Free Trade Agreement between Hong Kong, China and Georgia
Georgia is one of Hong Kong's important trading partners in the Caucasus. The total merchandise trade between Hong Kong and Georgia was HK$238 million in 2020. Georgia ranked 115th among Hong Kong's worldwide trading partners for trade in goods in 2020. Reciprocally, Hong Kong ranked 26th among Georgia's trading partners for trade in goods in 2019.
Hong Kong and Georgia commenced Free Trade Agreement (FTA) negotiations in September 2016. The negotiations were concluded in April 2017. The FTA was signed on 28 June 2018.
The FTA is comprehensive in scope, encompassing trade in goods, trade in services, investment, dispute settlement mechanism and other related areas. The FTA will bring to our traders and businessmen legal certainty and better market access to the Georgian market. It offers potential opportunities as a gateway to the Caucasus covered under the Belt and Road Initiative and enhance trade and investment flows between Hong Kong and Georgia and the greater Eurasia region.
The FTA entered into force on 13 February 2019.
The FTA (consisting of 18 chapters) covers many areas of importance to Hong Kong and Georgia. Key features are summarised below.
- Tariff commitments of Hong Kong and Georgia are set out in Chapter 2 (Trade in Goods) of the FTA.
- Georgia will eliminate import tariffs on 96.6% of its tariff lines for Hong Kong's originating products upon the entry into force of the FTA.
- The remaining 3.4% of its tariff lines, comprising mainly agricultural products such as fruits and nuts and their preparations as well as beverages and spirits, will continue to be subject to import tariff due to domestic sensitivity in Georgia. Details of the relevant products are set out in Annex 2-1 (Georgia's Exclusion List) of the FTA.
- Hong Kong commits to granting tariff free access to all products originating from Georgia when the FTA takes effect.
- Hong Kong exporters who comply with the relevant preferential origin rules and fulfil the requirements set out in Chapter 3 (Rules of Origin) of the FTA can benefit from the preferential tariff treatment for exports to Georgia.
- Hong Kong exporters can claim preferential tariff treatment from Georgia by applying for a certificate of origin (CO). The CO shall be issued by the Trade and Industry Department or by a Government Approved Certification Organisation (GACO) of Hong Kong. To help Hong Kong exporters make good use of the preferential tariff treatment under the FTA, trade circulars have been issued to inform the trade of the relevant preferential rules of origin and the related requirements. The circulars can be accessed at https://www.tid.gov.hk/english/ita/fta/hkgefta/press.html.
- Imports from Georgia are not required to be accompanied by a CO in order for the goods to enjoy the tariff-free treatment.
- Chapter 4 (Customs Procedures and Trade Facilitation) of the FTA provides for mutual cooperation in the administration of custom matters. It seeks to ensure that the customs procedures and practices applying to goods traded between the two sides are predictable, consistent, transparent and trade facilitating.
- Chapter 5 (Technical Barriers to Trade) and Chapter 6 (Sanitary and Phytosanitary Measures) of the FTA provide for cooperation in technical barriers to trade1 and sanitary and phytosanitary measures2.
- Hong Kong and Georgia have agreed not to apply countervailing measures against each other.
- The two sides have agreed to tighten the provisions on the use of anti-dumping measures. For example, an anti-dumping measure shall be terminated no later than five years from its imposition.
- Notification requirements will enhance transparency in anti-dumping and safeguard investigations.
- Details are set out in Chapter 7 (Trade Remedies) of the FTA.
2 Sanitary and phytosanitary measures are any measures applied (i) to protect human or animal life or health from risks arising from additives, contaminants, toxins or disease-causing organisms in their food; (ii) to protect human life or health from plant- or animal-carried diseases or pests; (iii) to protect animal or plant life or health from pests, diseases, disease-carrying organisms or disease-causing organisms; and (iv) to prevent or limit other damage from the entry, establishment or spread of pests.
3 Trade remedy measures refer to anti-dumping, countervailing and safeguard measures. Imposition of these measures by the importing economy could result in additional duties (being one of the usual forms) on top of tariffs and other charges or other import restrictions on certain imports.
View full text of Chapters and Annexes relating to Trade in Goods:
|Chapter 2:||Trade in Goods|
|Chapter 3:||Rules of Origin|
|Chapter 4:||Customs Procedures and Trade Facilitation
|Chapter 5:||Technical Barriers to Trade
|Chapter 6:||Sanitary and Phytosanitary Measures
|Chapter 7:||Trade Remedies
- The FTA, covering a comprehensive range of service sectors, will provide better business opportunities and legal certainty in market access for services and service providers of Hong Kong and Georgia.
- Among the various service sectors in which Hong Kong and Georgia have made commitments, services and service providers of both sides will enjoy the following benefits in each other's market, subject to listed specific exceptions:
- service providers of one party being treated no less favourably than service providers of the other party or a non-party in similar circumstances;
- removal or reduction of restrictions on foreign capital participation, the number of service providers or operations, the value of service transactions, the number of persons employed, and the types of legal entity or joint venture requirements; and
- business visitors and intra-corporate transferees of Hong Kong and Georgia will be granted temporary entry and stay into each other's area in accordance with the two sides' commitments. In addition, Georgia's commitments also cover contractual services suppliers.
- Georgia's commitments encompass sectors where Hong Kong has traditional strengths or has potential for development, such as financial services, telecommunications services, various business services, wholesale and retailing services, arbitration services, audiovisual services, construction and related engineering services, environmental services, various transport services and printing and publishing services.
- The FTA includes other obligations to facilitate trade in services. Annex 8-2 (International Maritime Transport) of the FTA, the first of its kind under Hong Kong's FTAs with other trading partners, provides for non-discriminatory treatment for vessels of a party with regard to their access to and use of ports and port services, as well as related fees and charges, and customs formalities of the other party. In addition, the rules and disciplines developed under the FTA will improve transparency of domestic regulations and streamline the procedures of applying for authorisation for providing services as well as ensure that such authorisation will not create unnecessary barriers to trade in services.
View full text of Chapters and Annexes relating to Trade in Services:
|Chapter 8:||Trade in Services
Annex 8-1: (Schedules of Specific Commitments)
|Chapter 9:||Electronic Commerce
- The FTA will enhance investors' confidence and facilitate two-way investment flows between Hong Kong and Georgia by providing investors with non-discriminatory treatment as compared with a party's own investors and other safeguards, in respect of their investments in non-services sectors.
View full text of the Chapter and Annex relating to Investment:
Annex 10-1: (Schedules of Reservations)
- Apart from reaffirming the rights and obligations under the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights, both sides have also agreed to promote and strengthen cooperation in the area of intellectual property rights in order to increase the benefits from trade and investment.
View full text of the Chapter relating to Intellectual Property:
|Chapter 11:||Intellectual Property
- The two sides have agreed to promote competition, and to encourage cooperation and information exchange between their competition authorities.
View full text of the Chapter relating to Competition:
- The two sides have agreed on a set of shared principles to enhance protection of the environment.
View full text of the Chapter relating to Environment:
|Chapter 13:||Environment and Trade
- The two sides have agreed to establish a transparent mechanism for consultations and settlement of possible disputes arising under the FTA.
- An arbitral tribunal may be established if the consultations fail to resolve the disputes.
View full text of the Chapter and Annex relating to Dispute Settlement:
|Chapter 16:||Dispute Settlement|