RESTRICTEDWORLD TRADE
ORGANIZATIONWT/REG45/M/1
WT/REG46/M/1WT/REG47/M/1
WT/REG48/M/1
WT/REG62/M/1
WT/REG63/M/1
23 July 1999
(99-3119)
Committee on Regional Trade Agreements
Twenty-Third Session
EXAMINATION OF THE FREE TRADE AGREEMENTS BETWEEN
THE CZECH REPUBLIC AND LATVIA; LITHUANIA; AND ESTONIA
AND OF THE FREE TRADE AGREEMENTS BETWEEN
THE SLOVAK REPUBLIC AND LATVIA; LITHUANIA; AND ESTONIA
Note on the Meeting of 2 July 1999
Chairman:  Mr. Andrew Stoler (United States)
1. This meeting was convened  in document WTO/AIR/1118.
2. Under Agenda Item C. XVII-XXII, the Committee on Regional Trade Agreements took up
the examination of the Free Trade Agreements (FTAs) between the Czech Republic and Latvia,
Lithuania and Estonia; and between the Slovak Republic and Latvia, Lithuania and Estonia.  The
following topics were discussed:
A. General Remarks
B. Section I - Background Information on the Agreements
- I.4 - Trade Data
C. Section II - Trade Provisions
- II.5 - Safeguards
A. General Remarks
3. The Chairman noted that the six Agreements under examination were first examined in
November 1998 (WT/REG/GEN/M/3).  He proposed that the Committee examine the six Agreements
in one group using the Standard Format as a guideline and suggested that delegations indicate whethertheir intervention related to a specific agreement or to the group itself.  The Parties had submitted
written questions and replies, distributed as  documents WT/REG45/4, WT/REG46/4, WT/REG62/4,
WT/REG47/4, WT/REG48/4 and WT /REG63/4 and the Standard Formats could be found as
documents WT/REG45/3, WT/REG46/3, WT/R EG62/2, WT/REG47/3, WT/REG48/3 and
WT/REG63/2.  He then opened the floor to questions of a general nature.
4. The representative of the Slovak Republic expressed the hope of the Parties that the statistical
information provided would be useful for the day's examination and welcomed further inquiries
regarding the Agreements.WT/REG45/M/1, WT/REG46/M/1,
WT/REG47/M/1, WT/REG48/M/1,
WT/REG62/M/1, WT/REG63/M/1
Page 2
B. Section I - Background Information on the Agreements
Section I.4 - Trade Data
5. The representative of the United States asked the Parties to make the notification dates of the
Agreements available where they had not already done so.  There had been significant lapses of time
between the entry into force and notification for some of the Agreements; in other cases, it appeared
that the Agreements had been provisionally applied for several years but not notified until fully
ratified.  Given that provisional application of the Agreements involved a deviation from MFN tarifftreatment, he was of the view that notifications should have been made when the Agreements were
provisionally applied and requested an explanation for the delays in notification. The representative of
the Czech Republic said that the date for the provisional application of the Czech Republic-Latvia
Agreement was absent because the Agreement entered into force directly.
6. The representative of the United States asked why several of the Agreements did not include
timetables for implementation, for example in the cases of the Czech and Slovak Republic
Agreements with Latvia.  The representative of Latvia said that the time-period for implementation
ended on 1 January 2001 as indicated in the fi rst pages of WT/REG45/4 and WT/REG47/4.  The
representative of the Czech Republic said that Article 3 of the Agreement indicated that, the "Parties
shall abolish on the date of entry into force of the Agreement all customs duties on industrial
products", which meant that there was no specific timetable but one date.  For agricultural products,
there was a reference to a Protocol which set out all the necessary dates so there was in fact a
timetable.
7. The representative of the United States asked whether there were provisions for transition
periods on the treatment for non-industrial goods and, if so, when such periods expired in the case of
each Agreement.
8. The representative of the Czech Republic said that in the case of the Czech Republic-Estonia
FTA, the timeframe for the implementation of agricultural concessions was contained in Protocol 1,
referred to in paragraph 10 of Article 2.  In the case of the Czech Republic-Lithuania FTA, such
information could be found in Protocol 2, referred to in paragraph 2 of Article 6.  In the case of the
Czech Republic-Latvia FTA, such information could be found in Protocol 2, referred to in
paragraph 2 of Article 11.
9. The representative of the United States said that he was interested in a description of the items
included in the Protocols including the identification of any items which might have implementation
periods longer than 10 years and, explaining that his question centered on the issue of implementation
periods, requested that the Parties respond in that context.
10. The representative of the Czech Republic said that 1 January 2001 was the maximum
transition period.  The representative of the Slovak Republic said that regarding the Slovak Republic-
Lithuania FTA, all customs duties applicable in the Slovak Republic on products originating in
Lithuania listed in Annex A to Protocol 1 of the Agreement were abolished on the date of entry into
force.  Customs duties on imports, applicable in the Slovak Republic to products originating in
Lithuania listed in Annex B to the Protocol, were to be reduced to the levels set out in the Annex asfrom the date of entry into force.  Finally, for the products listed in Annex C, the Protocols were to be
applied at the MFN rate.  Customs duties applicable in Lithuania to products originating from the
Slovak Republic, listed in Annex D to the Protocol, were abolished on the date of entry into force.
Customs duties applicable in Lithuania to products originating in the Slovak Republic, listed inWT/REG45/M/1, WT/REG46/M/1,
WT/REG47/M/1, WT/REG48/M/1,
WT/REG62/M/1, WT/REG63/M/1
Page 3
Annex E to the Protocol, would be reduced according to the levels set out in this Annex from the date
of entry into force.  Customs duties applicable in Lithuania to products originating in the
Slovak Republic, listed in Annex F to the Protocol, were applied at the MFN rate.  The sametimetables were also applicable to the Czech Republic-Lithuania Agreement.
11. With respect to the Slovak Republic-Latvia FTA, the representative of the Slovak Republic
said that customs duties applicable in the Slovak Republic to products originating in Latvia, listed in
Annex A to the Protocol, were abolished on the date of entry into force.  Customs duties applicable in
the Slovak Republic to products originating in Latvia  listed in Annex B were to be reduced within the
limits specified and levels set out in the Annex as of the date of entry into force.  Finally, there was
Annex C, which dealt with customs duties applicable in the Slovak Republic to products originatingin Latvia, and these duties were to be applied at the MFN rate.  Customs duties applicable in Latvia to
products originating in the Slovak Republic, listed in Annex D to the Protocol, were abolished on the
date of entry into force.  Customs duties applicable in Latvia on products originating in the Slovak
Republic listed in Annex E to the Protocol, were to be reduced within the limits of the Tariff Rate
Quotas (TRQs) specified in the Annex as from the date of entry into force.  Annex F dealt withcustoms duties on imports applicable in Latvia originating in the Slovak Republic, to be applied at the
MFN rate.  He thought that the same situation applied to the FTA between the Czech Republic and
Latvia.
12. With respect to the FTA between Estonia and the Slovak Republic, the representative of the
Slovak Republic said that customs duties applicable in the Slovak Republic to products originating in
Estonia listed in Annex A to the Protocol, were abolished on the date of entry into force.  Customs
duties applicable in the Slovak Republic to products originating in Estonia listed in Annex B to the
Protocol, were to be applied at the MFN rate.  Customs duties applicable in Estonia to products
originating in the Slovak Republic, were abolished on the date of entry into force.
13. Appreciating the response by the representative of the Slovak Republic regarding the
structure of the Protocols, the representative of the United States noted that the Protocols and Annexes
came into force on the date of entry into force of the Agreement.  However, TRQs were used inAnnexes B and E of some of the Agreements and he was curious about whether the size of the quotas,
in terms of amounts and rates, were fixed or whether they had been scheduled for expansion in terms
of quota allotment or rates of duties applied.  He also asked whether there was a schedule for the
elimination of MFN rates applied in some of the Agreements.  Lastly, he requested a general
description of the items in the MFN-rate Annexes.
14. The representative of Latvia said that both the size of the TRQs and the input quota rates were
fixed within the Agreements and Annexes.  As for the liberalisation or expansion of TRQs and the
elimination of MFN rates, there was a provision in  the Agreements, for instance, in paragraph 3 of
Article 35 of the Czech Republic-Latvia Agreement, which specified the intention of Parties to enter
into further liberalisation negotiations.  The Chairman asked whether this provision was generally
applicable to the other Agreements.  The representative of Latvia responded that it was also applicable
in the case of the Slovak Republic-Latvia Agreement.  The representative of the Slovak Republic
directed attention to the additional information provided by his delegation which foresaw the
possibility of future liberalisation.  Relevant provisions within the Agreements included: Article 33
and paragraph 4 of the Record of Understanding of the Agreements between Lithuania and the Czechand Slovak Republics; Article 34 and paragraph 3 of the Record of Understanding from the
Agreements between Latvia and the Czech and Slovak Republics; and Article 35 and paragraph 1 of
the Record of Understanding of the Agreements between Estonia and the Czech and Slovak
Republics.  The representative of the United States said he understood from the reply that none of theWT/REG45/M/1, WT/REG46/M/1,
WT/REG47/M/1, WT/REG48/M/1,
WT/REG62/M/1, WT/REG63/M/1
Page 4
Agreements had scheduled liberalisation for the TRQs or for the elimination of MFN duty rates,
however, all Agreements provided a mechanism for negotiating future liberalizations.
C. Section II - Trade Provisions
Section II.5 - Safeguards
15. The representative of the United States said he was aware that the Slovak Republic had
recently introduced a surcharge for balance-of-payments reasons and requested an explanation of how
this surcharge affected imports from Latvia, Estonia, Lithuania and the Czech Republic.  Hisdelegation was concerned that over 20 per cent of the trade in some sectors was receiving preferential
tariff rates and expressed the view that Article XXIV did not provide for preferential tariff rates.
16. With respect to the balance-of-payments measure recently adopted by his country, the
representative of the Slovak Republic said that the measure, with respect to Latvia, Estonia and
Lithuania, was applied in a non-discriminatory manner and in compliance with the provisions of
Article XII of GATT 1994.
17. The representative of the United States said that his understanding of surcharges was that they
were calculated based on the applied tariff rate.  In a case where an identical surcharge was applied to
a partner receiving a preferential tariff rate as well as to a partner receiving a MFN tariff rate, would
this surcharge not be preferential in effect?  The representative of the Slovak Republic offered to
respond in writing.
18. In summing up, the Chairman said that, although there were relatively few questions during
the meeting, there were a couple of outstanding items for which written replies from the Parties would
be appreciated as soon as possible.  He requested that delegations with further questions submit them
to the Secretariat by 15 July 1999.  In summing up, he hoped that the conduct of the written questionsand replies could provide solid background for a further round of examinations.
19. The Committee took note of the comments made.
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