Association Agreement: investment by today's Georgians in tomorrow
European Commission - SPEECH/14/562 18/07/2014
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European Commissioner for Enlargement and Neighbourhood Policy
Association Agreement: investment by today's Georgians in tomorrow
Ratification of the European Union-Georgia Association Agreement
Kutaisi, 18 July 2014
Mr Speaker, Mr Prime Minister, honourable Members, excellencies, ladies and gentlemen,
I am honoured and privileged to address you today as you deliberate this momentous step in your country's history. The choice before you is whether to commit your country irrevocably to the path of political association and economic integration with the European Union. I sincerely hope that this Parliament endorses your government's signature of the Association Agreement; but this is a choice for you alone, as the representatives of your people.
I wish to use this occasion, if I may, to share with you my conviction of the benefits, which the Association Agreement, with the Deep and Comprehensive Free Trade Area, will bring to Georgia. And let me make it crystal clear: whenever I refer to Georgia, I am doing so with a principled respect for its territorial integrity and sovereignty. And whenever I refer to benefits of Georgia’s cooperation with the EU, I mean benefits for all people living on Georgia’s territory.
I believe that by implementing the Association Agreement, Georgia will transform itself over the coming years. Using the Association Agreement as its foundation, Georgia will introduce reforms which will progressively bring the country into the European mainstream - economically, socially, and politically. Georgia will further embed into its public life core European values such as a vibrant, pluralist democracy, and profound respect for due process and the rule of law. And it is in this context that we pay due respect to traditions. Europe celebrates its diversity, and our integration has never and will never threaten this. By regulating the economy and public policy in line with European norms, Georgia will achieve a higher degree of political, economic and institutional stability, and a stronger, more prosperous economy. The Association Agreement offers Georgia's citizens nothing short of a higher quality of life.
The Association Agreement is an investment by today's Georgians in tomorrow. Young Georgians, and those not yet born, will grow up in a country which is stable, secure, and an increasingly prosperous part of a wider European continent.
As with all investments, it will take time to mature. This generation is showing great vision in committing to this path. You will face challenges along the way. Georgians know only too well that rewards come to those who put in the effort. But this is your choice, and you can count on the European Union to support you in that choice.
I know that some Georgians fear that implementing the Association Agreement will prove costly. No one should be under the illusion that these reforms will be easy. Investment will be needed to meet new regulatory standards, for example. But some benefits will quickly become apparent.
This ratification opens the way for a swift provisional application of this Treaty. Immediately upon entry into force, the European Union will remove all import duties on imports from Georgia. Georgian companies which export to the European Union will benefit right from the start. Companies will also benefit immediately from simpler conditions for establishing their businesses in the European Union and in Georgia. Not only does this help Georgian companies who wish to do business in the European Union; it will also boost investment and create jobs in Georgia with immediate effect.
Going forward, we expect that the Deep and Comprehensive Free Trade Area will boost Georgia's GDP by 4.3% each year, which is an additional €292 million in national income. Georgia's exports to the European Union are expected to rise by 12%, while imports from the European Union should rise by 7.5%. And these figures do not include growth in investment, which we expect to increase substantially.
The Agreement will help the Georgian economy to catch up with the European Union. Georgia will become more competitive, and this means that it will find its place in the world economy. The Deep and Comprehensive Free Trade Area will open up new opportunities in trade between the European Union and Georgia, of course; but it will also boost Georgia's trade with the rest of the world, given worldwide recognition of European Union norms and standards. The application of these standards will bring significantly more choice and higher quality products to Georgian consumers, and ultimately it will provide benefits also to your neighbours, including Russia.
Georgia is famous for the quality of its agricultural goods. I look forward to the day when Georgian wines feature prominently on supermarket shelves in the European Union and, given the quality of your country's wine, that day will surely come soon. Georgian agriculture has enormous potential; but it requires further modernisation. It can certainly compete on the European and the global stage, but to do that it will need reform and investment, not least in skills among the workforce.
Reforms take time. We know this, and that is why the Association Agreement includes transitional periods to give Georgia the time it needs to complete the process. In some areas – including agriculture – the transitional phase will last for a number of years. Our intention is to help the Georgian economy, and the Georgian people.
This is why the European Union is determined to support Georgia throughout the implementation phase. The European Union has already been providing Georgia with substantial financial assistance to support the reform process for a number of years. And let me make it very clear: it will be significantly increased, starting this year, on the basis of this Agreement. The European Union's support is not just financial. It includes training and technical advice; help with capacity- and institution-building and direct budget support to accompany reforms.
Some of you will certainly be asking where this process will eventually lead. I know that Georgia has ambitions to join the European Union one day. Certainly, the prospect of eventual European Union membership was an important incentive to our newest Member States as they embarked upon this same path of reform and association.
We know that the Association Agreement is not an Accession Agreement, and this is not an accession process. However, the Agreement leaves the way open for future progressive developments in European Union-Georgia relations. By implementing this Agreement fully Georgia will create "facts on the ground". At the end of the process, Georgia will increasingly resemble a Member State of the European Union. This would create a very different context in which to have this discussion. But most importantly it would mean that the Georgian people would already benefit from many of the advantages which European Union membership would bring. So I urge you to remain focused on the key challenge, which is to implement the Agreement in full over the coming years.
I am sure that Georgia is ready for this challenge. Your commitment over recent years, under successive governments, to pursue ambitious reforms leaves no room for doubt.
I want to end my address by urging you, as the representatives of your people, to devote equal energy not just to the technical aspects of the agreement but also to its spirit. I know that Georgians take their politics very seriously, and sometimes very personally! Feelings run high, and it can be hard to put differences to one side and to search for consensus. But the European agenda offers a platform for such consensus. Strong institutions, and a firm attachment to principles rather than people, are essential. This is the spirit which underpins the Association Agreement.
With the signature and ratification of the Association Agreement, and its imminent provisional application, the demands on Georgia will increase. This includes not less, but a more intensive international scrutiny.
Georgia is lucky to have such a strong national consensus in favour of integration with Europe, and an active and vibrant civil society plays a special role in this regard. The government could also count on the strong pro-European credentials of the opposition in this house. Given the difficult situation in the wider region, I believe that Georgia’s pro-European forces have a strong interest in uniting. You have a common interest in capitalising on this great potential for unity.
I urge all of you to reflect a spirit of unity and solidarity in the execution of your responsibilities as Georgia's leaders. Disagreement and debate are essential in a healthy democracy, along with respect for divergent views and above all for the institutions of democracy, and for the law. If, honourable Members, you remain committed to uphold these values as you steer Georgia along this course, then I am confident that your ambitions for your country will be fully realised.
I thank you very much for this special opportunity.