Georgian Business Week | Monday, January 26, 2009
“The job will be to ‘court’ specific manufacturers to Georgia”
An interview with Amy Denman, the Executive Director of the American Chamber of Commerce in Georgia (AmCham Georgia)
Q: The Charter on Strategic Partnership between the US and Georgia touches upon bilateral economic cooperation as well as pledges to pursue Enhanced Bilateral Investment Treaty and explore the possibility of a Free-Trade Agreement. How do you evaluate the Charter at large - its importance for Georgia?
A: The Charter is very important for US Georgian relations in the areas of defense and security cooperation, expanded economic and commercial ties, increased cultural exchanges and a commitment to continue to work together towards strengthening democracy. The importance for Georgia should not be underestimated. The Partnership Agreement is a very clear re-dedication of America’s strong commitment to the future security and, economic prosperity of Georgia.
Q: What do you think Amcham’s role in this process will be?
A: The section of the charter on Economic, Trade and Energy Cooperation is the most relevant section for AmCham to have a role in. The mission of AmCham and the statement in the Charter, namely to “enhance job creations and economic growth, support economic/market reform and liberalization, continue to improve the business climate and improve market access for goods and services” are very alike.
The work that AmCham has been doing for the past years, and the experience of AmCham member companies is, in a large part why the economic cooperation between our two companies can be called a success. The positive relationships that American companies have had in Georgia, and the fact that it is easier to do business here have led to a renewed commitment towards future growth in US-Georgia Trade and Investment.
Q: What are the advantages of the new Bilateral Investment Treaty? How helpful will it be to help attract additional investment? Can you identify the priority sectors?
A: That is just it: the overriding goal of the new BIT will be to attract additional investment. That is exactly what we are looking for. The new BIT will be a commitment to strengthen US Georgian economic partnership, through increased trade and investment.
Priority sectors would in my view be energy, manufacturing, and export (agricultural), and increased tourism. Georgia has laid a very good foundation for manufacturers to come in, now the job will be to “court” specific manufacturers to Georgia.
I’d like to also mention here that an expansion of coverage of the GSP would allow more Georgian products to enter the US market duty-free. This will be a very important step towards increasing Georgian exports.
Q: What was the volume of US investment in 2008 and 2007 and what is the forecast for 2009? What is the share of the US investment in Georgian GDP?
A: For the year 2007, FDI from the US to Georgia totaled around 85 million. For the first three quarters of 2008, the US was so far the 5th largest investor in Georgia with investments totaling more than 86 million. So the numbers are increasing. I don’t know the statistics yet for full year 2008, the August war and the downturn in the global economy will certainly have a negative effect on Q4 2008, but the main point is that US investment into Georgia is increasing. And we expect an increase for 2009. I cannot give an exact estimate, but we are optimistic. A lot depends on the turnaround of the global economy.
Q: Concerning the expected Free-Trade Agreement, what is the best outcome expected from this venture? Do you have any information about the timeframe for either document?
A: Georgia and the US have been informally discussing an FTA for some time now. We support the pursuit of a US-Georgia FTA, but this is a larger policy issue in the US. The new administration has just taken over, the US Chamber of Commerce has already held briefing rounds with the incoming administration. We will need to wait for a time to see where they stand on trade issues. The process takes time, and we can’t presume to put a deadline on it.
Again, I will say that it is something we’d like to see and something we will support with the new administration.
Volume of US-Georgia trade between Georgia and the US is increasing year on year. We want to see even further jumps in trade levels between our two countries. AmCham took part in or hosted several trade delegations in 2008, and we will do the same in 2009.