October 22, 2021

Georgia China Free Trade Agreement

1 Technical barriers to trade include technical rules, standards and conformity assessment procedures which may directly or indirectly affect trade in goods. There was already a lot of skepticism in 2015, but for a while it seemed that Georgia could actually play an important role in the BRI and help China pursue its ambitious goals. The Chinese side, which has asked the Georgian government to start negotiations for a free trade agreement between two countries, was the first shocking event to prove this point. In 2016, I joined the Georgian Ministry of Economy and Sustainable Development as Chief Trade Negotiations Specialist and was able to witness first-hand aspects of the negotiations for a free trade agreement between Georgia and China. It should be noted that in previous years the Georgian side had made proposals for a possible free trade agreement, but it had been rejected. But this time, China was more than concerned about achieving it. The free trade agreement is comprehensive and covers trade in goods, trade in services, investment, dispute settlement mechanisms and other related areas. The free trade agreement will provide our traders and businessmen with legal certainty and better access to the Georgian market. It offers potential opportunities as a gateway to the Caucasus, which is part of the Belt and Road Initiative, and improves trade and investment flows between Hong Kong and Georgia and the greater Eurasian region.

In addition, a trade war with the United States is leading Xi to move slowly in its global ambitions. U.S. tariffs and uncertainty over the overall geopolitical situation will reduce Chinese exports to the U.S., leading to a China current account deficit. This will force the Middle Kingdom to use its foreign exchange reserves primarily to defend its currency and maintain investor confidence in the country`s macroeconomic stability. As a result, Xi will have to think twice about external commitments, which calls into question the future of the BRI. Georgia is one of Hong Kong`s main trading partners in the Caucasus. Total merchandise trade between Hong Kong and Georgia amounted to $257 million in 2019. In 2019, Georgia took 123rd place among Hong Kong`s global trading partners for merchandise trade. Conversely, Hong Kong ranked 26th among Georgia`s trading partners for merchandise trade in 2018. China is one of Georgia`s main trading partners and exports have increased year on year. Statistics show that one of the most popular products of Georgia is wine, with data from January to April 2017 showing that supply has increased by 270 percent. Other Georgian products for the Chinese market are hazelnuts, honey, beer, mineral water, soft drinks, tea, medical and agricultural products and much more.

Georgia`s liberal trade regimes offer investors a propitious opportunity to access not only the country`s 3.7 meters of population, but also markets throughout the region, directly due to the absence of tariffs and import tariffs. To date, Georgia has signed free trade agreements with CIS countries, including Ukraine, Belarus, Moldova, Kazakhstan, Kyrgyzstan, Tajikistan, Uzbekistan and Turkmenistan, as well as its neighbours Turkey, Azerbaijan and Armenia. This free trade agreement will create greater flexibility for trade, services and investment in the Eurasian region, which includes 17 elements, including trade in goods, services and intellectual property rights. It also includes new themes such as e-commerce, market competition and the environment. And the result is an agreed upon thing. At this point, openly criticizing China would be costly to Georgia, which means that Tbilisi is not likely to take a firm stance on Taiwan or human rights issues. . . .

About Bob Bergey

Bob has been driving motorcoaches since 2002, in every state east of the Mississippi and a few west, as well as the four southeastern-most provinces of Canada. In addition to driving, he's an avid photographer (and former professional), enjoys writing and technology.