The 2011 Russia-Georgia Agreement – Threats and Challenges

2018 / 03 / 29


Author: Giorgi Bilanishvili, Research Fellow at Rondeli Foundation


Lately, the Agreement between the Government of Georgia and the Government of the Russian Federation on the Basic Principles for a Mechanism of Customs Administration and Monitoring of Trade in Good (or the 2011 agreement, as it came to be called later), which was signed in advance to Russia’s membership of the World Trade Organization in 2011, has become an actively discussed topic.

On 19 December 2017, the Georgian side signed a contract with a Swiss company, Société Générale de Surveillance (SGS), which, according to the 2011 agreement, will be tasked with monitoring the goods entering in and coming out of the trade corridors.

On 20 December, during the presentation of the structural changes in the Government of Georgia at the Parliament, at a meeting with the United National Movement faction, the Prime Minister of Georgia, Giorgi Kvirikashvili pointed out about the contract signed with the SGS, that “it concerns only force majeure situations, when there is snow or landfall in the direction of upper Larsi customs checkpoint, only then will this mechanism will be opened towards Tskhinvali and even in this case, in full accordance with the text set out in the agreement”. Here the Prime Minister also added that certain conditions posed by Russia with regard to the 2011 agreement are not acceptable.

What the conditions posed by Russia might mean, we can judge from the 25 January 2018 interview of the Deputy Minister of Foreign Affairs of the Russian Federation, Grigory Karasin to the Russian edition of Komersant. Karasin, who is involved both in the Geneva discussions, as well as in the Abashidze-Karasin dialogue from the Russian side (which practically means that the issue of Georgia, including the occupied territories, is within his direct authority), does indeed speak about topics not very pleasant to us, including about the new fixed customs borders from the Georgian side.

It should be pointed out that in Georgia, the 2011 agreement is mostly assessed positively, especially by the members of the previous government and also certain part of experts. However, there were a large number of questions about this agreement from the very beginning. Furthermore, it actually involves rather serious risks.


The Pre-Conditions to Signing the 2011 Agreement

When the Agreement was signed between Russia and Georgia in 2011, it was presented as a huge political victory, as by signing the agreement Russia was supposedly indirectly recognizing the territorial integrity of Georgia. According to the same version, Georgia managed to achieve this because it used the existing situation and forced Russia, which was actively being requested by the Obama Administration to enter the World Trade Organization, to sign an agreement which was beneficial to us.

It must be pointed out that all of the above-mentioned is false. Indeed, the 2011 Agreement does not talk about either Abkhazia or Tskhinvali region; however, this was not due to the fact that Russia did not want to do it, or was forced to indirectly recognize the territorial integrity of Georgia. Russia did this absolutely on purpose, as in reality it does not consider Abkhazia and South Ossetia to be independent states. Furthermore, the processes unfolding especially after the annexation of Crimea make it clear that Russia is preparing ground for the annexation of Abkhazia and South Ossetia as well.

The idea of Georgia using favorable conditions against Russia is entirely baseless. It should be pointed out that the period from 2008 to 2012 is one of the best in the recent history of US-Russia relations. This is the period when, after 2008, the Obama Administration is actively implementing the Reset Policy with the Russian Federation. Dmitri Medvedev is the Russian President from 2008 to 2012, which also positively influences US-Russian cooperation. Here we can remember that Russia taking a position that was satisfactory to the US regarding the issue of Libya is also commonly assigned to Medvedev.

Hence, the Obama Administration’s effort to make Russia the member of World Trade Organization should be considered a part of the Reset Policy and not as a coercion of Russia. In such a situation Georgia decided to block Russia’s membership in WTO, which, of course, did not make the Obama Administration very happy.

Hence, if we look at it objectively, the Government of Georgia found itself trapped at some point, as it was strictly demanding that Russia sign the agreement, in return for Georgia agreeing to Russia’s membership in WTO. Walking back on one’s demand and simply agreeing to Russian membership would be politically harmful, given the tense background created between Russia and Georgia after the 2008 War.

Hence, an agreement needed to be signed and in the conditions, when Georgia was at a disadvantage with already much more powerful Russia. It is clear that Russia would use this situation in its own interests. If we look at the 2011 Agreement, this is exactly so.


The 2011 Agreement – Main Risks

In general, the 2011 Agreement must be the subject of complex analysis, which is outside of the format of this article; however, some risks are so obvious, that they can still be identified with more-or-less accuracy.

First of all, it must be pointed out that according to the coordinates set out in the agreement, the SGS monitoring points at Abkhazia and Tskhinvali region will not be placed on the Georgian-Russian border, but rather a little farther away from the border, on the Russian territory. Hence, it is clear that Russia was not planning to pass the cargo sent to Abkhazia and Tskhinvali region through these points from the very beginning.

Moscow’s argument will be very simple. The agreement between Georgia and Russia was signed when Moscow had already recognized both Abkhazia as well as Tskhinvali region as independent states. The fact that the 2011 Agreement did not concern Russian cargo transported in Abkhazia and Tskhinvali region was being publicly pointed out by every Russian official involved in the negotiation process.

Of course, Georgia retains the possibility of using the legal method to compel Russia to subject its cargo to monitoring process. However, unfortunately I believe that achieving this is quite impossible.

According to the Agreement, the SGS monitoring points must also be placed on the Georgian controlled territory – south to Enguri River and near Gori as well. However, these points will have neither the function nor the competence to exercise customs or border control.

Customs and border control is the responsibility of the Government of Georgia, regarding these two corridors, as well as the one at Larsi. Hence, the government must manage to avoid even the perception of a state border being fixed south of Enguri or near Gori, which is no easy task, when you are forced to exercise customs and border control in these areas.

One of the directions of the Russian policy is to convince the international community that Georgia has made peace with the “new realities”, as Moscow calls the recognition of the “independence” of Abkhazia and Tskhinvali region after its 2008 aggression against Georgia. In order to strengthen such propaganda, Russia will probably try to paint Georgian government’s constructive policies as the desire to become closer with Russia, especially given the fact that its own policies towards Abkhazia and Tskhinvali region are definitely not becoming constructive. On the contrary, Russia has practically started the process of the annexation of these regions. It is also clear that the activation of the 2011 Agreement, which also includes opening the transport corridors through Abkhazia and Tskhinvali region, will be used by Russia for aforementioned purposes.

In addition, it is clear that starting international trade with Russia through Abkhazia and Tskhinvali region at least means that our neighboring countries will also want to use these corridors. Hence, it needs to be calculated what granting those requests might result in, especially since, in the case of a rather real scenario, we must also consider the transit of military cargo and the demand for re-instating the rail transportation.


In Place of a Conclusion

The analysis of the aforementioned risks is, of course, not full. It should be pointed out once again that making such an analysis can be achieved through an entirely different type and format of work. One thing is clear – the 2011 Agreement contains some rather serious risks. The fact that one needs to consider the worst case scenario when it comes to relations with Russia, is evidenced by a multitude of facts and experiences. In such conditions, it is especially important to make accurate calculations and plan the policy in a correct way, so as to maximally reduce the risks, which the 2011 Agreement contains.

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