RESTRICTEDWORLD TRADE
ORGANIZATIONWT/REG50/M/5
WT/REG51/M/5WT/REG52/M/5
20 January 1999
(99-0183)
Committee on Regional Trade Agreements
Twentieth Session
EXAMINATION OF THE EUROPEAN COMMUNITIES-HUNGARY EUROPE
AGREEMENT, SERVICES; THE EUROPEAN COMMUNITIES-POLAND, EUROPE
AGREEMENT, SERVICES; AND THE EUROPEAN COMMUNITIES-SLOVAK REPUBLIC
EUROPE AGREEMENT, SERVICES
Note of the Meeting of 1 December 1998
Chairman: Mr. Chul-Ki Ju (Korea)
1. Under Agenda Items E.XI-XIII of its Twenti eth Session, as found in Airgram WTO/AIR/977
and Corr.1, the Committee on Regional Trade Agreements (hereinafter CRTA or the Committee)
resumed the examination of the European Commun ities-Hungary Europe Agreement, Services; the
European Communities-Poland Europe Agreement, Services; and the European Communities-Slovak
Republic Europe Agreement, Services.
2. The Chairman recalled that the Committee had previously held four rounds of examination of
these three Agreements in November 1997, and in February, May and July 1998.  Summary records
of these meetings had been distributed as multi-symbol documents WT/REG50-51-52/M/1-4.  He
pointed out that these Agreements had been initially scheduled for examination in the Nineteenth
Session of the Committee, but had been postponed due to the late arrival of documentation.  Since
then, the Parties had provided written replies to a number of questions (document WT/REG50-51-
52/2/Add.2).  In line with past practice, he proposed that the Committee examine the three EuropeAgreements together, while keeping in mind that they were separate Agreements, and that the
discussion be structured according to the Standard Format.
3. The representative of the European Communities (EC) made a preliminary statement recalling
that there had been a number of discussions on these Agreements and that written replies had been
provided for all the questions which had been raised.  He considered that the Committee shouldshortly move on to the drafting of the examination reports.
4. The representative of Australia, in response to the statement made by the representative of the
European Communities, said that one of the questions raised by his delegation had not been answered,
nor had it been reflected in the outcome of the discussions.  In reference to the EC delegation's
explanation that the exemptions provided for under Articles 55 and 56 of the Treaty were inaccordance with Article I:3(b) of the GATS, given that the services refered to utilities which were not
covered by the GATS, he asked for confirmation that, in accordance with GATS Article I:3(c), these
services supplied in the exercise of governmental authority were supplied neither on a commercial
basis nor in competition with one or more service suppliers.  He also asked whether there were any
plans to privatize the provision of such services and, if so, whether WTO Members would bepermitted access on the basis of national treatment.  The representative of the European Communities
said he would provide a written answer to this question.  The representative of the United States
requested that the replies be circulated to all Members.WT/REG50/M/5
WT/REG51/M/5
WT/REG52/M/5
Page 2
5. The representative of the European Communities proposed departing from the traditional
procedure of using the Standard Format as a guideline for the debate, as this was the fifth round of
examination of these Agreements and all factual information was on the table.  He suggested that theCommittee use the questions recently submitted to see if Members had follow-up questions on these
or if there were any other outstanding points.
6. The representative of the United States expressed his appreciation for the answers provided.
However, he had three outstanding points to raise.  The first related to basic telecommunications and
financial services.  The EC had requested a ten-y ear phase-in period for liberalization in these two
areas, and he asked whether the Parties envisaged entirely free trade in these sectors at the end of the
transitional period.  In the responses provided, there was reference to treatment at least as favourableas that provided in the GATS, but it did not say whether trade would be entirely free in these sectors,
or if not, which restrictions would remain.  He had noted that the European Communities had already
started the liberalization process in both sectors, but it was limited to treatment indicated in the GATS
Schedule, which was not preferential and was avai lable to all WTO Members.  He asked when the
Parties envisaged beginning liberalization beyond what was provided for in the GATS Schedules.  Hissecond question was related to a statement made by the EC representative in July's meeting that
further liberalization had taken place in financial services, telecommunications and in certain
contractual services; he asked what was included within the definition of contractual services.  Lastly,
he asked for clarification of the status of foreign legal consultants, given that in one Agreement the
documentation had indicated that legal services were not part of the dynamic process of transitionalliberalization, but that foreign legal consultants were  excluded from this as they were subject to quick
liberalization.  The representative of Australia echoed the questions raised by the representative of the
United States.
7. Responding to the questions raised by the representatives of the United States and Australia,
the representative of the European Communities clarified that the exclusion regarding basic
telecommunications and financial services was only an exclusion with regard to the transitional
period.  Second, the provision of financial services was limited to what was in the GATS Schedules.
If there was any further liberalization in contractual services, his delegation would inform the
Committee and he would indicate the existence of any serious preparatory work in his written replies.
Third, he said that the general GATS provisions applied to foreign legal services which were not part
of the process.  He agreed to provide written answers to these questions and hoped that this would not
delay the drafting of the examination reports.
8. In relation to the issue of substantial coverage, the representative of Australia asked for
further information on the Parties' intention to creat e additional agreements for the transport sector, in
particular, transport by motorway and maritime cabotage.  The Parties had indicated that discussions
aimed at concluding sectoral transport Protocols were continuing;  he asked when these initiatives
would be finalized and to what extent they woul d extend coverage of the transport sector.  The
representative of the European Communities replied that the questions raised by the representative of
Australia were of the same nature as those put forward by the representative of the United States, andhe would provide written details of further liberalization to be undertaken by the Association Council
within each of the Europe Agreements, as well as the current state of play.  The representative of the
United States suggested that the representative of the European Communities break down this analysis
by excluded sector.
9. The Chairman noted that the representative of the European Communities would provide
detailed written answers.  Given that this was the fifth round of examination of these Agreements, he
proposed that the Secretariat begin drafting the examination report on the understanding that the
Parties would provide written replies to outstanding questions.WT/REG50/M/5
WT/REG51/M/5
WT/REG52/M/5
Page 3
10. The representative of Hungary said that his delegation agreed with this procedure on the
understanding that the questions asked during the meeting were for clarification purposes as they had
been already raised and answered.
11. The representative of the European Communities supported the proposal made by the
Chairman to move on to the drafting of the examination reports.  He said that these follow-up
questions and replies would be circulated by the Secretariat and should not be the subject of further
discussion before the Committee discussed the actual report.  In summary, he noted that there were
four issues which required further clarification: to provide information as to whether there would be
free trade in basic telecommunications and financial services at the end of the transitional period; to
provide the Committee with a break down by sector of any further liberalization steps taken by theAssociation Council on excluded sectors; to provide a clarification on foreign legal services; and,
finally, to provide confirmation that utilities, which were not covered by the GATS, would not be
supplied on a commercial basis nor in competition with commercial utilities  as well as confirmation
as to whether or not WTO Members would have access in the event of privatization of such utilities.
12. The representative of the United States reminded the Parties that he had asked for details of
any remaining restrictions in the areas of financial services and basic telecommunications where
entirely free trade was not envisaged by the end of the transitional period.  In addition, in relation to
further liberalization, he had asked for an explanation of the meaning of the term "certain contractual
services".  Finally, with reference to foreign lega l consultants, who were not included as part of the
dynamic process of transitional liberalization, he had asked what the process was and to what extentforeign legal consultants would be covered.
13. The Chairman proposed that, bearing in mind that the Parties would provide written responses
to the questions raised during the meeting, the Secretariat begin drafting the examination reports.
Once these reports had been circulated, the Committee would meet to discuss them.
14. The Committee took note of the comments made.
__________