Members of EUGBC Working Group on DCFTA held a meeting with the Chief Negotiator on DCFTA from Georgia

On 12th of July 2012, members of EUGBC Working Group on DCFTA held a working meeting with the Chief Negotiator on DCFTA from Georgia, Deputy Finance Minister, Tamar Kovziridze. EUGBC Secretary General, Konstantin Zaldastanishvili thanked the Chief Negotiator for the meeting and introduced to her the members of the Working Group. He informed that the meeting of the Working Group members with the EU Delegation representative has already been held several days ago. Tamar Kovziridze stressed that the establishment of the business-driven Working Group on DCFTA is timely and important to support and further facilitate the EU-Georgia trade relations. She expressed hope that this initiative will provide a good platform to voice business interest vis-à-vis sector specific issues negotiated by the Georgian and European authorities in the scope of the DCFTA.

Ms. Kovziridze informed the Working Group members on the current state of DCFTA negotiations. She highlighted that the negotiations on DCFTA was launched in December 2011 and it is now going in parallel with the negotiations on Association Agreement. Two rounds of negotiations have already been held in Tbilisi and in Brussels. Third round of negotiations will take place in Tbilisi (end of September, 2012) where parties will discuss tariffs in sectoral areas, including agriculture. The government of Georgia envisages completion of the negotiations in 2013. The Deputy Minister also noted that during the negotiation rounds, all fourteen chapters are discussed in parallel. These are: Trade in Goods; Rules of origin; Customs and trade facilitation; Technical regulations on industrial products, standards and conformity assessment procedures; Sanitary and phytosanitary measures; Services, freedom of establishment and investment; Competition; IPR, including GIs; Public procurement; Trade and sustainable development; Transparency; Trade defense instruments; Dispute-settlement/mediation mechanism; and Institutional structures/provisional application. Ms. Kovziridze informed that certain amount of texts has already been agreed and some chapters can soon be closed. However, there are several complex and technical chapters (such as food safety, technical barriers to trade etc.) that will require longer discussion and time scale to complete. Thereby Chief Negotiator noted that unlike other countries the government of Georgia approaches the EU approximation process very cautiously so that the possible direct coping from the EU acquis are avoided and the adaptation to DCFTA requirements is less painful for the businesses.

She concluded that overall DCFTA is a great tool to boost the country’s economy and increase trade with a large and significant EU market. But, alongside with the benefits, there are significant costs for the Government and businesses too. In short term, she said, DCFTA has more political implication. Whereas, in mid or long term perspective it will also show its real economic value.

The member of the Working Group, Christian Carmagnole of Bank Republic expressed interest whether there is a linkage in the government’s recent discourse regarding investments in the country’s agriculture and the reforms in the same sector envisaged in the scope of DCFTA. Ms. Kovsiridze noted that the government indeed intends to allocate funds in the agricultural sector. Yet, she stressed that although the Government’s intention is to support the private sector in the process of adaptation with the DCFTA requirements, this support will not be in the form of direct financing or subsidising the companies.

In addition, John Braeckeveldt of Gosselin Moving – Georgia voiced the concerns of some of the businesses, mostly of small and medium enterprises that the convergence cost might be high and can impose difficulties on business sector. He also stressed that raising awareness of Business community on DCFTA implications and broader EU trade requirements is necessary.

David Lee of Magticom also discussed with the Deputy Minister how Members of the Working Group, EUGBC and partner business association help in better informing businesses on the process of DCFTA negotiations and its implications.

Tamar Kovziridze said that it is important that businesses were better informed and that with the help of business associations they also talk with Brussels and voice their position. At the moment, she said, it is the Government of Georgia that speaks about the possible difficulties on behalf of the business community. It is necessary, she stressed, that the businesses too openly speak about their concerns with the EU officials. She welcomed the offer by the EUGBC to act as a coordinator of the Georgian business associations so that the business communities’ position was made clear to the EU and Government of Georgia as the negotiations continue.

The parties to the meeting agreed to meet and exchange information more frequently.