RESTRICTEDWORLD TRADE
ORGANIZATIONWT/REG65/M/1
WT/REG66/M/1
26 June 2000
(00-2583)
Committee on Regional Trade Agreements
Twenty-Fifth Session
EXAMINATION OF THE FREE TRADE AGREEMENTS BETWEEN
ISRAEL AND POLAND;  AND ISRAEL AND SLOVENIA
Note on the Meeting of 30 March 2000
Chairperson:  Ms. Silvia Ávila Seifert (Bolivia)
1. The meeting was convened in document WTO/AIR/1268 and Corrigendum 1.
2. Under Agenda Items F.VII-VIII, the Comm ittee on Regional Trade Agreements (CRTA) took
up the examination of the Free Trade Agreements (FTAs) between Israel and Poland and Israel and
Slovenia.  The following topics were discussed:
A. G ENERAL REMARKS
B. S ECTION I - B ACKGROUND INFORMATION ON THE AGREEMENT
C. S ECTION II - T RADE PROVISIONS
D. S ECTION III - GENERAL PROVISIONS OF THE AGREEMENT
A. GENERAL REMARKS
3. The Chairperson recalled that the notification and the text of the FTAs between Israel and
Poland and between Israel and Slovenia had been distributed as documents WT/REG65/N/1,
WT/REG65/1, WT/REG66/N/1 and WT/REG66/1, respectively.  She noted that, given their
similarities, the Agreements would be examined to gether, but that each would be assessed on its own
merits.  She added that, after general comments by delegations, the Standard Formats (WT/REG65/3
and WT/REG66/3, respectively) would be used to gu ide the debate.  The terms of reference for the
examination were contained in documents WT/REG65/2 and WT/REG 66/2, respectively.
4. The representative of Israel said that the FTA with Poland had been applied provisionally
from 1 March 1998 until its formal entry into force on 1 May 1999.  The FTA with Slovenia had been
applied on a provisional basis since September 1998.  Both Agreements reflected the mutual desire of
the Parties to deepen and strengthen the already existing trade relations and economic cooperation
between the countries.  By establishing a legal framework for eliminating trade barriers and
promoting conditions of free trade, the Agreements reflected the consistent trade policy of theirrespective governments at the bilateral, regional and multilateral levels in furtherance of trade
liberalization. In negotiating the Agreements, th e need to ensure the full compliance with WTO
obligations, in particular with Article XXIV of the GATT, had been taken into account.  In many
cases, specific reference to WTO Agreements had been made.  In accordance with Article XXIV of
GATT 1994, the Agreements covered substantially all trade between the Parties:  an average of 98 percent of Israel's imports from and exports to each of the respective countries was covered by the
Agreements.  For the majority of industrial produ cts, tariffs had been eliminated immediately upon
entry into force of the Agreements; for the rest th ere were gradual reductions.  In the Agreement withWT/REG65/M/1
WT/REG66/M/1
Page 2
Poland, tariffs would be phased out by 1 January 2002 and in the Agreement with Slovenia by
1 September 2000.  For the purpose of facilitating integration in the pan-European cumulation system
which would create further expansion of trade, the Agreements provided for rules of origin based on
the pan-European rules.  The Agreements did not create any new barriers to trade from thirdcountries, nor did they make duties or other regulations of commerce higher than before the formation
of the free-trade area.  The Agreements had been duly notified to the WTO, after completion of the
internal approval procedures by the Parties.  Both Agreements had been notified to the WTO on
18 December 1998 and the Standard Formats submitted on 29 February 2000.  As a small economy,
Israel was striving to use the FTAs as a means to increase trade and economic growth.  While the
trade between Israel and the Parties was relatively modest, it had grown over the last few years, and
he was sure that the Agreements would contribute to this growth.  He assured the Committee that theParties were dedicated to supplying Members with detailed and timely information on the
Agreements, as necessary.
5. The representative of the European Comm unities welcomed the complete information
provided by the Parties, particularly the figures on trade coverage.
6. The representative of Hungary noted that the Parties had provided timely and sufficient
information.  His delegation was of the view that the Agreements fulfilled the requirements of
Article XXIV of the GATT.
B. SECTION I - B ACKGROUND INFORMATION ON THE AGREEMENT
7. The representative of Australia said that his delegation would submit written questions for the
further disaggregation of trade data as the information provided was not sufficient to assess the
Agreements' conformity with Article XXIV.
8. The representative of the United States said that it was difficult to evaluate whether the
Agreements covered substantially all the trade based on the information provided.  In particular, the
data provided did not differentiate between duty-free and lesser levels of preferences and it appeared,
in many instances, that the share of trade covered by the Agreements had actually fallen over time.He sought clarification on which types of products were included in each of the many Annexes
provided.  He asked what amounts were provided for products subject to tariff quotas, whether they
increased from year to year and whether they were different from the amounts agreed to by the Parties
in the Uruguay Round.  He also asked the Parties to confirm that tariff elimination would occur by
1 January 2001 for the Agreement with Poland, and by 1 September 2000 for the Agreement with
Slovenia.  He wondered whether these dates were applicable to all products in all annexes or just to
industrial goods and whether there were other dates regarding the implementation of the Agreements.In particular, he wondered whether there were any products for which tariffs would be eliminated
more than 10 years from the date of entry into force of the Agreements.
9. The representative of Hungary said that data on a tariff-line basis was not necessary to
determine compatibility with GATT Article XXIV.
10. The representative of Canada asked for more information not only on tariff lines, but also on
the type of products covered by the Agreements.  Article 3 was similar in both Agreements; however,
the Agreement between Israel and Slovenia stated that customs duties on products listed in Annex II
would be abolished, whereas the Agreement betwee n Israel and Poland contained no such reference.
She asked whether only certain duties had been eliminated in the Agreement between Israel and
Slovenia and if so, which duties were not being eliminated.WT/REG65/M/1
WT/REG66/M/1
Page 3
11. The representative of Israel said that his responses would be preliminary in each case, to be
expanded if necessary.  Regarding the submission of trade data, he supported the point made by the
representative from Hungary that the provision of tariff-line data was not required.  Regarding trade
statistics, the figures provided were from the period prior to the entry into force of the Agreements.  In1998 the percentage of trade subject to zero tariffs was 99.4 per cent for imports from Slovenia into
Israel and 97.8 per cent for imports from Poland.  The Parties would be happy to provide these
statistics in writing.  He asked the representative of Canada to submit her question in writing to which
he would provide a written response.
12. The representative of Slovenia clarified that the tariff quota amounts specified in the
Agreement were additional to those agreed in the Uruguay Round.
13. The representative of the European Communities asked whether the Parties to the Agreement
between Israel and Slovenia could explain the volatility in the trade figures in the various years.  The
representative of Israel replied that the figures applied to the period prior to the entry into force of the
Agreement.
C. SECTION II - T RADE PROVISIONS
14. The representative of the United States asked whether the Parties maintained any quantitative
restrictions among themselves.  In response, the representative of Israel referred to the relevant
sections of the Standard Formats.
15. The representative of the United States said that Article 8 of the FTA between Israel and
Poland stipulated that no quantitative restrictions or measures having equivalent effect on imports
should be applied in trade between the Parties, except for those listed in Annex II of the Agreement.He asked for more information on what Annex II included.  He also asked for clarification on whether
the Agreement provided for the possibility of excluding a Party from a global safeguard action under
the WTO Agreement on Safeguards and whether any safeguard measures had been applied pursuant
to the bilateral safeguard provisions in the Agreements.  The representative of Israel replied that, to
the best of his knowledge, no bilateral safeguard actions had been applied by the Parties.  He agreed
to provide responses to the other questions in writing.
16. The representative of the United States said that Article 21 of the Agreement between Israel
and Poland and Article 20 of the Agreement between Israel and Slovenia dealt with provisions
regarding transparency in state aid and stipulated that measures be taken in conformity with the
procedures and under the conditions laid down by the WTO Agreement on Subsidies and
Countervailing Measures.  He asked for clarification on the kind of disciplines in operation to ensure
transparency.  The representative of Israel replied that, to the best of his knowledge, no criteria had
been drafted.
17. The representative of Australia wondered whether the requirement in Article 18.1 of the
Agreement between Israel and Poland (Article 17.1 of the Agreement between Israel and Slovenia),
that any state monopoly of a commercial character be adjusted so that no discrimination regarding the
conditions under which goods were procured and marketed existed between the nationals of theParties, had been met. He also wished to know whether the Parties had state monopolies, especially in
sectors of a commercial nature.  The representative of Slovenia replied that there were no state
monopolies in Slovenia.  The representative of Israel added that the aim of this provision was to
ensure that any state monopoly of a commercial ch aracter acted in a manner consistent with the
principles of non-discrimination.WT/REG65/M/1
WT/REG66/M/1
Page 4
18. The representative of Australia asked if the Joint Committees had discussed whether the
Parties met the requirements of Article 18.1 on state monopolies.  The representative of Israel replied
that in the case of Israel and Slovenia, the Joint Committee had thus far not met; in the case of Israel
and Poland, it had.  He agreed to provide a written response on whether state monopolies had beendiscussed.
D. S
ECTION III - G ENERAL PROVISIONS OF THE AGREEMENT
19. The representative of the Untied States asked whether the Parties' membership in these
Agreements limited in any way their ability to ma ke concessions in multilateral negotiations.  The
representative of Israel responded that it did not.
20. The representative of the United States asked whether the Parties were signatories to services
agreements.  The representative of Israel replied that they were not and referred the Committee to the
Terms of Reference for the examination under GATT 1994.  The representative of the United States
said that his aim was to find out the context in which the Agreements had been reached and whether
they were part of a broader package.
21. The Chairperson said that Members had asked several questions to which the Parties would
respond in writing.  She asked delegations to submit outstanding questions in writing by 20 April, to
which the Parties would reply by the end of May.
22. The Committee took note of the comments made.
__________