“We welcome the decision of the Parliament of the Republic of Turkey on the ratification of the Agreement on Diagonal Cumulation between the two countries. This Agreement will contribute to the growth of the exports from Georgia and, in particular, products from industrial raw materials imported from Turkey to Georgia will be exported to the EU in a wider range and volume,” – Natia Turnava, Minister of Economy and Sustainable Development commented on the ratification of the agreement by the Turkish Grand National Assembly on February 10, 2021. The Agreement, according to the Minister, will increase the range of products that can be exported from Georgia to the EU and, at the same time, encourage investments from Turkey in the Georgian economy, promote the establishment of the joint ventures and create new jobs.
The Diagonal Cumulation between Georgia, the EU and Turkey will fully enter into force after the relevant information is published in the official journal of the European Commission based on the notification by Georgia and Turkey.
After the introduction of the Diagonal Cumulation between Georgia, the EU and Turkey, it will be possible for products made on the basis of industrial raw materials imported from Turkey to be placed on the EU market within the Free Trade Regime. Along with other sectors, this innovation is especially important for the further development of the textile industry in Georgia and for attracting new foreign investments in this sector.
According to the Minister, in 2020, textile products of approximately 75 million USD were imported to Turkey and most of that textile were later exported to the EU. After the introduction of the Diagonal Cumulation, it will be possible to export these products directly to the EU within the Free Trade Regime, which will be much more profitable for local producers. According to Turnava, the export of the Georgian products made of the raw materials imported from Turkey as well as the further development of the production in Georgia covers such sectors as production of furniture, construction products, plastic products, steel products and paper and cardboard products. However, Diagonal Cumulation will not apply to the agricultural products, as the customs union between the EU and Turkey does not cover agricultural products.
The system of Pan-Euro-Mediterranean cumulation of origin allows for the application of diagonal cumulation between the EU, EFTA States, Turkey and the countries which signed the Barcelona Declaration, the Western Balkans and the Faroe Islands. In particular, Member States which have a Free Trade Agreement with each other may use the Diagonal Cumulation method (scheme) in a multilateral format under this Convention. Georgia has been a member of this convention since 2017. It should be noted that the opportunity to join the Convention was granted to Georgia by the Association Agreement by the European Union.
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