Georgia-China agree on Free Trade after 7 months - “Historic deal” brings significant benefits, says PM

Georgia has successfully completed free trade talks with one of its closest trading partners, China, and soon the new Free Trade Deal will facilitate increased business and trade turnover between both nations.

Georgian wine, mineral waters and agricultural products are among the goods that will be exported to China with zero tariffs and without any transition period.

Prime Minister of Georgia Giorgi Kvirikashvili said this was "a historic deal” for Georgia and that the talks were finalized in "a remarkably short time”.

“Georgian wine will be exported to China without customs fees and without any transition period. This year we were expected to sell 2.5 million bottles of wine in China however in the first eight months of 2016 we have already exported 3.5 million bottles of wine,” said Kvirikashvili.

“We are developing a network of Georgian wine stores in China and we think China will become one of the most important directions for exporting not only Georgian wine but many other goods. [This Free Trade Deal] is one of the biggest achievements of our government and will play an important role in the Silk Road project,” he added.

Georgia’s Economy Minister Dimitry Kumsishvili shared the PM’s enthusiasm about quickly achieving a free trade deal with China, and repeated that it was historic for Georgia.

“This is a historic deal for our country. Georgia is the first country which managed to finalise free trade talks with China in a record time of seven months. For some countries it took 10 years to reach a free trade deal with China,” said Georgia’s Economy Minister Dimitry Kumsishvili.

But before Georgian products can be exported to China with preferential conditions, both countries must sign the Free Trade Deal and then the deal must be ratified.

Next month, the Minister of Commerce of the People’s Republic of China will visit Georgia to sign a memorandum on finalising the Free Trade Deal with Georgia.

“After the agreement is made, the text will be closely examined, which will take about two or three months. Later in December we expect to sign a Free Trade Deal with China,” said Kumsishvili.

“In our opinion the Free Trade Deal will come into play in the middle of 2017 once the deal is ratified by both countries’ parliaments,” he explained.

Through the Free Trade Deal Georgia will be able to export its products to China – a market of 1.4 billion customers - without additional customs fees.

Kumsishvili said this would have huge benefits for Georgia as it meant the country would no longer have to pay high customs fees when exporting wine to China. This would be one of the main benefits offered by the deal.

“We have reached unprecedented result in terms of exporting Georgian wine to China, which means that Georgian wine will be exempt from paying more than 40 percent customs fees. This will raise the competitive advantage of Georgian wine in China,” said Kumsishvili.

Last year Georgia exported more than 2.6 million bottles of wine to China. This year we expect to export more than five million bottles of Georgian wine,” he added.

Georgia and China began discussing the possibility of establishing a free trade regime in September 2015. The first round of talks were held in Georgia’s capital Tbilisi in February 2016, while China hosted the second round of negotiations in May.

The third round of free trade talks were held in Tbilisi in July and it was here where both countries decided not to hold a fourth round of negotiations but continue the talks in a smaller format in September.

The final of these small format meetings was held yesterday in China, where both countries agreed on all rested and unsolved issues.

With the Free Trade Deal, Georgia will be able to export its products to China – a market of 1.4 billion customers - without additional customs fees.

When the agreement finally comes into play, Georgia will be the first country in the region to have this type of deal with China. (Agenda.ge)