Goergia Trade Policy

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TRADE POLICIES and

Export Promotion

Opportunities In Georgia


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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


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Foreign Trade Policy of Georgia

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

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

Competitive Trade Regimes

Main Features of Georgian Trade Policy


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Foreign Trade Statistic

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 in 2009

Foreign Trade Turnover 2004-2009 Exports, Imports, Trade Deficit

2.49

3.36

4.61

6.45

7.80

5.51

56

35 3840

21

-29

-40

-20

0

20

40

60

80

0

2

4

6

8

10

2004 2005 2006 2007 2008 2009

%

US$bil

lion

Foreign Trade Turnover Growth

-0.7-1.2 -1.6

-2.7

-4.0-4.8

-3.2

17.0

23.4 25.3

35.3 39.2 37.6

30.2

-30

-20

-10

0

10

20

30

40

-6

-4

-2

0

2

4

6

8

2003 2004 2005 2006 2007 2008 2009

%

US$billion

Export Import Trade Deficit deficit/GDP (%)


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Main Trade Partner

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 totaltrade 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 2009remained almost unchanged in 2009, the only excepti

being the substitution of the United Arab Emirates byCanada

The share of Georgias top 10 trade partners in Georgtotal foreign trade turnover of 2009 was 66,3%

Foreign Trade with Country Groups in 2009 10 Major Trade Partners in 2009

788

378

418

301

289

227

153

175

128

226

166

84

23

21

37

82

623

0

200

400

600

800

1000

1200

US$mln

.

Import Export

522

785957

1329

1807

2092

1547

595

983

1404

1792

2314

2543

1677

0

500

1000

1500

2000

2500

3000

2003 2004 2005 2006 2007 2008 2009

EU CIS


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Georgias Exports According to Countrie

According to the 2009 data, Turkey remains

Georgias largest export market (20% of totalexports). 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 largestexport 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)

Export Structure According to Countries in 2009

Turkey

20%Azerbaijan

15%

Canada

10%

Armenia

8%

Ukraine

8%

Bulgaria

7%

USA3%

Italy2%

Germany2%

Russia

2%Other

23%


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Georgias Exports According to Product Group

The list of top 10 export products in 2009 remainedalmost unchanged the only exception being thesubstitution 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 semi-

processed 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 made6.9% of total exports with 78.5 million USD

Export Structure According to Product Groups in 200

Ferro-alloys

11,5

Gold10,2

Motor Cars 6,9

Nuts 6,2

Scrap Metals

5,6

Ores 5,5

Fertilizes 5,3

Spirits 4,8Wine 2,8

Mineral Waters

2,2

Other 3


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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 9countries 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


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New Export Position

Exports ofberries 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 ofoil-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 ofelectricity increased by 3 million USD compared to the previous year and made 20.1 millionUSD

Particularly high growth in 2009 was registered in the exports ofcurative means (292%). It made 20million USD (1.8% of Georgias total exports)


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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 reliablesupporter 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 achievethem

Export Promotion Georgian National Investment Agenc

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

Key Functions


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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


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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)


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Fact Sheet

Capital: Tbilisi Head of State:

Surface area: 70 thousand sq km President HE Mr Mikheil Saakashvili

Official language: Georgian

Population: 4.5 million (2011) Head of Government:

Exchange rate: A$1 = 1.6925 Lari (Apr 2012) Prime Minister HE Mr Vano Merabishvili

Recent economic indicators: 2007 2008 2009 2010 2011 (a) 2012 (b)GDP (US$bn) (current prices): 10.2 12.9 10.8 11.6 14.3 16.0

GDP PPP (US$bn) (c): 20.6 21.5 20.9 22.5 24.5 26.3

GDP per capita (US$): 2,326 2,937 2,455 2,623 3,210 3,597

GDP per capita PPP (US$) (c): 4,677 4,906 4,767 5,064 5,491 5,929

Real GDP growth (% change yoy): 12.3 2.3 -3.8 6.3 7.0 6.0

Current account balance (US$m): -2,010 -2,912 -1,212 -1,334 -1,816 -1,648

Current account balance (% GDP): -19.7 -22.6 -11.3 -11.5 -12.7 -10.3

Goods & services exports (% GDP): 31.1 28.7 29.8 34.9 36.5 na

Inflation (% change yoy): 9.2 10.0 1.7 7.1 8.5 1.7

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

Australian merchandise trade with Georgia, 2011: Total share: Rank: Growth (yoy): Exports to Georgia (A$'000): 33,694 0.0% 78th -36.3%

Imports from Georgia (A$'000): 4,279 0.0% 121st 171.3%

Total trade (exports + imports) (A$'000): 37,973 0.0% 98th -30.3%

Major Australian exports, 2011* (A$'000): Major Australian imports, 2011* (A$'000):

Manganese ores & concentrates 16,786 Rubber tyres, treads & tubes 840

Butter 2,262 Inorganic chemical elements 429

Beef 449 Fruit juices 408

Medical electrodiagnostic apparatus 404 Cutlery 322

*Includes A$12.2m of confidential i tems, 36% of total exports *Includes A$0.5m of confidential items & special transactions,

12% of total imports

Australia's trade in services with Georgia, 2011: Total share:

Exports of services to Georgia (A$m): na na

Imports of services from Georgia (A$m): na na

Australia's investment relationship with Georgia, 2011 (e): Total: FDI:

Australia's investment in Georgia (A$m): nil nil

Georgia's investment in Australia (A$m): np nil

Georgia's global merchandise trade relationships:

Georgia's principal export destinations, 2010: Georgia's principal import sources, 2010:

1 Azerbaijan 15.4% 1 Turkey 17.3%

2 Turkey 13.6% 2 Ukraine 10.9%

3 United States 11.4% 3 Azerbaijan 9.1%

58 Australia 0.1% 31 Australia 0.6%

Australia's merchandise trade with Georgia Australia's merchandise exports to GeorgiaReal GDP growth

GEORGIA

0

5,000

10,000

15,000

20,000

Primary STM ETM Other

A$'0002006

2011

-5

0

5

10

15

2007 2008 2009 2010 2011 2012

%

0

10,000

20,000

30,000

40,000

50,000

60,000

2006 2007 2008 2009 2010 2011

A$'000

Imports

Exports

General information:


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Goergia Trade Policy

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