EU and Georgia adopted on June 26 Association Agenda, which sets priorities for the period of 2014-2016 with a view to preparing for the implementation of the Association Agreement.

The Association Agenda, which was adopted on the eve of signing of the Association Agreement between Georgia and the EU in Brussels on June 27, replaced EU-Georgia European Neighbourhood Policy Action Plan of 2006; it creates upgraded framework for achieving political association and economic integration between the EU and Georgia, European External Action Service (EEAS) said.

“The Association Agenda incorporates political elements, including political dialogue, reforms to strengthen democratic institutions, the rule of law, independence of the judiciary, respect for human rights, cooperation on foreign and security policy as well as peaceful conflict resolution, and cooperation on justice, freedom, and security. The Association Agenda also incorporates economic and trade elements, including a dedicated DCFTA [Deep and Comprehensive Free Trade Area] chapter and cooperation in a number of sectors such as energy, transport, employment and social policy,” the EU’s diplomatic service said.

“The European Union will support Georgia in a number of ways as it implements the Association Agenda. These include financial support, technical expertise and advice, information sharing, and capacity building,” EEAS said.

Georgia’s PM Irakli Garibashvili is in Brussels where he will sign the Association Agreement, also including DCFTA, on Friday morning.

Later in the evening on Friday the signature of the Association Agreement will be celebrated with an outdoor concert in downtown Tbilisi; President Giorgi Margvelashvili and PM Garibashvili plan to make an address at the event, according to PM’s office.

The Georgian Parliament is expected to ratify the agreement in second half of July.
 
Although it may take several years before all EU-member states ratify the agreement, the treaty envisages provisional application parts of the agreement even before EU members and the European Parliament complete ratification process.

Following Georgian ratification of the Association Agreement, provisional application could start tentatively by October, 2014.

Before its provisional application, an institutional framework should be established, which includes setting up of the Association Council (to replace the existing Cooperation Council), as well as various committees, subcommittees and trade-related working groups; the process will also be accompanied by engagement with civil society and parliamentary cooperation to provide for the monitoring mechanisms.

The voluminous agreement is accompanied by about three dozen of annexes, which list hundreds of relevant EU legislation to be taken by Georgia by a specific date with timeframes ranging from two to ten years – process that will require carrying out numerous reforms.

In July the EU plans to adopt new assistance programs for Georgia worth EUR 101 million to support reforms in the justice sector and implementation of the DCFTA, as well as to fund programs for small and medium enterprises.

Trade Sustainability Impact Assessment, 2012 report commissioned by the EU, estimated that the DCFTA will increase Georgia’s exports to the EU by 12% and imports from the EU by 7.5%. Full implementation of trade-related reforms, according to this report, could increase Georgia’s long-term GDP by 4.3%.

According to the EU estimations, Georgian agricultural products will become more attractive on the EU market after the removal of EU import duties worth EUR 5.7 million on basic agricultural products and EUR 0.5 million on processed agricultural products.

Georgian exports to the EU stood at USD 253 million in January-May 2014, a 58% year-on-year increase, according to the Georgian state statistics office, Geostat.

Georgian exports to CIS-member countries in January-May 2014 stood at USD 627.6 million of which Azerbaijan, Armenia and Russia were Georgia’s largest exporting markets with USD 240.4 million, USD 129.7 million and USD 108.3 million, respectively.

Georgia and the EU launched talks on the Association Agreement in July, 2010. Talks on economic part of the agreement, DCFTA, were launched later and finalized within seventeen months in July, 2013.

The Association Agreement, including DCFTA, was initialled at EU’s Eastern Partnership summit in Vilnius in November, 2013. Although initially signature of the agreement was planned for later this year, development in Ukraine promoted EU to move the date forward.