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Deepening EU-Georgian Relations Deepening EU–Georgian Relations Deepening EU–Georgian Relations What, why and how? Second edition Edited by Michael Emerson and Tamara Kovziridze CEPS contributors Reformatics Steven Blockmans contributors Michael Emerson Giorgi Akhalaia Hrant Kostanyan David Bolkvadze Guillaume Van Der Loo Zaza Chelidze Giorgi Chitadze Gvantsa Duduchava Lali Gogoberidze Alexandre Kacharava Helen Khoshtaria Tamara Kovziridze Vakhtang (Vato) Lejava Natia Samushia George Zedginidze One of a trilogy of Handbooks explaining the EU’s Association Agreements and DCFTAs with Georgia, Moldova and Ukraine Centre for European Policy Studies, Brussels Reformatics, Tbilisi Rowman & Littlefield International, London Published by Rowman & Littlefield International, Ltd Unit A, Whitacre Mews, 26-34 Stannary Street, London SE11 4AB www.rowmaninternational.com Rowman & Littlefield International Ltd is an affiliate of Rowman & Littlefield 4501 Forbes Boulevard, Suite 200, Lanham, Maryland 20706, USA With additional offices in Boulder, New York, Toronto (Canada), and Plymouth (UK) www.rowman.com Copyright © 2018 CEPS CEPS Place du Congrès 1, B-1000 Brussels Tel: (32.2) 229.39.11 E-mail: [email protected] Website: http://www.ceps.eu Illustrations by Constantin Sunnerberg ([email protected]) The authors have asserted their rights to be identified as the authors of this work in accordance with the Copyright, Designs and Patents Act 1988. All rights reserved. No part of this book may be reproduced in any form or by any electronic or mechanical means, including information storage and retrieval systems, without written permission from the publisher, except by a reviewer who may quote passages in a review. British Library Cataloguing in Publication Data A catalogue record for this book is available from the British Library ISBN: 978-1-78660-800-0 Paperback 978-1-78660-799-7 Hardback 978-1-78660-801-7 Ebook The paper used in this publication meets the minimum requirements of American National Standard for Information Sciences—Permanence of Paper for Printed Library Materials, ANSI/NISO Z39.48-1992. Printed in the United States of America CONTENTS List of Tables, Figures and Boxes vi Abbreviations vii Preface ix Summary 1 Part I. Political Principles, the Rule of Law and Foreign Policy 11 1. Political principles 12 2. Rule of law and movement of people 21 3. Foreign and security policy 29 Part II. Deep and Comprehensive Free Trade Area 35 4. Market access for goods 36 5. Trade remedies 45 6. Customs and trade facilitation 48 7. Technical standards for industrial goods 56 8. Food safety regulations 67 9. Services 76 10. Public procurement 87 11. Intellectual property rights 98 12. Competition policy 105 13. Statistics 110 Part III. Economic Cooperation 114 14. Macroeconomic context and financial assistance 115 15. Financial services 121 16. Transport 131 17. Energy 141 18. Environment 153 19. Digital sector 164 20. Consumer protection 172 21. Company law 176 22. Agriculture 184 23. Employment and social policy 191 24. Education, training and culture 199 25. Science and technology 204 26. EU agencies and programmes 208 27. Cross-border cooperation 214 28. Civil society 217 Part IV. Legal and Institutional Provisions 222 29. Dispute settlement 223 30. Institutional provisions 228 v List of Tables, Figures and Boxes Table S 1. Overview of political principles, rule of law and foreign policy 3 Table S 2. Overview of the DCFTA 5 Table S 3. Overview of EU-Georgian economic cooperation 7 Table S 4. Overview of legal and institutional provisions 10 Table 4.1 Trade turnover between Georgia & EU countries ($ mn), 2008–17 40 Table 4.2 EU–Georgia trade structure by commodity (top 10 products by volume), exports to the EU, 2017 ($ millions) 41 Table 4.3 EU–Georgia trade structure by commodity (top-ten products by volume), imports, 2017 41 Table 4.4 Georgia’s trade structure by country or region ($ mn), 2013 and 2017 42 Table 9.1 Reservations with regard to national treatment or MFN for establishment in service sectors 78 Table 9.2 Reservations with regard to market access and national treatment for cross-border supply of services 79 Table 9.3 EU trade in services with Georgia, 2013-2015 (billion €) 83 Table 10.1 Thresholds for the application of public procurement rules 88 Table 10.2 Indicative time schedule for approximation of public procurement rules 91 Table 14.1 Georgia’s main economic indicators, 2005-17 116 Table 21.1 EU company law directives applicable to Georgia 178 Table 22.1 Agriculture as a share of GDP, sown area and livestock numbers, 1990–2017 186 Table 22.2 Food imports to Georgia, 2000-17 188 Table 22.3 Food exports from Georgia, 2000–17 188 Table 25.1 Main thematic priorities of Horizon 2020 204 Figure 22.1 Real growth rate of agriculture in Georgia 187 Box 9.1 Summary of commitments and reservations of the EU and Georgia for service sectors 82 Box 17.1 European-funded investment in the Georgian energy sector 147 Box 23.1 Relationship between EU employment and social directives and ILO conventions 194 Box 26.1 EU agencies open to Ukraine, Moldova and Georgia* 208 Box 26.2 EU programmes open to Ukraine, Moldova and Georgia* 209 Box 27.1 Selected Georgia–Armenia cross-border projects 215 Box 27.2 Selected Georgia-Azerbaijan cross-border projects 215 vi ABBREVIATIONS ACAA Agreement on Conformity Assessment and Acceptance of Industrial Products AEO Authorised economic operator CAA Civil Aviation Agreement CCC Community Customs Code CE Conformité Européenne CEN European Committee for Standardisation CENELEC European Committee for Electrotechnical Standardisation CFSP Common Foreign and Security Policy CIS Commonwealth of Independent States CJEU Court of Justice of the European Union CSDP Common Security and Defence Policy DCFTA Deep and Comprehensive Free Trade Area DRB Dispute Resolution Board DSM Dispute settlement mechanism EaP Eastern Partnership EASA European Aviation Safety Agency EaTCP Eastern Partnership Territorial Cooperation Programme EBRD European Bank for Reconstruction and Development EDA European Defence Agency EEA European Environment Agency EFTA European Free Trade Association EIA Environmental impact assessment EIB European Investment Bank EMCDDA European Monitoring Centre for Drugs and Drug Addiction EMSA European Maritime Safety Agency ENP European Neighbourhood Policy ETSI European Telecommunications Standards Institute vii EU European Union FDI Foreign direct investment FSA Financial Supervision Agency FTA Free trade agreement GATS General Agreement on Trade in Services GATT General Agreement on Tariffs and Trade GI Geographical indications GOST Gosudarstvenny Standart (State Standard) GPSD General Product Safety Directive ICT Information and communications technologies IMF International Monetary Fund INTERREG Inter-regional cooperation programmes of the EU IPR Intellectual property rights MFN Most favoured nation MoU Memorandum of Understanding NBG National Bank of Georgia NGO Non-governmental organisation NIF Neighbourhood Investment Facility ODIHR Office for Democratic Institutions and Human Rights OECD Organisation for Economic Cooperation and Development OSCE Organization for Security and Cooperation in Europe PEM Pan Euro-Mediterranean System of Rules of Origin PESI Pan-European infrastructure PLLC Public limited liability companies SMEs Small and medium-sized enterprises SPA State Procurement Agency SPS Sanitary and phytosanitary (food safety) regulations TBT Technical barriers to trade (industrial product standards) TRIPS Agreement on Trade-Related Aspects of Intellectual Property Rights VLAP Visa Liberalisation Action Plan WTO World Trade Organisation viii PREFACE This Handbook seeks to explain the contents of a long and complex treaty, the Association Agreement, including the Deep and Comprehensive Free Trade Area (DCFTA), between Georgia on the one hand, and the European Union (EU) and its 28 member states, on the other. Like most complex legal texts, it cannot be read like a book. The purpose here is therefore to make it possible for anyone to understand what each chapter of the Agreement means, in terms of both the nature of the commitments that the parties have assumed, and the prospects for their implementation. This second edition of the Handbook reflects the two years that have elapsed since the first edition was published in 2016. This has allowed for a comprehensive update, with an early indication of how the implementation of the Agreements is progressing. In writing the Handbook, the authors had a broad range of readers in mind, including officials, parliamentarians, business leaders, lawyers and business consultants, think tanks, civil society organisations, university teachers, trainers, students and journalists. The structure of this Handbook essentially mirrors that of the Agreement, but the chapters are not identical to it. Some chapters in the Agreement of lesser interest are not covered, and there is some rearrangement of various chapter headings. The present volume is one of a trilogy of Handbooks that cover very similar but not identical agreements between the EU and its member states, and Georgia, Moldova and Ukraine. All three books are available electronically for free downloading in English and the respective languages of the three countries, at www.3dcftas.eu. There are some references in the Handbook to an Association Agenda, which is a document drawn up jointly by Georgia and the EU to review progress in the implementation of the Association Agreement, and which usefully provides updating and some greater
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