Georgia-Hong Kong Free Trade Agreement Signed

A free trade agreement (FTA) between Georgia and Hong Kong was signed last week, according to the Ministry of Economics and Sustainable Development.

The Deputy Minister of Economy and Sustainable Development of Georgia, Genadi Arveladze, and Secretary for Commerce and Economic Development Edward Yau Tang-Wah signed the document together as part of the Belt and Road Summit in Hong Kong.

The FTA was negotiated in 2016 and has several standard components, namely the elimination or reduction of tariffs, the liberalization of non-tariff barriers, flexibility regarding rules of origin to facilitate bilateral trade, customs facilitation procedures, liberalization and promotion and protection of investment; liberalization of trade in services, and a dispute settlement mechanism for the FTA.

A spokesperson from the government of Hong Kong said, “Georgia [is an] emerging market with potential for further growth,” and that the FTA “has strategic value for Hong Kong” and “will help expand Hong Kong's FTA network into the respective regions including Eurasia.” The agreement is Hong Kong’s first with a country in the Caucasus region. Total trade between the two countries reached $ 50.7 million (GEL 124.5 mil) last year. Georgia is the city's 121st trading partner in terms of goods. The signing is a part of Hong Kong's long-term strategy to expand its global reach as it moves towards being an international trading center. In the past 12 months, the city has secured three sets of FTAs, including Georgia.

The agreement was drafted based on an FTA between Georgia and China, which was enacted from the first of January, 2018. Hong Kong is, officially, a Special Administrative Region of the People's Republic of China, with the express right to make bilateral trade agreements with foreign countries.

The agreement aims to facilitate and promote trade between Georgia and Hong Kong. There are hopes that increased trade with Hong Kong will encourage Georgian entrepreneurs to participate in the high-end Hong Kong market. Arveladze remarked that the FTA is advantageous for Georgia, as Hong Kong is a key international transit and financial center. The agreement is scheduled to enter into force by the end of the current year.

By Samantha Guthrie