Foreign trade in the first half of 2005

Lali Chagelissvili

In January-June 2005 Georgian foreign trade turnover (excluding non-organized trade) made up 1334,7 million USD, which 25,4 percent more of the last year’s indicator; from which export – 374,2 million USD (correspondingly 26,1 percent more), and import – 960,4 million USD (25.1 percent more). In January-June 2005 Georgian negative trade balance made 586.2 million USD.

35,7 percent of trade deficit for the period of the six months of the current year falls on CIS countries (in January-June 2004 it made up 23,2 percent). The trade turnover with this countries for January-June 2005 made up 554,8 million USD (which is 31,2 percent more than for January-June 2004), while with the other countries – 779,8 million USD (accordingly 21,5 percent more). 41,5 of Georgian foreign trade falls on the share of CIS countries, including export – 46,2 percent, import 39,8 percent (correspondingly for January-June 2004 – 39,7,52,8 and 34,7 percent).
In January-June 2005 Georgian foreign trade turnover with the EU countries made up 323,6 million USD, which, compared to the last year’s indicator is 1,0 percent less; from which export – 57,0 million USD (correspondingly 1,2 more). It was caused with the export increase of ferrous metals scrap, nuts, nitrogen fertilizers, copper ore, and concentrated products, the import from the EU countries – 266,6 million USD (4,7 percent less). 24,2 percent of Georgian foreign trade falls on the share of these countries, including export – 15,2 percent, import – 27,8 percent.
Ferrous metal scrap still remains the export commodity and makes up 14% of total export. The next position is occupied by ferroalloys, aircrafts, natural wines, copper ore and concentrates.
The main import products are oil and mineral oils, which make up 12,8% of import. Then come cars, medicine, gas, and sugar.
From July 2005 up to 7200 descriptions of goods of Georgian produce is exported to 25 EU countries with zero customs rate. All this is possible thanks to the EU’s system of preferences, the essence of which consists in rendering assistance on the part of the developed states to the less developed ones by means of creating export conditions.
Georgia enjoys the beneficiary status with the US, Canada, Switzerland, Turkey and the EU. Georgia handed in an application for using additional preferences in 1998. It was considered by the Euro Commission in 2003, though the issue of additional preferences has not been solved then. The EU took this decision after the great efforts on the part of Georgian Ministry of Foreign Affairs. These preferences apply to 14 countries in all, and Georgia is the only of CIS countries that enjoys them. The list of these countries does not include Armenia, Azerbaijan, Moldova, and Russia. Georgia will use the obtained preferences till the end of 2008. Then the country’s rate of development for this period will be checked. The EU will take a decision concerning its aid in development of Georgian export only after consideration of the issue.