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Regulatory and Procedural Barriers to Trade in Georgia Needs Assessment UNITED NATIONS ECONOMIC COMMISSION FOR EUROPE Regulatory and Procedural Barriers to Trade in Georgia: Needs Assessment United Nations New York and Geneva, 2018 2 Regulatory and Procedural Barriers to Trade in Georgia: Needs Assessment Note The designation employed and the presentation of the material in this publication do not imply the expression of any opinion whatsoever on the part of the Secretariat of the United Nations concerning the legal status of any country, territory, city or area, or of its authorities, or concerning the delimitation of its frontiers of boundaries. This study is issued in English. ECE/TRADE/443 UNITED NATIONS PUBLICATION Sales No.: E.18.II.E.26 ISBN: 978-92-1-117173-0 e-ISBN: 978-92-1-047321-7 Copyright © 2018 United Nations All rights reserved worldwide United Nations publication issued by the Economic Commission for Europe Foreword 3 Foreword Georgia has consistently followed a liberal trade regime, which is geared towards achieving the twin objective of creating efficiency gains for the business community and integrating the economy into regional and global value chains. In 2018, the Government was in the process of intensifying reforms, with a special emphasis on fulfilling its commitments under the Association Agreement with the European Union and the European Atomic Energy Community and their Member States. Aware of the complexities of these reforms and the steep learning curve they carry for enterprises, the Government has been pursuing a phased approach. Implementation of reforms is spread across several years, with those sectors requiring intensive support accorded priority treatment. It is against this background that this study was conducted, using the ECE evaluation methodology, which captures the interplay between regulatory and procedural trade measures, enterprise development and export diversification. The aim is to support a coherent treatment of the regulatory and procedural trade measures. The study shows Georgia as one of the top reformers in the ECE region. The Government has effectively consolidated a private sector led market-based economy with a business-friendly environment. Regulatory and procedural trade barriers are limited, and reflect theinherent complexities of reforms to date. The study highlights Georgia’s experience and provides action-oriented recommendations for complementing the Government’s development efforts. We consider this study as an important step in deepening ECE’s engagement with the Government of Georgia as it forges ahead in its economic reforms and regional integration efforts. The secretariat will be working closely with the Government, development partners and donor agencies to support the successful implementation of the agreed upon recommendations. Ms. Olga Algayerova Under-Secretary-General of the United Nations Executive Secretary of the United Nations Economic Commission for Europe 4 Regulatory and Procedural Barriers to Trade in Georgia: Needs Assessment Preface Since 2010, the ECE has been undertaking demand-driven national studies of regulatory and procedural barriers to trade, with a view to: helping countries achieve greater regional and global economic integration; informing donors as to where assistance might be required; and supporting policy discussions within the Steering Committee on Trade Capacity and Standards (previously, the Committee on Trade) and its subsidiary bodies on where additional work is required. This study summarizes the key findings of the seventh study, which focuses on Georgia. It was prepared by the ECE secretariat in close consultation with public and private sector stakeholders. The study integrates the outcome of the stakeholder meeting, which was organized in Tbilisi, Georgia on 23 April 2018 by the Ministry of Economy and Sustainable Development to discuss the initial results and recommendations. Acknowledgments 5 Acknowledgments This study was prepared by Ms. Hana Daoudi (ECE) under the supervision of Mr. Mika Vepsäläinen (ECE). The ECE would like to acknowledge the contribution of the following consultants: Ms. Eka Akhobadze and Ms. Ekaterine Tsvariani from the Georgian Association for Quality for conducting personal interviews with traders in Georgia; Mr. Veaceslav Sterbet for conducting personal interviews with traders in Georgia and for carrying out the business process analysis of the fisheries sector; Ms. Irma Khvedeliani, who conducted personal interviews with representatives of agencies responsible for standardization, quality assurance, accreditation and metrology and prepared detailed transcripts that were used by the secretariat for drafting the study; Mr. Toni Männistö from the Cross-border Research Association, who visited two border crossings points (the sea port of Poti and its surroundings and the Tsiteli Khidi Border Crossing Point between Georgia and Republic of Azerbaijan), conducted personal interviews with State agencies responsible for trade facilitation and summarised the results of the interviews in a background report that was used along with the interview transcripts for drafting the study; and the Overseas Development Institute, particularly Mr. Maximilano Mendez-Para and Ms. Linda Calabresse, who prepared a background report on the country’s regional trade dynamics. The ECE would also like to acknowledge the contribution of the international polling institution SATISCAN Sàrl that designed the electronic database for compiling the results of the personal interviews with traders, provided on the job training to the national team of experts who conducted the interviews, and ensured the data validation and reconciliation of the results. The ECE would like to thank the following agencies for providing the Georgian Association for Quality with background information on the business enterprise sector: the Georgian Export Development Association, the Ministry of Economy and Sustainable Development, Legal Entity of Public Law “Produce in Georgia”, Georgian Farmers Association, and the United States Agency for International Development “Governing for Growth Programme”. The ECE is grateful to the national stakeholders for their engagement throughout the assessment process and for their valuable comments during the stakeholder meeting that was held on 23 April 2018 at the Ministry of Economy and Sustainable Development in Tbilisi. The ECE is also grateful to Mr. Giorgi Chitadze, Head of Unit, Foreign Policy Department, Ministry of Economy and Sustainable Development for his support and assistance in engaging relevant public stakeholders and in organizing the stakeholder meeting for validating the findings of the study. 6 Regulatory and Procedural Barriers to Trade in Georgia: Needs Assessment Contents Foreword .................................................................................................................... 3 Preface ........................................................................................................................ 4 Acknowledgments ................................................................................................... 5 Abbreviations ............................................................................................................ 12 Chapter One .............................................................................................................. 15 Introduction ............................................................................................................................................................................ 15 1.1 Country background .............................................................................................................................................. 15 1.3 Scope of the study .................................................................................................................................................. 24 1.4 Outline of the study ................................................................................................................................................ 25 Chapter Two ............................................................................................................... 27 Traders’ Profile......................................................................................................................................................................... 27 2.1 Location, size and activities ................................................................................................................................ 27 2.2 Export-import mix and trading partners ........................................................................................................ 28 2.3 Transport modes of choice .................................................................................................................................. 29 Chapter Three ............................................................................................................ 31 Trade Facilitation Conditions ............................................................................................................................................ 31 3.1 Introduction............................................................................................................................................................... 31 3.2 Transparency ...........................................................................................................................................................
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