Davit Songhulashvili: “Exports to the European Union have made significant progress since the implementation of the Association Agreement.”
Verdict: FactCheck concludes that Davit Songhulashvili’s statement is MOSTLY FALSE.
Exports to the European Union totalled USD 607 million in 2013, the year before the signing of the Association Agreement. The figure stood 5% lower at USD 574 million (or USD 690 million when including the United Kingdom) in 2024. Exports to the EU peaked in 2022 at USD 862 million (or USD 878 million with the UK) throughout the entire period, representing a 42% rise as compared to 2013. However, most of Georgia’s main trading partners recorded higher export growth over the same period.
Whilst local exports to the EU had increased by 17% in 2024 as compared to 2014 (earlier data is unavailable), the 2024 figure remains lower than in every individual year since then.
The decline is largely attributed to reduced demand for copper ores. Although wine exports increased during the reporting period, Russia – not the EU – remained the main market for Georgian wine as of 2024 like other products such as spirits, mineral waters and various agricultural goods.
The EU’s share in Georgia’s total exports dropped from 20.9% in 2013 to 16.9% by 2021 amidst export growth to other trading partners. The decline accelerated in the following years, driven by specific factors – particularly, the effects of the Russia-Ukraine war and an abnormally rise in re-exports to Central Asian countries.
The share of local exports in total exports constituted 65% in 2014, rising to 83% in 2015 and has consistently remained above 80% ever since – standing at 83% again in 2024.
Exports to the EU rose by 39% in the first quarter of 2025 as compared to the same period last year. Whilst this can be considered a positive development, it is nevertheless too early to comment on the broader trend.
Given the factual inaccuracy (exports have neither increased significantly in value nor undergone structural improvement since the implementation of the Association Agreement and that certain increases are tied to base effects), as well as the recent signs of positive change, FactCheck concludes that Davit Songhulashvili’s statement is MOSTLY FALSE.
Analysis
When commenting on trade with the European Union, Davit Songhulashvili stated: “Georgia has made significant progress in increasing exports to the EU markets since the implementation of the Free Trade Agreement. Active involvement of the private sector and encouragement of investment are essential to maintain this trend, which will ensure mutual economic benefits.”
Georgia signed the Association Agreement with the European Union on 27 June 2014. Georgian products, with some exceptions, were exempted from tariffs and quotas when exported to the EU under the agreement. At the same time, Brussels maintained strict requirements regarding the quality and compliance with the EU standards.
Several key questions need to be addressed to assess the impact of the Association Agreement:
- How has the value of exports to the EU changed since the Agreement came into force?
- Has the EU’s share in Georgia’s total exports increased?
- What was the trend prior to 2014 and was the dynamic altered?
- Have external factors influenced the rise or fall in exports during this period?
Three countries joined the EU over the past two decades: Bulgaria and Romania in 2007 and Croatia in 2013. Meanwhile, despite the United Kingdom officially leaving the bloc in 2020, it signed a separate Free Trade Agreement with Georgia. Unlike Bulgaria, Croatia has never accounted for a significant share in Georgia’s export figures – neither before nor after its accession in the EU. On the other hand, Bulgaria has consistently been an important trade partner. Georgia’s exports to the EU increased by USD 110 million in 2007 as compared to the previous year with more than half of that growth – USD 59 million – attributed to trade with Bulgaria. Thus, it is reasonable to set 2007 as the beginning of the reporting period.
Graph 1: Exports Prior to the Implementation of the Association Agreement (USD Million)
Source: National Statistics Office of Georgia
Graph 2: Exports Following the Implementation of the Association Agreement (USD Million)
Source: National Statistics Office of Georgia
Exports to the EU accounted for 21.8% of total exports in 2007, slightly decreasing to 20.9% by 2013 but plummeting to just 8.7% by 2024 – the lowest level since 1997. This decline is mainly attributable to the accelerated rise in exports to other regions. Although the UK formally left the EU in 2020, this shift did not drive the reduction in EU trade. Georgia’s total exports to the UK amounted to USD 89 million between 2020 and 2025, implying that 2024 export levels to the EU would still fall short of the 2013 benchmark even without Brexit.
Russia lifted its embargo on Georgian agricultural products in 2013 which led to increased export volumes, raising Russia’s share in Georgia’s overall trade.
Georgian wine returned to the Russian market in 2013 which held political and social context in addition to its economic implications. However, wine exports to Kyrgyzstan and Kazakhstan within the CIS grew at a much faster rate between 2022 and 2024. For comparison, wine exports to Russia amounted to USD 47 million in 2012, rising to USD 191 million in 2013 and USD 275 million in 2014, whilst exports to Kyrgyzstan alone surged from USD 31 million in 2021 to USD 1.3 billion in 2024.
Export growth is beneficial from an economic standpoint regardless of whether it occurs in Germany or Kyrgyzstan (whilst the reliability of trading partners and the minimization of political risks are also crucial factors, they represent a separate area of discussion). The real issue is not the increase in exports within the CIS region but rather the stagnation – or even decline in some cases – of exports to the EU.
Georgia’s exports to the EU have declined four times – in 2016, 2020, 2023 and 2024. What goods are we exporting to the EU and why has their volume decreased?
Copper ores accounted for USD 162 million – or 27% – of the total USD 607 million in Georgia’s exports in 2013 before the Association Agreement. Hazelnuts and walnuts followed with USD 113 million whilst passenger cars and fertilisers ranked third and fourth with USD 50-52 million each. Crude oil exports totalled USD 41 million whilst wine ranked eighth with USD 10 million.
Exports to the EU reached a record high in value in 2022. Copper ores once again ranked first with USD 438 million followed by hazelnuts at USD 74 million and wine at USD 31 million.
However, copper ore exports had sharply declined to USD 55 million by 2024, dropping to third place. Hazelnuts rose to the top with USD 64 million and precious metal ores ranked second with USD 56 million. Wine came fifth with USD 34 million.
These figures show that the growth and the subsequent decline of exports to the EU were largely driven by a single product – copper ores. Heavy reliance on one export commodity poses significant risks.
Graph 3: Exports to the European Union (USD Million)
Source: National Statistics Office of Georgia
Hazelnut exports to the EU have nearly halved as compared to 2013. Whilst wine exports have tripled over the same period, Georgia sold five times as much wine to Russia than to the EU in 2024. There is an imbalance in trade that favours Russia, particularly in the exports of alcoholic beverages and mineral waters, as well as fruits and other agricultural products with the exception of hazelnuts.
Table 1: Exports to the European Union, Ranked by the Top Ten Export Products of 2013 (USD Million)
Source: National Statistics Office of Georgia
The share of re-exports in Georgia’s total exports has increased sharply in recent years, surpassing that of locally produced goods. This trend is primarily driven by the significant rise in re-exports of passenger cars to Central Asian countries. However, the situation is different in the EU market where local exports have consistently accounted for more than 80% of total exports.
In monetary terms, local exports to the EU totalled USD 408 million in 2014 (disaggregated export data is unavailable prior to 2014). Whilst this figure had increased by 17% to USD 477 million by 2024, this is far from a record high and only surpasses the 2014 level. The decline in exports constitute 22% and 35% as compared to 2023 and 2019, respectively.
Graph 4: Structure of Exports to the European Union (USD Million)
Source: National Statistics Office of Georgia
Exports to the EU increased by 39% in the first quarter of this year as compared to the same period last year – rising from USD 133 million to USD 185 million. The main drivers of growth were copper ores, ferroalloys and precious metal ores. If the growth rate persists, exports to the EU will reach USD 800 million this year.[1]
Overall, we are presented with a picture in which exports to the EU have not increased 12 years after the implementation of the Association Agreement – in fact, they have even declined as compared to the pre-Agreement period. Even the record figure observed in 2022 exceeded the 2013 level by only 42% which is significantly lower than the growth achieved with other major trading partners. Notably, exports to the EU grew much more rapidly during the pre-Association period between 2007 and 2013.
Despite some growth in recent years, exports of wine, mineral waters, fruits, alcoholic beverages and other agricultural products to the EU remain low and fall significantly behind the corresponding figures for Russia.
The signing of the Association Agreement and the reopening of the Russian market occurred almost simultaneously. Whilst the Russian market carries political risks, its quality standards are consistently lower than those required by Brussels. It is likely that this factor has posed an obstacle to Georgia’s efforts to establish itself in the EU market.
Local exports have increased as compared to 2014 but have declined relative to all subsequent years.
The claim that Georgia has made significant progress in increasing exports to the EU markets following the implementation of the Free Trade Agreement is not accurate. Whilst there was a slight increase at one point, it was short-lived. Given this factual inaccuracy, despite the recent positive developments, which cannot yet be regarded as an established trend, FactCheck concludes that Davit Songhulashvili’s statement is MOSTLY FALSE.
