   
  
WT/REG391/M/1  
 
30 April 2019 
(19-2942) Page: 1/5 
Committee on Regional Trade Agreements  
Ninety -second  Session    
 
FREE TRADE AGREEMENT  BETWEEN CHINA AND GEORGIA  
(GOODS  AND SERVICES ) 
NOTE ON THE MEETING OF 1 APRIL  2019 
Chairm an: Ambassador Carlos Mario F oradori  (Argentina)  
1.1.  Under Agenda Item F. III of the Session, the CRTA considered the  Free Trade Agreement 
between China and Georgia (Goods  and Services ), (hereinafter "the Agreement").  
1.2.  The Chairman  noted that the Agreement had entered into force on 1 January 2018 . It had been 
notified to the WTO by the Parties on 5 April 2018 under Article  XXIV:7(a) of the GATT  1994 and 
the Understanding on the Interpretation of Article  XXIV of GATT 1994 as an Agreement establishing 
a free trade area (document  WT/REG391/N/1) and under GATS  Article  V:7(a) as an Agreement 
providing for the liberalization of trade in services withi n the meaning of Article V of the GATS 
(document S/C/N/900). The text of the Agreement was available, together with its Annexes, on the 
Parties' official websites. The Factual Presentation on the goods and services aspects 
(document  WT/REG391/1 dated 18 Ja nuary 2019) and questions and replies on this Agreement 
(document WT/REG391/2 dated 27 March 2019) had been distributed.  
1.3.  The representative of Georgia  thanked  the Secretariat for the preparation of Factual 
Presentation , China for its fruitful cooperation and Members who had demonstrated particular 
interest and raised questions on the Agreement.  
1.4.  The Agreement had been signed in May 2017 and entered into force in January 2018. It was  
in full compliance with the principles of the WTO and other trade agreement s Georgia had signed 
and aim ed to forge closer economic relations between the Parties . As a result of the effectiv e work 
by both Governments , negotiations had been concluded in  the shortest time possible, just seven  
months. Georgia was the only country in the region to have a preferential agreement with China.  
1.5.  The new generation  Agreement cover ed almost  all trade related matters including goods and 
services, intellectual property rights, SPS, competition, transparency and others. It was an essential 
tool in providing opportunity for closer cooperation and business to business relations between the 
two partners despite  their different economic nature, development model and size.  The Agreement  
present ed a huge opening for Georgian entrepreneurs to enjoy free market access to the biggest 
consumer market in the world.  
1.6.  In trade in goods, China would apply  a transition period on 4% of goods and retain tariffs at 
the end of the transition period on only  6% of all goods . On the Chinese side, the outcome of tariff 
negotiations could  be divided in three parts: immediate  liberalization ; liberalization with a transition 
period of five years ; and exemptions from free trade. On the Georgian side, only 4% of tariffs were 
maintain ed on goods.  However , practically  all of Georgia's p roduction or potential production  was 
subject to full  liberalization.   
1.7.  Trade between China and Georgia ha d been dynamically developing and had  substantial ly 
increase d over recent years making China among Georgia 's top foreign trade partners. In 2018 the 
foreign trade turnover between Georgia and China was estimated at over USD 1 billion , 10% higher 
than the  previous year . In terms of  turnover China was Georgia 's fourth  largest trade partner with 
a share of 8% in overall trade. Exports  in 2018 had amounted to almost USD 200 million  taking 
China to the sixth ranking with a 6% export share. The basic export commodities were copper ores, WT/REG391/M/1  
 
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  wine, nuts, automobiles, alcoholic beverages and others. Georgia believe d that the FTA would  
contribute to enhanced opportunities for investment, export diversification and economic growth 
thus bringing in significant potential benefits in the long-term.  
1.8.  As for trade in services, Chapter 8 applie d to measures of the Parties affecti ng trade in services 
and went further than the P arties ' commitments under the GATS. Special annexes additionally 
provide d measures for trade in financial services, transport and related services and movement of 
natural pe rsons, elevating the level of cooperation in the mentioned fields.  
1.9.  It was noteworthy, that from the entry into force of the Agreement for international maritime 
transport, vessels flying the Georgian flag would  be granted treatment no less favo urable than that 
accorded to China 's own vessels, with regard to access to ports, the use of infrastructure and 
auxiliary maritime services of those ports, as well as related fees and charges, customs formalities 
and assignment of berths and facilities for loading and  unloading. In addition, for tourism and travel 
related services, China -Georgia joint venture travel agencies and tour operators registered and 
established in Beijing, or in Shanghai and Tianjin Pilot Free Trade Zones, could engage in the 
activities of Chi nese travelling abroad and to Hong Kong, China and Macao, China.  
1.10.   In the areas of SPS and TBT the Parties had agreed on close cooperation on a technical level 
in order to increase the mutual understanding o f their respective regulatory systems and promote 
matters related to market access.  
1.11.   Regarding  the protection of intellectual property rights, the purpose of the Agreement was to 
increase the benefits from trade and investment through the protection and enforcement of 
intellectual property rights. It was noteworthy that the Parties took responsibility to protect each  
other 's geographical indications and by means of various legal mechanisms prevent ed related 
counterfeiting activities.  
1.12.   The provisions related to customs procedures and trade facilitation aim ed to promote trade 
between the Parties  and to  facilitate and harmonize existing customs procedures by supporting 
cooperation between customs administrations.  
1.13.   Undoubtedly, the Agreement was  a positive outcome  which increase d Georgia 's attractiveness 
for Chi nese traders and investors.  More specifically, Chinese investors could benefit by producing in 
Georgia and exporting to Georgia 's FTA partners with which China did not have a free trade regime, 
notably the EU, Turkey,  the CIS and some EFTA members . Thus  Georgia provide d a suitable platform 
for China in its efforts to access new markets, using the Georgian market as a production hub.  
1.14.   The Agreement, together with Georgia 's transport and transit infrastructure, business friendly 
environment and access to re gional and international markets, would provide increased 
opportunities for investment, export diversification and economic growth.  
1.15.   The representative of China  express ed her gratitude to the Secretariat for its hard work in 
preparing the Factual Presentati on, and to those Members who had raised  questions, to which the 
Parties had provided  response s. She also thank ed her colleagues from China and Georgia for the ir 
close cooperation in the process.  
1.16.   China was committed to promoting economic globalization and f ree trade  and had always 
been a strong supporter of the WTO. While China had  always put the WTO  as its priority, it was also 
working on  a network of high -standard FTAs to better  integrate into the global economy, strengthen 
its economic cooperation with ot her WTO Members, and further supplement the multilateral trading 
system. By the end of 2018, China ha d signed 16 FTAs with 24 trading partners, and 13 negotiations 
of either FTAs or updates to FTA were currently  ongoing . 
1.17.   With a view to enhancing bilateral trade and economic cooperation, China and Georgia had 
launched FTA negotiations in December 2015. With three  rounds of formal and three rounds of 
informal consultations, the Parties  had substantially concluded negotiation s in October 2016 and had 
signed the Agreement on 13 May 2017. The Agreement had entered into force on 1 January 2018  
and was in full compliance with the principles of the WTO and other trade agreements China had 
signed previously . It was the first FTA sig ned and implemented between China and Eurasian WT/REG391/M/1  
 
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  countries, and the first FTA that had been  initiated and concluded after the Belt and Road Initiative 
had been  launched.  
1.18.   The Agreement consist ed of 17 Chapters, covering trade in goods, trade in services, cust oms 
procedure s, trade facilitation  and so on . On goods , 90.9% of tariff lines o n imports from Georgia 
received duty -free treatment upon entry into force of the Agreement, and a further 3% would be 
duty-free in five years, covering 93.8% of import s from Geo rgia by value. Both Parties had agreed 
not to use the surrogate value of a third country in anti -dumping investigation s.  
1.19.   In services, China had made WTO plus commitments in areas such as professional services, 
banking and other financial services, travel agencies and tour  operator services, etc. As to 
investment the Parties had agreed to apply their existing policies and to further assess and, if 
necessary,  endeavo ur to conduct negotiations with a view to revising the Agreement  between the 
Government of the People’s Republic of China and the Government of the Republic of Georgia 
Concerning the Encouragement and Reciprocal Protection of Investments  (in force since 1995).  
1.20.   The implementation of the Agreement had contributed to the further deepening of econom ic 
ties between the two sides  in a mutually beneficial manner. Though in 2018 China remained  the 
fourth  largest trading partner of Georgia , the same as in 2017, trade had increased quite 
significantly. According to China's statistics two -way trade in goods  had reached US D 1.15 billion in 
2018, an increase of 17.3% compared with 2017 . In the first three quarters of 2018, two -way trade 
in services had reached US D 120 million, an increase of 155.6%. FDI flows from China to Georgia 
had amounted to US D 46 millio n in 2018.  
1.21.   The business communities of both sides ha d significantly benefited from the Agreement. For 
example, b ottled wine from Georgia had a  utilization rate of 81%, with over US D 14 million worth 
of bottled Georgian wine imported into China duty -free in 2018. Chinese consumers c ould order 
Kindzmarauli wine online and have it delivered  the day after. With the benefits provided by the 
Agreement, and the deepening economic reforms and further opening up of China, she believe d that 
the on -going positive mome ntum would  continue.  Georgia's participation in China's international 
import expo in 2018 had also resulted in positive outcomes during which turnover of Georgia 
amounted to USD 8 million. China was looking forward to more fruitful outcomes in expo 2019.  
1.22.   In conclusion, she said that the Agreement  was a milestone in the history of the bilateral 
relationship between the two countries. The Parties would  continue to work actively together to 
promote and implement the Agreement, and to make it a sound and compre hensive platform for 
further enhancing bilateral trade and investment, ultimately contributing to regional and world 
economic growth.  
1.23.   The representative of the United States  acknowledged the participation of the delegations 
from capital and appreciated the presentations they had made. In reviewing the coverage of goods,  
he noted the number of tariff lines that remained dutiable at the end of the implementation period 
includin g a not insignificant number of lines excluded by China. With respect to TBT provisions , while  
the Parties recognized the importance of international standards he was unsure  what Article 6.6 of 
the Agreement was intended to accomplish as it appeared to lim it the standards that would be 
recognized as international standards to the narrow set of bodies recognized in that Article. He asked  
the Parties to confirm that Article 6.6 of the Agreement did not establish a closed list of what was 
considered a relevant  international standard, and as a follow up, to confirm that they applied the 
TBT Committee 's decisions and recommendations with respect to international standards in 
determining what was considered a relevant international standard in the sense of Article  2.4 of the 
TBT Agreement.  
1.24.   On customs -related procedures, he noted that the  Agreement contained a number of 
important provisions on trade facilitation which the United States found useful and interesting. In 
particular, he noted the provisions providing fo r advance notice and comment on draft laws and 
regulations of general application including making them available over the internet to allow the 
public and interested parties the opportunity to comment. He asked  the Parties to share with the 
Committee the duration of the reasonable interval they provided for such comments as set out in 
the Agreement. He highlighted the inclusion of provisions on advanced rulings and acknowledged 
that the Agreement demonstrated the growing acceptance of this trade facilitati ng practice. He was 
interested to know if either Party extended advance rulings beyond tariff classification. There were WT/REG391/M/1  
 
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  a number of other TFA similar provisions relating to risk management  and rapid release of goods 
which he acknowledged and praised.  
1.25.   On services, he noted the minimal improvements made by the Parties over their GATS 
commitments  and that t he Agreement simply followed the GATS positive -list approach to scheduling. 
He asked China to explain the meaning of its footnote on computer and related s ervices with respect 
to content service , specifically what a  content service was and what China was excluding from the 
sector with the addition of the footnote that was not included in its GATS schedule. This was 
referenced in paragraph 4.23  of the factual  presentation . Finally , he noted the Agreement's limited 
approach to e -commerce which was an expanding part of trade and which was addressed in most 
trade agreements with certain binding commitments. The Agreement relegated that issue to one of 
cooperation  and sharing of information and experiences.  
1.26.   The representative of China  said that the representative of the United States should consult  
the written responses provided to Thailand, Ecuador and Mexico  as some of his questions on 
customs -related procedures, services and e -commerce had been addressed there . In response to 
the question about the determination of international standards he said that this issue should be 
discussed in the TBT Committee rather than the CRTA . He asked the  United States to submit  any 
additional questions  in writing. He added that the Agreement was a bilateral FTA and during the 
negotiations the Parties had to consider each Party's development status rather than trying to 
achieve the highest st andard.  
1.27.   The representative of the European Union  thanked the Parties for the insights provided 
including the interesting example of the online sale of wine and for providing the overall context for 
the RTA. She commended the Parties for including a section  on e-commerce in the RTA. The EU 
welcomed the Parties' recognition of the economic growth and opportunities that were provided by 
e-commerce and their commitment expressed in the Agreement to actively participate in the 
multilateral fora on work to promot e the development of e -commerce.  
1.28.   The representative of China  said that in the written responses provided to Ecuador the e -
commerce chapter had been mentioned  and e-commerce  had been included in the Agreement's 
chapter on cooperation. During negotiations th e Parties had considered  the possibility for  further 
negotiations on investment and e -commerce to update the Agreement  given the rapid development 
of e-commerce globally and the ability of Parties in different customs territories to conclude their 
transact ions electronically . The process of trimming logistics and other business processes through 
electronic commerce was inseparable from trade in goods , services and intellectual property rights 
which was why the Parties had left the  chapter intentionally open . When Georgia w as ready the 
Parties could  turn it into a more ambitious e -commerce chapter.  
1.29.   The representative of the United States  appreciated the willingness of the Parties to respond 
to additional written questions and agreed to submit his questions in  writing. Nonetheless it was not 
accurate to say that issues should be discussed in a different committee as the CRTA was the 
Committee  charged with reviewing RTAs and determining their  consistent with WTO rules. His 
questions were in the spirit of determi ning that consistency. It might not be widely known but the 
Committee followed a two -day process precisely because the reviews were meant to be meaningful 
and the second day was meant for a consultation process by the parties with capitals and return 
with meaningful responses. He was not invoking that request,  but it was imperative that all Members 
answer ed as fulsomely as they could because they were supposed to come prepared to respond to 
questions , as in a TPR review . 
1.30.   The representative of Georgia  thanked the United States and the EU for their comments . On 
TBT, Georgia would  provide a detailed response to the United States' questions. Regarding the  
question on Article 6.6 of the Agreement, he said that Georgia and China would use relevant 
internati onal standards  in line with the WTO's TBT Agreement which he had highlighted in his 
opening remarks.  
1.31.   The representative of China  said that in Chapter 6 of the Agreement the Parties had made it 
clear that one of the objectives was to facilitate the implemen tation of the principles of the TBT 
Agreement. Once the TBT Committee had made a decision the FTA would follow. He believed that 
the issue of international standards should be discussed in the TBT Committee.  WT/REG391/M/1  
 
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  1.32.   The representative of the United States  said if the Parties looked at Article 6.6 they would 
understand his question as the international standards of only four international organizations were 
recognized as  international standards and that was not  consistent  with the rules . He asked again 
whether  the list in Article 6.6 was a closed one. He would appreciate a clarification that neither China 
nor Georgia excluded international standards developed consistent with the TBT Committee 's 
decision s and recommendations because they were not from one of these fou r identified 
organizations.  
1.33.   The representative of China  said that there was a chapter on general provisions and 
exceptions and a mechanism with which China could communicate with Georgia. Once the TBT 
Committee had made decisions the Parties would consult  and once mutually agreed the TBT decision 
could be included in the Agreement.  
1.34.   The Chairman  said that consideration of the goods and services aspects of the Free Trade 
Agreement between China and Georgia ha d allowed the Committee  to clarify a number of ques tions 
and it could  now conclude oral discussion of th e RTA in accordance with paragraph 11 of the 
Transparency Mechanism. If any delegations wish ed to ask follow -up questions they are invited to 
forward submissions in writing to the Secretariat by 8  April 2019 and Parties are asked to submit 
replies in writing by no later than 22 April 2019. In accordance with paragraph  13 of the 
Transparency Mechanism all written submissions, as well as minutes of this meeting would  be 
circulated promptly, in all WTO  official languages, and would  be made available on the WTO website.  
1.35.   The Committee took note  of the comments made.  
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