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Georgia and EFTA: Free Trade Agreement Comes Into Force

Interview with President of Georgian Swiss Business Association Ms.Nona Mamulashvili.

A free trade deal between Georgia and four European countries has begun recently, how will Georgia benefit from this deal, and what is the importance of the agreement for both sides?

The FTA between Georgia and EFTA countries creates a unique opportunity for Georgian entrepreneurs to export their goods to a market that covers an additional 14 million customers with high purchasing power without tariff and non-tariff barriers.  Through this FTA, the parties will facilitate the increased involvement of the private sector, in particular of small and medium-sized enterprises, in trade and commercial cooperation between the EFTA States and Georgia;

The Free Trade Agreement (FTA) between Georgia and the EFTA states (Iceland, Liechtenstein, Norway and Switzerland) covers a wide range of sectors. It includes Trade in Goods, Sanitary and Phytosanitary Measures, Trade in Services, Establishment, Protection of Intellectual Property, Government Procurement, Competition, Trade and Sustainable Development, Institutional Provisions and Dispute Settlement. In the area of trade in goods, the Parties abolish all customs duties on industrial products at the beginning of the Agreement. From May 1, 2018, the Parties abolish all customs duties on imports and exports of industrial products, including fish and other marine products, originating in an EFTA State or in Georgia.

Additionally, The Agreement provides for tariff concessions on both basic and processed agricultural products.

It is important to underline that within the framework of the EFTA Georgia Free Trade Agreement, Georgian exports will receive preferential treatment, which will lead to the increase in trade volume in terms of goods and services, as well as to an improvement of the quality of exchanged products.

On a separate note, it should be noted that the EFTA Free trade Agreement with Georgia will strengthen economic cooperation among Parties and will establish a framework supporting the expansion and diversification of trade and investment flows between Georgia and the EFTA States.

What key effects will the free trade deal bring to Georgia?

The FTA will further strengthen the economic ties and promote trade and investment between the EFTA States and Georgia.

With a combined population of around 14 million, and a combined GDP of USD 1.2 trillion, the EFTA States are the world’s ninth largest merchandise trader and the fifth largest trader of commercial services, as well as significant actors in the area of foreign direct investment. These extremely stable markets are available now for Georgian entrepreneurs. Within the EFTA Free Trade Agreement, Georgians SMEs have enormous possibilities to expand their businesses and improve their quality of production.

The EFTA Free trade agreement will facilitate the modernization and development of the Georgian economy using technical assistance and financial aid from related institutions. The long-term economic effects are likely to be positive, as through the successful implementation of the EFTA Trade Agreement, Georgia will have a more competitive market, a more predictable and transparent legal setting, an improved investment climate, in addition to other improvements.

On June 7, Georgian-Swiss Business Association will organize EFTA-Georgia: Trade Promotion Seminar, could you tell us about this event? What key topics will be discussed at the seminar?

On June 7, the Georgian Swiss Business Association, in cooperation with the EFTA Secretariat and the Embassy of Switzerland in Georgia, organizes ‘EFTA-Georgia: Trade Promotion Seminar’. The event is also supported by the Ministry of Foreign Affairs of Georgia and the Ministry of Economy and Sustainable Development of Georgia.

The seminar will gather up to 100 representatives from the private and public sectors, diplomatic community, business associations, research institutions and NGOs, who will have the opportunity to listen and interact with the EFTA Secretariat’s experts.

The Seminar will cover key practical issues, including: a general overview of the EFTA- Georgia Free Trade Agreement and its benefits, customs issues and rules of origin;  verification and enforcement procedures; non-tariff measures; sanitary and phytosanitary measures (SPS); trade of agricultural products in the EFTA States and treatment of EFTA Free Trade Agreements. The EFTA Secretariat’s experts will guide the attendees on how to export to EFTA countries. The seminar also includes a panel discussion, where private sector representatives will have a chance to get acquainted with examples of successful Georgian business on the Swiss market.

What current and future projects of yours will be implemented in Georgia, and when will this happen?

The Georgian Swiss Business Association plans to organize a Georgian-Switzerland Round Table in Zurich at the end of October. The Georgia-Switzerland Business Round Table will bring together representatives of the public and private sector, as well as representatives of the diplomatic community and chambers of commerce in order to discuss key developments to facilitate and accelerate the growing trade volumes that we can expect from the positive impact of the EFTA Free Trade Agreement.

Topics of discussion will include: The EFTA-Georgia Free Trade Agreement: practical consequences and business benefits for companies from EFTA & Georgia; investment climate & new opportunities for local and foreign SMEs in Georgia; agriculture & food processing; the wine industry; transportation hubs;  ports and railway; the energy sector; banking & financial services, new technologies; tourism and hospitality. On the second day of the forum, the GSBA will organize B2B meetings between Georgian and Swiss companies.

Within the framework of the EFTA Agreement’s implementation, the GSBA plans to launch a series of workshops, which will be masterclasses on the FTA and its practical guidance, for SMEs in Tbilisi and in the regions of Georgia.

Furthermore, one of the main projects that the GSBA currently runs is empowerment for female entrepreneurs. This project aims to nurture innovation in gender equity and inclusion through vocational training and educational programs. The GSBA will offer technical assistance and advisory services for both aspiring and established female entrepreneurs in the regions of Georgia.

On July 12-13, the National Intellectual Property Center of Georgia, Sakpatenti, in cooperation with WIPO and the GSBA, is organizing its fourth international conference: “Georgia Against Counterfeiting and Piracy” on July 12-13 in Batumi.

This conference will cover recent developments of the IP protection system in Georgia and IPR enforcement mechanisms, counterfeiting in the health industry and recent development in artificial intelligence and its protection mechanisms. The conference will be accompanied by workshops in which delegates will have the opportunity to receive detailed information on the calculation of damages of IPR infringement, border measures, parallel import, proper branding strategies and other related issues.