AmCham Georgia President Sarah Williamson: Time for a free trade deal with Georgia

Imagine a country whose legislative body vigorously debates policy proposals and then comes together to strike compromises for the common good.

Imagine a government that enacts regulatory reforms that encourage long-term growth, expedites the country’s acceptance into trade agreements with the largest markets around, and creates a more equal business environment.  What country comes to mind? For me it’s Georgia, where I’ve lived since 1998 and co-own the country’s largest IT company.

In recent years, few countries can match Georgia’s progress when it comes to strengthening democratic institutions and creating a business-friendly environment for American investors.

As a steadfast ally of the United States in a strategically important region, whose soldiers have stood shoulder to shoulder with American forces in Iraq and Afghanistan, it’s about time Washington took note of Georgia’s recent accomplishments.

The presidential election held at the end of October was widely hailed by international observers as a successful free and fair election. This is a huge step for a country where stolen elections led to revolution only a decade ago. 

A pre-election assessment from the National Democratic Institute found that Georgians now “enjoy an electoral environment shaped by the fundamentals of democracy: the first peaceful transfer of power through the ballot box; a credible political opposition; a parliament characterized by meaningful debate and decisions; an increasingly independent judiciary; and a lively media environment.”

The presidential election marked another watershed moment as Prime Minister Bidzina Ivanishvili and President Mikheil Saakashvili, both of whom deserve credit for where Georgia is today, will leave government in the next month. Georgia is now entering a more vibrant era of governance where democratic institutions trump individual personalities.

President-elect Giorgi Margvelashvili and Prime Minister-designate Irakli Gharibashvili represent Georgia’s new political class who can work across party lines and are focused on an aggressive reform agenda. 

Over the past year, Georgia has made tremendous progress in strengthening democratic institutions. For the first time, the Parliament functions as a true legislative body with a significant majority and a strong opposition. Committees hold open debates and engage in negotiation and compromise more often than they do in Washington.

Among rule of law experts, there is near unanimous agreement that the judiciary is much more independent than it was a year ago. In a dramatic break from the past, judges are now ruling against prosecutors in many cases, and defendants are acquitted due to a lack of evidence or procedural violations. While we take these things for granted in the West, these are remarkable developments when one considers how Georgian courts functioned just over a year ago.

While the strengthening of democratic institutions bodes well for the future, Georgia’s transition to a full democracy needs continued support from the West. A successful presidential election and the appointment of a new prime minister carried out in accordance with the Constitution provide the U.S. with its greatest opportunity in recent years to help the Georgian people realize their ambition of integrating into the Euro-Atlantic community. 

Along with strengthening democratic institutions, Georgia has initiated reforms to improve the business environment and further integration into the global economy.

The new government regularly consults a broad base of stakeholders, including business associations and civil society organizations, on legislation impacting the business community

Over the past year, the government has introduced customs clearance zones and undertaken balanced reforms, while strengthening legal institutions relevant to business regulation.

The impact of these reforms is just starting to be felt. Recent estimates from the World Bank predict Georgia’s economy will grow by 5-6 percent next year.

Georgia is now poised to ink a Deep and Comprehensive Free Trade Agreement (DCFTA) as part of its EU Association Agreement that will be enacted later this month. The EU forecasts that the DCFTA will eventually increase Georgia’s exports to the EU by 12 percent and imports from the EU by 7-8 percent. Full implementation of trade-related reforms could increase Georgia’s long-term GDP by more than 4 percent.

Two years ago, President Obama announced that the US would begin discussing a free trade agreement with Georgia. Since Georgia has met the EU DCFTA requirements, which are considered as demanding as U.S. requirements, it’s time both countries move forward in earnest on this mutually beneficial initiative. 

The strengthening of democratic institutions, combined with pro-business economic policies aimed at unlocking Georgia’s growth potential, drives my optimism about Georgia’s future. In a region of the world that is trending away from democracy and free markets, Georgia provides a unique success story that U.S. policymakers should embrace by extending opportunities for greater Euro-Atlantic integration.

Sarah Williamson is the President of the American Chamber of Commerce in Georgia and Co-Owner of United Global Technologies [UGT], the largest IT company in Georgia.