The UK and Georgia could be hitting on a new trajectory in their bilateral ties. Trade and investment are showing signs of potential growth, ushering in a new period for British interest in Georgia.
Georgia and the UK enjoy a thriving partnership. Bilateral trade is on the rise, as is the scope of British investments in Georgia. The types of UK goods exported to Georgia are numerous, and include railway and tramway stock, pharmaceuticals, various machinery and mechanical appliances, beverages, spirits and vinegar, while precious stones and metals, fertilizer, iron and steel, aluminium and inorganic chemicals are imported from Georgia. Georgian tea, wines, and mineral waters are also present on the UK market.
Yet, there is still so much more potential! Georgia is currently the UK’s 139th largest trading partner, accounting for less than 0.1% of the UK’s total trade, while total trade in goods and services between the UK and Georgia was £95 million in 2018.
And there are promising trends. Firstly,
both countries signed a Strategic Partnership and Cooperation Agreement in 2019, a deal which came into play after Brexit. The document deals with partnership in various fields, but most significantly of all, includes provisions on the trade of goods (such as on preferential tariffs, tariff rate quotas, rules of origin, and sanitary and phytosanitary measures) and trade in services and intellectual property, among others.
The new agreement stipulates that tariff rates for bilateral trade in goods continues to apply, as set out in the EU-Georgia agreement. However, in some cases, non-preferential applied rates may, in fact, be lower because of changes in the UK’s Most Favoured Nation tariff schedule. Thus, Georgia becomes the 47th country with whom the UK has signed a trade continuity agreement.
In terms of Foreign Direct Investments (FDI) though, the UK’s position in Georgia seems more promising than ever. Overall, in 2020, of all FDI that flowed into Georgia, 32% came from the UK, which made it the biggest source of FDI for Georgia. Georgia’s banks – TBC Bank and Bank of Georgia – are included on the FTSE 250 share index.
To promote bilateral trade and investment, Georgia and the United Kingdom launched a new project that will contribute to increasing trade and export opportunities between the countries. The project was supported by many branches of the government, and the embassies of both countries. The UK-Georgia Trade Hub (UGTH) project is designed to unite small and medium-sized businesses interested in entering the British market, and to simplify logistical and administrative services, while helping SMEs to overcome any difficulties. Find out more about this on the next page.
Another important move was made in October 2020, when the Georgian Chamber of Commerce and Industry and the London Chamber of Commerce and Industry signed an agreement of cooperation which aims to strengthen business and commercial ties between Georgian and British businesses. This followed the UK Season in Georgia – a carefully curated programme of some 60+ events held in September-December 2019, across many locations in Georgia and aiming to increase bilateral trade ties.
The UK market has always been an important one for Georgian businesses. As yet, the UK serves as the largest investor for the Georgian economy, while Georgia was one of the first countries to sign a free trade agreement with the UK after they decided to leave the European Union, resulting in the majority of Georgian products now being exempt from any custom charges. There is a lot of potential for bilateral trade growth. Promising trends in economic relations are also buttressed by the common geopolitical aspirations both countries share: the promotion of political partnerships and economic cooperation based on common values, common interests and close links. This is helped by the fact that Tbilisi has long been a pursuant of EU and NATO membership, and has built strong partnership ties with the United States – the UK’s foremost ally. This makes the basis for UK-Georgia relations solid and broad enough to build upon.