EU-Georgia Deep and Comprehensive Free Trade Area (DCFTA)
DCFTA aims to forge closer political and economic ties with the EU. On this basis, the DCFTA includes several provisions aiming at reforming of Georgia’s trade and trade-related policies, in line with, and on the basis of, the EU acquis. These will provide for modernisation of the economy, anchoring of EU investment in the country, and better and more predictable policy environment. DCFTA encourages:
- Freedom of establishment .
- Opening markets and lowering bariiers for enterpeneours and service providers
- Modernisation of domestic procurement practices will give access to EU procurement market
The DCFTA is an integral part of the new contractual framework – the Association Agreement, signed with the EU in June 2014, that is the basic political framework governing the upgraded EU-Georgia relationship. The Agreement opens vast opportunities for development and greater approximation with the EU in all main sectors through political association and economic integration. It envisages gradual establishment of best European norms and standards in all sectors including good governance, rule of law, human rights, justice, social inclusion, media pluralism, and market economy as well as gradual economic integration of Georgia with the EU’s internal market thus giving access to the world’s largest consumer market without tariffs and quotas. It will bring benefits for the country's future growth, opening up new markets and creating job opportunities.
Thanks to the creation of a free trade area, approximation to the selected European legislation, and the drive towards internationally recognised quality of goods, more potential for growth, through increased exports and additional investment are expected over the medium term.
Since the provisional application of the Association Agreement in 2014 , Georgia already benefitted from the integration into the EU internal market. Consequently, the EU became the largest trading partner of Georgia, with a share in total trade of more than 30% and growth of Georgian exports to the EU market. While stimulating economic modernisation, the effect of the DCFTA has been fundamental for increasing the attractiveness of Georgia for foreign investments. The European Bank for Reconstruction and Development has announced record volume of investments in Georgia for 2016.
Georgian entrepreneurs will be able to set up a company or a branch of a company in relevant European country and bring qualified Georgian staff for a limited amount of time to work in the European Union; service providers – within the limits of the Agreement – can provide their services across the European Union. Implementation of the DCFTA will bring major benefits to the regulatory environment as well. in the production and trade of industrial goods, new regulatory standards will lead to improvements in the safety and quality of products available on the market. And indeed one of the biggest procurement markets in the world. This will provide business opportunities for Georgian companies and lower costs to the Georgian treasury as procurement rules become more transparent, leaner and more efficient. As reforms progress, Georgia will have access to different types of procurement bids in the European Union, which could eventually lead to a complete opening of the EU market.