RESTRICTEDWORLD TRADE
ORGANIZATIONWT/REG49/4
16 November 1998
(98-4530)
Committee on Regional Trade Agreements Original: English
FREE TRADE AGREEMENT BETWEEN THE REPUBLIC OF POLAND
AND THE REPUBLIC OF LITHUANIA
Communication from the Parties
The following communication has been received from the Permanent Mission of the Republic
of Poland with the request that it be distributed to the WTO Members.
_______________
I. BACKGROUND INFORMATION ON THE AGREEMENT
1. Membership and Dates of Signature, Ratification and Entry into Force
On 27 June 1996 the Republic of Poland and the Republic of Lithuania signed the Free Trade
Agreement.
The Agreement was ratified by the Republic of Poland on 13 December 1996 and by the
Republic of Lithuania on 8 October 1996.The Agreement entered into force on 1 January 1997.
On 8 May 1998 the Parties to the Agreement signed Additional Protocol No 1, amending the
corresponding parts of the original Free Trade Agreement, which has accelerated trade liberalization
provided in the Agreement.
Additional Protocol No1 is provisionally applied since 1 July 1998.
The Agreement was notified by the Republic of Poland on 30 December 1997
(WT/REG49/N/1 of 15 January 1998).
2. Type of Agreement
The Agreement creates a free trade area in conformity with the definition set out in
Article XXIV:8 (b) of GATT 1994 within a period ending at the latest on 1 January, 2001. The full
plans for the reductions to zero tariffs on substantially all the trade between the Parties are contained
in the relevant Articles of the Agreement and in the relevant Annexes and Protocols.WT/REG49/4
Page 2
3. Scope
All products (chapters 1 to 97 of the HS) are covered by the Agreement (no sector is
excluded) with textiles and clothing covered by Annex A and E to Protocol 1, steel products being
covered by Annex D to Protocol 1, oil products cove red by Annex C and G to Protocol 1, automobiles
covered by Annex B and F to Protocol 1 and processed agricultural products being dealt with in
Protocol 2 to the Agreement.
Sensitive products such as certain steel, oil, automobiles and textile products are subject to
full elimination of customs duties with the final date (only in respect of automobiles) as of 1 January
2002.
The Agreement also contains provisions, inter alia,  on  state monopolies, competition, state
aid, government procurement, protection of intellectual property, and others as it is evident from the
summary of the structure of the Agreement included in the Annex 1 to this information.
4. Trade data
Trade data is attached to this document in Annex 2.
II. TRADE PROVISIONS
Industrial Products
1. Import Restrictions
The provisions on gradual elimination of import restrictions for industrial products originating
in the Republic of Poland and the Republic of Lithuania relate to almost all products covered by
chapters 25-97 of the Harmonized Nomenclature.
1.1 Duties and charges.For each product the basic duty to which the successive reductions set out in the Agreement
are to be applied shall be the Most Favoured Nation rate of duty applicable on 1 of January 1996.
However if, after entry into force of the Agreement, any tariff reduction is applied on an erga omnes
basis, in particular reductions resulting form the tariff agreement concluded as a result of the Uruguay
Round of multilateral trade negotiations, such reduced duties will replace the basic duties.
Customs duties are eliminated in accordance with the provisions contained in the Protocol 1
to the Additional Protocol No 1 to the Agreement (signed on 8 May 1998).
The Parties to the Agreement eliminated, in their trade in industrial products, all charges
having an effect equivalent to customs duties on imports on the date of entry into force of theAgreement. The provisions concerning the prohibit ion and abolition of customs duties on imports also
apply to customs duties of a fiscal nature.
The Republic of Poland
The Republic of Poland abolished, since the date of the provisional application of the
Additional Protocol No 1 to the Agreement, most of the customs duties on imports of industrial
products. Poland still maintains its customs dutie s on automobiles (which are subject to full
elimination by 1 January 2002 – Article 1.2. of the Protocol 1 to the Additional Protocol No 1 to theWT/REG49/4
Page 3
Agreement), steel products (which are subject to full elimination by 1  January 2001 – Article 1.5. of
the Protocol 1 to the Additional Protocol No 1 of  the Agreement), oil products (which are subject to
full elimination by 1 January 2001 (Article 1.3. and 1.4. of the Protocol 1 to the Additional Protocol
No 1 to the Agreement) and textiles products (which are subject to full elimination by
1 January 2000-Article 1.1. of the Protocol 1 to the Additional Protocol No 1 to the Agreement).
The Republic of LithuaniaThe Republic of Lithuania abolished, since the provisional application of the Additional
Protocol No 1 to the Agreement, most of the customs duties on imports of industrial products.
Lithuania maintains its customs duties on textiles products (which are subject to full elimination by
1 January 2000 – Article 2.1. of the Protocol 1 to the Additional Protocol No 1 to the Agreement), oilproducts (which are subject to full elimination by 1 January 2001 - Article 2.3. of the Protocol 1 to the
Additional Protocol No 1 of the Agreement), on auto mobiles (which are subject to full elimination by
1 January 2001 - Article 2.2. of the Protocol 1 to the Additional Protocol No 1 to the Agreement).
1.2 Quantitative restrictions.All quantitative restrictions on imports and measures having equivalent effect are eliminated
as of the date of entry into force of the Agreemen t, except as provided for in Annex II (a limited
number of products).
2. Export Restrictions
2.1 Duties and charges
The Parties to the Agreement eliminated, since the date of the provisional application of the
Additional Protocol No 1 to the Agreement, in their trade all customs duties on exports and charges
having an equivalent effect.
2.2 Quantitative restrictionsAll quantitative restrictions on exports and measures having equivalent effect are eliminated
as of the date of entry into force of this Agreement, except as provided for in Annex III (a limitednumber of products).
Agricultural ProductsThe Parties to the Agreement granted each other concessions as specified in Protocol 2.
3. Rules of Origin
The rules of origin and of cooperation in customs administrative procedures are contained in
Article 16 of the Agreement and Additional Protocol No 1 (signed on 8 May 1998) to the Agreement.Te rules of origin are the same as applied within the European Communities and between the
European Communities and other European countries that have signed the Association Agreements
with the EC. The Additional Protocol No 1 to th e Agreement contains provisions on a bilateral
cumulation of origin between the Republic of Poland and the Republic of Lithuania as well as the
pan-European cumulation of origin.WT/REG49/4
Page 4
5. Safeguards
5.1 Balance of payments difficulties (Article 32)
Article 32 of the Agreement enables application of restrictive measures to protect the balance
of payments in accordance with the WTO rules.
5.2 Structural adjustment (Article 28)Customs duties on imports applicable in the Party introduced by structural adjustment
measures concerning infant industries, or certain sectors undergoing restructuring or facing serious
difficulties may not exceed 25 per cent ad valorem and should maintain an element of preference.The total value of imports of the products which are subject to these measures may not exceed 15 per
cent of total imports of industrial products from the other Party as defined in Chapter I, during the last
year for which statistics are available.
5.3 General safeguards (Article 27)Where any product is being imported in such increased quantities and under such conditions
as to cause or threaten to cause serious injury to domestic producers of like or directly competitive
products in the territory of the importing Party, or serious disturbances in any related sector of the
economy or difficulties which could bring about serious deterioration in the economic situation of aregion, the Party concerned may take appropriate measures under the conditions and in accordance
with the procedure laid down in Article 31
5.4 Specific safeguards (Article 14)
If, given the particular sensitivity of agricultural markets, imports of products originating in a
Party, which are subject of concessions granted under the Agreement, cause serious disturbances to
the market of the other Party, the Party concerned may immediately enter into consultations to find an
appropriate solution, Pending such a solution, the Party concerned may take measures it deems
necessary.
6. Anti-Dumping Measures (Article 26)
The Parties to the Agreement may take anti-dumping measures only under the following
conditions:
- if they find that dumping, within the meaning of the Article VI of the GATT 1994, is
taking place in trade relations governing by the Agreement, and
- only under the conditions and in accordance with the procedures laid down in
Article 31 to the Agreement.
7. Subsidies and State Aid (Article 23)
Any kind of form of aid granted by a Party to the Agreement, which distorts or threatens to
distort competition by favouring production of certain goods, shall be treated as incompatible with the
proper functioning of the Agreement. The above described provisions are not applicable toagricultural products.WT/REG49/4
Page 5
8. Sector-Specific Provisions
Sector specific provisions are contained in Chapter II of the Agreement,  which is relevant to
agricultural products. This chapter defines, in Article 11, the character of products to which the
specific provisions are applied (agricultural products originating in the Parties to the Agreement).This Chapter describes also the methods of exchanging by the Parties the concessions, the use of
specific safeguards as well as the application of sanitary and phytosanitary measures.
III. GENERAL PROVISIONS OF THE AGREEMENT
1. Exceptions and reservations
1.1 General exceptions
The Agreement does not preclude the use of prohibitions or restrictions on imports, exports or
goods in transit which are justified on the grounds of public morality, public policy or public security,the protections of health and life of humans, animals or plants and environment, the protections of
culture, the protection of intellectual property. Such prohibitions or restrictions should not constitute a
means of arbitrary discrimination or a disguised restriction on trade between the Parties.
1.2 Security exceptionsNothing in the Agreement prevents a Party from undertaking any measures, which it
considers necessary to prevent the disclosure of information contrary to its essential security interests
and for the protection of its essential security interests or for the implementation of international
obligations or national policies.
4. Relations with Other Trade Agreements
The Agreement does not preclude the Parties from entering into other free trade arrangements
to the extent that these do not negatively affect the trade regime of the Parties and in particular the
provisions concerning rules of origin provided for by the Agreement.
5. Institutional Framework
The implementation of the Agreement shall be supervised and administered by a Joint
Committee consisting of representatives of the Contracting Parties. The Joint Committee is authorized
to take decisions in cases provided for in this Agreement and to make recommendations  on othermatters, in order to ensure further removal of the obstacles to trade between the Parties.
IV. OTHER PROVISIONS
Other provisions of the Agreement refer to the following:
Article 17 :  Internal taxation - no practices or measure of an internal fiscal nature are applied
by the Parties, implying directly or indirectly  discrimination against the products of the Parties.
Article 20 :  State monopolies of commercial character - existing monopolies of this nature
should be adjusted within a period of five years from the date of entry into force of the Agreement so
that no discrimination will exist between nationals of the Parties.WT/REG49/4
Page 6
Article 22 :  Rules of competition concerning undertakings - these Article prohibits the abuse
of certain practices and the dominant position of certain enterprises, which may affect the trade
between the Parties.
Article 24 :  Government procurement - liberalization of the government procurement markets
is an objective of the Agreement.
Article 25 :  Protection of intellectual property - the intellectual property rights are subject to
the protection on a non-discriminatory basis and under the obligations arising from the WTO
Agreement on Trade - related Aspects of Intellectual Property Rights as well as other conventions
signed by the Parties, and listed in the Annex V.
Article 33 :  Evolutionary clause - the provisions contained in this Article constitutes the basis
for the future possible submission by the one Party to the Agreement to the other Party a reasoned
request for the further development and deepening the relations established between the Contracting
Parties to this Agreement.WT/REG49/4
Page 7
ANNEX 1
Summary of the Structure of the Agr eement including Annexes and Protocols
Preamble and Objectives Article 1
CHAPTER I - Industrial products
Scope Article 2
Basic duties Article 3
Customs duties on imports Article 4
  -  Protocol 1Charges equivalent to import duties Article 5
Fiscal duties Article 6
Customs duties on exports and charges having equivalent effect Article 7
Quantitative restrictions on imports and measures having equivalent effect Article 8
  -  Annex IIQuantitative restrictions on imports and measures having equivalent effect Article 9
  -  Annex III
Technical regulations Article 10
  -  Annex IV
CHAPTER II - Agricultural products
Scope Article 11
Exchange of concessions Article 12
  -  Protocol 2
Concessions and agricultural policies Article 13Specific safeguards Article 14
Sanitary and phytosanitary measures Article 15
CHAPTER III - General provisions
Rules of origin and cooperation of customs administration Article 16
  -  Protocol 3
Internal taxation Article 17General exceptions Article 18
Security exceptions Article 19
State monopolies Article 20
Payments Article 21
Rules of competitions concerning undertakings Article 22State aid Article 23
Government procurement Article 24
Protection of intellectual property Article 25
  -  Annex V
Dumping Article 26
General safeguard Article 27
Structural adjustment Article 28
Re-export and serious shortage Article 29
Fulfilment of obligations Article 30
Procedure for the application of safeguard measures Article 31Balance of payment difficulties Article 32
Evolutionary clause Article 33
The Joint Committee Article 34
Procedures of the Joint Committee Article 35WT/REG49/4
Page 8
Services and investment Article 36
Customs unions, free trade areas and frontier trade Article 37
Annexes and Protocols and amendments Article 38
Entry into force Article 39
Validity and withdrawal Article 40Record of understanding
Declaration of the Government of
the Republic of Poland
Additional Protocol No1 to the Free Trade Agreement
Preamble
Replacement of Protocols 1 to 3and Annexes to themWT/REG49/4
Page 9
ANNEX 2
I. BACKGROUND INFORMATION ON THE AGREEMENT
4. Trade Data
Republic of Poland Republic of Poland
Exports to the Republic of
LithuaniaImports from the Republic of
Lithuania
1996 1997 1996 1997HS
Chapter
000'USD 000'USD
01 9 97 195 350
02 630 974 0 0
03 162 532 369 465
04 425 1,152 217 461
05 393 304 284 318
05 456 143 1,343 5
07 613 1,181 0.1 110
08 1,080 2,560 0.2 112
09 4,133 9,085 0 0
10 135 79 88 0
11 362 421 16 1
12 451 528 1,214 338
13 11 4 0 0
14 3 0.05 0 0
15 1,179 1,677 0 6
16 2,018 2,069 0 19
17 5,038 10,196 534 323
18 4,001 3,689 37 0
19 5,413 8,693 0 0
20 1,709 2,787 0 0
21 6,487 8,908 65 66
22 2,770 2,708 14 13
23 999 1,954 0 6
24 773 255 2 36
25 451 574 605 309
26
27 3,462 2,573 48,000 35,566
28 2,591 2,238 51 60
29 688 1,013 188 23
30 14,593 20,137 3 2
31 40 362 163 176
32 5,294 8,634 24 33
33 7,745 12,343 0.4 0
34 6,984 17,105 0.1 0.2
35 2,073 2,054 587 746
36 24 135 0 0
37 304 291 0 365
38 1,762 1,428 49 99
39 15,878 30,453 592 846
40 5,635 5,917 44 50
41 1,563 510 693 1,029
42 178 336 12 1
43 88 310 0 0
44 4,444 5,456 14,213 14,591
45 47 102 0 0
46 16 5 3 2
47 1 0.3 388 10
48 13,497 20,180 154 44WT/REG49/4
Page 10
Republic of Poland Republic of Poland
Exports to the Republic of
LithuaniaImports from the Republic of
Lithuania
1996 1997 1996 1997HS
Chapter
000'USD 000'USD
49 1,332 1,369 11 96
50 2 0 0 0
51 123 104 42 246
52 308 677 790 1,196
53 60 20 127 491
54 1,614 3,568 296 981
55 1,972 1,628 2,627 3,687
56 708 1,218 3 4
57 113 298 0 0
58 173 120 2 6
59 3,901 5,239 45 74
60 14,394 17,971 53 299
61 438 871 114 102
62 2,246 2,037 26,557 36,622
63 619 624 18 1
64 3,045 5,617 589 304
65 16 46 1 0
66 11 47 0 0
67 6 27 0 0
68 2,711 4,108 9 5
69 694 1,164 629 754
70 1,472 3,642 1,682
71 432 807 3 8
72 1,400 2,398 908 270
73 6,406 9,562 347 345
74 548 1,312 113 0.1
75 10 53 0 0
76 20,456 4,149 1 60
77
78 29 11 0.09 1
79 299 145 0 995
80 24 48 0 0
81 33 113 0 0.06
82 1,086 1,550 27 46
83 2,031 3,107 13 90
84 12,614 25,102 3,440 2,401
85 14,378 20,715 772 4,763
86 1,589 98 1 0
87 4,374 5,882 413 147
88 2,498 31 505 0.9
89 439 41 651 2
90 4,529 4,897 243 464
91 5 27 0.3 0.07
92 0 0.6 0 0
93 163 28 0 10
94 10,351 11,419 127 83
95 1,173 2,375 4 3
96 655 1,547 4 6
97 151 3 12 0.7
5.7 1.1 0 0.3
TOTAL 230,289 337,996 109,655 111,752
__________