On 26 August 2014, the Minister of Economy and Sustainable Development of Georgia, Giorgi Kvirikashvili, talked about the enactment of the Deep and Comprehensive Free Trade Agreement with the European Union. The Minister stated:  “From 1 September 2014 the Deep and Comprehensive Free Trade Agreement with the European Union will be enacted. This means that the customs duties with all of the 28 EU countries will be nullified. This means that if, as of today, customs duties must be paid for the Georgian wine exported to the European Union, these duties will be equal to zero from 1 September. That is, if it meets all the standards, of course.”

FactCheck

took interest in the Minister’s statement and verified its accuracy.

On 29 November 2013, in terms of the European Union Eastern Partnership Programme, Georgia initialled the Association Agreement and on 27 June 2014, it signed the Association Agreement with the European Union.

According to the procedures, the Association Agreement with the European Union must be ratified by all of the 28 member states. On 18 July 2014, the Parliament of Georgia ratified the Association Agreement.

The Eastern Partnership offers two types of cooperation to the non-EU countries:  the Association Agreement (AA) and the Deep and Comprehensive Free Trade Agreement (DCFTA). The initiative was first voiced on 7 May 2009 during the Eastern Neighbourhood Summit in Prague. The aim of the programme is to deepen the integration process with the eastern partners (Azerbaijan, Belarus, Moldova, Georgia, Armenia and Ukraine) of the European Union. It should be noted that only Georgia, Moldova and Ukraine signed the Association Agreements in terms of the Eastern Partnership Programme.

According to the Communication from the European Commission on the Eastern Partnership, the main goal of the initiative is to facilitate the implementation of the European Neighbourhood Policy (ENP) of the European Union; however, this programme goes further and offers the partner countries special prospects for deepening their ties with the European Union. The cooperation in terms of the Eastern Partnership is being developed in two directions – bilateral and multilateral cooperation. The main goal of the bilateral cooperation is to create a wide political and legislative framework and deepen the cooperation of the country with the European Union. Multilateral cooperation creates a new format which enables the countries to cooperate in the spheres of shared interest and tackle the challenges together. This format is aimed at developing cooperation in the region through the implementation of joint projects in the fields of security, migration, trade, transport, energy, environmental protection and so on.

The agreement provides for the creation of the deep and comprehensive free trade areas between the partner countries and the European Union which will be based upon the Deep and Comprehensive Free Trade Agreement.

On 1 September 2014, part of the Association Agreement between Georgia and the European Union was enacted. According to the statement of the Minister of Foreign Affairs of Georgia, Maia Panjikidze, the Deep and Comprehensive Free Trade Agreement has been enacted temporarily.

“This means no tariffs and free movement of Georgian goods to the European Market and I’m sure that Georgian businessmen and businesses will use this opportunity. In order for this to happen, however, certain standards must be met. This is a difficult process but we are already working on it and I’m sure that soon we shall be able to enjoy all the privileges granted to us by the free trade agreement with the European Union,” said Panjikidze.

The Deep and Comprehensive Free Trade Agreement enables Georgia to gradually enjoy three of four freedoms of the internal market of the European Union which include free movement of goods, services and capital. The enactment of the fourth freedom (free movement of people) is supported by the visa liberalisation process. Title Four of the Association Agreement provides for the abolition of customs fees whilst a list of products enjoying the customs-free regime and a list of 28 products that are still subject to the entry price[1] is available on the website of the Ministry of Foreign Affairs of Georgia; however, it should be noted that the ad valorem tax[2]

is still abolished for these products. Cucumbers, tomatoes, zucchinis, tangerines and so on will still be subject to the entry price.

Conclusion

The Deep and Comprehensive Free Trade Agreement provides for closer trade relations with the European Union. The abolition of customs fees with the European Union member states is one of the examples. However, it should be noted that 28 products will still be subject to the entry price. These products are considered to be “sensitive” and will be subject to monitoring.

FactCheck concludes that Giorgi Kvirikashvili’s statement:  “From 1 September 2014 the Deep and Comprehensive Free Trade Agreement with the European Union will be enacted. This means that the customs duties with all of the 28 EU countries will be nullified. This means that if, as of today, customs duties must be paid for the Georgian wine exported to the European Union, these duties will be equal to zero from 1 September. That is, if it meets all the standards, of course,” is MOSTLY TRUE.


[1]

Entry Price to the European Union – Entry Price or the fixed price of import. If the sale price of a Georgian product is lower than the fixed price of the EU the importer will have to cover the difference. If, however, the sale price is higher than the fixed price of the European Union the product will be exempted from the price.

[2]

Tax on the transportation, customs and other payments based upon the value and *not the amount of the product.


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