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Making The Most of The DCFTA For Georgia, Ukraine And Moldova

Making The Most of The DCFTA For Georgia, Ukraine And Moldova

Interview with Nino Samvelidze, Manager of the Project, EU Programs Manager at PMCG.

International development consulting company PMCG recently organized a knowledge sharing conference in Chisinau, Moldova Making the Most of the DCFTA. The event was supported by International Visegrad Fund and aimed to assist Moldavan and Georgian businesses, entrepreneurs and Government bodies to strengthen their dialogue on the opportunities presented by the signature of the Association Agreement (AA), potential costs and benefit of the implementation of DCFTA, and the resolution of practical issues related to accessing European markets. Cecilia Malmstrom, EU Commissioner for trade, Luc Devigne, Head of EU Commission unit Russia, CIS, Ukraine, Western Balkans, EFTA, EEA and Turkey, also other high-ranking officials and people actively involved and having sound experience in DCFTA implementation process from Georgia, Moldova, Poland, Czech Republic, Slovakia, Hungary and Ukraine, also international development partners and institutions – EC, USAID, WB, EBRD, IFC, GIZ, UNDP have shared their experience and opinion about the process of EU approximation.

 – What was the major outcome of the conference?

– The conference stressed that implementation of DCFTA will be beneficial for Georgian, Moldovan, Ukrainian SMEs in terms of possibility to generate higher incomes due to new business possibilities and increased export opportunities.  Although there are several questions to be considered as the economic approximation is associated with several risks and challenges as well.

DCFTA has large political meaning for these countries and its proper implementation is important, it is essential to have permanent consultations with the private sector, in order to have clear understanding of business needs and interests.

Awareness and capacity of SMEs have to be further strengthened. DCFTA largely incorporates adoption of European norms and standards it is essential to empower capacity of and awareness of private sector in understanding of the compliance requirement and understanding of the changes required

Although, knowing the rules and regulations does not necessary mean that SMEs can adopt the necessary changes right away to their business, including investments required. External assistance is needed to develop a strategy and implementation plan for compliance with the new legislation applicable specifically for the product they produce or sell.

– What major challenges were stressed for Georgia, Moldova and Ukraine to overcome in the approximation process?

– One of the challenges stressed by Visegrad countries was about lack of possibility of local SMEs to catch up increased competition.

To deal with this challenge, Visegrad countries advised Georgia, Ukraine and Moldova to introduce reforms aimed to make economies liberal and to effectively use financial support of EU and international development organizations.

There are three main types assistance that donors offer:

  1. Budget support: International donors give money to governments and they allocated resources according to their priorities and needs.
  2. Technical assistance: Support to enhance skills of local SMEs to catch the opportunities DCFTA suggests. Most often it can be access to foreign expertise via international consultants with in-depth understanding of the process.
  3. Credit Lines: In this case international banks like The World Bank, European Bank for Reconstruction and Development (EBRD) and etc. give large amount credits to the banks operating in the local markets, aimed to be allocated within SMEs with lower rates.

The main key to deal with these challenges is to raise awareness of SMEs about the opportunities DCFTA offers, via permanent communication and dialogue between Public and Private sector.

– How such conference will benefit business community in Georgia?

– DCFTA implementation may bring quick legislative approximation process, which will in the end hinder the liberal economic development of the country. First of all, DCFTA implementation will bring the world’s largest 500 million market, which is stable so local businesses will obtain easier access to lower rate investments.

On the other hand, Georgia will become more attractive for other countries which don’t have access to European market to bring here production, so it’ll obtain the function of hub to largest market. Finally, in the mid and long term it will be positively reflected on local economies and the living standards of the citizens.

International donors attending the conference clearly declared that their priority is to support these countries in the process of EU integration. Adding that they are ready to enhance local SMEs with their financial support.

Cecilia Malmstrom, EU Commissioner for trade and Luc Devigne, Head of EU Commission unit Russia, CIS, Ukraine, Western Balkans, EFTA, EEA and Turkey recommended Georgia, Ukraine and Moldova to make the most of the opportunities DCFTA offers to these countries and implement respective reforms so that so that business environment is improved and businesses are encouraged to export on European markets..

Conferences and meetings like this one held in Moldova, play important role in this process, as they provide a platform for an open dialogue between key stakeholders, including: Governments, business community and international development organizations.

As form our part, we are proud to be part of this process and assist institutions in capacity development and economic reform agenda. We continue to support of EU approximation agenda of Georgia, Moldova and Ukraine and to provide policy advice in various areas of Association Agenda.