An Appraisal of the EU’s Trade Policy towards its Eastern Neighbours: The Case of Georgia

This study, conducted by researchers at Sciences Po in Paris, CEPS and the New Economic School of Georgia, assesses the present state of the EU-Georgia discussions on a free trade agreement and finds there is an urgent need for the European Commission to reshape its approach. To this end, the authors put forward concrete proposals that should be set in motion well before the autumn 2011 Eastern Partnership Summit. From the Introduction. This study assesses the present state of the EU-Georgia discussions on a free trade agreement—to say ‘negotiations’ would be premature since the European Commission has insisted on a hugely demanding set of preconditions before agreeing to open negotiations.

2. The case of Georgia is unique in two respects. On the one hand, Georgia’s own trade policy is more open towards the EU than vice versa, and Georgia has achieved governance reforms on a par with some of the old and new EU member states. On the other hand, the Commission is insisting on a complex set of preconditions being met before the opening of negotiations, which it has not done in the case of other neighbouring countries (Eastern or Southern). Taking both factors into account, the Commission’s approach is strikingly anomalous.

3. This study argues that the Commission’s approach is bad from three perspectives. It is bad development policy for Georgia. It requires Georgia to adopt and implement an enormous amount of imprecisely identified EU internal market regulations that go way beyond strictly trade-related matters, with no attempt to identify those that make sound economic sense for Georgia (and indeed for the Eastern neighbours in general). The burdensome regulatory changes imposed on Georgia are equivalent to taxing Georgian production—endangering its growth and the sustainability of its reforms and successful fight against corruption, which is so crucial for its long-term development.

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