Giorgi Khukhashvili: "Russia will not close its market to Georgia"

After the demarche of Georgian industrialists (see "VK" "Georgian Business pondered about the association with the EU"), which caused great resonance, an adviser to the former Prime Minister of Georgia, Giorgi Khukhashvili, in an interview with "Vestnik Kavkaza" expressed a somewhat naive view that the signing of an association agreement with the EU does not automatically mean the closure of the Russian market to Georgian products.    

- Giorgi, what are the risks associated with the Georgia Association Agreement with the EU?    

- Of course, there are certain risks. Georgia's economy is not ready for the European common market. This could lead to the fact that in the course of integration, the unprepared economy could turn the country into a consumer economy, to the detriment of its productive capacity.  Georgian products are unable to meet the standards and quality requirements that exist in Europe. And the opening of the market in such conditions can cause commodity expansion. Therefore, we must carefully discuss these risks with their European counterparts and introduce temporary preferences in order to protect the domestic market.  I think the leaders of the industrialists were just being protective of domestic producers. But this does not mean that because of this we must refuse to sign the association agreement with the EU.  However, the contract must comply with the national interests of Georgia. There's no need to hide the problems and risks related to the association with the EU. And if someone offers to address concrete specific issues, one should not assume that they are against EU association. We just have to work it out. We know what happened in the Ukraine, where the government used the shortcomings of the document as an excuse for refusing to sign the association agreement.    

- And what about the risk of possible closure of the Russian market, which has barely been opened to Georgian goods, after signing an agreement with the EU?    

- The risk is not about the closure of the Russian market. This risk is insignificant. The main risk is different: we sign an agreement with the EU, according to which we commit to introduce the regulations that exist in Europe in our domestic market. But Georgian production is not ready to manufacture products of this quality. It can strike a blow to local producers and displace local products from the domestic market. This is the systemic risk. So the association agreement needs to be signed, but we should obtain preferential treatment from Europe during the transition period in order to reinforce the domestic producers and let them modernize their production. This takes time. This was just what the industrialists meant, and not the risk of closure of the Russian market. It is unpleasant, but not as much as to review historical decisions.    

- Over the past seven months, Georgian winemakers sold 25 million wine bottles in Russia. The annual plan is 40 million bottles. That is more than half of total wine exports. Apart from that, fruits, vegetables, "Borjomi" and so forth are being sold in Russia again. Those are thousands of jobs. Could the European market become an alternative to avoid repeated shock for entrepreneurs and ordinary people working in the Russian market?    

- I do not think it would come to closure of the Russian market. If we behave intelligently, the signing of an association agreement with the EU will not automatically mean the closure of the Russian market.