Brussels, 23/07/2013 (Agence Europe) - As part of an association agreement aiming to strengthen political ties with the EU, the free-trade area should stimulate Georgian GDP by over 4%.
After 17 months and seven rounds of talks, the EU and Georgia concluded, on 22 July, their talks for a free-trade area, which will be covered by the association agreement that has been under negotiation since July 2010 in order to extend the scope of bilateral cooperation, governed by a partnership and cooperation agreement in force since July 1999 (see EUROPE 10893). Brussels and Tbilisi hope to initial the association agreement during the Eastern Partnership summit in Vilnius in November. The agreement should take effect between 12 to 18 months later.
Georgia, which already enjoys preferential access to the EU market via the GSP+, will gain better access to the European market for its goods and services. The free-trade agreement (FTA) negotiated also opens a path for further reforms in trade-related policies, such as hygiene standards for agricultural products and the approximation of regulations for industrial products. This will boost access for Georgian goods to the EU market while also increasing consumer safety in Georgia. The FTA is expected to boost the inflow of European direct investment to Georgia thanks to an open, stable and predictable policy-making environment.
According to an independent study, the free-trade area between the EU and Georgia should boost cross exports from the two partners by 7.5% and 12% respectively. Generally speaking, the agreement could increase Georgia's long-term GDP by 4.3% (€292 million).
The EU is Georgia's biggest trading partner, accounting for 26.6% of its total trade. Bilateral trade in goods was worth €2.63 billion in 2012. (EH/transl.jl)