Non-Tariff Barriers to Georgian Cable Export to Turkey

Domestic cable producers face significant competition from Turkish competitors, even on the local market. The information about the production of cables in Georgia is limited due to the small number of producers and their relatively new presence in the business. A large share of Georgian cable and wire demand is covered by imported goods, but recent years have seen an increase in cable production by existing firms, creating opportunities for domestic firms to substitute imported goods with local production and eventually export to other countries. Turkey has a large potential for cable production, with over 370 cable producers, including plants of multinational cable companies. The country is among the top 20 insulated wire and cable exporting countries, with a total export value of around 1.8 billion USD in 2016. The leading position among insulated wire and cable exporters is held by China, followed by Mexico, the United States, and Germany. Turkey's cable production is highly competitive, making it challenging for Georgian producers to stand their ground in the market. The trade dynamics of insulated wires and cables in Turkey and Georgia indicate that Turkey is not afraid to access markets dominated by top cable exporters. The major share of Turkish cable exports goes to the UK, Iraq, Germany, and Israel, with the UK being the largest market. Turkey's competitive production makes it harder for Georgian producers to export to Turkey, despite the zero tariffs set for exporting to Turkey. Georgian cable producers are increasing the variety of products they produce and continue to expand, but no companies are currently exporting cables to Turkey. The methodology used in this paper includes a desk review of different documents, data analysis, and interviews with local producers of wires and cables. The data analysis starts with a broad measure of cables and then narrows down to more specific types of cables. The first half of the paper analyzes trade dynamics of cables in Turkey and Georgia, compares the sizes and competitiveness of those industries in both countries, and measures how this might translate into non-tariff barriers for Georgian cable exporters. The second half of the paper highlights existing problems, shows findings, and proposes recommendations. The total value of exported insulated wires and cables from Turkey is around 1.8 billion USD, while its import is 813 million USD. The major share of Turkish cable exports goes to the UK, Iraq, Germany, and Israel, with the UK being the largest market. Turkey's competitive production makes it challenging for Georgian producers to export to Turkey, despite the zero tariffs set for exporting to Turkey. The Georgian cable production sector is small and mostly locally oriented, with most products sold on the Georgian market. Domestic cable producers face significant competition from Turkish competitors, even on the local market. The aim of this policy paper is to explore if there are any non-tariff barriers that Georgian cable producers might potentially face in Turkey that may prevent them from exporting and options for resolution. The paper analyzes the existing circumstances and looks into non-tariff barriers that may inhibit Georgian cable producers from exporting to Turkey. It was found that even Georgian market considers Turkish producers to be their main competitors. Most of Georgian cable export goes to Armenia and Azerbaijan, but the dollar value of total export is not much to start with.