FOREIGN TRADE OF GEORGIA AND EAST AND CENTRAL EUROPEAN STATES COMPARATIVE ANALYSIS

Abstract

After disintegration of the Soviet Union and subsequent collapse of the traditional system of foreign trade, former soviet Republics and now newly Independent States faced acute problems, which had a tremendous negative impact on all of them. Formation of the new economic relations was a tough process, in which former “Soviet Bloc” States had a preferential position; before long they chose the European course of development. The Course of joining the European Union was declared by Georgia after some period and only in 2014 was signed the Association Agreement. These Agreements turned out to be quite challenging for Georgia as it imposes huge obligations: in the field of Foreign Trade among others. What is the current situation,? And how can we benefit from the Free Trade Agreements? These are the topics of major interest for the present article, in which we use the techniques of comparative analysis. The Analysis is focused on several aspects of foreign trade, such as export geography, major exporting products, changes in foreign trade, based on the assumption that Association Agreement would positively influence export potential and scales of export on the EU market. In addition, Trade Intensification Index in all the above mentioned States is computed in order to find out the export potential utilization on the major markets – the EU, CIS and NAFTA. Trade Intensification Index allowed us to compare the export potential utilization of all the three States. The research led us to the following conclusions: association agreement didn’t support creation of new export products, major exporting groups in every State are stable, the TII revealed that the EU market export potential is best utilized by Eastern and Central European States and the same is true about Georgia on NAFTA.