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Davit Songhulashvili: “Georgia belongs to those seven countries of the world which have free trade agreements both with Europe and China.”

Verdict: FactCheck concludes that Davit Songhulashvili’s statement is TRUE.

Resume: Georgia has had a free trade agreement with the EU since 2014 and with China since 1 January 2018. After signing both agreements, Georgia’s exports to these respective countries have increased. In 2014, Georgia’s total exports to the EU were USD 624 million, peaking in 2019 at USD 825 million and reaching USD 716 million in 2020. When the China-Georgia agreement was concluded in 2018, the value of Georgia’s export goods to China amounted to USD 198 million whilst it reached USD 476 million in 2020.

There are indeed eight countries which have free trade agreements both with the EU and China. This list includes Japan, Singapore, Vietnam, Norway, South Korea, Chile and Switzerland in addition to Georgia.

Analysis:

On 22 February 2021, Chairperson of the Sector Economy and Economic Policy Committee of the Parliament of Georgia, Davit Songhulashvili, stated: “Georgia belongs to those seven countries of the world which have free trade agreements both with Europe and China.”

Georgia signed a free trade agreement with the EU in 2014 and the agreement went into force on 1 July 2014. The FTA means that if Georgia meets certain conditions, Georgian products can be exported to the EU without any barriers and with lower tariffs. Since the FTA went into force, Georgia’s export dynamic to the EU has been growing. In 2014, Georgia’s total exports to the EU were USD 624 million, peaking in 2019 at USD 825 million and reaching USD 716 million in 2020.

There are eight countries which have free trade agreements with both the EU and China. The list includes Japan, Singapore, Vietnam, Norway, South Korea, Chile and Switzerland in addition to Georgia.

The China-Georgia free trade agreement went into force on 1 January 2018. The agreement, similar to the EU-Georgia FTA, means that exporting Georgian products to China would become possible without barriers and with lower tariffs if Georgia meets certain condition. At the date of the agreement entering into force (2018), the value of Georgian exports to China was USD 198 million whilst it exceeded USD 476 million in 2020.

Graph 1: Exports to China and the EU in 2011-2020, USD Million Export Ratio to Total Exports %

Source: forbes.ge bm.ge

Despite these figures, the potential of both markets is much bigger as compared to Georgia’s current foothold. Therefore, more work needs to be done to make sure that more Georgian products reach the existing markets.


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