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Georgia-made products containing Turkish inputs to be exported to the EU under FTA

By Khatia Bzhalava
Tuesday, February 16
On February 10, 2021, the Turkish Grand National Assembly decided on the ratification of the Agreement on Diagonal Cumulation between Georgia and Turkey. The agreement was signed between Georgia, the EU, and Turkey on March 20, 2018. Natia Turnava, Minister of Economy and Sustainable Development has welcomed the decision and stated that the agreement would contribute to the growth of the exports from Georgia and, in particular, products from industrial raw materials imported from Turkey to Georgia will be exported to the EU in a wider range and volume. The minister stressed that the agreement would also encourage investments from Turkey in the Georgian economy, promote the establishment of joint projects, and creation of new jobs.

According to the Ministry of Economy, the diagonal cumulation between Georgia, the EU, and Turkey will be fully activated after the relevant information is published in the official journal of the European Commission based on the notification from Georgia and Turkey. Once the agreement enters into force, Georgia-made products that include Turkish raw inputs will be exported to the EU under the Free Trade Agreement (FTA). The ministry notes that along with other sectors, this agreement is particularly important for the further development of the textile industry in Georgia and for attracting new foreign investments in this sector.

As Turnava stated, in 2020, $75 million worth of textile products were imported to Turkey and most of that textile was later exported to the EU. Diagonal Cumulation allows importing these products directly to the EU within the Free Trade Regime, which, according to the minister, will be much more profitable for local producers in Georgia. Diagonal Cumulation will support the further development of such sectors like the production of furniture, construction products, plastic products, steel products, and paper and cardboard products, however, the agreement will not apply to the agricultural products, as the customs union between the EU and Turkey does not cover agricultural products.