On June 27, the EU and Georgia signed an Association Agreement, which includes a Deep and Comprehensive Free Trade Area (AA/DCFTA). According to the EU procedure, the temporary use of specific parts of the Agreement starts on September 1, 2014. About 80% of the Association Agreement will take effect, including the Deep and Comprehensive Free Trade Area (DCFTA) component.
During the period of temporary application of the Association Agreement, certain paragraphs of the 22 April agreement signed between the EU and Georgia about partnership and cooperation will also be valid.
The Agreement significantly deepens political and economic ties with the EU under the Eastern Partnership. It follows the Partnership and Cooperation Agreement, the previous basis for EU-Georgia bilateral relations since 1999. The Partnership and Cooperation Agreement will fully lose power from the day the Association Agreement takes effect.
The Deep and Comprehensive Free Trade Area is expected to bring many economic benefits to Georgia by giving firms access to the EU’s single market – the world’s largest. This will create business opportunities, bring better goods and services, and boost competitiveness. Georgia will benefit from new trading opportunities and easier access to the EU market. This will open up new opportunities not only in EU-Georgia trade, but in Georgia’s trade with the rest of the world, given the worldwide recognition of EU norms and standards. The application of these standards will bring significantly more choice and higher quality products to Georgian consumers and make Georgia a more attractive place for foreign investors. The most sensitive sectors will benefit from long transitional periods to ensure the smooth adaptation of Georgia’s economy.
Under the DCFTA, the supply and export of all goods of Georgian origin to the EU’s market will be exempt from customs tariff. However, there will be certain restrictions. Specifically, Georgia will have to pay customs duties for exporting 28 kinds of products, including wine, fruits and vegetables.