Russia Threatens Georgia With Renewed Trade War

The Russian government regularly uses its agency for consumer protection, Rospotrebnadzor, for trade discrimination and blocking imports from countries whose policies Moscow does not like (see EDM, March 28, 2006; October 11, 2013; October 16, 2013). On August 4, 2015, Rospotrebnadzor issued a warning to Georgia about the “low quality” of Georgian wines being exported to Russia. “Georgian winemakers systematically violate technical standards while [Georgia’s] controlling agencies fail to provide proper oversight for their production processes,” the Russian watchdog agency said (Rospotrebnadzor.ru, August 4).

On the same day, but just prior to Rospotrebnadzor’s announcement, Russian Prime Minister Dmitry Medvedev warned about a possibility of “response measures” against Georgia for the latter joining European sanctions against Russia (Snob.ru, August 4).

Yet, as the special representative of the prime minister of Georgia for relations with Russia, Ambassador Zurab Abashidze, told Jamestown, “There was nothing new in those sanctions [cited by Medvedev], since it was about last year’s decision. Last year, the European Union introduced about 15 sets of sanctions against Russia in connection to its actions in Ukraine and Crimea,” Ambassador Abashidze said. Fearing a strong backlash by Moscow, Georgia decided to join only one of them, banning imports from Crimea and Sevastopol. “Now, the European Commission only extended last year’s sanctions [it did not pass new ones], and I do not understand all the excitement about Georgia’s year-old sanctions,” the diplomat asserted (Author’s interview, August 7).

Abashidze is evidently concerned about the possible resumption of the Russian embargo on Georgian wine, agricultural produce and mineral water. Russia unofficially barred these Georgian products from its market in 2006–2012 to punish the government of Mikheil Saakashvili for its pro-Western course. After the democratic change in government in Tbilisi, the ruling Georgian Dream coalition managed to start a dialogue with Moscow about gradually lifting the unofficial embargo. “[I]n the past two years, [Georgia’s] exports to Russia were valued at $400 million. This translates into tens of thousands of jobs,” Abashidze proclaimed. The ambassador called the possible resumption of trade restrictions on Georgian goods “a serious mistake of the Russian leadership” (Author’s interview, August 7).

Prime Minister Irakli Garibashvili, meanwhile, said in an interview for the Georgian media that he and his government “highly value the resumption of trade relations with Russia.” According to the head of government, Georgia “could not have ignored joining one of the EU sanctions, because it was about the ban on imports from Sevastopol and Crimea. After all, we demand from our partners the same attitude toward products originating from Abkhazia and South Ossetia,” he argued (Georgiatoday.ge, August 7).

The opposition regards the government’s stance a “defeatist policy toward the aggressor,” however. A member of the parliament from the opposition party United National Movement, David Darchiashvili, told Jamestown: “Solidarity with the West in the fight against Russian aggression is far more important than the export of wine to an unstable and uncivilized [sic] Russian market.” Darchiashvili also said that the opposition had tried hard, but with little success, to convince the ruling Georgian Dream coalition to join all the Western sanctions against the Russian Federation and pass corresponding legislation to this effect in the parliament (Author’s interview, August 5).

Economist Giorgi Khukhashvili, a former aide to the prime minister of Georgia, pointed out, in an August 6 interview with Jamestown, that the Georgian government was likely concerned about the possible repercussions of a renewed Russian embargo for the Georgian economy. “Export to Russia is very important to the stability of the national currency, the lari, which depreciated by 30–35 percent in the past several months anyway,” Khukhashvili said. According to the economist, “Georgia has not managed to play on two teams at the same time—on Russia’s side and on the side of the West. …Tbilisi will have to make an unequivocal decision [between the two] eventually.”

Khukhashvili added that if Moscow decides to implement restrictions against Georgian produce, “Georgia will not be able to counter that in any way” and will just have to accept this reality (Author’s interview, August 6).

For now, Rospotrebnadzor’s statement is only a warning; it is unlikely that Moscow is that irritated by Georgia’s symbolic joining of EU sanctions. “In reality, Russia is much angrier about Georgia’s continued military cooperation with NATO [the North Atlantic Treaty Organization],” David Avalishvili, an expert from the news agency GHN, argued (Author’s interview, August 7).

Indeed, in recent months, the Georgian government made several bold steps toward NATO. First of all, in June, Georgia’s “defense ministry acquired the latest anti-aircraft systems, including radars and medium-range missiles” from France, noted Irakly Aladashvili, the editor-in-chief of the military analytical journal Arsenali. This was the first time a NATO member country sold such potent arms to Georgia, he argued (Author’s interview, August 7; see EDM, June 29).

Second, NATO Secretary General Jens Stoltenberg is expected to arrive in Georgia by the end of August. The official plans for his visit include participating in the opening ceremony of the “joint military training center” under the auspices of the North Atlantic Alliance (Vestnik Kavkaza, August 3). The agreement to open the center was reached during the NATO summit in Wales, where Georgia received a “substantial package for intensive cooperation,” including the establishment of a military training center, strengthening of the Alliance’s communications office in Tbilisi, and holding joint military exercises (see EDM, February 4).

Moscow has traditionally treated its neighbors’ relations with NATO with a great suspicion. It is, therefore, not surprising that Russia now is considering resuming the trade war with Georgia under the pretext of Tbilisi’s joining 1 of the 15 European sanctions. The banning of imports from Crimea and Sevastopol is both the most symbolic while, at the same time, economically, least consequential of the individual sanctions.

Georgia’s notable ability, over the past few years, to increase trade with Russia while simultaneously developing relations with NATO and the EU can be largely attributed to skillful diplomacy, first of all by Zurab Abashidze, a long-time former ambassador to Moscow. Unlike Ukraine, which was overtly punished by the Kremlin for attempting to sign the Association Agreement and the Deep and Comprehensive Free Trade Area agreement with the EU, Russia has not used comparable military measures against Georgia, even though Tbilisi signed both agreements with the EU in 2014 (Civil Georgia, June 27). Still, judging by the latest statements of officials in Moscow, the era of such soft handling of Georgia is coming to an end, and the country will have to make a decisive choice between Russia and the West.