Russia’s intention to suspend free trade agreement with Georgia was not a surprise for Tbilisi and it will not either be a “tragedy”, said Georgian PM’s special representative for relations with Russia Zurab Abashidze.
““Actually it was expected; we were not ruling out such a development while moving towards signature of the Association Agreement [with the EU],” he told Maestro TV on July 31.
“I do not think it is a tragedy,” he said.
Abashidze said the move is likely to make Georgian exports to Russia more expensive, making it harder for some Georgian products to compete on the Russian market.
“Some of our products will perhaps become more expensive on the Russian market, some tariffs will increase, others will be revised, but I repeat we have not been seeing big tragedy in this,” he said.
“We should get accustomed to it. When we are going towards Europe, its standards, when we want to become part of the European economic space, we should also be ready that such thing may happen,” Abashidze said.
He said that there is “a political element” in this decision by Russia, but also added that Moscow had its arguments in respect of its concerns over Georgia’s deep and comprehensive free trade agreement with the EU.
A technical expert-level meeting was held in Prague on July 7 during which Georgian and Russian officials exchanged information on potential effects of Georgia’s free trade agreement with the EU on bilateral Georgian-Russian trade.
“Our take has always been that free trade with the EU does not in any way hinder our free trade with Russia; they [the Russian authorities] as it seems think otherwise,” Abashidze said.
The Georgian diplomat said it should neither be a surprise for the Georgian businesses, which have already experienced Russian embargo, that Moscow may one day “change rules of the game.”
“Yes, businesses may have some losses from this move by Russia, but our initial estimations are that we should not expect any big tragedy,” Abashidze said.
Georgian exports to Russia reached USD 134 million in the first half of 2014, a 3.2-fold increase, compared to the same period of last year.
Russian market accounted 9.4% of total Georgian exports in the first six months of 2014, according to the Georgian state statistics office, Geostat.
The increase is mostly due to exports of Georgian wines and mineral waters to Russia, which was banned by Russia up until late spring, 2013.