Transformation of Georgia's Trade Policy Strategy : From Frailty to Sustainability

Abstract

The following article reviews the trade policies and practices of Georgia as well as Georgia-WTO relationship. The authors focus on Georgia’s recent economic performance, including Association Agreement (AA) with the European Union that contributed powerfully to stabilising Georgia's trade legislation and reinforcing domestic economic reform. The Association Agreement between Georgia and the European Union and its member States aims at Georgia's gradual economic integration into the EU Internal Market, through the establishment of the DCFTA, which should provide for far-reaching market access based on sustained and regulatory approximation. The study reveals the importance of the World Trade Organization, main trade agreements and arrangements with Georgia as a developing country. It demonstrates that effective trade stabilization in the WTO can be achieved by the implementation of specific WTO’s regulations on trade, economic and legal spheres. One of the reasons for the special success of the WTO is systemic exceptions for developed countries and states with special needs (country like Georgia) that contributes to the development of international trade through progressive liberalization and the comparative advantage of the states when carrying out trade. The example of Georgia shows very well that so far the country has not been able to actively apply all the advantages that can be used within the framework of international or regional organizations, at least for the simple reason that the country does not possess the appropriate infrastructure for bringing innovative products to foreign markets, and thus accumulate more economic wealth. This case study evidences and confirms that while the accession process to the WTO is challenging per se, it is part of a process of domestic reforms that triggers growth and economic benefits.