WORLD TRADE S/C/N/24
27August 1996
ORGANIZATION(96-3368)
Original: English Council forTrade inServices
JOINT COMMUNICATION FROM THE EUROPEAN COMMUNITIES AND
THEIR MEMBER STATES AND THE REPUBLIC OFHUNGARY
Notification Pursuant toArticle V:7(a) ofthe
General Agreement onTrade inServices
Thefollowing jointcommunication hasbeenreceived from thedelegations oftheEuropean
Communities andtheirMember States andtheRepublic ofHungary. Thiscommunication constitutes
thenotification oftheEurope Agreement establishing anassociation between theRepublic ofHungary,
oftheonepart,andtheEuropean Communities andtheirMember States, oftheother part.
_______________
PursuanttoArticleVparagraph7(a)oftheGATS,theEuropeanCommunitiesandtheirMember
States, ontheonepart,andtheRepublic ofHungary, ontheother part,hereby notify the"economic
integration agreement" asinstituted bythe"Europe Agreement" concluded between themselves. The
formal notification, made inaccordance withthe"guidelines fornotifications under theGeneral
Agreement onTrade inServices", asadopted bytheCouncil forTrade inServices, isattached tothe
communication.
Tofacilitate theexamination bytheMembers, therelevant provisions ontrade inservices in
thisagreement havebeenidentified inthenotification. ThefulltextoftheEurope Agreement where
theseprovisions canbefound, intheiroriginal version, isavailable attheWTO Secretariat. TheEurope
Agreement ispublished intheOfficial Journal oftheEuropean Communities (L357,volume 36,
31December 1993) andintheHungarian Official Journal Magayarközlöny of4January 1994.
1. Members notifying :
TheEuropean Communities andtheirMember States (15)
TheRepublic ofHungary
2. Notification under:
Article Vparagraph 7(a).S/C/N/24
Page2
3. Date ofentry intoforce:
01.02.1994
Duration :
unlimited period oftime
4. Agencies responsible forimplementation andenforcement ofthemeasures:
Association Council, Parties 'legislative, regulatory andjudicial authorities.
5. Description ofthemeasures:
(a) Provisions intheEurope Agreement which arerelevant tothescope oftheGATS:
- Article 1-"Objective": Theobjectives oftheassociation areamong others
"toestablish gradually afreetradeareabetween theCommunity andHungary,
covering substantially alltradebetween them" and"tomake progress towards
realizing between themtheother economic freedoms onwhich theCommunity
isbased";
- Article 6-"General principles": Article 6provides forageneral transition
period ofamaximum duration oftenyears divided intotwosuccessive stages,
eachinprinciple lasting fiveyears, thefirststage beginning attheentry into
force oftheAgreement andthesecond oneupon decision bytheAssociation
Council attheearliest 12months preceding theexpiration ofthefirststage;
- TitleIV-Chapter 1:"Movement ofworkers"; Chapter 2"Establishment";
Chapter 3:"Supply ofservices between theCommunity andHungary and
Chapter 4:"General provisions";
- TitleV-Chapter 1:"Current payments andmovement ofcapital"; Chapter 2
"Competition andother economic provisions" andChapter 3"Approximation
oflaws";
- TitleIX:"Institutional, general andfinalprovisions".
(b) TheEurope Agreement constitutes anagreement liberalizing tradeinservices between
theEuropean Communities andtheirMember States, ontheonepart,andHungary,
ontheother part,inthesense ofArticle V,paragraph 1.Itisalsoanintegral part
ofthewider process ofeconomic integration among theparties which isnotonlytaking
place inthefieldofservices, butalsoinrespect oftrade ingoods andintheeconomic
relations ingeneral. Inaddition, thisAgreement willhelpachieving theobjectives
ofHungary becoming amember States oftheEuropean Community. TheAgreement
provides for:
- auniversal sectoral coverage ofallservices activities, subject toagradual
coverage ofsome services 'activities (seeArticle 44para1(i)and(ii)),
i.e.financial services, acquisition, useandrentofState owned assets under
privatization process anddealing andagency activities inrealproperty and
natural resources); thetemporarily exemption under Article 51
(i.e.establishmentinairtransportservices,inland-waterwaystransportservicesS/C/N/24
Page3
andmaritime cabotage transport services) andtheexception under Article 44.7
(i.e.agriculture, forestry andfishing, notincluding processing ofagriculture,
forestry, fishing andtheirproducts; ownership, salelong-term leaseoruser
rightonrealproperty, landandnational resources; legalservices notincluding
business consultancy involving relevant legal aspects; andorganization of
gambling, betting, lotteries andother similar activities). These exclusions are
fullyconsistent withtheexceptions provided forunder theGATS andmore
inparticular withtheAirTransport Annex, Articles 1.3(b), andXIV.
- theliberalization oftrade through allmodes ofsupply: "cross border" trade,
"consumption abroad", "commercial presence" (with orwithout movement
ofpersons) aswell asthrough "presence ofnatural persons" (seein
particular Articles 37,41,42,44,48,52,55,56and59);
- theabsenceoreliminationofsubstantiallyalldiscriminationthroughelimination
ofexisting discriminatory measures andprohibition ofnew ormore
discriminatory measures (seeinparticular Articles 37,44,45,55,56,59and
115);
- atime-tablefortheprogressiveeliminationofexistingdiscriminatorymeasures,
i.e.atransition period ofamaximum of10years (seeArticles 6and44);
- liberalization inother areas thantrade assuch: thedegree ofliberalization
oftradeinservices between theCommunity anditsMember States ontheone
part, andHungary ontheother partgoes beyond therequirements and
disciplines oftheGATS inmany respects. Toachieve fullnational treatment,
additional disciplines andmeans ofliberalization areforeseen suchas:mutual
recognitionofqualifications(Article46);awardofpubliccontracts(Article66);
rules oncompetition; approximation oflaws, behaviour ofmonopolies and
exclusive service providers, restrictive business practices, payments, transfers
andfreemovement ofcapital.
6. Members specifically affected, ifany:
None. TheEuropean Communities andtheirMember States, ontheonepart,theRepublic
ofHungary, ontheother part,havenegotiated theirSchedule ofSpecific Commitments and
listofMFN exemptions during theUruguay Round. Theentry intoforce oftheEurope
AgreementaimsatfacilitatingtradebetweentheParties.NoprovisionsoftheEuropeAgreement
raisethelevelofrestrictions oftrade inservices inrespect ofanyother WTO Member.
7. Thefulltextoftheagreement isavailable from:
- theWTO Secretariat;
- theEuropean Commission;
- Ministry ofIndustry andTrade, Hungary
Department ofTariff Policy andInternational Organizations.