WT/REG118/M/1  
 
10 July 2017 
(17-3703) Page: 1/3 
Committee on Regional Trade Agreements  
Eighty -fifth Session    
 
FREE TRADE AGREEMENT  BETWEEN GEORGIA AND THE RUSSIAN FEDERATI ON  
(GOODS)  
NOTE ON THE MEETING OF 29 JUNE  2017 
Chairman: Ambassador Walid DOUDECH (Tunisia)  
1.1.  The 85th Session of the Committee on Regional Trade Agreements (hereinafter 'CRTA' or the 
'Committee')  was convened in Airgram WTO/AIR/RTA/10/Rev.1 dated 16 June 2017.  
1.2.  Under Agenda Item E.II I of the Session, the CRTA considered the Free Trade Agreement 
between Georgia and the Russian Federation , goods, (hereinafter "the Agreement").  
1.3.  The Chairman  said that the Agreement had entered into force on 10 May 1994. It had been  
notified to the WTO by the Parties on 8  February 2001 under Article  XXIV:7(a) of the GATT  1994 
and the Understanding on the Interpretation of Article  XXIV of GATT 1994 as an Agreement 
establi shing a free trade area (document  WT/REG118/N/1). The text of the Agreement  was 
available, together with its Annexes, on the Parties' official websites.  The Factual Presentation on 
the goods aspects (documents  WT/REG118/7 and WT/REG118/7/Corr.1 dated 13 Ap ril and 12  May 
2017 respectively) ha d been distributed. No questions had been  received from Members on th e 
Agreement.   
1.4.  The representative of the Russian Federation  express ed Russia's  appreciation to the 
Secretariat for preparing the Factual Presentation  of the Agreement . Russia saw  indisputable merit 
in the RTA Transparency Mechanism as it ke pt WTO Members well informed of trends and 
developments in other Members' RTAs and provide d a valuable opportunity to discuss such 
agreements. He hope d that the meetin g would be helpful for Members to better understand the 
Russia -Georgia FTA.  
1.5.  The Agreement had been  signed in 1994, becoming one of Russia's  first free trade 
agreements. It was aimed at the development of trade and economic cooperation between the 
Parties o n the basis of equality and mutual advantage. Although at that time neither of the 
signatories had participated in the GATT, the Agreement had incorporated fundamental provisions 
of regional trade agreements in accordance with multilateral trade rules.  The text consist ed of 
22 articles and two annexes. Russia and Georgia had agreed not to impose customs duties, taxes 
and charges having equivalent effect on the export and import of commodities originating from 
their customs areas, except for the products exc luded from the coverage of the Agreement.  
1.6.  The Russia -Georgia FTA had become a commercially significant Agreement that had largely 
contributed to the sound expansion of trade between the two countries. Total trade turnover 
between Russia and Georgia had reached US$700 million in 2015, and US$800 million in 2016, 
which was remarkable growth compared with about  US$95 million in 1995. Russia had seen  steady 
growth in imports from Georgia of alcoholic and non -alcoholic beverages ( US$110 million in 2016), 
metals (US$39 million), fruit and nuts ( US$26 million) as well as clothing, tea and coffee. On the 
other hand, Russia had benefit ed from exporting to Georgia fuel products ( US$132 million in 
2016), machinery and equipment ( US$56 million), vehicles, pharmaceutical s, wheat, tobacco and 
food items.  
1.7.  In pursuing regional economic integration, Russia was fully committed to supporting and 
strengthening the multilateral trading system. The Agreement was a valuable complement to the WT/REG118/M/1  
 
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  multilateral framework. Therefore, Russia welcome d the opportunity to discuss it with WTO 
Members and look ed forward to having a fruitful exchange of views.  
1.8.  The representative of Georgia  express ed his  sincere gratitude to the CRTA for the 
comprehensive review of the FTA between Georgia and the Russian Federation and express ed 
particular appreciation to the Secretariat for the dedicated work in the preparation of the Factual 
Presentation.  
1.9.  The Georgia -Russia FTA was Georgia's  first bilateral FTA. It  had been  signed on 3 February 
1994 and had subse quently entered into force on 10 May of the same year. The Agreement 
envisage d liberalization of trade in goods through the eliminat ion of  import tariffs on almost 100% 
of commodities except for a small number of goods under the exemption list. Namely, bot h Parties 
had made  an exception for undenatured ethyl alcohol and tobacco products and additionally, the 
Russian Federation had made  an exception for white sugar and Georgia for beer.  
1.10.   The Agreement belong ed to the first generation of FTAs and had no provi sions on  trade in 
services. It d id not regulate other trade -related areas such as TBT, SPS, IPR, Government 
Procurement and others. At the time the Agreement had been  concluded, the Parties were 
members neither of the GATT nor of the WTO. The Agreement sti pulate d provisions for the 
determination of rules of origin. Since 16 March 2010 the Parties had applied rules of origin as 
stipulated in the bilateral diplomatic notes.  
1.11.   Article 5 of the Agreement provide d for the establishment of modalities for the exchan ge of 
information with respect to customs issues, including customs statistics. Even though the Russian 
Federation had highlight ed that such modalities had been  developed and fixed in the framework of 
the Agreement about main principles of the mechanism of  customs administration and monitoring 
of trade in goods of 9 November 2011, he underscore d that such bilateral modalities, envisaged by 
Article 5 of the Agreement, ha d not been developed or fixed.    
1.12.   By the time the Agreement had become effective, the vol ume of trade turnover between the 
Parties in 1995 had been estimated at US$ 98 million showing an increasing trend in the coming 
years. Starting in 2000, trade turnover ha d increas ed dramatically from US$160  million to 
US$535  million in 2005 displaying 230%  growth over a period of five years. Due to the ban 
introduced by the Russian Federation on Georgian agricultural export s, in 2006 the export volume 
from Georgia to the Russian Federation had declined by more than half and was estimat ed at  
US$75 million, e ven though the trade volume had increased by 18% amounting to US$630 million 
based on import s from the Russian Federation to Georgia amounting to US$555 million. Th e 
negative balance had been  maintained for the following six years during which  overall trad e had 
plummet ed and Georgian exports had deteriorat ed, falling to US$46 million in 2012 , 4% less as 
compared to 1995.  
1.13.   In 2013, the situation had changed with the lift ing of the Russian ban, which had caused 
300% export growth estimat ed at  US$190 million w ith overall trade turnover equaling 
US$775  million. The increasing trend ha d been retained amounting to US$881 million trade 
turnover in 2016.  
1.14.   The Russian Federation ha d been among Georgia’s basic foreign trade partners in recent 
years taking third place in 2016. The main export commodities were wine, ferroalloys, mineral 
waters, alcoholic beverages, nuts and others. The basic import commodities were oil and oil 
products, wheat, tobacco, chocolate and others.  
1.15.   The representative of the Republic of Moldova  congratulated the Parties for having 
demonstrated transparency on the Agreement and for having found a path to develop and 
liberalize trade in goods . She congratulated the Russian authorities for having removed the 
embargo on Georgian agricultural products  and she emphasized the importance of upholding the 
GATT Agreement of 1994 and the GATS Agreement.  
1.16.   The Chairman  said that the consideration of the Goods Aspects of the Free  Trade Agreement 
between Georgia and the Russian Federation ha d allowed the Committe e to clarify a number of 
questions and it could conclude oral discussion of this RTA in accordance with paragraph 11 of the 
Transparency Mechanism. If any delegations wish ed to ask follow -up questions they were invited WT/REG118/M/1  
 
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  to forward submissions in writing to the Secretariat by 6  July 2017 and Parties were asked to 
submit replies in writing by no later than 20  July 2017. 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.  
1.17.   The Committee took note  of the comments made.  
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