Issue 5, 2018. October-November

   

The Benefits of Free Trade with the Georgian Republic

This editorial by Mamuka Tsereteli has been reprinted from The Washington Times, www.washingtontimes.com

Mamuka Tsereteli

When Prime Minster Mamuka Bakhtadze visits Washington in mid-September he should be greeted as the essential partner in the Caucasus region that Georgia has proven itself to be.

Since leaving the orbit of the Soviet Union in 1991 the Georgian Republic has been ruled by several different political parties, yet has been steadfast in choosing an open economy based on transparency and rule of law and resisting reintegration with its giant neighbor.

This openness to trade, knowledge, technological know-how and management skills has helped Georgia advance its national interest. But it is an act of bravery for such a tiny country facing constant threat from Russian occupational troops.


We in the United States must do all we can to advance Georgia's economic development and its clear and demonstrated preference to be a full-fledged trading partner with the West.

The United States, more than any other country in the world, has tangible incentives to work closely with Georgia. For over two decades Georgia and the United States have been consistently reliable strategic partners that have contributed mightily to each other's national security. Georgia's military has participated in every military campaign of the United States since 2003, and this small nation with population of only 3.7 million became one of the largest contributors of troops to coalition forces first in Iraq, and then in Afghanistan.

In fact, by 2008 Georgia was the second largest contributor of troops to coalition forces in Iraq, after United States, and today Georgia is a largest non-NATO contributor of forces in Afghanistan. This commitment is all the more remarkable since the country has 20 percent of its territory occupied by Russia.

Being a large recipient of the U.S. assistance, Georgia reciprocates not only by contributing military forces to international security operations, but also by fostering great business opportunities for American companies. Georgia itself provides excellent opportunities for U.S. enterprises in the areas of infrastructure development, transportation, telecommunications, hospitality, food and beverage industry, and finance.

Georgia has free trade agreements with the EU, Turkey, CIS countries, and China, which create exceptional opportunities for U.S. companies involved in Georgia to have tariff-free access to markets of more than two billion people.

The United States must do all it can to encourage expanded economic ties with Georgia to exploit these and other economic and financial opportunities, but also for important geo-political reasons. The alternative course for Georgia would be to reintegrate into the backward governance, obsolete technological and management environment of the Russian orbit. Georgia lives, as they say, in a very interesting neighbourhood of great interest to many of the United States' most challenging adversaries - China, Iran, and of course, its immediate neighbour, Russia. The interests of global powers in Georgia is mostly determined by its location and available infrastructure, which ensures access to the "heartland of Eurasia" and to the hydrocarbon resources of the Caspian basin.

The United States should prioritize keeping Georgia on its current course. Georgia's commitment to economic openness democratizes the country's key assets, transit and transportation infrastructure, to the benefit of all Georgians. This, in turn, has created a paradigm of orderly, transparent, commitment to the rule of law in doing business that the United States encourages globally.

Like its international security commitments, Georgia has demonstrated its progress in building welcoming, stable and transparent economic environment. It is a good place to do business, and a beachhead in that regard, in a turbulent, unstable region.

Georgia has a successful track record in completing international infrastructure projects, including energy pipelines and oil terminals. Georgia has attained high rankings in all positive international indicators, including Index of Economic Freedom of the Heritage Foundation and Doing Business of the World Bank, with particular emphasis on low rates of tax, regulation, crime, and corruption.

Given this stable environment, the country enjoys strong support from international financial institutions, and from investment promotion agencies, such as the U.S. government's Overseas Private Investment Corporation. Last, but not least, entering or expanding business activities in Georgia offers American companies the potential to reach an exponentially larger regional market, thanks to Georgia's free trade agreements with Turkey, CIS countries, the EU, and China. It is in the shared U.S. and Georgian interest to significantly boost bilateral trade between the United States and Georgia by adopting a Free Trade Agreement. If awarding consistently loyal allies is truly the priority, Georgia presents an excellent opportunity for the administration to demonstrate it, and I hope it will be on the table when Prime Minster Bakhtadze visits the White House.

Mamuka Tsereteli is president, America-Georgia Business Council, a senior research fellow for the Central-Asia Caucasus Institute at AFPC, and a member of the part-time faculty at Johns Hopkins SAIS and American University.

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