WORLD TRADE
ORGANIZATIONWT/REG1/7
17 October 2002
(02-5642)
Committee on Regional Trade Agreements Original:  English
EUROPE AGREEMENT BETWEEN
THE EUROPEAN COMMUNITIES AND BULGARIA, SERVICES
Notification Pursuant to Article V:7(a) of the General Agreement on Trade in Services
Pursuant to Article V paragraph 7(a) of the GATS, the European Communities and their
Member States, on the one part, and Bulgaria, on the other part, hereby notify the "economic
integration agreement" as instituted by the Europe Agreement concluded between themselves.  This
notification follows the formal notification already submitted and is made in accordance with the
"standard format for information on economic integration agreements on services” as taken note of by
the Committee on Regional Trade Agreements at its meeting on 2 May 1997.
To facilitate the examination by the Members, th e relevant provisions on trade in services in
this agreement have been identified in the notification.  The full text of the Europe Agreement where
these provisions can be found, in their original version, is available at the WTO Secretariat.1  T h e
Europe Agreement is published in the Official Journal of the European Communities (L 358 of31 December 1994, p. 2).
I. BACKGROUND INFORMATION ON THE AGREEMENT
1. Membership and dates of signature, ratification and entry into force
The Europe Agreement establishes an association between the European Communities and
their Member States, acting within the framewor k of the European Union, of the one part, and
Bulgaria, of the other part. The agreement entered into force on 1 February 1995 after the ratification
process had been concluded by the EU Member States and Bulgaria. The Europe Agreement was
signed on 8 March 1993.
2. Type of agreement
The Europe Agreement is the basic legal instrument of the relationship between the EU and
Bulgaria. It establishes gradually a free trade area between the EU and Bulgaria, provides for a
political dialogue, legal approximation and various other areas of cooperation.  No new customs
duties or quantitative restrictions can be introduced in trade between the European Union and
Bulgaria from the date of entry into force of the Europe Agreement. The Europe Agreement providesfor progressive alignment with Community rules as well as a number of specific provisions in such
areas as capital movement, rules of competition, intellectual and industrial property rights and public
procurement. The Europe Agreement constitutes a key element of the EU’s pre-accession strategy
which aims at preparing Bulgaria for EU membership.
                                                     
1 The text of the Agreement has been circulated as WT/REG1/6.WT/REG1/7
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3. Scope
As regards the services sectors, the Europe Agreement covers in principle all services sectors
and all modes of delivery (see II.1(b) below).
4. Economic and Trade Data
See available data from Eurostat.
II. PROVISIONS AFFECTING TRADE IN SERVICES
1. (a) Provisions in the Europe Agreement which are relevant to the scope of the
GATS:
− Article 1 - Objective;
− Title II - "General principles":  Articles 6 and 7;
− Title IV - Chapter 1:  "Movement of workers";  Chapter 2 "Establishment";
Chapter 3 "Supply of services between the Community and Bulgaria" and Chapter 4
"General provisions";
− Title V - Chapter 1:  "Current payments and movement of capital";  Chapter 2
"Competition and other economic provisions" and Chapter 3 "Approximation of
laws";
− Title VI - "Economic cooperation", in particular Articles 74 on Investment promotion
and protection;  Article 79 on energy; Article 81 on environment; Article 82 onTransport;  Article 83 on Telecommunications and postal services; Article 84 on
Banking, insurance and other financial services; Article 90 on Tourism and Article 91on Small and medium-sized Enterprises;
− Title IX - "Institutional, general and final provisions".
(b) These provisions of the Europe Agreement constitute an agreement liberalising trade
in services between the European Communities and their Member States, on the onepart, and Bulgaria, on the other part, in the sense of Article V, paragraph 1, given
that:
− it provides for universal sectoral coverage of all service activities, subject to a
gradual coverage of some services' activities (see Article 45 para 1, 3 and 6)
and the temporary exemption under Article 52 (i.e. establishment in airtransport services, inland-waterways transport services and maritime
cabotage transport services.)
− it provides for the liberalisation of trade through all modes of supply:  "cross
border" trade, "consumption abroad", "commercial presence" (with or
without movement of natural persons) as well as "presence of naturalpersons" (see in particular Articles 38, 42, 43, 45, 53, 56 and 59);WT/REG1/7
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− it provides for the absence or elimination of substantially all discrimination
through elimination of existing discriminatory measures and prohibition ofnew or more discriminatory measures (see in particular Articles 38, 45, 47,
53 and 56);
− the time-table for the progressive elimination of existing discriminatory
measures is reasonable:  a transition period of a maximum of 10 years (see
Articles 7 and 45);
− the degree of liberalisation of trade in services between the Community and
its Member States, on the one part, and Bulgaria, on the other part, goesbeyond the requirements and disciplines of the GATS in many respects.  To
achieve full national treatment, additional disciplines and means ofliberalisation are foreseen such as:  mutual recognition of qualifications;
approximation of laws;  behaviour of monopolies and exclusive service
providers;  restrictive business practices and payments, transfers and free
movement of capital.
(c) Consideration should also be given, pursuant to Article V paragraph 2 of GATS, to
the relationship of this agreement to the wider process of economic integrationbetween the European Communities and their Member States, on the one part, and
Bulgaria, on the other part, provided for under the Europe Agreement.  Economic
integration is not only taking place in the field of services, but also in respect of trade
in goods and in economic relations in general.  In addition, this Agreement will help
Bulgaria to achieve its objective to become a Member of the European Union .
(d) The European Communities and their Member States, on the one part, and Bulgaria,
on the other part, have negotiated their Schedule of Specific Commitments and list of
MFN exemptions during the Uruguay Round. The entry into force of the Europe
Agreement did not imply any modification or amendment in these lists. The EuropeAgreement aims at facilitating trade between the Parties. No provisions of the Europe
Agreement aim at raising the level of restrictions of trade in services in respect of any
other WTO Member.
2. Rules of origin
A “Community company” or a “Bulgarian company” respectively shall mean a company set
up in accordance with the laws of a Member State or of Bulgaria respectively and having its registered
office or central administration or principal place of business in the territory of the Community or
Bulgaria respectively. However, should the company,  set up in accordance with the laws of a Member
State or Bulgaria respectively, have only its registered office in the territory of the Community or
Bulgaria respectively, the company shall be c onsidered a Community or a Bulgarian company
respectively if its operations possess a real and continuous link with the economy of one of theMember States or Bulgaria respectively (Art. 49).
3. Standards/Recognition
The Europe Agreement foresees measures necessary for mutual recognition of qualifications
(art. 47) and to achieve Bulgaria’s full confor mity with Community technical regulations and
European standardisation and conformity assessment procedures (Art. 75).WT/REG1/7
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4. Safeguards
The Europe Agreement has provisions for balance-of-payments difficulties in the Community
or in Bulgaria (Art. 65) and for limited derogations for Bulgaria from the provisions on establishment
in special cases including: Bulgarian industries undergoing restructuring, facing serious difficulties or
elimination/drastic reduction of the total market sh are, or for newly emerging industries in Bulgaria
(Art. 51). These provisions have not been applied so far.
5. Subsidies and state-aid
Article 64 contains a number of provisions as regards subsidies and state aids. It contains
inter alia  a general prohibition of any public aid which distorts or threatens to distort competition by
favouring certain undertakings or certain products. Any practices contrary to this rule shall be
assessed on the basis of criteria arising from the application of the rules of Article 87 (ex-Article 92)of the Treaty establishing the European Community. In applying this provision, the parties recognise
that during the first five years after the entry into force of the Europe Agreement, any public aid
granted by Bulgaria shall be assessed taking into account the fact that Bulgaria shall be regarded as an
area identical to those areas of the Community described in Article 87(3)(a) of the Treaty establishing
the European Community. In addition, special implementing rules on state aids shall be developed toimplement the above mentioned provisions. These rules are currently in the process of being adopted.
Each party shall ensure transparency in the area of public aid.
6. Government procurement
Article 68 contains provisions on non-disc rimination as regards public procurement.
III. GENERAL PROVISIONS OF THE AGREEMENT
1. Exceptions and reservations
Exceptions are provided for under articles 54 (public policy, security and health) and 115
security).
2. Accession
The Europe Agreement does not contain any provisions allowing other countries to accede to
the Agreement. However, with necessary modifi cations, the agreement shall apply to any new
Member State of the European Communities.
3. Dispute settlement procedures
Each of the two parties may refer to the Association Council any dispute relating to the
application or interpretation of this Agreement. The Association Council may settle the dispute by
means of a decision, which will be binding for each party (Article 108).
4. Relations with other trade agreements
Article 28 states that the Europe Agreement shall not preclude the maintenance or
establishment of customs unions, free trade areas or arrangements for frontier trade except in so far as
they alter the trade arrangements provided for in the Agreement. Consultations shall take place within
the Association Council concerning agreements establishing such customs unions or free trade areasand, where requested, on other major related issues.WT/REG1/7
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5. Institutional framework
The Europe Agreement provides for a cycle of annual meetings of the Association Council
(ministerial level) and the Association Committee (high level officials) as well as frequent multi-
disciplinary sub-committee meetings (technical level). These institutions of the Europe Agreementhave assumed an enlarged role in the pre-accession proc ess, in particular in regard to monitoring the
progress made by Bulgaria in the adoption and implementation of the acquis communautaire .
Exchanges between the European and the Bulgarian Parliaments are taking place within a Joint
Parliamentary Committee which meets 1-2 times a year.
IV. OTHER
The full text of the agreement is available from:
- the WTO Secretariat;
- the European Commission;
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