EU trade officials concluded talks on a free trade agreement with Georgia on Monday (22 July), as the South Caucasus country edges towards an association treaty with the bloc.

The commercial text covers trade in energy and services together with standards on rules of origin, customs and trade facilitation.

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Officials hope to seal overall agreement on the trade and association pact in October or November.

According to the European Commission, the EU is Georgia’s largest single trading partner, accounting for 26.6 percent of its total trade in 2012. The EU executive arm also estimates that the free trade deal could increase the country's economic output by 4.3 percent per year, equivalent to €292 million.

The EU started negotiations on an association agreement with Georgia in July 2010, as part of its eastern partnership strategy launched in 2009 involving Armenia, Azerbaijan, Belarus, Moldova and Ukraine.

Although the agreements do not offer the prospect of accession to the EU, the bloc is keen to use access to its markets, as well as visa liberalisation schemes, in exchange for commitments to political reform.

Progress on the eastern partnership is the main priority of the Lithuanian presidency, with the prospect of signing an association agreement with Ukraine in the autumn widely regarded as being the big prize.

Earlier this month, Lithuanian President Dalia Grybauskaite told journalists in Vilnius that "stopping the drift" of the proposed eastern partnership agreement with Ukraine, as well as energy policy, would be the two priorities of her country's EU presidency.

However, Grybauskaite acknowledged that relations with Ukraine were "sensitive and complicated."

She added that President Viktor Yanukovych's government would be required to move towards judicial reform, in particular by ensuring that the office of public prosecutor should be politically neutral, and to end "selective justice" by releasing former PM Yulia Tymoshenko from jail to receive medical attention.

The Lithuanian government is anxious that failure to secure agreement with eastern European countries could push them into the arms of Russia, which is promoting its own trade bloc.

Launched in 2010 together with Kazakhstan and Belarus, which itself borders Lithuania, the Russia-dominated Customs Union aims at establishing a future Eurasian Union by 2015.

Critics such as the United States fear that it is an attempt by Moscow to re-establish a Soviet-style economic bloc.