Georgia-China Free Trade Deal Comes into Effect

The Free Trade Agreement (FTA) between Georgia and China, signed in May 2017, took effect on January 1, 2018, meaning that the world's largest market, which unites approximately 1.4 billion customers, is now open to the goods and services of Georgia.

The China-Georgia FTA is the first FTA China has signed with a Eurasian country, and is the first such agreement China has initiated and achieved since the Belt and Road Initiative was put forward.

The Chinese FTA Network reports that now that the agreement has gone into effect, in terms of trade in goods, Georgia will impose zero tariffs on 96.5% of China's products immediately, covering 99.6% of the total imports from China; China will impose zero tariff on 93.9% of Georgia’s products, covering 93.8% of China's total imports from Georgia, of which 90.9% (comprising 42.7% of imports) will have zero tariffs immediately and the remaining 3% (comprising 51.1% of imports) will have zero tariff within 5 years. In terms of trade in services, both sides will further open their markets to each other on the basis of their WTO commitments. In addition, both sides have reached a broad consensus in many fields, including environment and trade, competition, intellectual property, investment, and e-commerce.

“By taking advantage of the agreement coming into effect, China and Georgia will comprehensively improve the practical cooperation level of both sides, thus firmly promoting the Belt and Road construction and achieving common prosperity,” the Chinese FTA Network reported.

In 2017, Georgia exported 7,585,407 bottles of wine to China, a 43% increase compared to 2016, making China one of the largest importers of Georgian wine after Russia (47,778.920 bottles) and Ukraine (8,502.554 bottles).

Further, China is one of Georgia’s top trading partners. Georgia’s top 10 trade partners in January-November 2017 made up 66.5% of the country’s total trade turnover, with Turkey ($1.41 billion), Russia ($1.05 billion) and China ($834.3 million) filling the top three spots.

So far, Georgia has made Free Trade deals with the European Union, Turkey, European Free Trade Association (EFTA) countries - Switzerland, Norway, Iceland and Liechtenstein, and with the Commonwealth of Independent States (CIS) countries - Armenia, Azerbaijan, Kazakhstan, Kyrgyzstan, Moldova, Turkmenistan, Uzbekistan and Tajikistan.

China has signed 14 Free Trade agreements with more than 24 states and regions throughout the world.

Free trade negotiations between Georgia and China were launched in 2015. The Memorandum of Free Trade Agreement was signed in October 2016, and after seven months, the deal was finalized, making Georgia the first country in the region to have such an agreement with China.

Thea Morrison

08 January 2018 17:15