Prospect of Deep and Comprehensive Free Trade Area (DCFTA) – Is there a European Way for Georgia?
Prospect of Deep and Comprehensive Free Trade Area (DCFTA) – Is there a European Way for Georgia?

Author(s): Tamar Khuntsaria
Subject(s): National Economy, Economic policy, International relations/trade
Published by: CSS - Center for Social Sciences
Keywords: DCFTA; Free Trade Agreement;
Summary/Abstract: This paper offers analysis of the possible impediments to concluding a DCFTA with Georgia. My arguments are based on three major factors hindering the process: First and foremost, Georgia’s long term economic development model is uncertain. The country’s ruling elite, dominated by an influential libertarian group, maintains the government’s ambivalent attitude towards the two fundamentally different ‘European’ and ‘Singaporean’ models of country’s development. It is argued here that becoming a second Singapore is an obscure prospect for Georgia and that the best possible alternative for the country’s long-term sustainable development is to follow the European path. Second, the Government of Georgia is unenthusiastic about implementing the EU preconditioned ‘deep and comprehensive’ regulatory reforms due to high convergence costs. Instead of targeting long-term sustainable economic growth, official Tbilisi proceeds with marginal reforms and uses the possibility of the EU approximation as a political tool to sustain the EU’s political support and aid. Third, the EU’s ‘enlargement-lite’ and technocratic policy along with its limited conditionality towards unfulfilled reforms in Georgia further encourages the government’s “selective convergence” and hesitance to decide firmly and ultimately on the European way.

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