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Russia Suspends Free Trade Agreement with Georgia

Russia is suspending free trade agreement with Georgia. According to the Russian RIA Novosti agency, the Ministry of Economy of Russia has elaborated a draft about the suspension of the free trade agreement with Georgia.

The agency says that on 18 July the Parliament of Georgia ratified an Association Agreement with the EU. The main paragraphs of the agreement, including the Deep and Comprehensive Free Trade Area component, will take effect on 1 September.

According to the draft, suspension of free trade with Georgia has been agreed with Russia’s Ministry of Foreign Affairs, Ministry of Economy and Ministry of Justice.

Free trade agreement was signed between Georgia and Russia on February  3, 1994.

Prime Minister’s special envoy for relations with Russia Zurab Abashidze does not rule out that the termination of the free trade agreement with Russia will result in a deterioration of relations with Russia – first of all, the price of some Georgian products will be inflated on the Russian market and on top of that, in his words, the Georgian authorities may also find it difficult to ship Georgian produce to Russia.

As Mr. Abashidze announced with Maestro TV, this decision from Russia will definitely “bear political elements”.

“Recently, Russia has taken similar steps in relation to Ukraine. In addition, it has stiffened trade regulations with Moldova too. Why would Georgia be an exception? Thus, in the present state of play, we exclude absolutely nothing. We have kept all this in mind and we knew perfectly well that our relations with Russia might decay while negotiating the landmark pact with the EU. However, I really do not think that this must be viewed as a tragedy; neither can Russia’s move to impose bans on our products inflict great trauma on us. We are both members of the World Trade Organizations that has its own rules and we will by all odds comply with them. The price of our products will presumably increase in Russia, we will also find it cumbersome to export our produce to Russia; however, if we want to become an inalienable part of the European space, we must be ready to negotiate these kinds of challenges,” – declares Mr. Abashidze.