Free Trade Agreement Georgia China

Free Trade Agreement Georgia China

Georgia`s liberal trade regimes provide investors with a good opportunity to access not only the country`s 3.7 million people, but also markets across the region, largely due to the absence of tariffs and import duties. To date, Georgia has signed free trade agreements with CIS countries, including Ukraine, Belarus, Moldova, Kazakhstan, Kyrgyzstan, Tajikistan, Uzbekistan and Turkmenistan, as well as its neighbours Turkey, Azerbaijan and Armenia. China is also one of Georgia`s main trading partners. In January-November 2017, Georgia`s top 10 trading partners accounted for 66.5% of the country`s total revenue, with Turkey ($1.41 billion), Russia ($1.05 billion) and China ($834.3 million) occupying the top three spots. And the result is an obvious conclusion. At this point, open criticism of China would cost Georgia dearly, meaning that tbilisi`s firm stance on Taiwan or on human rights issues is unlikely. But as tensions between the West and China escalate, you expect Georgia to side more with the West, not only politically, but also increasingly economically, by adopting Western 5G technologies, as well as its trade and investment standards. A free trade agreement between China and Georgia came into force on January 1, 2018. This means that about 94 per cent of Georgian products will be duty-free, while Georgian services and goods will enter a market of 1.4 billion people.

In addition, a trade war with the United States lets Xi go slowly with his global ambitions. U.S. tariffs and uncertainty over the overall geopolitical situation will reduce Chinese exports to the United States, resulting in a current account deficit in China. This will force the Middle Kingdom to use its foreign exchange reserves primarily to defend its currency and maintain investor confidence in the country`s macroeconomic stability. As a result, Xi will have to think twice about external commitments, which calls into question the future of the BIS. 1 Technical barriers to trade include technical rules, standards and compliance assessment procedures that may have a direct or indirect impact on merchandise trade. “This is a major historic step that takes trade and economic relations between the two countries to another level. It will encourage small businesses and increase commercial capacity in both countries,” said Georgian Prime Minister Giorgi Kvirikashvili. In order to develop the country`s economy, facilitate trade and liberalize its tax system, Georgia signed an agreement with China on the creation of free trade zones in Georgia.

As mentioned in my previous article, the Sino-Georgian relationship was based on a win-win strategy for both countries. While Georgia was helping China with the BIS, it expected more jobs and infrastructure projects, significant foreign direct investment (FDI) and a general economic boost. The free trade agreement was seen as a first step towards achieving these goals, but free trade agreements alone cannot work miracles.