Georgia will sign the Association Agreement with the EU today. Georgian Prime Minister Irakli Garibashvili, President of the Commission of Europe Jose Manuel Barroso and President of the EU Council Herman Van Rompuy will sign the Agreement.
The signing ceremony will be held in Brussels at 9 AM local time, 11 AM Tbilisi time.
The Georgian delegation will include Foreign Minister Maia Panjikidze, State Minister for European and Euro-Integration Issues Alexi Petriahsvili, Justice Minister Tea Tsulukiani and Minister of Economy and Sustainable Development Giorgi Kvirikashvili.
The Association Agreement was initialed at the Eastern Partnership summit in Vilnius on 29 November 2013.
The Association Agreement aims to deepen political and economic relations between the EU and the other signatories and to gradually integrate these countries in the EU’s Internal Market, the largest single market in the world. This entails creating a Deep and Comprehensive Free Trade Area (DCFTA) between the EU and each of these countries.
Following the signature much work will remain to be done on domestic reforms. In this area, the EU and each country will cooperate on: strengthening the rule of law, advancing judicial reforms, fighting corruption, ensuring respect for fundamental rights and freedoms and strengthening democratic institutions.
Another important area where provisional application can start soon is that of economic and sectorial cooperation. This concerns, for example, consumer protection, financial services, civil society cooperation and the countries’ participation in EU Agencies and programmes. The Deep and Comprehensive Free Trade Area part of the Association Agreement will be provisionally implemented, alongside the financial assistance and anti-fraud and control provisions.
Between the signature of the Association Agreements and the beginning of their provisional application a considerable amount of work will need to be done to prepare the institutional set-up. This includes the creation of the Association Council, and establishing various committees and subcommittees and their rules of procedure. The same is true for e.g. trade-related working groups, engagement with civil society and parliamentary cooperation. In this way, it will be possible to formally approve the institutional set up and the monitoring mechanisms as soon as we reach the date of provisional application.
Trade conditions for goods and services, including the wide establishment conditions for companies will be immediately improved for both the EU and Georgia, when the Agreement enters into force. This will facilitate trade and investment. This is particularly important for Georgia, which needs further foreign investment to boost its economic growth. Georgia’s enterprises will have access to the EU market without transition periods. But it is also true that a number of additional benefits that Georgia will take from the Agreement do depend on the completion of reforms.
The Association Agreement with Georgia goes significantly further than classical forms of economic integration, offering not only improved trade and investment opportunities but also assistance in trade-related reforms with the aim to contribute to economic recovery and growth and to better integration of the Georgian economy with the world markets. Provided that the reforms are completed, an economic growth of 4.3% per year is predicted (amounting to €292m in national income).
For example, Georgian agricultural products will become more attractive on the EU market thanks to the removal of EU import duties worth €5.7m on basic agricultural products and €0.5m on processed agricultural products. New market opportunities in the EU and higher production standards in Georgia will spur investment, stimulate the modernisation of agriculture and improve labour conditions.
Georgia will benefit from new trading opportunities and easier access to the EU market. The Agreement should allow the Georgian economy to catch up with the EU in terms of competitiveness and thereby gradually find its place in the world economy. 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.