WORLD TRADE WT/MIN(98)/ST/44
18May1998
ORGANIZATION(98-2020)
Original: English MINISTERIAL CONFERENCE
Second Session
Geneva, 18and20May1998
GEORGIA
Statement Circulated byMr.Konstantin Zaldastanishvili,
Minister ofTrade andForeign Economic Relations
Itishighhonour totakepartinthe2ndMinisterial Conference oftheWTO aswellasto
represent Georgia onthe50thAnniversary oftheMultilateral Trading System.
After thefirstMinisterial Meeting Georgia hasmade abigsteptowards theaccession tothe
WTO. Thelatter weconsider asthemostimportant stage ontheroadtothefullinclusion ofGeorgia
intotheworld trading system. Because ofthisfact,theGovernment ofGeorgia hasdeclared thatrapid
entry intothisinternational organization isthemostimportant priority initsentire foreign economic
policy. Inconnection with thisfact, Iwould like toexpress mydeep gratitude to
Ambassador E.Herfkens, thechairperson oftheWorking Party ofGeorgia ’sacceding totheWTO;
totheMembers oftheWorld Trade Organization; andtotheSecretariat fortheircooperation inthe
process oftheaccession ofGeorgia totheWTO. Anadditional important benefit forusisthestimulus
thattheaccession process provides tomore rapid development ofmarket reforms inGeorgia.
Georgia began theprocess ofjoining theWTO in1996, when itofficially applied forfull
membership andreceived observer status.
UndertheMinistryofForeignAffairs,theCommissiononaccessiontotheWTOwasestablished
inGeorgia. Representatives from virtually allMinistries andDepartments takepartinthework of
theCommission. Ourwork hasalsobeensubstantially assisted byrepresentatives oftheEuropean
Union, theUnited States, andtheWorld Bank, forwhich helpweareverygrateful.
Inashort period oftime, theCommission prepared theMemorandum ontheForeign Trade
Regime, which wasofficially submitted totheSecretariat oftheWTO inApril 1997. Wethank the
Member States oftheWTO forattentive study ofthisdocument. Asaresult, wereceived about
400questions ontheMemorandum, thereplies towhich wesubmitted inSeptember 1997.
Atthebeginning ofDecember 1997, intheheadquarters oftheWTO hereinGeneva, bilateral
consultations wereconducted withrepresentatives oftheUnited States, Canada, theEuropean Union,
Japan, andAustralia. Themain subject ofthese consultations wasdiscussion andclarification of
questions concerning Georgia 'sforeign trade regime. These consultations contributed substantially
totheprocess ofouraccession totheWTO.
Atthebeginning ofthisyear, wesubmitted totheSecretariat ourInitial Offers ongoods and
services.WT/MIN(98)/ST/44
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Bilateral negotiations withtherepresentatives ofAustralia, Canada, theCzech andSlovak
Republics, theEuropean Union, Hungary, Switzerland, Turkey, andtheUnited States, which took
place lastweek andyesterday, havealsobeenveryfruitful.
Thefirstmeeting oftheWorking Party ontheAccession ofGeorgia totheWTO washeld
on3March 1998andinaccordance withtheopinion oftheWTO Member States itwasquitesuccessful,
that,undoubtedly, brought usnearthedayofobtaining afull-member status oftheWTO. After this
meeting wereceived about 170additional questions. Thedraftversion onreplies onthisquestionnaire
wehavealready circulated.
Moreover, asresults oftheaforementioned bilateral meetings wesubmitted totheWTO
Secretariat ourrevised initial offers ongoods andservices.
Letmenowtoinvite yourattention toseveral positive developments inGeorgian legislation
since thesubmission oftheMemorandum onForeign Trade Regime. Forexample, incompliance
withourcommitmentsintheMemorandum,suchimportantlawsastheCivilCode,theTaxandCustoms
Codes, theMaritime andAviation Codes, the"Law onPrivatization ofStateProperty", the"Law on
advertisement" havebeenadopted andhavealready come intoforce. Experts from keyinternational
organizations made important contributions tothedevelopment oftheselaws, which fullycomply with
international norms.
Atthepresent time,Parliament isconsidering suchimportant billsasthe"Law onTrademarks",
the"Law onCopyright", the"Law onPatents", andothers. Thedraft "Law onGovernment
Procurement" isintheprocess ofdevelopment intheappropriate ministries. Therequirements ofthe
WTO havebeenfullytaken intoaccount inthedevelopment ofthese documents.
Inaddition, theParliament hasmade acommitment that,beginning 1September 1998, allnew
legislation adopted inGeorgia mustbeinfullcompliance withthelegalnorms oftheEuropean Union.
Inthisconnection, noteshould betaken thattheGeorgian-European Centre forEconomic Policy
andLegal Consultation ("GEPLAC") which hasbeenrecently established inTbilisi under theaegis
oftheEuropean Union, hasactively begun toassist intheprocess ofharmonizing ourlegalsystem
withtheEUandWTO standards.
Itisimportant alsotomention thesignificant contribution oftheCaucasus Mission oftheUnited
States Agency forInternational Development (USAID) anditsCentre forInstitutional Reform andthe
Informal Sector (IRIS) totheharmonization ofourlegal system ingeneral andspecifically tothe
accession ofGeorgia totheWTO.
Active work hasstarted onthetransformation oftheoldSoviet system ofstandardization and
certification toanewonecorresponding tointernational standards. Thefirstrealstepinthiswasthe
adoption oftwoimportant documents: the"Law onCertification ofProducts andServices" andthe
"LawonStandardization".TogetherwiththeirGeorgiancolleagues,foreignexpertsareactivelyinvolved
inthiswork. Also, on1January 1998, Georgia became acorrespondent-member oftheInternational
Standards Organization (ISO). On17October 1997, Georgia applied formembership intheCodex
Alimentarius Commission aswell. Thisapplication wasofficially registered bytheSecretariat ofthe
Commission inJanuary thisyear.
Nowadays, theappropriate structures oftheGovernment ofGeorgia areintheprocess of
converting fromtheHarmonized System ofNomenclature ofGoods 1992totheHarmonized System
1996.WT/MIN(98)/ST/44
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Itisalsoimportant tonotethat,effective from 1January ofthisyear, Georgia applies the
destination principle withrespect toindirect taxation ofimports andexports.
Notcontenttobeapassiveobserveroffurtherliberalizationoftheworldtradingsystem,Georgia
isconsidering theimportant initiatives thathavebeenadopted covering tradeininformation technology
andpharmaceuticals. Inaddition, aPresidential Decree on"The Common PlanofPrivatization of
Separate Sectors oftheGeorgian National Economy" hasbeenadopted, which envisages restructuring,
de-monopolization andprivatization oftheentire telecommunications network ofthecountry. These
measures willbeimplemented withtheparticipation oftheWorld Bankandtheconduct ofinternational
tenders.
With respect tointellectual property rights, Georgia isamember oftheParis Convention on
Protection ofInternational Property Rights, theBernConvention onProtection ofWorks ofLiterature
andArt,andtheTreaty onPatent Cooperation. Thenecessary intergovernmental procedures for
accession ofGeorgia totheProtocol oftheMadrid Convention onInternational Registration ofMarks
havejustcompleted.
Georgia paysgreatattention toregional cooperation. Wewelcome theprospect ofcooperation
within theframework ofsuchregional organization astheBlack SeaEconomic Cooperation (BSEC).
Wehavealsoconcluded aPartnership andCooperation Agreement between Georgia andtheEuropean
Union.
Theactive support ofinternational organizations andindividual country donors hasgreatly
helped theGovernment ofGeorgia toimplement market reforms.
Thelatest statistical datademonstrate therapid improvement oftheGeorgian economy. In
1997, realgrowth inGDP was11.3percentagainst 10.6percentin1996. Theannual inflation rate
wasfixed atthelevel of7.3percentin1997, andisprojected todecline further to3.1percentin
1998. Price liberalization hasbeencompleted. Thenational currency introduced in1995--thelari--
isstable. Theforeign debtofGeorgia, which totals $1.6billion, hasbeenentirely restructured.
Thebanking system ofGeorgia isbeing actively reformed. Asaresult ofincreased liquidity
requirements, thenumber ofbanks hasbeenreduced from229to53.Tenofthesehavebeenestablished
withtheparticipation offoreign capital. Most Georgian banks havejoined theinternational "SWIFT"
system ofpayments. Special attention should bedrawn tothefactthatGeorgia hasaccepted Article 8
oftheIMFAgreement.
There arealsopositive trends inthedevelopment offoreign trade. In1996, Georgia hadtrade
relations with82countries; lastyearthisnumber increased to93.Foreign trade turnover increased
30percentin1997, rising toatotalofoneUS$1.108 billion. Exports amounted toUS$250 million.
There wasagrowth ofexports, butimports alsoincreased, dueespecially totheneedtoimport energy
andgrains.
From May 1996 through theendof1997, 161private foreign investments, totalling
US$135 million, were registered inGeorgia. Investors from 36countries haveputtheirmoney in
Georgia. Onestimulus tothisinvestment wastheadoption in1996 ofthe"Law onPromotion and
Guarantee ofInvestment Activity", which provides fornational treatment ofinvestments.
Adoption andenforcement ofsuchlawsasthe"Law onMonopoly andCompetition", the"Law
onEntrepreneurship", andthe"Law onBankruptcy" haveplayed asignificant roleinincreasing business
activity andcompetition inGeorgia.WT/MIN(98)/ST/44
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Small privatization isvirtually complete inGeorgia. More than11,492 small enterprises have
already beenprivatized. 1,160 medium andlarge enterprises havealready beenconverted intojoint
stock companies. Thefactthatprivatization hasincluded suchstrategic branches oftheeconomy as
energy, transport, andthebread industry points outthedepth oftheprocess. Itisnoteworthy that
during1997,thetotalamountofcapitalattractedbyprivatizationtenderswasmorethanUS$100million.
Toemphasize theimportance ofGeorgia 'srapid accession totheWTO, wewould liketoinvite
yourattention totheimportant effects thataccession willhaveonworld trade. What doImean?
Georgia, withapopulation ofjustoverfivemillion people, occupies astrategically located
territory ofapproximately 70,000 square kilometres. Withitsdeepwater portsontheBlack Sea,Georgia
provides themost direct transit corridor between theBlack andCaspian Seas.
Great attention hasrecently been focused onthedevelopment oftheTransport Corridor
Europe-Caucasus-Asia (TRACECA), which issometimes described asarestoration ofthe"Great Silk
Road." Thefactthatthisroute, which would runthrough theBlack Seaandacross Georgia tothe
Caspian Sea, would shorten thesearoutes connecting Europe with Asia byapproximately
8,000 kilometres isanindication ofitsimportance.
Because Georgia isacentral country forthecarriage ofbothenergy andgoods along theSilk
Road, therapidaccession ofGeorgia totheWTO would significantly assist therealization ofthisproject.
Inconclusion, onbehalf oftheGovernment ofGeorgia, letmeoncemore assure youthatwe
willdoeverything thatwearerequired todoinorder tofulfil thecommitments weareundertaking
inacceding totheWTO.
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