THE EU’S ASSOCIATION AGREEMENT WITH GEORGIA: ASSESSING THE DOMESTIC POLITICAL AND ECONOMIC IMPLICATIONS
EU-Georgia relations have entered a new phase. Georgia took a step closer to the European Union at the third Eastern Partnership Summit in Vilnius in November 2013 when it initialed an Association Agreement (AA) with a Deep and Comprehensive Free Trade Area (DCFTA). The agreement is to be signed later this year, provided that Georgia meets all necessary conditions. The AA represents a bilateral dimension of the EU’s Eastern Partnership (EaP) initiative, launched at the Prague Summit in May 2009. The overall objective is to support the political and economic approximation to the EU of the latter’s six eastern neighbors, Georgia included. Structurally and policy-wise, the AA/DCFTA is the most advanced of the cooperation mechanisms that the EU has offered to Georgia (and to other eastern partners) over the past twenty years. The weight of the AA lies in its relatively enhanced conditional structure, i.e., clear future benefits linked to the imposition of domestic reforms. This does not imply reactive enforcement, such as application of penalties in case of non-compliance. Instead, it consists of clearly formulated programmatic benchmarks for the implementation of EU requirements. Within the scope of the AA, the EU embarks on a so-called “more for more” approach, meaning that the EU offers concrete carrots in exchange for commitments to deep and comprehensive political reforms. Although the agreement does not open a possibility for accession to the EU, the benefits of the AA/DCFTA are still attractive: deepened and intensified political dialogue, full access to the EU market, and visa liberalization. The EU-Georgia AA is a thick and comprehensive document of around 1,000 pages. The European Commission released the text of the agreement after its initialization at the EaP Summit at the end of November 2013. The AA is structured into three major parts. The first part focuses on political dialogue, association, and respective reforms; cooperation and convergence in the field of foreign and security policy; and convergence in areas of justice, freedom, and security. The provisions of the DCFTA, which is an integral part of the AA, are covered in the second (economic) and third (sectoral) parts of the agreement. This includes convergence and cooperation in fields such as: trade and trade-related matters, national treatment and market access for goods, technical barriers to trade, sanitary and phytosanitary measures, customs and trade facilitation, intellectual property rights, and competition. In addition, the agreement covers sectoral areas, such as tourism, agriculture and rural development, consumer protection, cooperation on employment and social policy, public health, education, culture, sports, civil society, and cross-border and regional cooperation. The convergence reforms that the EU has set forth in the scope of the association process are complex and require serious domestic political and economic commitments. This raises questions about the AA’s potential benefits, as well as the anticipated costs and risks of compliance. This memo analyzes the potential domestic implications of the AA for Georgia.
1. Tamar Khuntsaria, “Prospect of Deep and Comprehensive Free Trade Area (DCFTA) – Is there a European Way for Georgia?” Center for Social Sciences, Tbilisi State University, September 2012
2. Ecorys-Case, “Trade Sustainability Impact Assessment in support of negotiations of a DCFTA between the EU and Georgia and the Republic of Moldova,” Final Report, October 2012
3. Conclusions of the European Council, EUCO 217/13, 19/20, December 2013
4. Geostat: www.geostat.ge/cms/site_images/_files/english/bop/FTrade_06_2013_ENG.pdf