Georgia-China free trade deal comes into play from January 2018
Monday, January 8Free Trade Agreement between Georgia and China took effect on January 1, 2018, making Georgia the first country in the region to have made such a deal with China.
Starting from January 1, 2018 ,Georgian wine, mineral waters, honey, tea, fruit, vegetables and agricultural products will be exported to China’s market of 1.4 billion consumers, with zero tariffs, without additional customs fees and without any transition period.
Georgia and China began discussing the possibility of establishing a free trade regime back in September 2015. However, the Memorandum on finalising a Free Trade Agreement was signed in October 2016 and the agreement was finally signed in May 2017.
In recent years Georgia has forged strong ties with China through bilateral trade and economic cooperation; Georgian wine is one of the most promising exported products to China.
Last year, 7,585,407 bottles of Georgian wine were exported to China, says the Georgian National Wine Agency. This is a 43 percent increase compared to 2016. With these results, China is on third place as the largest importer of Georgian wine.
China is one of Georgia’s top trading partners . Georgia’s top 10 trade partners in January-November 2017 made for 66.5 percent of the country’s total trade turnover, with Turkey ($1.41 billion), Russia ($1.05 billion) and China ($834.3 million) taking the top three spots.
Following the free trade agreement, Georgia and China had to work on developing innovative zones and joint industrial technologies. For this reason Georgia and China signed a Memorandum of Understanding on developing economic zones and entrepreneurial capacity between the countries within the Tbilisi Silk Road Forum in November 2017.
In regards to the the Silk Road Forum should be noted that Georgia and China are strengthening cooperation within the ‘One Belt, One Road’ initiative – a vast development strategy starting in China and spanning across Eurasia which includes reviving the Silk Road route for trade.
Within the ‘One Belt, One Road’ initiative Chinese corporation CEFC China Energy Company Limited purchased 75 percent of Poti Free Industrial Zone shares. Poti Free Industrial Zone is strategically located adjacent to the Black Sea port city of Poti – the largest sea port in Georgia. It brings significant logistics and supply chain advantages to companies looking for a straightforward and tax-friendly business environment.
Meanwhile, another Chinese corporation ZPMC a famous equipment manufacturing company in China signed a deal with the Anaklia Development Consortium – a company which is responsible for building the Anaklia Deep Sea Port to become its long-term partner.
ZPMC will invest $50 million in the construction of Anaklia Deep Sea Port and potentially attract additional investments from Chinese financial institutions.
The Chinese corporation will also supply Anaklia Deep Sea Port with some of its products such as large-scale container machinery and a bulk cargo handling machine.