Does the marketing survey of European market is a key aspect for relationship with EU?
On this stage EURO-ATLANTIC integration is a top priority for Georgia- this phrase is heard numerous times. But when we speak about our country’s perspectives of integration in these two structures, experts often mark one circumstance- due to political reasons Georgia’s accession in the NATO may happen much more early than in EU, because European membership is a truly economic issue.
How much close is Georgia and Georgian business with European market? What Georgian businessmen know or should know in order their products to appear on the shelves of the European supermarkets? May be more activeness is needed from the side of business and only the efforts of state authorities are not to integrate us with EU? Especially now, that effective steps towards this direction do not happen from the side of state authorities. Still lots of problems connected with the issues of Metrology and Standardization are in Georgia. But it is obvious that Europe is not going to compromise anything in the part of non-tariff barriers’ regulation, every demand that EU raises for developing countries aspiring to enter European market must be fulfilled. This of course refers to Georgia too. Without existence of particular Laboratory and Certification level European market will stay unreachable for Georgian products. Government is to invest money in this. Before the War has been started our specialists used to take standards again in Moscow and Petersburg in order to check technical parameters. On these issues we spoke with Kote Zaldastanishvili- Secretary General of EU-Georgian Business Council (EUGBC).
_ Mr. Kote let’s start with the introduction of EUGBC. What does the EU-Georgian Business Council present and what is your main mission?
_ This is a non-profitable organization that was established in 2006 by different companies. We cooperate with all other business organization, as we consider them not to be competitors but to supplement each other. We are not making business, as we are non commercial organization, but we can give an advice to organizations how to make right steps towards this or that direction in order to achieve success. Our main function is to increase intensification, trade turnover and investment flow. If our businessman makes investments abroad it will be interesting and profitable for our country too.
Besides this, it is necessary that our businessmen become more market oriented and initiative. Our business does not know that it has to be active and initiative should come from it. Our organization serves to improve such attitude and give more information to Georgian businessmen. Today Georgian business is very passive. Our one of the main functions is directly this- to inform our private business sector, in order it know how to use its own pressure mechanisms on government. Business should know what procedures are necessary in order to enter European market and what the state’s role in all this is. For example, I am a businessman and I want to carry my product in European Union, but for this, product should pass laboratory examination, but businessman found out that no such laboratory exists in Georgia. Does businessman has to address government is such case or not? Of course he does. But for this, it is necessary to be active and well informed about everything.
_But here exists the other side too – may be Georgian business is bullied and for this they close their eyes on many things?
_ Yes of course. Our business is bullied and lots of other problems exist, but we say that business is obliged to become more active, they shouldn’t await someone and be in hopes of others.
_Let’s talk about it, what should be done in order to approach European market? At that time when monthly Georgia has the import of 600-650 million and export does not exceed 80-100 million, how we are to make stimulus for Georgian trade?
_Here numerous factors are to be taken into consideration. But the very first thing that should be done is- to make a marketing survey of European market. It is possible that similar order should be coming from government- be announced a tender on the conduction of the above mentioned survey, in which several serious organizations take participation. If there would be an order making of it is possible at any time. Why it is so important? Before a businessman enters a market he should count his advantages, minuses and pluses. You are not to start producing before and then start market research, everything these should be studied before in order to enter on market fully prepared. It is extremely important, especially for a beginner businessman, who has no idea what to produce and carry on market.
What consumption is in Europe? With what does Europe live? The key aspect for relationship with Europe is on the following- government should study carefully European market. Finding market places are the number one problem and this does not only refer to one company, this is a complex process.
For example, our wine-makers should know that while entering a large market they are not competitors for each other any more, they become partners. Separately “Badagoni” or any other firm can’t enter European market. In Europe such kind of situation takes place- you enter a supermarket and ask for a “Chilean Wine”, “French Wine” and so on. So customer looks not at a brand’s name, but first of all at country’s name from where this or that product is imported.
What we are doing now is somehow an order. There are many regulations in European Union and they are written with an obscure language. And a businessman who has lots of work to do can not just read this regulation. So on it professional people should work, who would give this material to businessmen on a language understandable for them. If they need, they should know that it is possible to visit somebody for consultations on these questions. Besides this, even these instructions change constantly. But European Commission always gives information beforehand on every possible change. In order this change not to be unexpected for a businessman it is necessary to be fully informed. But they do not know where to find this information. Our one of the main function is to keep an eye on it. We are fully informed with possible changes and warn businessmen too. We are going to arrange two seminars for businessmen in December on the above mentioned issues. One seminar will be held in region and one in Tbilisi. I think that it is not good to concentrate everything on Tbilisi. And the most interesting is that directly European Union spends large sum of money in order to give the possibility of entering European market to the Third World countries. For example, exists the web site of European Union- “export help desk”, it is a big job to teach a businessman how to use it. It is possible to receive innumerable information from this web site completely free, without any money, information about any export product, about its custom or non custom tariffs. This is for developing countries, or for those which aspire to appear on European market and of course it is for Georgia too. Let’s take a specific product- meat. You put the code of this product in a “Search” and receive all kind of information- how much product has been sold according to countries, what are the tariffs, how the customs-tariff is counted, how much is the VAT, what documents are necessary to go on export? For example, if European Union demands Phytosanitary document and you have no authority which delivers such document, good bye, the door of European Union’s market is closed for your product.
_Let’s extend this subject more- now discussion goes with EU on free trade, but this regime again and again refers to the tariff barriers, non tariff barriers remain unchanged
_ Yes it is right and herewith non-tariff barriers are always more difficult to overcome than the tariff barriers. Tariff barrier is not the main problem. If we look at tariff barrier on a product we will find out that it isn’t for business. Much more complicated and difficult are non-tariff barriers, (Phytosanitary, product safeguard and customers’ right protection, etc) which are strictly controlled in Europe. Businessman must know these. For example, the European Union adopted rules for wood, how it should be cultivated in order to enter European market.
Let’s assume that I sell lemonade and consider that norms connected with wood cultivation and sanctions are not obligatory for me while entering the EU market, but at the same time I use wooden boxes for lemonade. Directly for the reason that the wood cultivation norms do not satisfy European standards and demands it has no sense how and in what kind of conditions the lemonade is produced, if it is placed in unreliable way cultivated wooden box lemonade can’t access the EU market.
So when we talk about export in Europe we should keep from making populist statements and should not say that this is a free trade regime with Europe. What does free mean? When you try to access the European market problems are appearing one by one, e.g. overcoming the non-tariff barriers, as for the tariff barrier it is just a one number. When there were negotiations with the EU on free trade regime there was a heated discussion. We wanted Simple Free Trade Regime and Europe offered Deep Free Trade. We were saying, let’s be oriented only on tariff liberation and it offers Deep Free Trade, which implies existence and adoption of particular sanctions and norms not only in trade but in service sphere. Here approximation of Georgia’s and EU trade legislation basis is implied. It’s impossible to carry such product on European market that may harm customer.
_ What can we say about the State role and responsibility?
_ State’s role and responsibility always exists. Liberalization does not mean declining all responsibility from the side of government. For example, a stamp on which basis product goes on export is given by the Ministry of Economy, or in other words this document possesses the State’s stamp. European Union along with the laboratory stamp (that had made an analysis on this or that product) demands consent of State responsible authority. Consequently, government takes responsibility of righteousness of the analysis’s that has been made by laboratory, so it is natural that all these regulations are government’s responsibility too. This is a competence of business. Perfection of the legislative basis is a responsibility of executive and legislative powers.
_How much is working towards this direction our government’s priority?
_I don’t know how to say, I think that it is priority, but how much real and effective steps are made for it, is another question. For example, in Georgia business registration is possible in one day. So what? What about if it is possible in three days? Important is what happens after the business registration. Or how much easy is to make business, it means that accession on market should be simplified, which is completely impossible in Georgia. For example, there is a state monopoly on alcohol drinks in Norway. There, before entering the market we have matter with State, which is connected with numerous problems, but if you manage to enter market the matter is done. If you manage to access there it’s really a great job.