Note: Advance written questions by WTO Members and replies provided by the Government of 
Slovenia are reproduced in document WT/TPR/M/98/Add.1 and will be available online at:  
http://www.wto.org/english/tratop_e/tpr_e/tp_rep_e.htm.WORLD TRADE
ORGANIZATIONWT/TPR/M/98
13 June 2002
(02-3301)
Trade Policy Review Body
13 and 15 May 2002
TRADE POLICY REVIEW
SLOVENIA
Minutes of Meeting
Chairperson:  H.E. Ms. Amina Chawahir Mohamed (Kenya)
Page
I. INTRODUCTORY REMARKS BY THE CHAIRPERSON 3II. OPENING STATEMENT BY THE REPRESENTATIVE OF SLOVENIA 4III. STATEMENT BY THE DISCUSSANT 7
IV. STATEMENTS BY MEMBERS OF THE TRADE POLICY REVIEW BODY 9
V. REPLIES FROM THE REPRESENTATIVE OF SLOVENIA AND
ADDITIONAL COMMENTS 15
VI. CONCLUDING REMARKS BY THE CHAIRPERSON 19WT/TPR/M/98
Page 3
I. INTRODUCTORY REMARKS BY THE CHAIRPERSON
1. The first Trade Policy Review of Slovenia was held on 13 and 15 May 2002.  The
Chairperson (H.E. Ms. Amina Chawahir Mohamed) welcomed the delegation of Slovenia, headed by
State Secretary of the Ministry of Economy, Mrs. Renata Vitez, and the discussant
H.E. Mr. Kare Bryn (Norway).  As usual, the disc ussant would speak in his personal capacity and, in
accordance with established procedures, he had made available in advance a broad outline of the
themes he intended to raise (document WT/TPR/D/77).
2. The Chairperson recalled the purpose of the Trade Policy Reviews and the main elements of
the procedures of the meeting.  The Report by the Government of Slovenia was contained in
document WT/TPR/G/98 and that of the Secretaria t in documents WT/TPR/S/98 and Corr.1.  Copies
of advance written questions, submitted by:  Canada;  Norway;  the European Union;
Hong Kong, China;  Switzerland;  Republic of Korea;  the United States;  Japan;  and Uruguay,  had
been transmitted to the delegation of Slovenia.  These questions and the replies provided by the
delegation of Slovenia are reproduced in document WT/TPR/M/98/Add.1.
3. Both the Government and the Secretariat Reports highlighted that trade and investment
liberalization had been a core element of Slovenia's reform programme aimed at restoring
macroeconomic stability and establishing a fully functioning market economy.  Trade and investment
liberalization had also contributed significantly to Slovenia's good economic performance since itsindependence in 1991.  Both reports also indicated that Slovenia was fully committed to the WTO,
and that preferential agreements, particularly with the European Union (EU), were of paramount
importance.  According to the Secretariat Report, tr ade with the EU accounted for over two thirds, and
exclusively MFN rates applied to only 15% of  Slovenia's imports.  Whereas the Secretariat Report
was a thorough analysis of Slovenia's trade policy developments in the last decade, the GovernmentReport provided Slovenia's recent and future trade policy directions, and presented its perspective of
the post-Doha WTO Agenda.
4. The Chairperson informed Members that due to unavoidable circumstances she would not be
able to chair the second day of the Review to be held on 15 May 2002, and that H.E. Ambassador
Carlos Pérez del Castillo, Chairman of the Disput e Settlement Body, had accepted to replace her as
Chairperson.WT/TPR/M/98
Page 4
II. OPENING STATEMENT BY THE REPRESENTATIVE OF SLOVENIA
5. The representative of Slovenia stated that her country had made one of the most successful
transitions to a market economy.  Following its declaration of independence in 1991 and its
subsequent international recognition in early 1992, Slovenia had moved quickly to establish
macroeconomic stability, launching a systemic transformation of its economy and normalizing its
relationship with the international financial community.  In ten years Slovenia had established a
functioning market economy, a relatively stable macroeconomic environment, and had achieved thehighest living standard among the countries in transition.  After having lost about 20% of its output,
the Slovenian economy had been recovering since 1993, and its GDP had been increasing annually by
3% to 4%.  This was achieved in spite of the disruption of trade flows and the regional instability
associated with the break-up of the former Yugosl avia.  The relatively successful adaptation of the
Slovenian economy could be explained by its competitive potential, including the availability of anexperienced and educated labour force, information-technology infrastructure, and satisfactory
research capabilities. Slovenia's good economic performance had also been the result of its
courageous decisions.
6. In 2000, real growth of GDP was 4.6%, GDP per capita stood at 72% of the EU average.  In
2001 growth was 3%, but the estimated growth rate for 2002 was 3.3% (revised rates), and it wasexpected to reach 4.3% in 2003.  The average unemployment rate (ILO methodology) had declined
from 7.6% in 1991 to 6.3% in 2001.  In this area, no major improvements were expected in the next
two years.  International trade played an important  role in Slovenia's economic development.  The
60% share of exports of goods and services in GDP in 2001 demonstrated that Slovenia had a
distinctive export-oriented economy.  Recognizing the importance of liberalized trade, enhanced
access to global markets, and reduced barriers to trade for economic growth, Slovenia had concluded
preferential trade agreements with 33 countries.  Overall trade with preferential partners representedapproximately 85% of total trade.  Although this trend might seem questionable from the multilateral
point of view, Slovenia, as a small economy, could not afford "trade with everyone".  FTAs were
mostly with Slovenia's traditional partners.  In 2001, Slovenian exports of goods and services
amounted to US$9.3 billion and imports to US$10.1 billion.  Total trade in goods and services had
risen by 4.9% in real terms compared to 2000.  E xport growth was 6.2% and import growth was 2.1%
(less than estimated).  As a result, the trade deficit had narrowed by more than US$500 million.  The
current account deficit was US$121 million (0.6% of GDP).  Real growth of exports was expected to
be 4.7% in 2002, and to increase to 6.5% in 2003.  Expected import growth was 3.8% in 2002 and
5.3% in 2003.
7. Although trade patterns were shifting toward the Russian and the former Yugoslav markets,
where Slovenia had increased both its market shares and trade surpluses, the EU remained Slovenia's
most important trading partner, representing 62% of Slovenian exports and 68% of its imports.  Real
growth rates for exports of goods to the countries of former Yugoslavia had reached more than 16% in
2000 and almost 17% in 2001.  A similar trend was detected in exports of goods to the countries of
the former Soviet Union, i.e. real growth rate was close to 46% in 2000 and 51% in 2001.  Trade withthe CEFTA countries was constantly increasing, and represented 9.5% of Slovenian imports in 2001.
Total trade volume with EFTA had dropped significantly, following the accession of Austria, Finland,
and Sweden to the EU.  In this respect, she clarif ied the statement made in the Government Report:  it
was not trade with the above-mentioned countries th at had dropped but rather total trade volume with
EFTA.
8. In the first phase of its transition, Slovenia had attracted relatively low inflows of FDI, rarely
surpassing 1% of GDP.  Other Eastern European co untries had done better in this area, and Slovenia
had been traditionnally perceived as being hostile to FDI.  The principal reason for this perception
was Slovenia's choice of mass privatization methods, which relied on internal buy-outs by managersWT/TPR/M/98
Page 5
and employees.  Given the long tradition of empl oyee participation in management, this method had
ensured a privatization process that had contributed to both economic and social stability.  Theprivatization process had now entered into its second phase, more conducive to the participation of
strategic investors, including foreign investors.  Acceleration of the privatization process had brought
positive results in increasing FDI in 2001:  at th e end of the year, FDI inflows accounted for 2.3% of
GDP, while they where still less than 1% of GDP at the end of 2000.  This trend was likely to
continue due to the EU integration process,  and the privatization of the financial sector and publicutilities, including energy and telecommunications.  Slovenia also encouraged outward investment.
The outward investment stock had doubled over the last five years.  The outward investment flow
doubled in 2001 and reached 0.59% of GDP.  This process of intensified outward investment of
Slovenian enterprises was likely to continue throughout 2002 and 2003 as business was expanding,
and privatization had been accelerated in the target markets of South-East Europe.  Former YugloslavRepublics represented 65% of Slovenia's outward investment, while Austria represented 45% of FDI
in Slovenia.  With the objective of further strengthening FDI, Slovenia had adhered to the OECD
Declaration on International Investment and Multinational Enterprises in December 2001.
9. Slovenia was striving for economic growth, quality of life, and social welfare, which were
important elements of its social policies.  Slovenia aimed at becoming an active and successfulcompetitor in the global economy, with competitive strengths based on high-value-added
manufacturing and services, quality, innovation, and entrepreneurship.  Greater international
competitiveness, however, was not a goal in itself: it ensured high economic growth, which, in return,
led to a strong and prosperous country with high quality of life and social welfare.  The Government
was aiming to achieve these goals through a syst ematic combination of short-term macroeconomic
policy measures and structural reforms, thus encouraging long-term development factors.  The long-
term strategic directions were encompassed in the Strategy of Economic Development in Slovenia;the National Programme for the Adoption of the acquis ; and the National Development Programme
for 2001-06.
10. In spite of its positive results, the Slovenian economy still suffered from some persistent
structural weaknesses, some of which had been in hereted from the past, while others resulted from
Slovenia's slowness in adopting reforms.  Slovenia 's main structural reforms would be based on:
(i) wide-ranging stimulation of domestic and fo reign investment by abolishing administrative
obstacles, particularly with regard to the formation of new businesses, the acquisition of real estate,
employment, and of the financial and capital markets;  (ii) increased labour-market flexibility;
(iii) the state aid system in the direction of incent ives for competitiveness, the development of small
and medium-size enterprises, and the adoption and development of modern technology;(iv) streamlining and greater transparency of administrative procedures;  (v) more effective use of
public resources, for which discussions on how to control public expenses for 2003 were currently
under way;  and (vi) increasing the role of the private sector on a concession basis through an adapted
allocation structure.  Gradual reduction of inflation remained a prime concern for the Government,
aware of the link between macroeconomic stability and control of inflation rates.  Discussions with all
partners concerned were under way to introduce measures aimed at reducing inflation over the next
three years.  As the modern economic trends called for continuous adaptation and a high degree of
initiative, economic policy was changing focus and scope.  Slovenia was, therefore, promoting an
active industrial policy, which was being implemented through a number of programmes.
11. The positive reorientation of Slovenia towards FDI was reflected in the Programme for the
Promotion of FDI for the period 2001-04, which focussed on:  (i) lifting of administrative barriers;
(ii) improvement of the supply of industrial sites;  and (iii) creation of an internationally comparable
system of non-refundable incentives.  A similar programme had been designed for domestic
investment.  The affirmation of Slovenia as a springboard for business in the successor countries of
former Yugoslavia provided an opportunity to increase future FDI inflows into Slovenia.  South-EastWT/TPR/M/98
Page 6
Europe was gradually merging into the European integration process, and Slovenia was already an
important investor in the region.
12. In Slovenia's view, the Government had to play a catalyst role in enhancing the development
process.  State policies were to maintain competitive and open markets, while the responsibility of
structural adjustment remained with the enterprises.  State interventions were organized in integral
approaches, and carried out in a cost-effective manner.  By no means would the modern trends
towards globalization bypass Slovenia.  The 11 September 2001 events had not stopped globalization,which had, however, proved to be a complex and controversial process:  the interdependence of
producers of goods and services was deepening, while the decisions on allocation of production
factors were increasingly met at global level.  It called for constant liberalization of trade and financial
flows, putting pressure on national economies to open up at an accelerated pace.  Without taking into
account social, human, and environmental components, "freedom" of globalization might turn into the"tyranny" of the powerful.
13. Accession of Slovenia to the European Union (EU) was perceived not only as a process of
regional integration but also an important step forward in the globalization of the Slovenian economy.
Slovenia expected to complete its EU accession negotiations by the end of 2002, and to become a
fully fledged member in 2004.  Nevertheless, being a WTO Member with a small share in the globaleconomy and global trade, Slovenia attached great importance to the WTO rules-based system as a
guarantor for fair treatment of its trade interests and rights.
14. In the process of the preparation of the fourth Ministerial Conference at Doha, Slovenia had
supported a comprehensive and substantial approach to a new Work Programme leading to
multilateral negotiations on key issues of world trade. Slovenia maintained the view that the new
round of negotiations was critical to maintaining the momentum of a rules-based system.
15. There were some lessons learned in this transition from challenges to opportunities:
(i) during the first phase of transition, economic policy inevitably concentrated on assuring
macroeconomic stability;  (ii) to achieve conti nuous growth, employment a nd well-being, new high-
value-added production and services had to be generated. Here, the issue was how to develop value-
added activities;  (iii) the Government had to develop policies to strengthen and support an
environment conducive to economic efficiency and success;  and (iv) the State had to maintainprimarily a role of a passive agent, which would not take responsibility for structural adjustment
programmes.
16. In conclusion, globalization was an irreversible process, which would strongly influence the
performance of the economies in transition.  Regional integration might be an umbrella and an
important step forward in the globalization of th ese economies, while the WTO remained a guarantor
for fair treatment of Members' interests and rights.WT/TPR/M/98
Page 7
III. STATEMENT BY THE DISCUSSANT
17. The discussant (H.E. Mr. Kare Bryn) structured his presentation around three main themes:
(i) economic environment;  (ii) trade policy regime;  and (iii) sectoral policies.
Economic environment
18. Since its independence in 1991 Slovenia had had an impressive economic performance with
an average annual GDP growth of more than 4%;  a per capita income of about US$10,000;  broadly
balanced budgets;  reduced unemployment rates, to 7% in 2001; and moderate inflation (8,4% in
2001) and current account deficits.  There were several reasons behind this performance: at the time
of independence Slovenia was the richest and most open of the Yugoslav republics, with a well-
educated workforce and a considerable industrial base, although in need of modernization and
structural changes.  Slovenia had embarked on an ambitious reform programme since 1991, aimed atrestoring macroeconomic stability and establishing a fully functioning market economy.  There was
no doubt that Slovenia had been successful so far in meeting these objectives, creating a modern,
stable, outward-looking economy, well integrated in the world economy, with trade and investment
liberalization playing a very important role in the performance since independence.
19. Slovenia’s economy was highly dependant on foreign trade, with exports and imports each
amounting to around 60% of GDP.  In parallel with political developments in the area, Slovenia had
seen a loss of its traditional markets in the Balkan s.  A significant development, therefore, had been
the reorientation of trade towards the EU and other Eu ropean markets.  In the longer term perspective,
however, Slovenia had a potential for developing its traditional links with South-East Europe, and
becoming a springboard for business with former Yugoslavia, as noted in the Government Report.
The foreign direct investment regime of Slovenia was fairly liberal, but flows were fairly moderate,
representing 1-2% of GDP annually.  The Government had introduced a special programme for FDIin 2001 aimed at lifting administrative barriers and introducing new incentives for FDI.  A top priority
for the Slovenian Government, both politically and economically, was EU accession.  Slovenia
expected to become a member in 2004.  Therefore, in all areas of Slovenia's economic life, the
reforms had as principal objective to adopt the acquis communautaire .  There was  little sense in
examining the Slovenian reforms without this central point in mind.  He noted four points for further
discussion: the political support for the reform programme;  Slovenia's policies to become a
springboard to the Balkans;  Slovenia's policies and attitude towards FDI;  and problems faced in
adapting to the EU acquis communautaire .
Trade policy regime
20. Slovenia was the last country to become a contracting party to the GATT in 1994, and was
thus an original Member of the WTO.  Slovenia was fully committed to the WTO, and endeavoured to
ensure effective implementation of the WTO Agreements.  In the process leading up to the Doha
Ministerial Conference, Slovenia had supported a comprehensive and substantial approach to a new
work programme in the WTO, leading to multilateral negotiations on key issues of world trade.Slovenia had made extensive commitments upon accession, binding all its tariff lines, dismantling
non-tariff barriers, and making specific commitments in two thirds of GATS activities.  Slovenia had
since joined the Information Technology Agreement,  had participated in the extended negotiations on
financial services, and was in the process of acceding to the Agreement on Government Procurement.
Like so many other countries, Slovenia was also an active user of preferential trade agreements thatsupplemented its reliance on the WTO system.  The agreement with the EU was of paramount
importance.  As already noted, the orientation of Slovenia’s economic and trade policies was largely
driven by the goal of accession to the EU.  Thus, the harmonization of Slovenia’s trade regimeWT/TPR/M/98
Page 8
involved not only the approximation of Slovenia's tariffs with the EU Common External Tariff, but
also extended to customs, standards, competition, subsidies, TRIPS, and other trade-related areas.The EU was by far Slovenia’s largest trading partner, representing 62% of Slovenia's exports and 68%
of its imports.  Slovenia had concluded preferential trade agreements with 33 countries, covering
approximately 85% of its foreign trade.  These agreements had been concluded with the EU, EFTA,
CEFTA, the Baltic countries, Israel, Turkey, Croatia, Macedonia, and Bosnia and Herzegovina.
Slovenia’s trade with its largest trading partners was, therefore, virtually duty free for non-agriculturalproducts, while tariff quotas had been negotiated with each preferential partner for sensitive
agricultural products.  Also, MFN tariffs had been reduced in recent years, although less rapidly than
for preferential trade.  In 2001, the simple average applied MFN rate was close to 11% with an
average of 9.5% for industrial goods and 15.3% for agricultural products.  Many tariffs remained
escalatory, and there was a gap of 13 percentage points between applied and bound rates.  Slovenia'simport regime had few non-tariff barriers. Customs procedures had been simplified in recent years.
Conditions of access to the Slovenian market had also been eased by a complete overhaul of behind-
the-border legislation on investment, competition, stat e aid, and intellectual property rights.  Slovenia
maintained non-automatic licensing requirements to regulate certain imports affecting public security,
safety, health, and the environment; and to administer tariff quotas in agriculture.  The only remainingquantitative restrictions per se  were those on textiles and clothing.  Slovenia had enacted
legislation on trade remedy measures, i.e. anti-dumping, countervailing duties, and safeguards, but
had made little use of it.  The discussant invited Slovenia's views on:  the role of multilateralism and
regionalism;  the rationale for high MFN rates applicable to only 15% of imports, and for the large
differences between bound and applied rates;  and the application of trade remedy measures.
Sectoral policies
21. While sectoral policies had moved towards greater market-orientation, the level of
government assistance in agriculture had been increasing.  Despite the decreasing share of agriculture
in GDP over the last few years, budget allocations to the sector had increased.  The main reason for
this development was the Government's effort to  harmonize the support system with the EU Common
Agricultural Policy (CAP).  In addition, agriculture was shielded from international competition byborder measures (high tariffs and tariff quotas).  The manufacturing sector had withstood well the loss
of Yugoslav markets in the early 1990s and the exposure to international competition.  Aided by trade
liberalization and a relatively modern industrial base inherited from the federal past, Slovenia’s
manufacturing sector had been able to integrate in, and compete with, neighbouring clusters in the
EU.  The reorientation of trade flows posed major challenges to manufacturing enterprises, inparticular with regard to the need to upgrade facilities and increase productivity.  This process had
been more successful in pharmaceutical, mechanical engineering, and paper and wood industries, and
less so in areas such as textiles and clothing, and food processing.  In services, liberalization had
begun only in the late 1990s.  Policies and impediments, such as the privatization of companies
through internal buy-outs instead of stock operations as well as capital controls, investment limits, andadministrative barriers had contributed in the early 1990s to limit foreign participation in financial and
telecommunication services.  During the last few years, however, the focus had shifted towards
increased competition and foreign presence.  Major modernization of the transport and tourism
networks was also under way.  He asked for Slovenia's views on:  the high and increasing level of
agricultural support;  the future orientation of the CAP;  the future of the Slovenian textiles andclothing industry;  Slovenia's policies for liberalization of the financial and telecommunication
sectors;  and Slovenia's policies for the transport and tourism sectors.WT/TPR/M/98
Page 9
IV. STATEMENTS BY MEMBERS OF THE TRADE POLICY REVIEW BODY
22. Members commended Slovenia for its economic performance since its independence in 1991,
and noted that Slovenia's continued efforts to liberalize its trade and investment regimes had played an
important role in its good economic performance.  By managing its macroeconomic and structural
policies responsibly, and through balanced budgets, modest debt, and moderate inflation, Slovenia
had strengthend its economy to withstand external economic shocks. Members recalled that Slovenia
was the last country to become a contracting party to the GATT in 1994, and was thus an originalMember of the WTO.  They noted Slovenia's commitment to the multilateral trading system as
embodied by the WTO, and its efforts in the framework of the EU accession process.
23. The representative of Canada commended struct ural changes brought about by Slovenia since
its independence, including the elimination of various forms of control and the privatization of state
firms.  Thanks to these changes, 60% of GDP was now generated by the private sector, employmenthad increased, and a respectable per capita income of roughly US$10,000 had been reached.  Canada
congratulated Slovenia for its ability to recover from the loss of its traditional Yugoslav markets, and
to establish trade with other partners.  Canada noted that Slovenia had made extensive commitments
regarding its tariffs and non-tariff barriers by joining the ITA.  Slovenia had also signed free-trade
agreements with the EU and associated countries, and with most of its former Yugoslav partners.  Thesimplification of customs procedures and the rationalization of the vast majority of Slovene tariffs
was also welcomed.  Concerns remained, however, wi th individual items, especially in agriculture.
Canada recognized that Slovenia's trade with its most significant trading partners was virtually duty
free, and congratulated Slovenia for having relatively few non-tariff barriers.
24. Canada called upon Slovenia to base its SPS regulations on science. Slovenia had made great
strides in harmonizing its standards and technical regulations with those practised internationally and
within the EU.  Canada welcomed Slovenia's recent improvements in legislation governingprocurement, and encouraged it to ensure a transparent public procurement system.  Canada looked
forward to Slovenia's accession to the Agreement on Government Procurement (GPA).  Canada
acknowledged progress made in the areas of investment, competition, state aid, and intellectual
property rights.  Noting Slovenia's openess to foreig n investment in most sectors, he recalled that
there had been doubts abroad about its commitment to accommodate foreign investors, especially inthe financial sector.  The recent recommendation by the state privatization commission that the
government proceed with the sale of a minority share of Nova Ljubljanska Banka/NLB to Belgian
interests had sent a positive signal to the international financial community.  Canada encouraged
Slovenia to become even more investor-friendly to fully benefit from capital inflows and expertise.
25. The representative of Norway stated that the rules-based system of the WTO, guaranteeing
fair treatment of trade interests and rights with equal application and implementation by all Members,
was important, particularly for small countries.  Slovenia had made great strides in adjusting its
domestic and trade policy since its independence.  A large part of this was due to the EU accession
process.  Norway had the same regime in a number of areas.  The progress made in areas regarding
transparency was welcomed.  Norway looked forward to Slovenia joining the GPA.  Norway recalledthe increase in bilateral trade, and hoped that th e EU accession would not weaken this trend.  Norway
welcomed Slovenia's efforts to secure capital, technology, and know-how, which were vital for
establishing and maintaining competitiveness.
26. The representative of the European Union noted that Slovenia was one of the most advanced
candidate countries for accession.  The political momentum had to be kept to solve the most difficult
issues in the enlargement negotiations.  The EU aimed to conclude negotiations with candidate
countries that were ready by the end of 2002.  After independence in 1991, Slovenia had started
building the most prosperous and stable successor states of the former republics of Yugoslavia.  In theWT/TPR/M/98
Page 10
past decade, impressive political and economic changes had consolidated Slovenia's democratic and
economic reform to achieve its full integration into Europe and into the world economy.  Thetransformation into a functional market economy was largely complete and economic reforms were
giving rise to competitive structures.  It was important for Slovenia to finalize preparations for
membership by completing its legislative alignment process and by strengthening its institutional
capacity to implement the acquis communautaire .  The Europe Agreement with Slovenia formally
defined the EU-Slovenian relations, and layed down the rules and regulations to be respected by bothsides concerning trade, economic, business, and financial relations.  The agreement aimed at
progressively establishing free trade in goods over a gradual, transition period, on the basis of
reciprocity, applied in an asymmetric manner, which meant that liberalization on the EU side took
place more rapidly.  Special arrangements were foreseen for trade in a number of sectors, in particular
services and agriculture, as well as provisions on Slovenia's committment to align its legislation onintellectual property, competition, and public procurement to the EU's.  Slovenia's economic and trade
policies presented a growing convergence with the EU's:  both economies were increasingly
integrated, and trade in goods and services between the EU and Slovenia had been widely liberalized.
Although structural reforms remained to be completed, significant progress had been made.  As a
small, open economy Slovenia was highly dependent on foreign trade.  Today the EU was Slovenia'smain market.  Competitiveness vis-à-vis  the internal market had mostly been achieved.  The EU
strongly supported Slovenia's efforts to pursue greater privatization, and to further relax restrictions to
create opportunities for increased FDI flows.  The share of private-sector involvement in the economy
was still too low. Increased competition in Slovenia's domestic market was important to help to fully
withstand the competitive pressures in today's open markets.
27. Regarding agricultural products, the agreement on reciprocal concessions with Slovenia had
entered into force in November 2000 on an autonomous basis.  A second round on reciprocalconcessions on agricultural products was curren tly under way.  The EU hoped that an agreement
would be reached soon.  The EU-Slovenia wine agreement had been successfully concluded, and had
come into force in January 2002.  Slovenia had been very supportive of EU positions within the WTO
framework, and the EU trusted that this would continue in the ongoing negotiations.  The EU
appreciated Slovenia's commitment to sign up to the GPA, and to support negotiations on anagreement on transparency in government procurement without any restrictions.
28. The representative of Hong Kong, China noted Slovenia's forthcoming stance with regard to
the post-Doha agenda.  Hong Kong, China agreed th at the new round was instrumental in sustaining
the momentum of trade liberalization, and in updatin g the disciplines of the rule-based multilateral
trading system.  Hong Kong, China welcomed Slovenia’s efforts in reducing state involvement in theservices sector, and in encouraging private investment in several services activities.  Hong Kong,
China noted that Slovenia’s GATS commitments reflected only its domestic legislation of 1995, and
invited Slovenia to improve its commitments in the current round of negotiations.
29. The representative of Switzerland noted that Slovenia's macroeconomic stability had ensured
the framework for long-lasting growth, and had in creased the competitiveness of the Slovenian
economy, thus contributing to higher standards of living.  Further liberalization of Slovenia's foreign
investment regime  had led to the impressive increase of FDI.  Nevertheless, compared with other
central European countries, the total amount of FD I per capita remained relatively low.  Switzerland
encouraged Slovenia to pursue liberalization and privatisation.  In Switzerland's view, attracting FDI
was indispensable to further improve the competitiveness of small economies.  Slovenia was engagedin liberalizing trade flows, through a large number of preferential trade agreements, inter alia, with
the EFTA counrtries.  Preferential agreements made an important contribution to regional integration,
and were supportive to the multilateral trading system.WT/TPR/M/98
Page 11
30. The representative of Korea conveyed his country's concern on the differential tariff regimes
for EU products versus products from other countries since the conclusion of a temporary agreement
with the EU in 1996.  A 15% tariff rate had be en imposed on automobiles and color TV from non-EU
countries, while EU products enjoyed zero tariffs.  In fact, in 1997 the trade volume between Korea
and Slovenia had reached over US$112 million but there had been no increase since then.  There was
significant potential for trade expansion between the two countries, if the issue of differential
treatment was addressed.  Korea invited Slovenia to comment on this issue.
31. The representative of the United States recalled that since the two countries had established
relations, in 1992, the United States had supported Slovenia’s efforts to achieve a democratic, market-
oriented society based on the rule of law.  Under the SEED program, the United States had provided
technical assistance on enterprise competitiveness, banking and pension reform, competition policy,
and debt restructuring. Slovenia was among the first countries to graduate from the SEED program,thus reflecting its economic progress. Slovenia had taken its international responsibilities seriously.
32. Slovenia was an important ally in the global co alition against terrorism, in ensuring that its
legislation provided no shelter for terrorists and the networks that supported them, and in safeguarding
its financial systems against the possibility of abuse.  Slovenia had offered assets to the coalition relief
efforts in Afghanistan.  Slovenia had played a commendable role in Eastern Europe, promotinggreater political understanding and reducing tensions in the region.  Slovenia had shown its interest in
building on its existing partnerships by applying for accession to NATO and to the EU.  Slovenia had
created a stable legal framework, creating regulatory bodies in key areas, such as telecommunications,
securities, and competition, and it had taken steps to liberalize the agriculture sector and privatize the
public sector, although progress had at times been slow.  In January 2002, the Slovenian parliament
had passed legislation reinstating data exclusivity protection in Slovenia.  The protection of
intellectual property testified to Slovenia's intention to encourage research and development as well asthe importation of important new pharmaceuticals.  The United States commended Slovenia for its
adoption of the ITA, and for its efforts to accede to the GPA.  The United States welcomed Slovenia's
support for the new negotiations in non-agricultural market access, and establishing a target date for
the negotiations modalities.  It was important to ma intain a disciplined work plan to ensure their
conclusion by 2005.
33. The representative of Japan expressed appreciation for Slovenia's MFN tariffs reduction over
recent years, but noted the relatively large gap between bound and applied rates.  In 2001, the margin
was around 13 percentage points, and for non-agricultural products it was 13.8 percentage points.
This gap left room for increases in applied rates,  thus undermining the predictability of Slovenia’s
tariff regime.  Japan, therefore, requested Slovenia to reduce its bound rates in the market-accessnegotiations.  Concerning safeguards, the Secretariat Report stated that the Decree on Safeguard
Measures did not apply to products imported under FTAs.  Japan asked whether:  (i) this meant that
imports from all FTAs of which Slovenia was a member were excluded from safeguard measures;
(ii) this situation resulted from an obligation existing in the FTAs or whether Slovenia could decide
upon safeguards application on a case-by-case basis;  and (iii) imports from each FTA membercountry were taken into account when carrying out a safeguards investigation.  Noting the importance
of the services sector for Slovenia, Japan appreciated Slovenia’s efforts to liberalize main services
activities, such as financial and basic telecommunications services.  Japan wished to know whether
Slovenia had any plan to liberalize the services in mode 1 regarding insurance for maritime shipping,
commercial aviation, space launching, and freight, including satellites;  and Slovenia's positionregarding liberalization of mode 1 in travel agency services.
34. The representative of Uruguay noted Slovenia's efforts to fully integrate into the world
economy as reflected in its participation in multilateral, regional, and bilateral initiatives.  UruguayWT/TPR/M/98
Page 12
recalled that Slovenia was an original Member of the WTO, and commended its contribution to
strengthening the multilateral trading system.
35. The representative of Kenya noted Slovenia's efforts to liberalize trade through elimination of
quantitative restrictions, removal of export measures, and significant reduction of MFN tariffs.  MFN
tariffs had been further consolidated through the elimination of import surcharges on several products,
and the incorporation of a number of charges in its tariff schedules.  These measures had gone a  long
way in enhancing the predictability in Slovenia's application of trade policy measures.  The simpleaverage MFN tariffs applied on agricultural products was 15.3% in 2001 compared with 9.5% applied
on industrial products.  In addition, market access for certain sensitive agricultural products was
regulated by tariff quotas, also with a complex tariff structure.  Simplification of Slovenia's tariff
regime in agriculture would be desirable both for traders and domestic producers.  The agriculture
sector was heavily protected, overshadowing good progress made in many other areas.  While theimportance of agriculture in terms of its contribu tion to GDP had been diminishing over time, the
subsidies to the sector had more than doubled between 1998 and 2000.  Tariff peaks and tariff
escalation also presented a major problem for agri cultural exporting countries.  According to the
Secretariat Report, tariff peaks were well beyond 100% for lines subject to tariff quotas, while the
average MFN rate for processed goods was about two-and-a-half that for raw materials during 2001.Kenya encouraged Slovenia to eliminate trade-distorting measures in agriculture, and open this sector
for competition within the framework of the Doha Work Programme.  Kenya shared Slovenia's views
that the Doha Development Agenda should provide benefits to developing countries, and assist in
their integration into the multilateral trading system.  Slovenia's current efforts to prepare legislation
establishing duty-free imports from least developed countries was welcome.  Kenya invited Slovenia
to consider extending such arrangements to low-income developing countries.
36. The representative of India noted that, as stated in the Secretariat Report, the consistent
pursuit of sound structural and macroeconomic policies, with accelerated pace since 1998, had not
only resulted in  the achievement of a regular growth in the economy, with low external debt ,
moderate inflation levels and external current account deficits, but also increased the resilience of the
Slovenian economy to external shocks.  The latter had been truly demonstrated during the Russian
financial crisis of 1997-98 and the current economic slowdown.  The strong economic performancehad, in turn, resulted in substantial improvement in the social indicators.  While Slovenia had been
maintaining a relatively transparent  and open regime, and was committed to the multilateral trading
system, India noted with some concern its excessive use of preferential trading  agreements.  As
mentioned in the Secretariat Report, given the large number of preferential agreements of which
Slovenia was a member, exclusively MFN rates applied to only 15% of imports into Slovenia.
37. While the average tariff on imports of industrial products from the EU was 0.5%, the average
MFN tariff for these products was 9.5%.  While it fully recognized the importance Slovenia attached
to its EU accession process, India requested Slovenia to ensure full compatibility with the WTO rules,
and to avoid trade diversion.  India invited Slovenia to comment on the observation in the Secretariat
Report that the operation of preferences in agriculture required the management of hundreds of tariffquotas carrying mixed duties, contained in 14 different lists, thereby hampering transparency and the
efficient use of Slovenia's scarce administrative resources.  Noting the importance of agriculture to
developing countries, India invited Slovenia to be more flexible by undertaking greater liberalization
commitments in the agriculture sector in the ongoing mandated negotiations, and to provide a
favourable climate for developing countries to increase their exports.
38. The representative of Hungary noted that Slovenia's regional agreements had contributed not
only to increased trade with their members, but had opened up additional trade and investment
opportunities for third parties.  Slovenia's special relations with countries in southern and south-east
Europe, including the significant FDI by Slovenia therein, had contributed positively to theWT/TPR/M/98
Page 13
normalization process in the region.  He recalled that no trade defence measures had been applied by
Slovenia vis-à-vis  Hungary recently.  It was Hungary's intention to further develop economic and
trade ties, both bilaterally and within the CEFTA.  Hungary hoped that both countries would become
members of the EU.  Hungary wished to increase it s participation in Slovenia's privatization process,
including in the services sector, and welcomed measures taken by Slovenia to facilitate trade and
foreign direct investment in this area.  Hungary believed that Slovenia's accession to the EU would
further develop its economic well-being and its relations with third countries.  Slovenia was a clearmanifestation that liberal economic and trade policy, applied with the necessary flexibility and taking
into account specific countries' concerns, would bring results.  Regional and free-trade agreements
had helped considerably the smooth adaptation of  Slovenia's economy.
39. The representative of Brazil noted that according to the Secretariat Report, the Slovenian
tariff structure was characterized by tariff escalat ion.  Brazil would be interested to know Slovenia's
position in this regard, in particular in the context of the current WTO negotiations.  Brazil
encouraged Slovenia to further reduce the gap be tween applied and bound tariffs in the negotiations.
Brazil asked for clarification on Slovenia's plans with regard to its specific duties and mixed tariffs,
and encouraged it to convert specific duties and mixed tariffs into ad valorem  tariffs.  The Secretariat
Report pointed out that Slovenia's producer supp ort estimate was higher than the OECD average.
Brazil further noted that the amount of agricultural state support had increased consistently between
1998 and 2000.  In this regard, Brazil asked how Slovenia intended to position itself with regard to
these issues in the current WTO agriculture negotiations;  and what the impact of the acquis
communautaire  would be on Slovenia's tariff and tariff quota regimes, in particular as regards
agricultural products.  Brazil asked for more information on the functioning of Slovenia's tariff quotas
and non-automatic import licensing systems for agricultural products, and requested that relevant
legislation currently in force be attached to the answers or that website addresses be provided foraccessing the legislation.  The Secretariat Report pointed out that Slovenia's RTAs had resulted in a
number of tariff quotas, in particular on agricultural products;  Brazil wished to know how tariff
quotas were applied to coffee grain.
40. The representative of Croatia recalled the long-standing trade relations between the two
countries, and noted that Slovenia continued to be one of Croatia's most important trading partners, in
terms of exports and imports, mutual investment flows and intensive contacts between the economic
operators.  Slovenia's commitment to the multilateral trading system had been underlined by its active
participation in the WTO, including its support for a broad-based new round of multilateral trade
negotiations launched at Doha.  Croatia shared Slovenia's views on specific negotiating issues in the
new round, and on the complementarity between  the multilateral trading system and preferential tradeagreements.  Croatia and Slovenia had concluded a bilateral free-trade agreement effective from
1 January 1998;  this had been amended to deepen the scope of mutual preferential trade.  The
complexity of bilateral trade relations advanced through this FTA was contributing dynamically to the
overall economic cooperation between Croatia and Slovenia, but was sometimes subject to different
views that required further cooperation between economic policy regulators.
41. The representative of the Czech Republic recalled that Slovenia had implemented its
accession commitments in a timely fashion, and had joined a number of WTO initiatives.  It had
become one of the major proponents of a broa d-based round of trade negotiations aimed at
strengthening the multilateral trading system.  Slov enia had complemented its multilateral endeavors
with impressive liberalization at regional level, and had proved that multilateralism and regionalismwere complementary.  Slovenia was a traditional trading partner of the Czech Republic.  The two
countries had been pursuing trade liberalization in the framework of CEFTA, and had developed a
network of political, economic, cultural, and human relations.WT/TPR/M/98
Page 14
42. The representative of Bulgaria  recalled that since 1996 trade relations with Slovenia had been
underpinned by a free-trade agreement, which had he lped to double trade between the two countries.
That agreement had been superseded by Bulgaria's accession to CEFTA in early 1999.  Slovenia was
Bulgaria's fifth major trading partner in CEFTA.  Both countries pursued accession to the EU.
Slovenia had been committed to the multilateral trading system as demonstrated by its accession to
the ITA, its participation in the extended WTO negotiations on financial services, and the initiation of
the process of accession to the GPA.  Slovenia had strongly supported the launching of a new roundof trade negotiations at the Doha Ministerial Conference.  Its participation in the WTO, and the
preparation for EU accession had contributed to the liberalization of Slovenia's trade regime.
Slovenia had made little use of trade remedies  and non-tariff measures.  Slovenia had improved
national legislation on customs, standards, competition policy, investment, subsidies, intellectual
property, and other trade-related areas.  Bulgaria encouraged Slovenia to participate actively in themultilateral trade negotiations currently under way.
43. The representative of the Slovak Republic recalled that Slovenia's positive economic
performance had been influenced by its accession commitments in the WTO, while the Europe
Agreement, the CEFTA agreement, and other regional agreements had contributed to Slovenia's
overall development.  The Slovak Republic maintained excellent economic cooperation with Sloveniaboth bilaterally and  within CEFTA.  The Slovak Republic asked whether Slovenia had decided to
administer tariff quotas by first-come-first-serve system and by an auction system, and, if that was the
case, what was the rationale behind the combination of those two systems.
44. The representative of Lithuania recalled that the turnover of trade between the two countries
in 2001 had been about US$20 million:  Lithuania had had a constant negative trade balance with
Slovenia.  Trade between the two countries had incr eased during the last two years, and Lithuania
hoped that their free-trade agreement would further boost trade.  Slovenia and Lithuania were both inthe EU accession process, and had similar views on the new round of multilateral trading negotiations,
including liberalization of agriculture, the recognition of the non-trade concerns, further liberalization
on trade in services, and further reduction of tariffs on agricultural products.  They also shared
positions in areas such as environment, investment, competition, and trade facilitation.
45. The representative of Estonia recalled her country's similarities and common objectives with
Slovenia.  Estonia understood the challenges faced by Slovenia in its economic transition, and in its
participation in the multilateral trading system.  Estonia commended Slovenia for achieving stable
economic growth and a well-integrated economy.WT/TPR/M/98
Page 15
V. REPLIES BY THE REPRESENTATIVE OF SLOVENIA AND ADDITIONAL
COMMENTS
46. The Chairperson invited the representative of Slovenia  to focus her responses on three main
themes:  (i) economic environment;  (ii) trade policies and measures;  and (iii) sectoral policies.
(i) Economic environment
47. The representative of Slovenia noted that GDP growth was expected to remain at around 4%
in the near future, and that the inflation rate was likely to drop from 8.4% in 2001  to 6.9% in 2002,
and to 5.1% in 2003 .  Throughout the entire transition period, Slovenia had more or less sustained
fiscal and external balance, with a budget deficit around 1% of GDP.  The Government had recently
announced a package of measures to curb inflation, public spending, and wage pressure in the public
sector.  Internationalization was perceived by Slovenia as an increasingly important element to boostcorporate sector competitiveness.  FDI was not only a source of additional capital: what Slovenia
expected from FDI was transfer of technology, access to foreign markets, better management and
organization techniques, integration into the international economy, and transfer of knowledge and
skills.  As a result, Slovenia had decided to encourage and promote inward FDI by stable, transparent,
and non-discriminatory regulations based on the national-treatment principle.  A priority policy of theGovernment was acceleration of the privatization process, and increasing the role of FDI through
privatization.  Slovenia's programme for the promotion of FDI included a commitment to attract
greater levels of foreign participation in the privatization process, including in the banking sector and
public utilities.
48. In Slovenia's view, regional arrangements were not only compatible and supportive of the
multilateral trading system, but promoted its rules, disciplines, and principles.  Slovenia saw regional
trade arrangements as a form of enhanced liberalization of trade, as a vehicle for better integrationinto the multilateral trading system, and for better adaptation to the pressures from global competition
and the globalization process.  Slovenia had maintain ed the view that a consistent improvement of the
multilateral trading system was an important process.  The "extensive use" of free-trade agreements
was the road that Slovenia had to take as a newly independent economy in transition.  Free-trade
agreements were instrumental for a small economy depending on foreign trade, and for thedevelopment of a fully fledged functional market economy.  It was a necessary policy approach.
Slovenia had to liberalize its trade fairly quickly;  therefore, it had to adapt its trade instruments to a
historically new situation, and develop new markets.   Slovenia's geographical position made it logical
to conclude free-trade agreements with its trading partners, in the interest of its economy, stability,
and broader economic cooperation.  Slovenia appreciated Bulgaria's comments on trade facilitationand stability in Eastern Europe.  Slovenia did not see these agreements as trade diversion. Slovenia
was promoting and supporting trade with more distant markets, with which Slovenia registered trade
deficits, and which required different, and  more long-term-oriented business approaches.  As a result,
in the past decade Slovenia had had to rely on tr aditional flows.  Accession to the EU was a step
forward in the globalization of the Slovenian economy.  Slovenia expected to complete thenegotiations by the end of 2002, and to become a member in 2004.  Three chapters remained to be
negotiated:  agriculture, regional development, and budget.  Slovenia considered the accession process
to the EU to be as important as its membership;  by absorbing the acquis communautaire  the country
had accelerated reforms and upgraded its system.  This was a positive experience. Slovenia had
concluded FTAs with Croatia, Macedonia, and Bosnia and Herzegovina and was negotiating an FTAwith Yugoslavia.  Slovenia was a donor country in the Stability Pact, offering its experience and
promoting the transfer of knowledge to these countrie s:  Slovenia had been very active in the Working
Group on facilitation and liberalization of trade in the Western Balkans.  The countries had  signed a
memorandum of understanding to conclude bilateral FTAs by the end of 2002.  Trade would play an
important role in ensuring stability in the region.  Slovenia welcomed this development.  Slovenia wasWT/TPR/M/98
Page 16
an important investor in the region.  This demonstrated the capability of Slovenian enterprises to
manage risk in these countries.  Slovenia was the first country to open up the insurance sector forBosnia and Herzegovina and later for Yugoslavia, and was considering, together with other
international investors, the possibility of setting up an investment fund to further promote investment,
to promote employment, and to enhance economies in the region.
49. The discussant welcomed Slovenia's replies on FDI, privatization, and on its experience with
the acquis communautaire, and  appreciated Slovenia's role in the region.
50. The representative of the United States noted Slovenia's role within the Stability Pact, to
which the United States attached considerable importance.  The United States asked further
information on where negotiations on the agricultural chapter stood, and on remaining outstanding
issues.
51. The representaive of Slovenia proposed to reply to this question under the cluster on sectoral
policies.
(ii) Trade policies and measures
52. The representative of Slovenia recalled that differences in tariffs resulted from the Europe
Agreement, which was in full compliance with Article XXIV of GATT 1994.  In this regard, she
noted that imports from overseas had developed much more rapidly than exports from Slovenia.
Although there were differences between bound and applied rates, there was no uncertainty in
Slovenia's tariff regime.  This was consistent with Slovenia's general policy of developing a
progressive and forward-looking economy.  Slovenia was prepared to take part in the negotiations on
market access, once an agreement was reached on modalities of negotiations.  In the past decade,
Slovenia had never misused the tariff gap.  Although it had enacted trade remedy measures, Slovenia
believed that extensive use of trade remedies were not the solution to structural problems, but couldbe short-term remedies against competitive pressures.  Slovenia did not support the proliferation of
trade remedies because of their counterproductive effects, and invited its trading partners to reduce
their use of such measures.  For the third time, Slovenia was improving its basic legislation and
procedures on government procurement.  Slovenia had not notified export subsidies because it granted
none.
53. The discussant noted and supported Slovenia's appeal to other Members to refrain from using
trade remedies.  He mentioned that Slovenia's accession to the EU would solve the difference between
bound and applied rates, with the adoption of the common customs regime.
54. The representative of the United States noted that Slovenia had granted no export subsidies in
2002.  However, it appeared as though export subsidies had been granted in the year prior to
notification.  If no export subsidies had been granted in 2002, it would be extremely useful to submit a
nil notification to the Committee on Subsidies and Countervailing Measures.  He noted that the date
of Slovenia's accession to the EU had been readjusted to January 2004.  The United States asked for
further clarification on whether the date for tariff readjustment had slipped back, or whether Slovenia
was taking advantage of those two years to stage down its tariff to facilitate the adjustment of itsindustry to outside competition.
55. The representative of Japan noted that the Secretariat Report needed to be corrected regarding
its statement that Slovenia had concluded an agreement with the EU on the patent extension, as
Slovenia had not concluded such an agreement.WT/TPR/M/98
Page 17
56. The representative of Slovenia confirmed that as the date of Slovenia's accession to the EU
had been postponed to 2004, Slovenia had adjusted all its policies, including its tariff regime,
accordingly.  Slovenia had never notified any export subsidies.  For the sake of transparency,
Slovenia had explained the activities of the Slovenia Export Corporation, and of the Interest Rate
Equalization Programme, which was consistent with the OECD guidelines and rules.  Slovenia did not
consider the programme as a subsidy.
(iii) Sectoral policies
57. The representative of Slovenia noted that telecommunications had been liberalized in
Slovenia to an even greater extent than in some comparable and more developed countries.  The 2001
Telecommunications Act provided a framework for a fully liberalized environment.  For example,
among the three mobile telephone operators two were foreign-owned.  The Government would beginthe procedures for the sale of its 65% share of Telekom Slovenije as soon as market conditions for
such sale improved.  Specific issues in this regard had been covered in Slovenia's written replies.  On
financial services, Slovenia was also following policies of gradual liberalization, and pursuing open
market policies, while the last technical controls in the area of capital flows were being phased out.
The Government had just signed a contract for the sale of 34% share in the leading state-owned bank.
58. The textiles sector would be fully integrated into the GATT 1994 by 2005, in accordance with
Slovenia's integration schedule.  Currently quotas were in place only for clothing, and they were
administered through Slovenia's Chamber of Commerce.  Restructuring efforts were being made in
view of Slovenia's accession to the EU, including through a programme that contained horizontal
measures to promote and update marketing and technological capability of Slovenia's textiles
companies. It did not entail any support to increase their capacity.  A similar programme was set up
for the leather and footwear industry.  Road transport in Slovenia, including line-bus services, wereoperating on a fully commercial basis at full risk of transport operators.  Slovenia had adopted a
number of bilateral agreements.  Because of its size, Slovenia was not only an intensely transitory
country, but also sensitive to transport and transit policies of neighbouring and other countries, to
which most exports were conducted by road.  Slovenia had fully liberalized tourism, including mode
1, on the basis of the Law on Tourism.  Slovenia was following world trends, and was active in theimport and export of tourism services.  The above-mentioned Law regulated consumer-related
concerns in line with the current trends of consumer protection, namely in the area of fraud
prevention.  Technically speaking, the EU accession negotiations on agriculture had not started yet.
Technical meetings were also held.  A common position paper was likely to be provided by the end of
July 2002, and negotiations were likely to be concluded in autumn 2002.  Written replies providedfurther details in this regard.
59. The discussant welcomed Slovenia's replies under this cluster.
60. The representative of the United States asked:  when the reference paper and the GATS
commitments on telecommunications sector would be  updated;  whether Slovenia planned to make
progress in this area prior to the EU accession;  and whether Slovenia's preferential trading partnershad access to mode 1 supply in insurance, interm ediation, and services auxiliary to insurance, or
whether because of prudential requirement all services providers were excluded from mode 1 in those
specific insurance subsectors.
61. The representative of  Brazil noted that his delegation had submitted a question on the impact
of the acquis communautaire  on Slovenia's tariff and tariff quota regime, particularly in agriculture.
Brazil asked about the implications of the acquis communautaire  on Slovenia's tariff bindings in the
WTO.WT/TPR/M/98
Page 18
62. The representaive of Slovenia stated that her country intended to update its GATS
commitments.  Slovenia's FTAs did not cover services, therefore, there was no preferential access in
this area, and access in the insurance subsectors was applied on erga omnes  basis.  Slovenia intended
to fully take on board CAP commitments upon its EU accession.  As a result, no derogations on tariff
and tariff quotas were foreseen.WT/TPR/M/98
Page 19
V. CONCLUDING REMARKS BY THE CHAIRPERSON
63. This first Trade Policy Review of Slovenia has been excellent. Our discussion has been
thorough and comprehensive, and has raised important trade issues.  Our dialogue has provided a
good understanding of Slovenia's trade-related policies and practices, not least due to the open and
full involvement of State Secretary Renata Vitez and her delegation, and to the active engagement of
many delegations.
64. Members commended Slovenia for its good economic performance.  Slovenia's trade and
investment liberalization efforts have been key elem ents in its reform programme, aimed at restoring
macroeconomic stability and establishing a modern, stable, and fully functioning market economy.  In
consequence, Slovenia is now well integrated in the world economy through closer trade and
investment links.
65. Members also praised Slovenia for its strong commitment to the multilateral trading system,
and commended its strong support for the launching of the Doha Development Agenda. At the same
time, Members noted that much of the orientation of Slovenia's economic and trade policies is driven
by its goal of accession to the European Union (EU).  Several Members maintaining preferential trade
agreements with Slovenia commented on the positive effects of such agreements on trade and
investment for Slovenia.  Other Members also noted that, in general, falling trade barriers underpreferential agreements have not been matched by similar improvements for MFN partners. This was
a source of concern to a number of Members, who encouraged Slovenia to narrow the gap.
66. Several Members noted that an important gap exists between Slovenia's bound and applied
tariff rates, which could undermine the predictability of the tariff regime, although Slovenia has never
exploited this gap.  Some Members requested Slovenia to reduce the gap between applied and bound
rates in the context of the current WTO market-access negotiations. There was also some concern
about tariff escalation.
67. Members commended Slovenia's various initiatives to streamline and increase transparency in
many administrative areas, including customs administration. Clarifications were requested on the
simplified customs procedures.  Some concerns were also expressed about Slovenia's non-automatic
licensing requirements related to public security, safety, health, and the environment; and to the
administration of tariff quotas in agriculture.
68. Some Members noted that Slovenia has enacted legislation on trade remedy measures, while
having made very little use of it. Several Members encouraged Slovenia to quickly complete its
accession to the WTO's Government Procurement Agreement.
69. On sectoral policies, Members noted the increase in the level of government assistance to
agriculture, and Slovenia's plans to harmonize support systems with the EU's Common Agricultural
Policy. Concerns were expressed about agriculture being shielded from international competition by
border measures (high tariffs and restrictive tariff quotas).
70. Members indicated interest in developments in telecommunications, transport, and tourism,
notably with respect to foreign participation, th e role of the domestic regulators, and commitments
under GATS. On financial services, questions were asked about the 1992 crisis, the privatizationplans, and the degree of competition, particularly in the insurance sector.  Several Members thought it
desirable to further open services activities to private investment, observing Slovenia's positive
experience with liberalization in other areas.WT/TPR/M/98
Page 20
71. Members also sought further clarification on a number of specific areas, including:
- structural weaknesses such as labour market rigidities, administrative obstacles, use of public
resources, and plans to overcome them;
- foreign direct investment (FDI) regime, incentives, and policies for becoming a springboard
for doing business in south-east Europe;
- privatization process, methods, and future plans, particularly for divesting some key financial
and telecommunication enterprises;
- safeguards legislation and its application to FTAs;
- scientific approach to SPS matters;
- export subsidies, and subsidy programmes that support manufacturing sectors;  and
- protection of intellectual property rights.
72. The Slovenian delegation gave written and oral replies to questions posed during the Review.
The replies provided have made a major contribution to this meeting, and were clearly appreciated by
all Members.
73. In conclusion, I believe that through this Review we have gained a first-hand appreciation of
Slovenia's achievements since its independence in 1991, and of the challenges that lie ahead.Slovenia is now seen by many Members as a prime example of the benefits of trade and investment
liberalization, notwithstanding a number of cyclical and structural problems. However, Slovenia's
liberalization paradigm raises important questions for all WTO Members concerning the relationship
between regional and multilateral efforts, questions that no doubt we will have to come to grips with
as part of the Doha Development Agenda.
74. For Slovenia itself, an additional challenge is to manage its process of accession to the EU, its
large number of preferential agreements, together with the many components of the evolvingmultilateral agenda.  Moreover, it is possible that dealing with issues such as ownership and
competition in some critical areas, such as ag riculture, telecommunications, financial services,
transport, and tourism, would contribute to an improved growth profile.  Slovenia's exemplary
participation in this Review bodes well for its capacity to meet those challenges, to the benefit of its
people and its trading partners.
__________