkey (since November 1, 2008) Most Favored Nation Regime (MFN) with World Trade Organization (WTO) member countries Preferantial Regime (GSP) with USA, Canada, Japan, Switzerland, Norway Preferential Regime (GSP+) with EU (7200 items) since 2005
Possibility of FTA with EU in the near future

Main Features of Georgian Trade Policy

Low import tariffs Few export/import licenses and permits No quantitative restrictions on import and export No customs tariff on export and re-export No VAT on export Simplified export and import procedures

Foreign Trade Statistics

Foreign Trade in 2009
Total Foreign Trade Turnover 5,513 million USD (29.3% reduction from the previous year) Exports 1,135 million USD (24.1% reduction) Imports 4,378 million USD (30.6% reduction) Trade Balance - -3,243.4 million USD

From 2004 to 2009, Georgias foreign trade turnover grew by 121.2%

Foreign Trade Turnover 2004-2009

10 56 8 35 38 40 7.80 6.45 4 4.61 3.36 2 2.49 -29 0 2004 2005 2006 2007 2008 Growth 2009 Foreign Trade Turnover -40 -20 0 80 60 40 % 21 5.51 20

Exports, Imports, Trade Deficit

8 6 4 US$ billion 2 0 -2 -4 -6 2003 Export 2004 2005 2006 Import Trade Deficit -0.7 -1.2 -1.6 17.0 23.4 25.3 35.3 39.2 37.6 30.2 40 30 20 10 0 %

US$ billion

-10 -2.7 -4.0 2007 -4.8 2008 2009 deficit/GDP (%) -3.2 -20 -30

Main Trade Partners

Foreign Trade with Country Groups in 2009
3000
2543

10 Major Trade Partners in 2009

1200 1000

2500 2000 US$ mln 1500 1000 500 0 2003

522 595

EU

CIS
1792 1404 1329

2314 2092 1677 1547

US$ mln.

1807

800
788 84 23

226 166

600 400

983 785

957

21

37

378

418

82 6

23 128

301

289

227

200 0 2004 2005 2006 2007 2008 2009

153

175

Import

Export

Foreign trade turnover with the EU countries 28.1% of total trade turnover Export 237.6 million USD (20.8% of total exports) Import 1,309.2 million USD (29.9% of total imports) Foreign trade turnover with CIS countries 30.4% of total trade turnover Export 417 million USD (36.7% of total exports) Import 1,260.1 USD (28.8% of total imports)

The list of Georgias top 10 trade partners in 2009 remained almost unchanged in 2009, the only exception being the substitution of the United Arab Emirates by Canada The share of Georgias top 10 trade partners in Georgias total foreign trade turnover of 2009 was 66,3%

14

117

Georgias Exports According to Countries

Export Structure According to Countries in 2009
Bulgaria 7% Ukraine 8% Armenia 8% Canada 10% Azerbaijan 15% Turkey 20% USA 3% Italy Germany 2% 2% Russia 2%

Other 23%

According to the 2009 data, Turkey remains Georgias largest export market (20% of total exports). Exports to Turkey declined by 14% compared to 2008 and made 226 million USD Exports to Azerbaijan declined by 19% and made 166 million USD. Despite this, Azerbaijan remained Georgias second largest export market (15% of total exports) Canada is Georgias third largest export market. Exports to Canada declined by 12% compared to the previous year and made 117 million USD (10% of total exports)

Georgias Exports According to Product Groups

Export Structure According to Product Groups in 2009
The list of top 10 export products in 2009 remained almost unchanged the only exception being the substitution of cement with mineral waters Georgias top export product is ferroalloys, which made 130.1 million USD (11.5% of total exports) The second on the list is unprocessed or semiprocessed gold with 116.2 million USD (10.2% of total exports) Georgias third top export product is automobiles, which declined by 34.9 million USD but still made 6.9% of total exports with 78.5 million USD
Scrap Metals 5,6 Nuts 6,2 Motor Cars 6,9 Other 39,1 Gold10,2 Ferro-alloys 11,5

Fertilizes 5,3 Ores 5,5 Spirits 4,8

Wine 2,8 Mineral Waters 2,2

Foreign Trade Trends in 2009

The share of agricultural produce in total exports has increased by 11.2% and made 15.6% The number of trade partners with whom Georgia has a positive trade balance has increased by 9 countries compared to the previous year and now stands at 30 The share of the European Union in Georgias foreign trade turnover registered a slight increased Imports from the EU countries exceeded imports from the CIS countries for the first time in 2009

New Export Positions

Exports of berries in 2009 almost doubled compared to the previous year and made 1,548,000 USD. Besides the CIS countries (Armenia, Belarus, Kazakhstan, Moldova, Ukraine), berries are exported to Greece and Italy Exports of oil-bearing plant seeds and spores increased 12.4 times and made 22.53 million USD. Besides Armenia, Kazakhstan and Turkey, these products are exported to 6 EU countries (Germany, Austria, Czech Republic, Denmark, France and UK) Exports of electricity increased by 3 million USD compared to the previous year and made 20.1 million USD Particularly high growth in 2009 was registered in the exports of curative means (292%). It made 20 million USD (1.8% of Georgias total exports)

Export Promotion Georgian National Investment Agency

From February 2010, the Georgian National Investment Agency (GNIA) was made responsible for export promotion. By giving this function to GNIA, Georgian exporters and producers will have a reliable supporter and guide in the mission of Georgian export development Together with partners the Georgian National Investment Agency has defined key objectives it has to achieve for successfully fulfilling the function of export promotion. It is currently working to achieve them

Key Functions Informational support of Georgian producers and exporters Facilitation of business contacts between local producers and foreign buyers Promotion of Georgias export potential internationally Increase of the export potential of Georgian producers

Main Instruments of Export Promotion

Trade web-portal Export Information Centre Help Desk Answering info-requests of Georgian producers and foreign buyers Capacity building seminars/trainings for Georgian producers Participation in international trade fairs Business forums/buyer missions Monthly newsletter

Partners
GTZ (German Society for Technical Cooperation) HSBC Bank Georgia Ministry of Agriculture Department of Customs National Statistics Office of Georgia ITC (International Trade Centre, Switzerland) CBI (Center for the Promotion of Imports from Developing Countries, Netherlands)

GEORGIA
General information:
Capital: Surface area: Official language: Population: Exchange rate: Tbilisi 70 thousand sq km Georgian 4.5 million (2011) A$1 = 1.6925 Lari (Apr 2012) 2007 10.2 20.6 2,326 4,677 12.3 -2,010 -19.7 31.1 9.2 2008 12.9 21.5 2,937 4,906 2.3 -2,912 -22.6 28.7 10.0
Real GDP growth
%

Fact Sheet

Head of State: President HE Mr Mikheil Saakashvili Head of Government: Prime Minister HE Mr Vano Merabishvili 2009 10.8 20.9 2,455 4,767 -3.8 -1,212 -11.3 29.8 1.7 2010 11.6 22.5 2,623 5,064 6.3 -1,334 -11.5 34.9 7.1 2011 (a) 14.3 24.5 3,210 5,491 7.0 -1,816 -12.7 36.5 8.5 2012 (b) 16.0 26.3 3,597 5,929 6.0 -1,648 -10.3 na 1.7

Recent economic indicators:

GDP (US$bn) (current prices): GDP PPP (US$bn) (c): GDP per capita (US$): GDP per capita PPP (US$) (c): Real GDP growth (% change yoy): Current account balance (US$m): Current account balance (% GDP): Goods & services exports (% GDP): Inflation (% change yoy):
Australia's merchandise trade with Georgia
A$'000 60,000 50,000 10 40,000 30,000 20,000 0 10,000 0 2006 Imports 2007 2008 2009 2010 2011 Exports 5 15

Australia's merchandise exports to Georgia

A$'000 20,000 2011 15,000 2006

10,000

5,000

-5 2007

0 2008 2009 2010 2011 2012 Primary STM ETM Other

Australia's trade and investment relationship with Georgia (d):

Australian merchandise trade with Georgia, 2011: Exports to Georgia (A$'000): Imports from Georgia (A$'000): Total trade (exports + imports) (A$'000): Major Australian exports, 2011* (A$'000): Manganese ores & concentrates Butter Beef Medical electrodiagnostic apparatus 16,786 2,262 449 404
Total share: Rank: Growth (yoy):

33,694 4,279 37,973

0.0% 0.0% 0.0%

78th 121st 98th

-36.3% 171.3% -30.3% 840 429 408 322

Major Australian imports, 2011* (A$'000): Rubber tyres, treads & tubes Inorganic chemical elements Fruit juices Cutlery
12% of total imports

*Includes A$12.2m of confidential items, 36% of total exports

*Includes A$0.5m of confidential items & special transactions,

Australia's trade in services with Georgia, 2011: Exports of services to Georgia (A$m): Imports of services from Georgia (A$m): Australia's investment relationship with Georgia, 2011 (e): Australia's investment in Georgia (A$m): Georgia's investment in Australia (A$m):

Total share:

na na

na na
Total: FDI:

nil np

nil nil

Georgia's global merchandise trade relationships:

Georgia's principal export destinations, 2010: 1 Azerbaijan 2 Turkey 3 United States 58 Australia 15.4% 13.6% 11.4% 0.1% Georgia's principal import sources, 2010: 1 Turkey 2 Ukraine 3 Azerbaijan 31 Australia 17.3% 10.9% 9.1% 0.6%