RESTRICTEDWORLD TRADE
ORGANIZATIONWT/REG108/M/1
8 March 2001
(01-1132)
Committee on Regional Trade Agreement
Twenty-Eighth Session
FREE TRADE AGREEMENT BETWEEN ESTONIA AND UKRAINE
Note on the Meeting of 22 February 2001
Chairman:  Dr. V. Notis (Greece)
1. The meeting was convened in document WTO/AIR/1484.
2. Under Agenda Items D.VIII of its Twenty-Eighth Session, the Comm ittee on Regional Trade
Agreements (hereinafter CRTA or the Committee) t ook up the first round of examination of the Free
Trade Agreement (FTA) between Estonia and Ukraine.  The following topics were discussed:
A. General Remarks
B. Section II - Trade Provisions
C. Section III - General Provisions of the Agreement
D. Section IV - Other
A. G ENERAL REMARKS
3. The Chairman said that the Agreement had been signed on 24 May 1995 and had entered into
force on 26 March 1996.  It had been notified to the WTO in July 2000 and the notification could be
found in document WT/REG108/N/1, with the text of the Agreement appearing in document
WT/REG108/1.  The terms of reference for the exam ination were adopted by the Council for Trade in
Goods on 16 October 2000 and were contained in document WT/REG108/2.  He proposed to use the
Standard Format, document WT/REG108/3, to guide the debate.
4. The representative of Estonia noted that as the main provisions of the Agreement were
described in the Standard Format, he would only provide a short overview of its basic principles and
its effects on the trade flows between Estonia and Ukraine.  The FTA between Estonia and Ukrainehad been signed on 24 May 1995 and entered into force on 14 March 1996.  It had been concluded as
a logical step after long-standing and traditionally good trade relations between the two countries and
due to real trade interest from both sides.  The result was a real FTA;  while FTAs did not always
provided zero-for-zero treatment for all products, that  was the case in that Agreement and that was the
reason why it amounted to a real FTA.  The FTA had eliminated all duties and other trade barriers inrespect to all trade between the Parties, in accord ance with the requirement of Article XXIV of the
GATT 1994.  It did not include any customs duties or any other trade barriers and provided
zero-for-zero treatment for both Parties in all products.  The provisions of the FTA applied to products
originating from Estonia and Ukraine and covered agricultural as well as industrial goods, i.e. the
Agreement covered Chapters 1-97 of the Harmonized Commodity Description and CodingSystem (HS).  The main articles of export from Estonia were meat, fish and fish products, paper and
chemicals, and from Ukraine meat products, paper products and chemicals, specially fertilizers.  The
conclusion of the FTA had significantly increased the trade volume and contributed to more active
trade relations between Estonia and Ukraine.  Whereas the trade volume during the years 1993-1995WT/REG108/M/1
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had been around 50-90 million USD, it had increased120radically after the entry into force of the
FTA in 1996 to reach up to USD 155 million.  That trend had continued in the following years and
trade volume had grown 15-25 per cent per year during 1996-1998, reaching USD 210 million.
B. S ECTION II - T RADE PROVISIONS
Section II.1 – Import Restrictions
5. Noting that in the introductory statement the representative from Estonia had indicated that
100 per cent of trade between the Parties was tariff free and that all duties had been eliminated, the
representative of Australia sought confirmation of the fact that the Parties did not make use of
concession rates.  Confirming that, the representative of Estonia reaffirmed that all trade was carried
duty-free.
Section II.3 – Rules of Origin
6. Noting that in the Standard Format it was indicated that Ukraine did not belong to the system
of pan-European cumulation, the representative of the United States sought confirmation that the
existence of commitments by Estonia elsewhere with respect to the European system of cumulation
did not somehow affect the implementation of the Agreement or any trade thereunder.  The
representative of Estonia confirmed that such commitments did not affect trade between Estonia and
Ukraine because Protocol A of the Agreement laid down specific rules on the handling of rules oforigin under the Agreement.
Section II.4 – Standards
7. The representative of the United States asked whether the Joint Committee had developed any
standards or whether it was in the process of developing a strategy on implementing standards.  She
also asked where would those standards be found, e.g. in amendments to the Agreement, documents,
website.  The representative of Estonia indicated that a reply would be submitted in writing.
Section II.5 – Safeguards
8. The representative of Canada asked whether bilateral safeguard measures had ever been taken
since the entry into force of the FTA in 1996.  She asked whether the safeguard provisions provided
for a limit on the increase of duties, that is whether they could go to a rate above the applied rate at the
time the FTA came into effect or up to the MFN rate or the bound rate.  She also asked whether a time
limit existed after which the Parties could not resort to bilateral safeguard actions, similar to the sunset
clause that existed on the structural adjustment provision which provided for a five years limit after
which the Parties could not avail themselves of the provision.  Replying to those questions, therepresentative of Estonia said that no bilateral safeguard measure had ever been taken, that no specific
rates had been set regarding the amount of imports or exports that could be considered dangerous, andthat no limit in terms of a sunset clause for bilateral safeguards  existed.
Section II.7 – Subsidies and State-Aid
9. The representative of the United States asked whether any "appropriate measures" under the
respective procedures had ever been taken.  The representative of the European Communities asked
whether any resort had been taken by either Party to  the procedures foreseen in either Articles 13:2
or 20:5 of the Agreement.  The representative of Estonia replied in the negative.WT/REG108/M/1
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C. S ECTION III - G ENERAL PROVISIONS OF THE AGREEMENT
Section III.1 – Exceptions and Reservations
10. Noting that Article 8 of the Agreement provided for introduction of prohibitions or
restrictions on imports and exports for a variety of reasons, most being a paraphrasing of GATT
Articles XX and XXI, the representative of Canada  requested Estonia to elaborate on what sort of
measures would be justified for reasons of "public policy".  Noting that such cases had never existed,
the representative of Estonia indicated that a reply would be submitted in writing.
D. S ECTION IV - O THER
11. Referring to the evolutionary clause contai ned in the Agreement which provided for its
expansion to cover other areas, the representative of Canada asked whether, since the Agreement's
entry into force in 1996, any expansion of the Agreem ent had occurred, in particular to cover trade in
services.  The representative of Estonia replied in the negative.
12. The Chairman said that the first round of examination of the Free Trade Agreement between
Estonia and Ukraine had allowed the Committee to clarify a number of questions, but some others
were pending.  He invited delegations to forward oral and any other additional questions to the
Secretariat by 23 March 2001 and the Parties to submit replies not later than 30 April 2001.  The nextround of examination would be scheduled for July 2001.
13. The Committee took note of the comments made.
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