The Free Trade Agreement between the EFTA States and Georgia was signed in Bern, Switzerland, on 27 June 2016. The agreement entered into force on 1 September 2017 for Georgia, Iceland and Norway and on 1 May 2018 for Liechtenstein and Switzerland.
As a broad-based agreement, the FTA covers trade in goods, trade in services, establishment, the protection of intellectual property rights, government procurement, competition, and trade and sustainable development. In the area of trade in goods, the Parties abolish all customs duties on industrial products as of the entry into force of the Agreement.
The Agreement consists of 13 Chapters and 16 Annexes, covering the following main subjects:
- Trade in Goods
- Sanitary and Phytosanitary Measures
- Trade in Services
- Protection of Intellectual Property
- Government Procurement
- Trade and Sustainable Development
- Institutional Provisions
- Dispute Settlement
TRADE IN GOODS
With the entry into force of the Agreement, the Parties abolish all customs duties on imports and exports of industrial products, including fish and other marine products, originating in an EFTA State or in Georgia.
The Agreement provides for tariff concessions on both basic and processed agricultural products, as covered by the bilateral Annexes V to VII of the Agreement.
The rules of origin and the methods of administrative cooperation between customs authorities (Annex II) are governed by the Regional Convention on Pan-Euro-Mediterranean rules of origin. This allows for accumulation of materials originating in the EFTA States, Georgia and the other 'Pan-Euro-Med' member countries once the respective agreements are in place between the parties concerned.
The Agreement contains detailed provisions on trade facilitation (Annex III) including some “WTO+” provisions, inter alia opening up for advance rulings as well as limiting the possibility of new fees and charges.
SANITARY AND PHYTOSANITARY MEASURES (SPS)
Provisions pertaining to SPS are set out in Chapter 4 to the Agreement. The chapter contains provisions pertaining to inspections, certification systems, system audits, certificates and import checks and ensures low threshold consultation mechanisms. The chapter also foresees the possibility to review the chapter in the future with a view of extending to the other Parties treatment granted to the European Union.
TRADE IN SERVICES
Chapter 5 closely follows the WTO General Agreement on Trade in Services (GATS) approach. It covers trade in all services sectors under all four modes of supply. Separate annexes on financial services (Annex X), telecommunication services (Annex XI), maritime transport services (Annex XII) and energy-related services (Annex XIII) complement the chapter with additional disciplines specific to those sectors. The Parties’ lists of specific commitments and exemptions from most-favoured-nation (MFN) treatment are contained in Annexes VIII and IX, respectively. Those lists shall be reviewed periodically with the aim to further liberalise trade in services between both sides.
The aim of Chapter 6 is to improve the legal framework conditions for investors from the EFTA and Georgia investing in each other’s markets. This is achieved by granting non-discriminatory rights of establishment and operation (“commercial presence”) in economic sectors not covered by the chapter on trade in services. In certain economic areas, the Parties have included reservations to national treatment based on restrictions in their national legislations (Annex XIV). The chapter foresees a periodical review of such reservations, with the aim of increasing the Parties’ commitments over time.
INTELLECTUAL PROPERTY RIGHTS
The provisions on protection of intellectual property rights (Chapter 7 and Annex XV) cover, inter alia, trademarks, copyrights, patents and geographical indications, and include provisions for the enforcement of intellectual property rights and cooperation among the Parties. They are based on the WTO Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS) and provide for a high level of protection, taking into account the principles of most-favoured-nation treatment and of national treatment.
The Agreement provides for the mutual opening of government procurement markets of the Parties. Covered government entities as well as goods and services are listed in Annex XVI. Chapter 8 deals with the procedures to be followed by an entity when procuring, including provisions on national treatment and transparency, and contains a review clause. The chapter is based on the revised WTO Government Procurement Agreement but has been adapted in some areas to reflect the Parties’ specific interests.
In Chapter 9, the Parties recognise that anti-competitive business practices have the potential to undermine the benefits of liberalisation arising from the Agreement. They highlight the importance of cooperating on issues relating to competition law enforcement.
TRADE AND SUSTAINABLE DEVELOPMENT
The Parties recognise that economic development, social development and environmental protection are interdependent. In Chapter 10, they reaffirm their commitment to multilateral environmental and labour agreements and principles and undertake to uphold their levels of protection. Arbitration procedures do not apply to this chapter.
INSTITUTIONAL PROVISIONS AND DISPUTE SETTLEMENT
Chapter 11 establishes a Joint Committee to supervise and administer the Agreement and to oversee its further development. The Joint Committee, which normally meets every two years, may modify the Agreement or consider and propose amendments, as provided for in the Agreement. Chapter 12 sets out the rules and procedures applying with respect to the avoidance or settlement of any disputes that may arise between Parties concerning the interpretation or application of the Agreement.