A member of the Parliament of Georgia, Giorgi Kandelaki, stated:  “The Georgian Dream has effectively removed the free trade agreement with the USA from the agenda. In 2011, Saakashvili and Obama agreed to launch negotiations on a free trade agreement. However, the Georgian Dream made a full bet on the Russian market.”

FactCheck

took interest in the accuracy of the statement.

The President of the United States of America confirmed the possibility of launching negotiations on a free trade agreement with Georgia at the beginning of 2012 at his meeting with the President of Georgia. The Presidents talked about a high-level dialogue to strengthen trade relations between the two countries, including a possible future free trade agreement. However, after 2012, representatives of the new Georgian government denied the fact of starting a dialogue with the USA in regard to a free trade agreement. In May 2015, at a Parliamentary Minority session, the then Prime Minister of Georgia, Irakli Gharibashvili, stated that rumours about a possible conclusion of a free trade agreement between Georgia and the USA were not true. As stated by Mr Gharibashvili, he had been informed by an official American representative that President Saakashvili had created “the biggest embarrassment” for the American government when he “gave his interview to the Wall Street Journal

and stated that the American government was ready to conclude a free trade agreement. This is an absurdity. This deserves mockery. This is making fun of and offending our population.”

The meeting between the Presidents of Georgia and the USA was not the first occasion when the idea of concluding a free trade agreement between the two countries was voiced. In 2009, American Senator John Kerry (D) and Representative David Drier (R) came forward with the initiative to establish a free trade agreement with Georgia. They stated that the development of trade relations with the USA would help Georgia to advance economically. A free trade agreement (FTA) between the countries envisages the removal of trade barriers and puts in place measures to protect investments and intellectual property rights. At the present moment, the USA has this kind of agreement with 20 nations. Its bilateral free trade agreement with South Korea

entered into force on 15 March 2012.

At the present moment, the USA is not conducting free trade agreements with any specific country although the Trans-Pacific Partnership (TPP) and the Transatlantic Trade and Investment Partnership (TTIP) are under negotiations. As of today, Georgia has a unilaterally favourable trade agreement with the USA – the GSP (

Generalised System of Preferences). This free trade regime covers more than 3,000 types of Georgian products. Of note is that the GSP regime is not permanent and is subject to periodic revision. Compared to the GSP regime, a free trade agreement is preferable in the sense that it covers almost all types of products. Additionally, a free trade regime is permanent which is a guarantee of stability for investors.

The issue of mending fences with Russia became particularly important in 2012 after the change of government in Georgia. As stated by the then Prime Minister of Georgia, Bidzina Ivanishvili, Tbilisi moved toward a new format of relations with Moscow and appointed Zurab Abashidze as the Special Representative of Georgia for Georgia-Russia relations. One of Mr Abashidze’s first tasks after his appointment to the new position was to facilitate the resumption of the export of Georgian goods to Russia. To this end, Mr Ivanishvili tasked Mr Abashidze to work in tandem with the Minister of Agriculture of Georgia. The restrictions on the export of Georgian fruit and vegetables to the Russian Federation were abolished in October 2013.

Georgia, together with Russia and the USA, is a member of the World Trade Organization (WTO) and trade with WTO member states is carried out on the basis of the Most Favourable Nation (MFN)

principle.

According to 2015’s data, of Georgia’s top trade partners, Russia was in the second place and the USA was in the ninth place. As of January-March 2016, Russia moved down to the third place whilst the USA is not even in the top ten.

Georgia’s National Security Concept states that:  “Open partnerships, free trade and economic relationships with all nations and international entities, especially the European Union, the United States and the countries in the region, are important choices that Georgia has made. Additionally, Georgia’s Socio-Economic Development Strategy, GEORGIA 2020,

states that:  “Deepening trade-economic links with the United States under the US-Georgia Charter on Strategic Partnership will be a priority; besides, emphasis will be made on launching negotiations on a possible free trade agreement with the USA under high-level talks concerning trade and investments.”

On 9 January 2009, the United States-Georgia Charter on Strategic Partnership was signed in Washington, DC. For the implementation of the United States-Georgia Charter on Strategic Partnership, a commission was established which includes four bilateral working groups dealing with democracy and governance, defence and security; economy, trade and energy, and people-to-people and cultural exchanges. These topics comprise the frame

work of the relationship between the two countries. The commission’s meetings are held on a regular basis.

The last meeting of the working group dealing with economy, trade and energy cooperation was held on 12 April 2016. The meeting’s agenda concerned the trade-economy relations between Georgia and the USA, including regional and bilateral investment projects. The conclusion of a future free trade agreement also appears on the agenda of these meetings. However, according to the information of the Ministry of Foreign Affairs of Georgia, even though the possible conclusion of a free trade agreement with the USA frequently features as a part of high-level dialogues, real negotiations have not yet been started. A special working group to deal with this specific issue has also not yet been established.

According to the information of the Ministry of Foreign Affairs, the discussion of topics related to a free trade agreement within the format of the economy, trade and energy working group (established by the United States-Georgia Charter on Strategic Partnership) is not conducted separately but together with other economic issues on the agenda. This happens because the work of the United States-Georgia Charter on Strategic Partnership

commission and the working group is led by the Department of State instead of a trade representative. However, of note is the statement of the Ministry of Foreign Affairs which indicates that the issue of a free trade agreement is discussed at every meeting of the working group dealing with economy, trade and energy.

In 2012, the High Level Trade and Investment Dialogue (HLTID) format was established which is focused upon deepening trade between the countries and attracting investments. The last HLTID meeting was held on 30 October 2015 between the then Minister of Foreign Affairs of Georgia, Giorgi Kvirikashvili, and the US Trade Representative, Michael Froman. The interlocutors discussed

the possibility of a free trade agreement together with the facilitation of bilateral trade and investments.

Conclusion The statement about the possible conclusion of a free trade agreement between Georgia and the USA was made by President Barack Obama during a meeting with his Georgian counterpart at the beginning of 2012. However, after 2012, representatives of the new Georgian government have repeatedly denied this fact and accused former President Saakashvili of using this issue for making speculations. At the same time, members of the government assert that a free trade agreement with the USA is still on the agenda and constantly make statements about its importance. According to the information of the Ministry of Foreign Affairs of Georgia, the free trade agreement is discussed within the economy, trade and energy working group which exists within the format of the United States-Georgia Charter on Strategic Partnership.

It is true that the government has not officially put off the issue of a free trade agreement with the USA but up until now there has not been any specific and tangible steps made in this direction.

Therefore, FactCheck concludes that Giorgi Kandelaki’s statement is MOSTLY TRUE.