As it stands, Ireland’s largest trading partner is the United Kingdom. This has been the case since Independence although the balance has shifted greatly since Ireland entered the EEC in 1973 with the UK no longer wholly dominate although our reliance on the UK in certain sectors such as beef, timber, pork and much more.
As Ireland’s reliance on the UK as a trading partner has diminished, it has been able to look to a wider market largely thanks to membership of the EU both in terms of exporting to EU Member States as well as using EU trade deals to export to third parties.
Following the UK’s decision to leave the EU, made official this week by the triggering of Article 50, and the election of Donald Trump as President of the US with a far more protectionist outlook; Ireland must now use its EU membership to develop new markets and make the most of trade deals.
Having met with their Charge d’Affaires recently, I thought I would use my first in a series of profiles, to look at opportunities for Ireland to do business with Georgia.
Diplomatic relations between Georgia and the Republic of Ireland were established in 1996. Ireland is represented in Georgia through its embassy in Sofia, Bulgaria and Georgia has an embassy on Morehampton Road in Dublin. Ireland will take on Georgia in a vital World Cup qualifier in Dublin this September while the IRFU runs a mentoring programme for Georgian referees.
Ireland supports EU initiatives to promote peace between Georgia and Russia. Ireland recognises Georgian sovereignty over the separatist regions of Abkhazia and South Ossetia. Ireland also condemned the decision of Russia to recognise South Ossetia and Abkhazia as independent states.
In February 2017 the Embassy of Georgia in Ireland hosted a presentation on Georgia’s business and investment environment that was organized in partnership with the Irish Chamber of Commerce in Central and Eastern Europe (I-Cham) while there is currently an exhibition in my old stomping ground of County Hall in Dún Laoghaire focussing on the potential of Georgia as a trading and investment partner.
The EU and Georgia signed an Association Agreement in June 2014 that has been in force since July 2016. The agreement introduces a preferential trade regime – the Deep and Comprehensive Free Trade Area (DCFTA).
This regime increases market access between the EU and Georgia based on having better-matched regulations. The EU is the main trade partner of Georgia. Around 32.6% of its current trade takes place with the EU, followed by Turkey (17.2%) and Russia (8.1%). EU exports to Georgia amounted to €1.84 billion in 2015.
EU trade with Georgia accounts for 0.1% of its total trade with a turnover of €2.6 billion in 2015. The key EU imports from Georgia include mineral products, agricultural products, base metals and chemical products. The EU imported goods to the value of €742 million from Georgia in 2015.
Seen as a gateway market, Georgia has an extensive Free Trade network with other countries in the region such as Turkey, the Middle East, certain Gulf States and recently with China.
There is a 0% tax to attract investors to establish industries in Georgia with the operations in the regional market while the stable banking sector with no restrictions on currency convertibility or repatriation of capital and profit is attractive for many as is the tax system that is liberal and business friendly with only six low and flat taxes. Corporate tax is at 15%.
Georgia has been a member of the World Trade Organisation (WTO) since 2000. Visa free travel from Georgia to the EU came into effect in March 2017.
Looking at the pharmaceutical, agri-food and construction sectors in particular; there is obviously huge potential for increased cooperation between Irish and Georgian enterprises directly as well as for Irish businesses to utilise Georgia’s gateway status into the region.
We will never have a better trading partner than the UK nor will we ever replace it’s preeminent role in Irish commerce but it is vital that we look to develop new markets and the obvious first ports of call must be those closest to home with the easiest levels of access.
Senator Neale Richmond is the Government spokesman on EU Affairs in Seanad Éireann.
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