RESTRICTEDWORLD TRADE
ORGANIZATIONWT/TPR/G/60
3 September 1999
(99-3577)
Trade Policy Review Body Original:  English
TRADE POLICY REVIEW
ROMANIA
Report by the Government
Pursuant to the Agreement Establishing the Trade Policy Review Mechanism
(Annex 3 of the Marrakesh Agreement Establishing the World Trade
Organization), the policy statement by the Government of Romania is attached.
Note: This report is subject to restricted circulation and press embargo until the end of the meeting
of the Trade Policy Review Body on Romania.Romania WT/TPR/G/60
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CONTENTS
Page
I. OVERVIEW 5
II. ROMANIA’S TRADE POLICY:  AN INSTRUMENT OF DEVELOPMENT
TOWARDS MARKET ECONOMY 6
MAIN CHARACTERISTICS 6
(1) Import Customs Tariff, the main trade policy instrument 6
(2) Elimination of quantitative restrictions 6(3) Defence measures at the border 7
(4) Licensing system 7
(5) Customs policy, a component of the trade policy 8(6) Trade policy within the internal environment 8(7) Regional integration 10
III. ROMANIA’S ACTIVITY WITHIN WTO 11
(1) Background evolution 11
(2) Developments in the negotiating process under WTO 12(3) Status of observing WTO commitments 12
IV. PROSPECTS FOR THE ECONOMIC DEVELOPMENT AND TRADE POLICY
EVOLUTION IN ROMANIA 15
(1) Economic development 15
(2) Trade policy 19
ANNEX I 20
ANNEX II 21Romania WT/TPR/G/60
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I. OVERVIEW
1. The period since Romania’s first trade policy review under GATT in December 1992, is
characterized by a large number of events having a direct effect on international commercial relations,
as well as on the multilateral trading system and, without doubt, on the social and economic
development of Romania.
2. The successful conclusion of the Uruguay Round and the Decision of the Ministerial
Conference in Marrakesh to establish the World Trade Organization are the prerequisites for
globalizing the multilateral trading system.  Th is new multilateral system was endowed with
transparent and uniform rules, instruments and disc iplines, able to govern trade policy mechanisms.
The stated goal of this system is the development of commercial relations, while trade liberalization
for goods and services committed by WTO Members is intended to have a positive impact oneconomic development.
3. The results of trade liberalization have appeared:  world trade increased at a faster rate than
industrial output, the most dynamic sector being that of services;  progress has been registered for the
economic development of several developing countries, which increased their weight in world trade
and improved their export pattern.
4. However, these positive effects of liberalization were threatened by the financial and
economic crises in several parts of the world.  Aside from the dramatic contraction of certain markets,
some of which being practically locked for Romanian products, temptations arose to reinforce
commercial defence measures and to intensify the use of budgetary layouts to support the export of
those products for which the market was significantly reduced.
5. During the same period of time, Romania’s economy and society have been developed within
the continuous and more determined process of pass ing from an excessively centralized system to a
market economy, from a totalitarian regime to a democratic society.  The financial and economic
crisis as well as political changes and events which occurred in several parts of the world adversely
affected Romania’s foreign trade and increased the already high social costs of transition.
6. Romanian exports have been directly affected by:  the disappearance of several traditional
markets;  the observance of the UN embargoes fo r countries having an important weight for
Romanian exports or debts to be reimbursed;  th e contraction of Asian and then Russian markets;
intensification of commercial defence measures as a result of turmoil in international markets.  At the
same time, the contraction of internal industrial and agricultural output and insufficient development
of the tertiary sector affected the export offer.  Meanwhile, the high degree of export dependence on
imports determined the continuous deterioration of the balance of payments, in addition to theconsumer and enterprise demand for imported products under Romania’s liberal trade regime.
7. In spite of these difficult circumstances, it is commendable that Romania enforced one of the
most liberal trade policies in Europe.  This fact is proved by:  all commitments regarding the bound
rates of customs duties were observed;  practically no export subsidies were granted;  import
restrictions were eliminated since 1992 while export restrictions were gradually relaxed and finallyabolished as of 1998.  During all this period of time, no commercial defence action has been taken on
a multilateral level, preference being given to competition as a way of speeding up restructuring and
improving economic efficiency.
8. When deciding to enforce such a trade policy, the Government took into consideration two
major goals:  to make the Romanian economy act in accordance with multilaterally agreedWT/TPR/G/60 Trade Policy Review
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instruments, mechanisms and rules as well as to encourage the development of a competitive
environment, capable to foster the enforcement of  market rules.  The entire commercial policy
decision making process is aiming at transforming the Romanian economy into a market economy
and ensuring that producers act in a competitive environment, aiming to ensure an active involvement
of the Romanian economy in the globalization pro cess.  Among the most important steps taken to
attain this objective, emphasis has been  given to the transparency of trade policy and
non-discrimination of the measures taken.
9. From a theoretical point of view, such an ap proach should have only positive impacts on the
national economy but in reality effects were different in some respects.  Thus, as the Romanian State
lacked enough financial resources to support sectoral development and restructuring or did not
maximize the effect of the existing ones, domestic producers had to compete with foreign products atprices distorted by domestic support and direct export subsidies.  Under these circumstances, even if
those exporting countries were not breaking their commitments under WTO, at least a part of their
exports were causing serious difficulties to the Romanian producers.
10. The above remarks lead to the assertion that:  the trade policy of Romania was conducted
under rather difficult conditions as the international environment produced direct or indirectrestriction of the international market, thus leaving little room for continuing trade liberalization.
II. ROMANIA’S TRADE POLICY:  AN INSTRUMENT OF DEVELOPMENT
TOWARDS MARKET ECONOMY
M
AIN CHARACTERISTICS
(1) IMPORT CUSTOMS TARIFF , THE MAIN TRADE POLICY INSTRUMENT
11. As of 1992, Romania enforced a customs tariff based on the HS, approximated at the
eight-digit level with the Combined Nomenclature of the European Union.  For the current year,HS 1996 and the CN 1998 are applied.  All tariff lines are bound under the WTO Agreement.  This
commitment was implemented starting in 1995, the applied customs duties being at the bound level or
below.
12. In practice, starting with 1 July 1995, the Im port Customs Tariff strengthened its role and
importance as the main instrument of trade policy and of protection at the border.  With a view toensure more transparency, within the context of deve lopments in regional integration, as well as in the
process of restructuring, the Ministry of Industry and Commerce publishes, on a yearly basis, a Guide
to the Import Customs Tariff.  This Guide includes all important international agreements and national
legislation, constituting the basis for the level of customs duties applied.  Any economic operator can
be thus informed on the level of customs duties to be applied during the year, the legal basis for thatlevel, the rules of origin to be observed, any other important rules or regulations in force.
(2) E
LIMINATION OF QUANTITATIVE RESTRICTIONS
13. The previous trade policy review highlighted that Romania did not apply any quantitative
restrictions on imports.
14. Starting with 1 January 1998, all remaining restrictions or quantitative limitations on exports
have been completely eliminated.  From that moment, all Romanian foreign trade is free of any
prohibition or quantitative limitation.  The process of the export liberalization registered a steady
development:  the number of goods temporarily proh ibited to export diminished continuously whileRomania WT/TPR/G/60
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the products under export quota were gradually phased out.  For prudential reasons, some products
(raw materials, low manufactured goods) continue to be monitored through an automatic export
licensing system.  This system encompasses exhaustible natural resources or those affecting the
environment.  Automatic import licenses are also used for goods with an impact on human and plant
health.
15. This facilitating Romanian trade regime has to be compared with those offered by some
WTO Members to Romanian exports.  Reference could especially be made to the continuous
limitation of the access of Romanian textiles a nd clothing on two major destinations (USA and
Canada).  The real dimension of the concern is given by the fact that although textiles and clothing
represent 34% of overall Romanian exports, Romania’s share on those important markets is still at the
level of small suppliers.
(3) DEFENCE MEASURES AT THE BORDER
16. In accordance with international rules, in cases where imports produce or threaten to produce
important prejudices to national industry, trade defence instruments can be enforced, irrespective of
the protection ensured through customs duties.  According to Romanian legislation, namely Law
133/1994 ratifying the WTO Agreement, such measures can be taken only in strict observance withthe relevant GATT and WTO provisions.  Up to th e date of this Report, Romania did not take any
trade defence measure on a multilateral level.  Certain safeguard measures have been taken within
some regional integration Agreements, in accordance with their respective provisions and without any
prejudice to third parties.
17. The trade regime applied by Romania with regard to dumping, subsidies or safeguards
contrasts with that encountered by Romanian exporters on certain markets.  Some exports are limited
as a result of old measures taken many years ago.  Those anti-dumping or safeguard measures have, infact, stopped our exports on important markets;  reviews, if any, did not remove the respective
measures.  Such anti-dumping measures affect ce rtain Romanian exports on three important markets.
In two other cases, exports did not produce prejudice as defined by the Anti-dumping Rules but
according to Romania’s evaluation, the Romanian exporters did not have the best conditions to defend
their interests and are now facing anti-dumping duties.
(4) L
ICENSING SYSTEM
18. A steady improvement of the licensing system can be noticed, for the period after 1990.  The
process started from a system according to which all export or import operations were administered
through licenses.  A first relaxation occurred in 1992 and a further one in 1993, when the greatest part
of licenses were issued for quantitatively restricted exports.  Finally the process ended with a systemof reduced compulsory automatic import and export licensing.
19. During the 1993-1998 period, when restrictions on export were still in force, these restrictions
were administered through export licenses while imports were conducted without import license.
During the same period, the temporary export prohibitions were reduced from 178 tariff lines in 1996
to 155 tariff lines in 1997.  Starting with 1 January 1998 all remaining export prohibitions andquantitative restrictions were eliminated, this decision producing an important effect on foreign trade
liberalization.
20. For the time being, only automatic export or import licenses are in force, their number is
much reduced and the nature of these licenses is a statistical one.  Thus, there are no restrictions on
exports or imports, the licensing system being an automatic one and having a monitoring function.WT/TPR/G/60 Trade Policy Review
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21. As a general rule, the Ministry of Industry and Commerce issues automatic export or import
licenses, without any other prior endorsement.  Ex ceptions to this rule encompass products which
might affect human health, environment protection or trade in precious metals, for which prior
endorsement is required from the Ministry of Heal th, Ministry of Environment and the National Bank
of Romania respectively.
(5) CUSTOMS POLICY , A COMPONENT OF THE TRADE POLICY
22. The customs policy – as one of the trade policy’s important component – can affect
international trade.  This is the reason for which a special attention has been given to the continuous
improvement of the customs regulations and activity.  The customs system scored an evident
progress, shifting in mid-1998  from a manual treatment of customs operations to an electronic one.
Another significant achievement related to the improvement of the customs activity was the setting-upof a customs database, providing customs officers an additional neutral and operative instrument in
carrying out customs clearance in accordance with international commitments of Romania.
23. The Romanian legislation on customs matters has been improved and detailed through the
new Customs Code (1997) and the Regulation for applying the Customs Code, both in accordance
with the WTO relevant provisions.
24. Further aspects regarding the trade policy are included in Chapter 3, concerning Romania’s
presence in the WTO.
(6) T
RADE POLICY WITHIN THE INTERNAL ENVIRONMENT
25. During the years elapsed since the previous trade policy review, the young democracy in
Romania developed in a steadily changing society and economy.  The political changes in Romania
determined important developments in the economic and social fields.  The Governments, enjoying
the support of electors, established as their goal the speeding up of the reform and restructuring of theRomanian economy, a special highlight being put on privatization.
Table 1
Dynamics of the main macroeconomic indicators
Indicator 1992 1993 1994 1995 1996 1997 1998
GDP 91.2 101.5 103.9 107.1 103.3 93.1 92.7
Industrial output 78.1 101.3 103.3 109.4 109.9 94.1 83.0
Agricultural output 86.7 112.9 100.2 104.1 101.8 103.1 92.4
Foreign trade volume (import/export)
in thousand of US$10.623 11.414 13.260 18.188 19.519 19.710 20.120
Weight of foreign trade in GDP (%) 42.3 43.3 44.1 51.0 54.9 57.7 59.7
Foreign trade index (1992=100) 100 107.4 116.2 137.2 107.3 101 102.1
Remark: For the evolution of the GDP, industrial and agricultural output, mobile basis indexes were used.
Source : Computed on the basis of data supplied by the National Commission for Statistics.
26. The economic reform proved to be a very complex one, with direct incidence on the
Romanian economy and in this context on the volume and structure of the export offer.  It has to be
emphasized that despite the difficult and changing environment, foreign trade grew steadily,becoming the most dynamic sector of the economy.Romania WT/TPR/G/60
Page 9
27. The structure of exports did not change significantly in 1998, as compared to the average of
the previous years;  capital goods maintained the same level while consumption goods gained
4 percentage points from the intermediary ones.  The share of consumption goods in exports of 40%
and intermediary ones of almost 50% is the mirror of an economy characterized by medium to low
technologies and limited resources to increase exports.  As a positive sign, basic raw materials
account only for 7% of exports, the medium manufactured goods representing the bulk:  textiles andclothing 36.4%, steel products 15.8%, footwear 11 .1% and machinery and equipment 10.2%, as for
1998.
28. The structure of imports  for the same year reflects the dependence of the economy on the
import of machinery, apparatus, equipment, transpor t means and energy.  This structure is determined
both by the lack of/or insufficient internal resources and by the efforts of restructuring and also byimports of new technologies for the emerging economy.
29. During the latest years, the contraction of certain markets, the reduction of domestic output as
well as the continuous need to support national economic activity with imports both for restructuring,
modernization and diversification of consumption (as the internal offer did not develop enough) had a
negative impact on the balance of payments.
Table 2
Balance-of-payments
1992 1993 1994 1995 1996 1997 1998
Export (f.o.b.) 4,363 4,892 6,151.3 7,910 8,084.5 8,431 8,299
Import (c.i.f.) 6,260 6,522 7,109 10,277.9 11,435.3 11,279.7 11,821
Balance -1,897 -1,630 -957.7 -2,367.9 -3,350.8 -2,848.7 -3,521.4
Remark: For 1998, provisional data.
30. The geographical structure  of exports substantially changed:  most of Romania’s foreign
trade encompasses Europe, the highest share being that of the European Union.  The dynamic
evolution of foreign trade, presented in Annex 1, shows the objective to maintain an active worldwide
presence of Romanian products.  Another important feature is the steady increase of the volume of
exports on all markets, certain few exceptions being the result of international short-term economic
developments.
31. During the period under review, reform programs determined the internal environment.  The
actual program took into consideration the need for macro-stabilization and to this end, the following
main fields were emphasized:
- a severe budgetary policy, aiming at a better collection of the amounts due to the
State Budget as well as the drastic cut of expenditures;
- restructuring the regies autonomes , especially those in energy, and their
transformation into commercial companies, acting under conditions of competition;
- speeding up the process of privatization, by decentralizing it and including the
banking and telecommunication sectors in the process;
- institutional reform, having as an important component the central public
administration reform;WT/TPR/G/60 Trade Policy Review
Page 10
- limiting, through firm measures, the losses generated by state owned companies;
- continuing trade liberalization.
(7) REGIONAL INTEGRATION
32. One of the main priority policy objectives after 1990 was the more active part to be played by
Romania within regional and subregional cooperation in Europe, having as a very important
component European economic integration.  The process was launched by the conclusion of theAssociation Agreement with the European Union, im plemented as an Interim Agreement starting on
1 May 1993.  On the same date, the Free Trade Agreement with the EFTA Member States entered
into force.
33. The Association Agreement aims at the European economic integration of Romania and
includes, as its main provisions, the liberalization of trade in goods, rules regarding trade in services,general rules applicable to trade, aspects concerning bilateral political and social-economic dialogue.
As far as trade in goods is concerned, the agreement encompasses all areas.
34. The basic principles of the association are:
- a free trade area to be achieved gradually, on an asymmetric basis;  to this aim, the
European Union eliminated, from the entry into force of the agreement, the customsduties on most industrial products, wh ile Romania is gradually reducing up to
elimination these customs duties, according to a calendar foreseeing progressive
reductions in periods of three-five years.  The remaining customs duties for industrial
goods are to be eliminated by Romania in 2002;
- mutual elimination of quantitative restrictions on imports, enforced from the entry
into force of the Agreement;
- eliminating quantitative restrictions on exports:  they were eliminated by the
European Union from the entry into force of the Agreement and from 1 January 1998
by Romania (according to the timetable included in the Agreement);
- starting trade liberalization for agricultural  goods on the basis of concessions granted
to one another;
- continuing trade liberalization for agricultural goods through commercial
negotiations.
35. An important component of the European integration process is the transposition into
domestic law of the acquis communautaire, which requires, wherever necessary, completing or
modifying the national legislation, in full accordance with the multilateral rules.
36. Romania’s European economic integration policy is complementing and reinforcing the
process of taking part in the multilateral trading system.  On the one hand, liberalization of trade
relations on a regional level is a preparation for the speeding up of multilateral trade liberalization;  on
the other hand, observing the rules established within Romania’s regional integration agreements, as
they are fully in conformity with the multilateral ones, enhances the enforcement of WTO rules.  The
Association agreement, as well as the free trade agreements concluded by Romania, includeprovisions stating the legal prevalence of GATT and WTO rules.Romania WT/TPR/G/60
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37. The functioning of the Association agreement allows the Romanian economy to prepare for
the moment of accession.  The asymmetry of the concessions provided the basis for an increase of
industrial product exports to the EU, thus positively influencing the process of modernizing or using
new technologies in our economy as well as the experience of acting in a more competitive
environment.  At the same time, the need to ob serve internationally accepted rules improved the
commercial behaviour of the Romanian exporters.
38. The Free Trade Agreement with the EFTA States is also an asymmetric agreement, covering
trade in goods.
39. The process of regional integration continue d by the accession of Romania to CEFTA, on
1 July 1997.  The Central European Free Trade Agreement aims at liberalizing trade among member
states and can be considered as a useful exercise to prepare the entry of these countries in the singleinternal European market.  This exercise is considered important as it takes into consideration the
differences in the development of candidate countries as compared to that of the EU Member states.
At the same time, enforcement of market instru ments and mechanisms can speed up the dominance of
the market economy in former centrally planned economies.
40. Starting with 1 January 1995, trade relations between Romania and the Republic of Moldova
are governed by a free trade agreement, establishing a free trade area for all goods.
41. The Free Trade Agreement with Turkey entered into force in February 1998 is also aiming at
the gradual creation of a free trade area for goods, the start being done more boldly for industrial
products.
42. It is to be emphasized that all regional integration agreements concluded by Romania include
provisions according to which trade relations between partners are governed by the multilateral
principles and rules , each specific provision of these agreements being either a reiteration of those
included in WTO legal texts or even a stronger rule.
43. Romania is considering the possibility of continuing the process of regional integration by
further negotiating free trade agreements with the Baltic States (Lithuania, Latvia and Estonia),
Morocco, Israel and Egypt.
44. Romania is a member of the Black Sea area Economic Cooperation (BSEC), where there are
not yet conditions to envisage a free trade agreement.  The members of this subregional cooperation
are economically very heterogeneous;  trade policy instruments differ too much, WTO membership is
not yet a common characteristic, as well as the nature of the economic cooperation with other
European regions.  Taking into consideration this extreme diversity, some results are to be noted:
institutional cooperation at the Parliamentary level as well as at the level of business environment;the BSEC Trade and Development Bank is to be operational soon.  All these constitute a real progress
towards economic cooperation in the subregional Black Sea area.
III. ROMANIA’S ACTIVITY WITHIN WTO
(1) B
ACKGROUND EVOLUTION
45. In 1971 Romania became a GATT Contracting Party, joining on the basis of a Protocol of
Accession reflecting the characteristics at that time for a centrally planned economy.  Under GATT,
Romania took part in the Tokyo Round multilateral trade negotiations, bound 158 tariff lines and
accepted most of the agreed Tokyo Codes.WT/TPR/G/60 Trade Policy Review
Page 12
46. The radical internal changes at the beginning of this decade allowed Romania to
fundamentally modify its participation in the multilateral trading system.  Negotiations and
commitments have been achieved in the Uruguay Round on standard terms of market ruled
economies, permitting Romania to be more active in the multilateral system.
47. At the conclusion of the Uruguay Round, Romania bound all tariff lines, accepted the
multilateral agreements, took advantage of the facilities granted to developing countries or those intransition and accepted three of the four plurilater al agreements (except for the Agreement on Public
Procurement).
48. At the end of 1994, the Romanian Parliament ratified the results of the Uruguay Round and
the commitments undertaken by Romania (through Law No. 133/1994 ratifying the
WTO Agreement), becoming thus, as from  1 January 1995, an original WTO Member.
(2) D
EVELOPMENTS IN THE NEGOTIATING PROCESS UNDER WTO
49. Decided to enforce the decisions adopted by WTO Members regarding the continuation of the
process of trade liberalization, Romania took part in the process leading to the conclusion of
Protocols IV and V of GATS (telecom services and financial services) and submitted lists of specific
commitments.
50. At the same time, aware of the importance of the emerging information society and its
benefits, after the conclusion of the telecom negotiations, Romania participated in the negotiations for
the conclusion of the Information Technology Agr eement, accepting to eliminate the customs duties
for the covered products.
51. This constant active position of Romania took into consideration both the decision to support
the process launched at the Ministerial Conference in Marrakesh and continued by the
Singapore Ministerial, as well as the aim to preserve Romania’s rights and obligations under theWTO, in correlation with its development interests.  A special attention has been given to the opening
of new markets for Romanian products and for the internal enforcement of rules for new areas
(mainly for services) in full accordance with the already accepted international rules governing trade
in services.
52. During the Ministerial Conference in Geneva , the Romanian delegation strongly supported
the adoption of the Declaration on electronic commerce, considering that multilateral rules should
govern this new form of trade characterized by a high dynamic and large coverage.
(3) S
TATUS OF OBSERVING WTO COMMITMENTS
53. The establishment of a multilateral trading system, in a full process of liberalization, carried
out in a predictable and transparent manner, based on uniform rules, is subject among others to theobservance of the commitments accepted under WTO agreements.  The importance of this aspect is
underlined in the WTO legal texts and is closely monitored by the WTO bodies.  This process
includes both the review of national legislation with respect to its conformity with WTO rules and the
enforcement of specific Members’ commitments or trade policy measures.
54. For each area covered by the WTO Agreements, Romania notified both national legislation
and the enforced measures.  During their examination it was stated that Romania did fully observe its
commitments under WTO.Romania WT/TPR/G/60
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(a) Tariff concessions
55. The bound level of customs duties functioned;  furthermore, in many cases, the applied level
was below the bound level.
56. For those agricultural products where minimum access quotas were pledged, the quotas were
opened at the beginning of each year and administered in a transparent, unconditional and neutral
manner, aspects highlighted during their examinations.
57. Romania introduced the HS 1996 changes in its Schedule of concessions without breaching
any applicable rule and made the submission to the IDB.
(b) Safeguards, anti-dumping and subsidies
58. National legislation has been reviewed in the relevant WTO bodies;  the present legislation
was found in compliance with multilateral rules;  however, Romanian authorities are considering the
possibility to add certain specific elements to allow for an accurate and easy enforcement of this
legislation.
59. During the period under review Romania notified that no safeguard, anti-dumping or
countervailing measure was taken.
60. In a particular case – where Romanian authorities considered that the exporters did not enjoy
the best conditions to defend their interests – bilateral, unofficial, consultations were conducted.
61. Romania notified the right to use certain subsidies, in accordance with the facilities provided
for countries in transition (Art. 29 of the Agreement on Subsidies and Countervailing Measures),
related to programmes covering agriculture, industry, investment, exports, environment and regional
development.
(c) Trade related investment measures (TRIMs)
62. In TRIMs area, Romania notified and explained the measures existing at the entry into force
of the WTO Agreement.
(d) Trade in agricultural products
62. The sensitivity, for most of the WTO Members, of this area determined the acceptance of
specific rules governing domestic support and export subsidies, as well as the special safeguard
measure.
63. Romania has preserved its right to support its farmers and to subsidize agricultural exports,
for certain products.  The scarcity of budgetary layout, for the period after 1995, did not allow the use
of this right, and domestic support therefore ranked under the de minimis  level while export subsidies
were granted only for a very small part of wheat exports.
64. Romania did not use the special safeguard clause and notified this to the Committee
on Agriculture.
65. During the period since the implementation of WTO commitments in agriculture, Members
have had the opportunity to evaluate again the huge differences between agricultural policies,WT/TPR/G/60 Trade Policy Review
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domestic support, export subsidies and became awar e of the fact that not all WTO Members were
really able to take full advantage of the process of liberalization in trade with these products.  For the
time being and within the level of commitments under WTO, there are products for which a triple
advantage is granted:  domestic support, export subsidies and tariff concessions on certain markets.
Thus, goods exported from countries having available layouts for domestic support and export
subsidies could generate an unexpected competition on other markets, mainly on those where theybenefited tariff concessions.
(e) Technical barriers to trade and sanitary and phytosanitary  measures
66. For both areas, notification obligations have been observed, both as far as measures enforced
and established contact points.  As for the standards, notification was not compulsory, Romanian
standards not differing from the international ones.
(f) Intellectual property rights (TRIPS)
67. According to the provisions of Art. 65 of the TRIPS Agreement, Romania reserved its right to
make use of the five-year period of transition to bring its legislation into full compliance with the
TRIPS Agreement.  Notwithstanding this reservation and without any prejudice to the transition
period benefit, Romania engaged itself in the review of its legislation by the TRIPS Council.  Such anapproach was meant to give the Romanian authorities the possibility to modify, if necessary, before
the end of the transition period, the existing legislation as well as to confer more transparency to this
process.
68. Romania’s decision was highly appreciated by the TRIPS Council.  The legislation related to
patents, industrial designs and layout-designs of integrated circuits, trademarks and geographical
indications, copyright as well as to enforcement was consequently reviewed.  According to the results
of the reviews, actions were taken to complete the legislative framework, mainly with instruments ofenforcement at the border.  The international comm unity recognized Romania’s efforts to improve its
legislation protecting intellectual property rights at international standards.  Romania’s approach
favoured the decision to establish within OSIM (State Office for Inventions and Trademarks) the
regional coordination center for the Regional Intellectual Property Project of PHARE for industrial
property rights.
(g) Balance of payments
69. The dynamics of the balance of payments, for the last five years, shows a continuous
deterioration, a deepening of deficits, as shown in  Annex 2.  Under such circumstances and evaluating
the discouraging prospects, Romania’s Government  decided to apply an import surcharge of 6%.
The measure has been enforced on 10 October 1998 and notified to the WTO.  According to the
decision of the Romanian authorities this measure shall be gradually eliminated:  the first reduction to
4% was enforced on 1 January 1999;  the second will be enforced to 2% on 1 January 2000 while the
elimination will occur on 1 January 2001.  The import surcharge is applicable to the majority of
imported goods, irrespective of the origin.  Exceptions refer to some important goods for the
functioning of the economy (energy, certain raw materials), for the health of the population(medicines) as well as to temporary imports.  Statistical data for 1998 show that the import surcharge
was applied to over 63% of the imports.  The measure taken by the Romanian authorities focused on
both components of the balance of payments, tempering imports and supporting exports.Romania WT/TPR/G/60
Page 15
70. The measure has been accompanied by a general program aiming at economic development,
based on market rules, at reform and privatization, strengthening of the banking system and cutting
the losses in the economy.
71. Following the notification of the measure, consultations were held in the BOP Committee in
February 1999.  On that occasion the entire set of economic policy measures as well as the first results
of it were presented.  The Committee found the measure taken by Romania to be in full compliancewith the WTO rules.
72. The above overview of the manner in which Romania understood to observe the
commitments highlights the fact that it  succeeded in enforcing its commitments under WTO, fully
observing the relevant rules.
73. Very shortly after the present review, a new round of multilateral trade negotiations within
WTO is to be launched.  Romania is preparing its participation in the forthcoming negotiations and is
aiming at:
- continuing the process of liberalization of trade with goods and services on a
multilateral basis, within packages able to ensure a balance between rights and
obligations for most of the countries;
- negotiating more clear provisions in the area of commercial defence;
- clarifying with more accuracy the relationship between internal support and export
subsidies, on the one hand, and further liberalization of the agricultural  sector, on the
other hand;
- speeding up the process of liberalization for textiles and clothing;
- maintaining a special treatment for developing countries and/or for countries in
transition for all the areas, which might support their efforts of economicdevelopment and transformation.
IV. PROSPECTS FOR THE ECONOMIC DEVELOPMENT AND TRADE POLICY
EVOLUTION IN ROMANIA
(1) E
CONOMIC DEVELOPMENT
74. According to the present Governance Program, the Romanian authorities are decided to take
the most appropriate measures for the speeding up of reform and restructuring, a special attention
being given to privatization.
75. To attain these objectives some important steps have already been made, mainly in the field
of restructuring and privatization.  Regies  autonomes in energy, communications and rail-transport
were submitted to a process of externalization of auxiliary and connected activities.  As a resultcommercial companies have been established for the activity of services and operating main facilities,
these commercial companies acting under competition, without any barriers to free access on the
market.  Meanwhile these companies were prepared for privatization.  Restructuring in the field of
energy included the close of several economic units, accompanied by a reduction of the number of
employees, all these measures having in mind increasing economic efficiency.  Measures in the fieldof energy included the mining sector (coal, iron, non-ferrous metals), electricity, oil and natural gas.WT/TPR/G/60 Trade Policy Review
Page 16
76. With a view to speed up the process of privatization and to increase its effects, the following
measures have been taken:
(a) descentralizing privatization activity by granting local representatives of the State
Ownership Fund the possibility to privatize small and medium sized companies;
(b) concentrating, at a central level, privatization of large companies, the loss-makers in
the national economy.
Such an approach aimed at changing the privatization strategy, with a view to increasing its effects,
both through a greater number of privatized companies and for the quality of the privatization actions.
The process will continue and it is expected to result in a sounder and more efficient economy.
77. From a financial point of view, 1999 is a difficult year for Romania as the due (mature)
external debt is of over US$3.2 billion, out of which more than 70% is due in the first half of the year.Difficulties were increased by the limited access to external financing as a result of both the
insufficient internal economic performance and the Russian crisis in 1998, making foreign investors
refrain from actions in the neighbouring area.  In order to cover the payment obligations our country
needs international financial support.  To this end, when finalizing negotiations with the IMF (end of
April 1999) the Romanian Government issued an d signed a Memorandum, reviewing the present
economic situation and presenting the economic and social policies to be enforced during 1999.
78. As stated in the Memorandum, the Government is prepared to take certain tough reform
measures.  As a consequence, GDP will decline by another 3.5% in 1999 while the inflation rate is
foreseen to be 35%.  The budget deficit (without receipts from privatization) will be reduced to 3.9%
of the GDP as compared to 5.7% in 1998.  Actions will be enforced to eliminate 22% of the state
companies losses.  As far as fiscal policy is concerned, tough measures will be taken, almost all fiscal
facilities being frozen.
79. Decisive measures for speeding up the reform, restructuring and privatization processes have
to be accompanied by economic development programs.  Reform and restructuring of the economy,
alongside with the privatization process are expected to identify the most efficient and dynamic
sectors of the economy.  For the selected sectors, as well as for the services sector, punctual
supportive measures are to be taken with a view to their development.
80. This approach could enhance Romania’s export offer, on a more diversified structure.  Such a
perspective could allow continuing trade liberalization and a more active presence of Romania in
world trade.  Romania is decided to contribute to the strengthening of the multilateral trading system,
the single one capable to ensure predictability, transparency and certainty for balanced trade relations.
81. The internal difficulties challenging the Govern ment’s firm action for reform are dramatically
amplified by the consequences of the Balkan crisis, having a negative impact on trade relations in the
area, on transport routes and impeding investment and commercial activity.
82. Within the framework of the Governance Program, the actual Cabinet presented a
sub-program for the period April-September 1999.  The main provisions of this sub-program, in the
field of restructuring and privatization are:
- increasing the share of privatized social capital in the total volume of the social
capital of the commercial companies;Romania WT/TPR/G/60
Page 17
- qualitative changes in the process of state property transfer to the private property,
using  those privatization methods which ensure competition and a more rapid pace of
selling shares through auctions and public offer on the capital market;
- ensuring transparency of transactions and equal chances of the potential Romanian
and foreign investors;
- encouraging investment by new owners in order to relaunch the development of the
privatized companies;
- restructuring/reconverting assets through administrative or judicial liquidation of the
inefficient commercial companies.
83. In accordance with the above provisions, the Offer-Program for privatization includes over
3600 commercial companies, having a social capital of US$3 billion, out of which the StateOwnership Fund is responsible for the privatization of US$1.8 billion worth capital.  The programme
gives priority to privatizing large companies, in surance and reinsurance companies, certain banks as
well as the commercial companies resulting from reorganizing national and local regies autonomes.
For 1999, contracts are carried out for the privatization of 33 commercial companies, with the support
of international investment banks and advanced negotiations are under way for another twocommercial companies.
84. In order to speed up the restructuring and privatization process and to increase its quality, the
following measures will be taken:
- providing for a more efficient framework for information, promotion, development
and conclusion of relations with potential investors;
- attracting on a larger scale foreign investors through sales by deposit certificates
issued by investment banks on the international financial market;
- using privatization methods which ensure a high selling pace of the shares;
- decisively attacking loss making commercial companies through either restructuring,
privatization, and reconversion of assets or liquidation.
85. A special emphasis will be put on important actions, as specified below, related to
restructuring and privatization of the banking and insurance system and of the majority state-ownedcommercial companies.
(a) Restructuring and privatization of the banking and insurance system
86. It is worth to mention some of the most importa nt recent results in this area:  the signing in
December 1998 of the sale contract for 41% of the SOF shares at the Banca Romana de Dezvoltare
(Romanian Bank for Development) to Société Générale  – France ;  the conclusion on 2 April 1999, of
the negotiations with General Electric Capital Corporation  and Banco Portugues de Investimento  for
the sale of 45% of the shares of Bancpost .  Until the end of  2000, three other important banks are to
be privatized:  Banca Agricola  (Agricultural Bank), Bancorex  and Banca Comerciala Romana
(Romanian Commercial Bank).WT/TPR/G/60 Trade Policy Review
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87. In accordance with Government Decision 374/18.05.1999, regarding the terms for the
implementation of the Program for adjusting the pr ivate sector and the Program for institutional
development in the private sector, the following objectives are to be attained:
- drafting restructuring plans for privatization of Banca Comerciala Romana (BCR),
Banca Agricola (BA) and Bancorex;
- hiring a consultant for the privatization of  BCR and BA;
- accomplishing due-diligence process for the credit portfolio of the BCR;
- identifying and transferring to Agentia pentru Valorificarea Activelor Bancare –
AVAB (Bank Assets Recovery Agency) 50% of the non-performant credits of BA;
- adopting irreversible measures for the restructuring process of Bancorex.
88. The recent establishment of the AVAB   is meant to ensure collection of non-performing loans
of the banking system;  a first step will be done through the entire transfer of non-performing credits
from Bancorex  to AVAB .
(b) Restructuring and privatization of majority state-owned commercial companies
89. According to Government Decision no. 374/1999 th e following measures and actions are to
be taken:
- hiring liquidators or stopping the functioning of state-owned commercial companies
responsible for at least 12% of the State Ownership Fund (SOF) losses;
- reducing by 25% the losses in mining activities;
- finalizing the process of auction and concluding contracts with international
investment banks in order to privatize at least three large commercial companies;
- selecting five large commercial companies for restructuring or liquidation and
selecting the international investment banks for implementing this program;
- drafting privatization offers through sellers selected in accordance with international
rules for 50 large commercial companies, in packages of ten companies each;
- privatizing in 1999 at least 30 large commercial companies and 250 small and
medium sized ones.
90. It is important to mention that, according to the Governance Program, the personnel losing
their jobs as a result of restructuring will enjoy a special social assistance programme.
91. In supporting this tough program, several measures are envisaged in order to improve the
business environment (modification of Privatization Law, adoption of the Financial Audit Law, of the
Income Taxation).  The drafts for these modifications or new legislation are aiming at ensuring a
competitive legal and institutional framework, according to international rules and practice.Romania WT/TPR/G/60
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(2) TRADE POLICY
92. All these restructuring and privatization actions are aiming at finalizing Romania’s passage to
a market driven economy, the start for relaunching economic development, as well as at preparing
Romania’s integration into European economic structur es.  Within this internal environment, foreign
trade will continue to develop, special attention being given to exports.  There are not envisaged
measures to diminish the imports;  a dynamic balance of Romania’s foreign trade is to be reachedthrough different growth rates of the two components of the trade balance.  This approach concerning
foreign trade development has in view the need for a continuous improvement of the trade balance
and of the current account, in order to avoid difficulties in the reimbursement of the foreign debt.
93. Romania will continue the trade liberalization process through policy measures both on a
multilateral and regional basis.  The trade policy instruments will continue to be transparent,foreseeable and common for the entire business environment, supporting the evolution of
entrepreneurial spirit for both national and foreign investors.
94. The reform and restructuring measures as well as the trade policy foreseen by the
Government are considered able to relaunch economic development, under market rules.  The
commitments undertaken by Romania in the WTO will  continue to be observed, being aware that only
multilateral rules and commitments can ensure a further development of international trade.
95. Romania’s efforts can be successful, or more successful, with the support of WTO Members
and mainly with their decision to continue enfor cement of their own commitments and to actively take
part in the process of trade liberalizatio n, according to multilaterally accepted rules.WT/TPR/G/60 Trade Policy Review
Page 20
ANNEX I
Table AI
Geographical orientation of the foreign trade
1992 1997 1998
Exports Imports Exports Imports Exports Imports
Europe 63.25 70.00 72.05 76.20 78.25 81.25
of which
European Union 35.18 41.27 56.50 52.50 64.50 57.70
EFTA 2.38 2.14 1.30 1.50 1.20 1.35
CEFTA 3.79 5.14 4.06 5.69 4.44 8.79
Russian Federation 9.51 12.75 2.96 12.02 0.97 8.98
America 4.05 5.95 5.80 7.60 6.30 7.05
of which
USA 1.92 3.55 3.80 4.10 3.85 4.22
Canada 0.43 0.54 0.42 0.79 0.74 0.59
Mexico 0.05 0.08 0.17 0.06 0.46 0.02
Brazil 0.07 0.53 0.21 0.81 0.11 1.21
Asia-Oceania 28.75 19.30 16.60 14.55 11.00 10.95
of which
Turkey 5.02 2.81 4.20 1.89 3.89 2.30
Israel 0.71 0.75 1.46 1.21 1.14 0.94
Japan 1.37 1.21 0.44 1.17 0.28 0.72
South Korea 0.09 0.37 0.52 5.12 0.22 2.15
China 4.56 1.18 0.52 1.06 0.27 1.50
Australia 0.19 0.49 0.05 1.09 0.04 0.62
New Zealand 0.01 0.00 0.01 0.01 0.00 0.02
Africa 3.95 4.75 5.55 1.65 4.45 0.75
of which
Egypt 1.76 2.56 2.80 1.03 2.22 0.37
Total 100.00 100.00 100.00 100.00 100.00 100.00Romania WT/TPR/G/60
Page 21
ANNEX II
Table AII
Balance-of-payments
(US$ million)
1995 1996 1997 1998*
ITEM
Credit Debit Net Credit Debit Net Credit Debit Net Credit Debit Net
Current account
(A+B+C)9,964 11,738 -1,774 10,402 12,973 -2,571 10,889 13,026 -2,137 10,424 13,434 -3,010
A. Goods and 
services9,404 11,306 -1,902 9,648 12,503 -2,855 9,955 12,349 -2,394 9,508 12,622 -3,114
(a) Goods (exp.       7,910
fob/imp. fob)9,487 -1,577 8,085 10,555 -2,470 8,431 10,411 -1,980 8,300 10,911 -2,611
(b)Services 1,494 1,819 -325 1,563 1,948 -385 1,524 1,938 -414 1,208 1,711 -503
B. Revenues 81 322 -241 79 388 -309 204 526 -322 166 679 -513
C. Current
transfers470 110 369 675 82 593 730 151 579 750 133 617
* Preliminary data.
__________