Customs taxes have been reduced by 300 million in order to assist small and medium enterprises

FROM THE REDACTION

Now it is clear to everybody that integration into the global economic space is very important for Georgia’s foreign economic policy.

From this point of view, letting Georgian business representatives have complete information on the internationally recognized and accepted trade practice has a special load. Export growth and obtaining a foothold on the EU market is very important for the Georgian economy, but there is no end to the problems from this point of view.
In connection to these issues, on July 18 of the current year, in “Marriott Tbilisi” hotel the representatives of the European Union and the EU-Georgia Business Council held a seminar on the issues related to the trade between the EU and Georgia. The purpose of the seminar was giving information to the Georgian society and business circles on the EU’s trade policy, the terms of getting on its market, technical regulations, tariff and non-tariff barriers and Georgia-EU trade relations. The EU’s preferences (GSP+) are applied to Georgia, the precedent of which is only in 14 countries out of 180 ones benefiting from the system of generalized trade preferences.
The President of the Georgian Chamber and Industry, Jemal Inaishvili:
– It is an important fact that the business union between the EU and Georgia was formed a few months ago, but it has already appeared before us with its real actions. The today’s seminar is also important for the Georgian business, it will be one of the factors promoting trade relations between the EU member-countries. Our country’s objective is the development of close trade relations with the EU countries, especially in view of the problems that sprang up for our export. That is why we should think of opening up of new markets and development of export. The European market is important from this point of view. The development of trade relations mainly depends on the development of trade and attraction if investments in our country. A lot is being done in Georgia in order to create an attractive investment climate and form a liberal economic policy. In a few days Georgian parliament will pass a new law, on the basis of which nullification of everything, except for agricultural and food products, will take place, which will considerably contribute to attraction of investments to the country and the development of the economy, which, in its turn, will have an effect on increasing of the trade and export potential. The discussion of the new variant of the Customs Code is underway in the parliament, which should be maximally liberal and simplified. It should particularly concern the export regime. We are also working on perfection of the Tax Code. These actions should have a positive result in the end. The matter concerns GSP+ regime, which is very important for Georgia, but I want to inform you that, unfortunately, it does not include wine, while inclusion of Georgian alcoholic beverages in this regime is of great importance to us.
Sophia Muniz, the Deputy Head of the EU’s Trade Directorate’s Department for relations with Russia, the CIS, candidate countries and the Balkans:
– I believe that our seminar is very important for your country in the context of further negotiations and the development of trade relations between the EU and Georgia. Every speaker will agree with me that trade is the important element, which is followed by the country’s prosperity and growth. That is why trade is the main sector in the plan of actions, based on which we are going to hold negotiations with you. In general, Georgia should comprehensively develop its trade system with the purpose of economic development. We are keeping an eye on the trade relations between the EU and Georgia, Georgia’s trade structure, in which, in my opinion, you have a lot of problems. As to your export, it fully depends on you. My primary purpose is give you information on the necessity of creation of the trade structure and speak about trade relations between Georgia and the EU. The European Union is Georgia’s main trade force. It is the largest exporter and second largest importer after the US. It clearly shows you that it is not only your trade force, it is a force of open trade, and not only in trade at that.
We carefully familiarize ourselves with the data on the trade relations between the EU and Georgia, along with your trade relations with other countries of the world. This is the sphere where the balance is often disrupted, it concerns your neighborly policy and the policy of the countries neighboring to you, which is implemented in relation to you. There is a plan of actions in neighborly relations, which will help you in settling of this problem. During the past 5 years we have seen growth in Georgia’s total trade, but, in fact, the EU’s trade has againg taken orientation for the CIS countries, which had an effect on the trade policy with the CIS countries. As I have pointed out, there is a certain disbalance in trade relations between the EU and Georgia as to the products by which trade is implemented. This concerns raw materials, agricultural products; it is not clear why they are exported to the EU. I want to explain the main features of the EU’s trade to you. There are frame laws, which we apply in establishing of trade relations with other countries, it is responsibility to other countries of the world that we have assumed. Our objective is to promote the development of trade, but this assistance should be implemented in acceptable forms. We try to demonstrate our values in trade relations in order to make the trade market a more progressive one. The main feature of our trade policy is multilateral and bilateral trade, the way it take place in the case of relations between the EU and Georgia, which is written down in the plan of actions. In your case GSP+ system is applied. As to multilateral trade relations, you know about them well since your country is a member of the WTO, which means inclusion in the system of international trade relations. The EU inculcates its values in the World Trade Organization as well, which confirms once again that our state policy is trying to export its values even at the level of the WTO. Though, great importance is also attached to bilateral trade in our trade relations. The EU has similar agreements with 120 countries, but this does not mean a free trade agreement with 120 countries, by means of them we are trying to intensify and develop trade relations with these countries.
Georgia will benefit from GSP+ system, which applies to 14 countries only, which will help your country in raising of the export level of agricultural, metal and other products. This is being done in order to assist the poor countries in entering the EU market.
The Director General of the EU Tax and Customs Committee, Patrice Pille gave a talk at the seminar. He spoke on customs and trade promotion issues in the context of the EU’s neighborly policy:
– Customs administration occupies an important place in trade issues, its liberalization and simplification is related to customs tariffs. Customs taxes were reduced by 300 million euro with the purpose of rendering assistance to small and medium enterprises, which is a big preference for them. Comparatively different approach is necessary in relation to large producers, it is necessary to introduce corresponding customs systems, obligations concerning risk analysis, otherwise there will be problems in the issues related to simplification of the customs system. The issue of corruption is important as well, because of which there are expensive obligations in customs sectors, that is why harmonization with customs documentation at the level of regulation is necessary. Orientation of the EU’s customs policy is contribution to the development of trade with the World Trade Organization. Another objective is making the customs regulations public and available ones for all interested persons. In accordance with Kyoto convention, payment of the sum should be a procedure accompanied by submission of documentation. I should say that the EU has many problems that it has to implement. We should consider the “one window principle” as a major achievement, a computerized system should be inculcated on EU scale so that exchange of information on import and export should take place in automatized way. New provisions will be considered in the EU Council, such as neighborly policy, here the EU implies all the partner countries. Modernization of the customs systems and inculcation of new concepts, cooperation between the departments and struggle against corruption is necessary. According to the agreement between Georgia and the EU of 1999, there is a provision that envisages the program of mutual assistance in the customs sector. There is a provision in the action plan of cooperation with the EU – stepping up of safety in the trade sphere should be considered at regulation level in the candidate countries. Each partner country has recognized the necessity of the customs legislation’s harmonization. After the negations between Georgia and the EU, a non-obligatory document was adopted in the form of a draft, the EU recognizes Georgia’s responsibility in case of inculcation of the provisions in Georgia. It is true that there are a lot of things to be perfected, but adoption of the new customs law, which will be harmonized with the EU standards, is necessary.