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Recent Changes in Georgia’s Government Expected to Breathe New Life into Georgian-Russian Trade Relations

Published: October 15, 2012 | 10:16 am
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The COMMERCIAL TIMES

Russia is in the expectation condition of starting negotiations with Georgia’s new government. On its part, Georgia’s new government says entering the Russian market is one of the top tasks on their agenda.

After Georgian Dream Coalition’s winning the parliamentary elections, the discussions around settling relations with Russia have been intensified. Russia expects Georgia to start negotiations on transportation issues.

Georgian production, rejected by Gennady Onishenko, Russian Chief Sanitary Inspector, and thrown way from the neighboring country, could again find its way to the north.

Georgia’s recent parliamentary elections appear to have much influenced on Georgian-Russian political and economic relations.

Maia Panjikidze, candidate for the Minister of Foreign Affairs of Georgia, says it’s essential to restore relations with Russia and claims that entering the Russian market is one of the main tasks.

Russian side, in particular, the transport ministry, also says they’re ready to start negotiations. According to Transport Minister Maksim Sokolov, after Bidzina Ivanishvili’s victory, transportation issues between Georgia and Russia will be improved. “They have to make a proposal andwe’re ready t contemplate and start negotiations,” Sokolov told Life News.

Transport relations between Georgia and Russia have been worsened since 2008. Reportedly, currently only two companies S7 and Airzena operate flights from Georgia to Russia.

Other air companies are also interested in launching flights to Russia. Acoording to Salome Beraia, Sales Manager of Fly Georgia, there is an interest in simplifying transportation between Russia and Georgia. “Fly Georgia is interested in launching flights to Moscow. However, since no negotiations are ongoing, no decisive steps are made. If the situation improves, our company will operate flights to Russia by all means as it is really profitable,” said Beraia.

Georgian wine companies welcome the reopening of the Russian market. Khareba Winery positively assesses Russian market entrance prospect, saying it would be one more new export market. The company also keeps working on wine markets of other countries. “Indeed, we’ll continue working with other export markets in order to have export direction maximally diversified so that political crisis with any country, whether it’s Russia or Georgia’s other partners, does not influence negatively on our export volume,” noted Natalia Gogoladze, Marketing Manager of Khareba Winery.

“Wine has always been a significant part of Georgia’s export direction, occupying second or third place in this respect for many years. This was conditioned by the fact that 90% of the wine exported from Georgia was sold in Russia. This neighboring market was and remains a convenient option for Georgia for its close location and another plus is that Georgian wines are much demanded in Russia. Since the wines made in Georgia have good public awareness in Russia, it saves local wine-makers finances. However, we do not think it’s reasonable to depend on one market only and this was proved by the 2006 Russian embargo on Georgian wines,” explained Natalia.

It appears that particular companies have found alternative ways and are not much interested in returning to the Russian market. For instance, Wine Man, which plans to sign a contract with China in near future, doesn’t plan to enter the Russian market at this phase. “Currently, we are not intended to start export to Russia. In general, we’re interested in all markets where we see commercial profit,” declared Koba Mikava, Marketing Manager of Wine Man.

According to economic expert Irakli Lekvinadze, it’s important to start trade-related negotiations with Russia. “It’s essential in terms of agro sector. If the Russian market opens for Georgia there’s a good chance for the growth of the local agro production. The country will get more income and Georgian manufacturers will be incited to increase production volumes,” stated Lekvinadze.

As Lekvinadze said, Russian market is rather accessible and acceptable for Georgia than the European Union. “European market is oriented at special quality production whereas the Russian market does not set strict quality standards,” he said. “Indeed, starting trade relations should not be accomplished in exchange of any type of compromises. Political disagreement may remain between the countries but business relations should develop.”

It might be a mere coincidence, but Love with Accent- a lyrical comedy movie by a Georgian director Rezo Gigineishvili, returns on Russian’s TV screens.

 

 

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