Georgia's long road to Europe

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Media captionSome worry about losing Russia as a market for Georgian wine again, as Rayhan Demytrie reports

Georgia has signed an association agreement with the EU just as its trading ties with Russia are picking up.

A similar path was chosen by Noe Zhordania, the leader of the short-lived Democratic Republic of Georgia, created after the collapse of the Russian Empire in 1918.

"What do we have to offer to the cultural treasure of the European nations? A 2,000-year-old national culture, a democratic system and natural wealth.

"Soviet Russia offered us a military alliance, which we rejected," he said. "We have taken different paths. They are heading for the East and we for the West."

But his aspirations were halted when in 1921 the Red Army invaded the country and Georgia became a Soviet republic.

Almost a century later, many in Georgia regard the EU deal as a historic opportunity.

Putin's assurances

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Media captionGeorgia's envoy to Russia, Zurab Abashidze: 'No contradiction' after EU pact signed

The association agreement is not a guarantee of future membership of the EU. What it offers is closer political and economic ties.

Along with Ukraine and Moldova, Georgia has also signed a deep and comprehensive free trade agreement (DCFTA).

But Tamara Kovziridze, a former lead Georgian negotiator with the EU, says that in the short term the benefits of this agreement are more likely to be political than economic.

"This has enormous political relevance. The events in Ukraine have demonstrated that Russia does worry about EU integration," she said at a recent public discussion on Georgia-EU relations.

Given the Ukrainian crisis and Georgia's own troubled history with Russia that included a war in August 2008, there is concern that the signing will prompt a reaction from the Kremlin.

"It's difficult to guess. Maybe they will use some new methods vis-a-vis our trade relations," says Zurab Abashidze, Georgia's designated envoy on Russian-Georgian relations.

"But we don't see any contradiction in having a free trade regime with the EU and having a comfortable visa regime with Russia."

Visiting Tbilisi in June, European Commission President Jose Manuel Barroso said he had been personally reassured by President Vladimir Putin that Russia would not interfere with the signing. And Georgia itself would reap the rewards of the deal, he said.

"Georgia is a relatively small country, it has to benefit much more from having access to our market - the biggest market in the world, than European companies coming to Georgia," Mr Barroso told the BBC.

Market risk

However, critics say there has been little analysis of the impact this agreement will have on the Georgian economy.

"Only one study has been undertaken by Europe but that's not something Georgia should be counting on," says Eric Livny, director of the International School of Economics at Tbilisi State University.

Image caption The former Russian embassy in Tbilisi: the two countries still have no diplomatic ties

"The DC (deep and comprehensive) part of the FTA essentially forces on Georgia the same standards that would apply in Europe. Prices will increase, production and exports will not necessarily increase, the level of income in real terms will fall. Politically this may backfire against the current leadership."

For the moment, Georgia has much more to gain economically from ties with Russia and Eurasian countries such as Kazakhstan and Belarus - which are all natural markets for Georgian goods.

Official statistics show that Georgia's exports to Russia have tripled since Moscow lifted a seven-year ban on Georgian wine and mineral water in 2013.

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Image caption Noe Zhordania (image thanks to Redjeb Jordania)

In the first quarter of 2014, Russia became Georgia's third largest trading partner. Nearly 70% of Georgian wine exports are sold on the Russian market.

"I am not saying that Russia is going to intervene militarily, but it will definitely be not as open to Georgia as it has been over the past year and a half," says Eric Livny. "This is a risk that somebody has to understand and deal with."

'Protection from Russia'

In the Georgian capital Tbilisi there is a celebratory mood ahead of the signing. The authorities are planning to hold a concert in Europe Square.

Despite the publicity few people appear to understand what the agreement is about or how they will benefit from it. For many it is simply a choice between Europe and Russia.

"Ninety-five per cent of Georgians regard this as protection from Russian aggression," says a young Georgian, Irakli Pachulia.

But 72-year old pensioner Vladimir Abasheli thinks Georgia should not ignore its geography: "Europe is all very well, but Russia's Vladikavkaz is one-and-a-half hour's drive from here, and we have to be on friendly terms with our neighbour."

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