Georgia's foreign trade and the challenges facing the country's economic security
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Date
2023
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Ivane Javakhishvili Tbilisi State University Press
Abstract
In terms of globalization, external economic security of the country is one of the main elements of national
security; therefore, the country should pay more attention to it. External economic security is always on the
agenda for small states, including Georgia. Having historical ties and geographical proximity to great powers,
small states find themselves at a disadvantage in confrontation. The experience of the Baltic countries proves
that external economic security of these countries is mainly related to NATO and EU membership.
Diversification of foreign trade is critical. This is evidenced by the experience of both developing and developed
countries. Recently, trade relations between Georgia and Russia have been increasing, which is associated
with certain risks and dangers.
Georgia's negative foreign trade balance has increased at large and amounted to $ 7.9 billion in 2022. It is
essential to gradually reduce the negative trade balance by increasing local exports. The country has quite great
export potential, which isn’t properly used. The main characteristic of Georgia’s foreign trade is low level of
export and negative trade balance.
Georgia's export of goods to the CIS countries in 2022 increased by 33% compared to the previous year.
Georgia is a potential candidate country for the European Union. Notwithstanding, the share of the European
Union in the country's foreign trade is low.
It’s important for Georgia to develop and strengthen trade and economic relations with the members of
international community. Widening the scale of trade and economic relations with its strategic partner countries
is of special importance for Georgia.
Diversification of export is very important for Georgia and consequently, the EU market is one of the main
priorities for the country. The Association Agreement signed between Georgia and the European Union will
open the EU single market for Georgia. According to 2022 data, the EU accounts for 26% of total trade turnover
of Georgia, 22% of export and 28% of total import.
The role and position of Georgia in foreign trade of the EU is very modest. According to the 2022 data, Georgia
holds 87th position among the EU importer countries, 62th place among exporter countries and 761h position
in the total trade turnover. In the concluding part of the paper theoretical and practical conclusions and recommendations
are made.
Description
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Keywords
Citation
VIII International Scientific Conference: "Challenges of Globalization in Economics and Business", Proceedings , Tbilisi, 2023, pp. 380-388