RESTRICTEDWORLD TRADE
ORGANIZATIONWT/REG66/3
15 March 2000
(00-1058)
Committee on Regional Trade Agreements Original:  English
FREE TRADE AGREEMENT BETWEEN ISRAEL AND SLOVENIA
Communication from the Parties
The following communication has been received from the Permanent Missions of Israel and
Slovenia with the request that it be distributed to WTO Members.
_______________
I. BACKGROUND INFORMATION ON THE AGREEMENT
1. Membership, Dates of Signature, Ratification and Entry into Force
The Parties to the Agreement are the State of Israel and the Republic of Slovenia.  The
Agreement applies to the customs territories and free zones of the State of Israel and the Republic ofSlovenia.
The Agreement was signed on 13 May 1998 and has been applied on a provisional basis since
1 September 1998.  The Agreement was ratified by the State of Israel on 5 July 1998, and will enter
into force on the first day of the month after the Republic of Slovenia notifies the State of Israel that
its internal requirements for the entry into force have been fulfilled.
The Agreement was notified to the Council on Trade in Goods on 18 December 1998, in
accordance with Article XXIV:7(a) of GATT 1994.
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.
3. Scope
The Free-Trade Area established by the Agreement provides the framework for future
relations between the State of Israel and the Republic of Slovenia.
The Agreement covers all trade in industrial products (Chapters 25-97 of the Harmonized
System (HS)), and substantially all trade in agri culture products (HS Chapters 1-24).  The products
covered are products originating in the State of Israel  or in the Republic of Slovenia according to the
rules of origin laid out in the Agreement.WT/REG66/3
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The agricultural products covered by the Agreement are those listed in Annex A to Protocol 2
of the Agreement for the Republic of Slovenia and Annex B to Protocol 2 of the Agreement for the
State of Israel.
Article 11.4 of the Agreement provides that the Parties shall examine periodically, within the
framework of the Joint Committee, the possibilities of granting each other further concessions in trade
in agriculture products.
4. Trade data
Total trade coverage of the Agreement is as follows:
Republic of Slovenia - Imports from Israel
(US$)
Total Trade Trade Covered % of Trade Covered
1995 48,456,319 48,387,981 99.9
1996 72,166,028 72,087,292 99.8
1997 35,588,183 35,532,004 99.8
State of Israel - Imports from the Republic of Slovenia
(US$)
Total Trade Trade Covered % of Trade Covered
1996 9,139,220 9,027066 98.8
1997 8,555,157 8,492,090 99.3
1998 9,832,043 9,771,389 99.4
Detailed statistics can be found in the Annex.
II. TRADE PROVISIONS
1. Import Restrictions
1.1 Duties and charges
In accordance with Article 3.2 of the Agreement and as prescribed in Protocol 1 of the
Agreement, customs duties on all originating goods listed in HS Chapters 25-97, except those listed in
Annex I and II of the Agreement and those listed in Annex A, B, C and D of Protocol 1 of the
Agreement, shall be abolished on the date of entry into force of the Agreement.
Customs duties on products listed in Annex A and C of Protocol 1 of the Agreement shall be
progressively reduced by the Parties in accordance to the timetable listed in Protocol 1 of the
Agreement and finally eliminated by 1 January 1999.
Customs duties on products listed in Annex II of the Agreement and in Annex B and D of
Protocol 1 of the Agreement shall be progressivel y reduced by the Parties in accordance to the
timetable listed in Protocol 1of the Agreement and finally eliminated by 1 September 2000.
In the case of agriculture products (HS Chapters 1-24) and Annex I of the Agreement,
specific concessions, in the form of preferential duty and/or tariff quotas, for a broad range of
products are listed in Annex A and B of Protocol 2 of the Agreement.WT/REG66/3
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Agricultural products (HS Chapters 1-24) not listed in Annex I or in Protocol 2 of the
Agreement, in accordance with Article 11.5 of the Agreement, shall be traded in accordance with the
provisions of the WTO/GATT 1994 Agreements and with the respective commitments of each Party
within the framework of the WTO Agreement on Agriculture.
Article 5.2 of the Agreement provides that all charges having an effect equivalent to customs
duties on imports shall be abolished on the date of the entry into force of the Agreement, except as
provided for in Annex II of the Agreement.
1.2 Quantitative restrictions
Article 8.1 of the Agreement provides that no new quantitative restrictions or measures
having equivalent effect on imports shall be introduced in trade between the Parties.
Article 8.2 of the Agreement provides that all quantitative restrictions and measures having
equivalent effect on imports of products originating in the Parties shall be abolished on the date ofentry into force of the Agreement;  with a few exce ptions listed in Annex III of the Agreement, the
restrictions will be abolished no later then 1 January 2001.
2. Export Restrictions
2.1 Duties and charges
Article 7.1 of the Agreement provides that no new customs duties on exports or charges
having equivalent effect shall be introduced in trade between the Parties.
Article 7.2 of the Agreement provides that the Parties shall abolish between them on the date
of entry into force of the Agreement any customs duties on exports and any charges having equivalent
effect.
2.2 Quantitative restrictionsArticle 9.1 of the Agreement provides that no quantitative restrictions or measures having
equivalent effect on exports shall be applied in trade between the Parties.
Article 9.2 of the Agreement provides that for a short list of products, listed in Annex IV,
each Party reserves its right to apply quantitative restrictions and measures having equivalent effect
on export of products.
3. Rules of Origin
Protocol 3 of the Agreement lays down the rules of origin.  In general, origin is confirmed
when:
- the good is wholly obtained or produced in the territory of a Party; or- each of the non-originating materials used in the production of the good undergoes
an applicable change in tariff classificatio n set out in the specific rule for that good
(detailed in Annex II to Protocol 3), and the good satisfies any other applicable
requirement set out in that rule, as a result of production occurring in the territory of a
Party;  andWT/REG66/3
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- the good satisfies other particular circumstances as set out in Protocol 3 of the
Agreement.
The rules of origin enable bila teral cumulation of origin between the Parties, i.e. materials
originating in a Party shall be considered as materi al originating in the other Party when incorporated
into a product obtained there.
In addition, the rules of origin provide for up to 10 per cent tolerance for non-originating
materials country except for products falling within HS Chapters 50-63 and for up to 10 per cent
tolerance for outward processing in a non-member.
The specific rules of origin per product provided for in Annex I and Annex II of Protocol 3 of
the Agreement, are identical to the new European rules of the European Community (EC), in order to
facilitate cumulation of origin with the EC and with other countries maintaining free-trade area
agreements with the State of Israel or with the Republic of Slovenia.
The Agreement provides for prohibition of drawbacks as of 31 December 2000.
4. Standards
4.1 Technical barriers to trade
Article 22.1 of the Agreement stipulates that this area in the Parties’ relations shall be
governed by the WTO Agreement on Technical Barriers to Trade.
Article 22.4 of the Agreement provides that the Parties will enter where appropriate into
negotiations for the conclusion of agreement for th e mutual recognition in the field of conformity
assessment.
4.2 Sanitary and phytosanitary measuresArticle 11.2 of the Agreement provides that the Parties shall apply their sanitary and
phytosanitary measures in accordance with the provisions of the GATT 1994 and the other relevant
WTO Agreements. The Parties shall not apply their regulations in veterinary, plant health and health
matters in an arbitrary, unjustifiable or discriminatory way or as a disguised restriction on tradebetween them.
5. Safeguards
Article 29 of the Agreement establishes the administration procedures for the application of
safeguard measures between the Parties in the case of a given practice which is incompatible with therules of competition (Article 19);  emergency action on import of particular products – the general
safeguards (Article 25),  measures related to re-export and serious shortage (Article 27);  and in
failure of a Party to fulfill an obligation under the Agreement (Article 28).
Article 25.1 of the Agreement provides for the application of general safeguard measures by a
Party, where any product is being imported in such quantities and under such conditions as to cause or
threaten to cause:
- serious injury to domestic producers of the like or directly competitive products in the
territory of the importing Party; orWT/REG66/3
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- serious disturbances in any sector of the economy or difficulties which could bring
about serious deterioration in the economic situation of a region,
Article 25.2 of the Agreement provides that when in view of the importing Party, the
importation of a product from the other Party is not substantial cause of a serious injury or threatthereof, the product of the Party shall be exempted  from any import relief that may be imposed with
respect to imports of that product from third countries.
Article 26 of the Agreement provides for the application of exceptional measures of limited
duration concerning infant industries or certain sectors undergoing restructuring or facing serious
difficulties.  These measures may not exceed 25 per cent ad valorem and should maintain an element
of preference.  The total value of imports of products, which are subjects to these measures, may notexceed 15 per cent of total imports of industrial products during the last year for which statistics are
available.  These measures shall be applied for a period not exceeding three years and should cease to
apply at the latest on 1 January 2001.
Article 30.1 of the Agreement provides that the Parties will attempt to avoid the imposition of
restrictive measures relating to imports for balance of payment purposes.
In the case of serious balance of payment difficulties, Article 30.2 of the Agreement allows
the Parties to adopt restrictive measures in accord ance with the conditions laid down in the framework
of WTO/GATT 1994.
6. Anti-Dumping and Countervailing Measures
Article 23 of the Agreement provides that if a Party finds that dumping within the meaning of
Article VI of the GATT 1994 is taking place in trade relations governed by the Agreement, it may
take appropriate measures against that practice in accordance with the WTO Agreement onImplementation of Article VI of the GATT 1994.
7. Subsidies and State-Aid
Article 20 of  the Agreement refers to state-aid:  Article 20.3 of the Agreement provides that
the Parties shall ensure transparency in the area of  state-aid, in accordance with the provision of the
Agreement on Subsidies and Countervailing Measures and the WTO/GATT 1994.  Article 20.4 of the
Agreement provides that measures taken must be under the condition of and in accordance to theprocedure laid down in Article 29 of the Agreement.  Such appropriate measures may only be taken in
conformity with the procedures and under the co nditions laid down by the Agreement on Subsidies
and Countervailing Measures and the WTO/GATT 1994 and in accordance with the relevant internal
legislation of the importing Party.
8. Sector-Specific Provisions
The Agreement does not contain sector-specific provisions.WT/REG66/3
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9. Other
(i) Customs Cooperation
Article 13.1 of the Agreement establishes a framework for co-operation in customs
administration, with particular regards to the method of co-operation in the administration of the rulesof origin.
(ii) State MonopoliesArticle 17.1 of the Agreement calls for the Parties to ensure that any state monopoly of a
commercial character be adjusted so that no di scrimination regarding the conditions under which
goods are procured and marketed exist between nationals of the Parties.
(iii) Competition PolicyArticle 19 of the Agreement relates to the rules of competition.  Article 19.5 of the Agreement
states that in regards to activities under the Ag reement and in accordance to the Parties’ laws,
regulations and policies, each Party will accord fair and equitable treatment to the individuals,
companies, government agencies and other entities of the other Party.
(iv) Internal Taxation
Article 14 of the Agreement prohibits any measures or practice of internal fiscal nature
establishing discrimination between the products originating from either Party. This Article also
prohibits repayment of indirect taxation in exce ss of the amount of indirect or direct taxes.
(v) PaymentsArticle 18 of the Agreement prohibits restrictions on payments in freely convertible
currencies relating to commercial transactions between the Parties and refers to Article VIII of the
Statutes of the International Monetary Fund.
(vi) Public Procurement
On public procurement, under Article 21.2 of the Agreement, the Parties shall progressively
develop their respective regulations for public procurement with a view to grant suppliers of the other
Party access to contract award procedures on their respective public procurement markets.
Under Article 21.3 of the Agreement, the Joint Committee shall examine developments
related to the achievement of the objectives of this Article and may recommend practical modalities of
implementing the provisions of 21.2 so as to ensure free access, transparency and a mutual opening of
their respective public procurement markets.
According to the Joint Declaration on Government Procurement, each Party shall grant
companies of the other Party contract award procedures under a treatment no less favorable then that
accorded to companies of any other countries, whil e maintaining each Party’s legislation with regard
to domestic companies.
(vii) Intellectual PropertyOn intellectual property, under 24.1 of the Agreement, the Parties shall grant and ensure
adequate, effective and non-discriminatory protection of intellectual rights, to a level corresponding toWT/REG66/3
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the substantive standards of the multilateral Agreements, which are specified in Annex V of the
Agreement.
III. GENERAL PROVISIONS OF THE AGREEMENT
1. Exceptions and Reservations
Article 15 of the Agreement, in accordance with Article XX of the GATT 1994, allows
restrictions on imports, exports or goods in transit justified on grounds of public morality, public
policy or public security;  protection of health and life of humans, animals and plants, including
environmental measures necessary to protect human, animal or plant life or health;  of the protection
of natural treasures possessing artistic, historic or archaeological value;  of the protection of
intellectual property;  or of the rules related to gold or silver or conservation of exhaustible naturalresources.
Article 16 of the Agreement includes a provision on national security in accordance with
Article XXI of the GATT 1994.
2. Accession
The Agreements do not contain provisions regarding accession.
3. Dispute Settlement Procedures
Article 34 of the Agreement provides for a dispute settlement process to deal with any dispute
relating to the application or the interpretation of the Agreement, either through the Joint Committee
by decision, or through a panel of three arbitrators by majority, within a 90 day period or within such
longer period as may be agreed by the Joint Committee.
4. Relations with Other Trade Agreements
The Agreement incorporates certain provisions of GATT 1994 including Articles VI,
XX, XXI and other WTO/GATT 1994 Agreements, namely the Agreement on Subsidies and
Countervailing Measures, the Agreement on Technical Barriers to Trade, the Agreement on
Implementation of Article VI of the GATT 1994, the Agreement on Agricultural and the Agreement
on Sanitary and Phytosanitary Measures.
As mentioned in section II, for the protection of intellectual property the Agreement relates to
the multilateral agreements listed in Annex V of the Agreement.
5. Institutional Framework
Article 32 of the Agreement establishes a Joint Committee composed of the representatives of
the Governments of the Parties.  The Joint Committee shall meet at least once a year to ensure theproper implementation of the Agreement.  It sha ll examine any issue arisin g from the agreement and
any other trade or economic issue of mutual interest.
The Joint Committee may take decisions in the cases provided for in the Agreement and make
recommendations on any other trade and economic matter of mutual interest to the Parties.  It may setup subcommittees and working groups as it considers necessary to assist it in accomplishing its tasks.WT/REG66/3
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ANNEX
Imports to Israel from Slovenia
(in US$)
HS Chapter 1996 1997 1998
10 0 0
20 0 0
30 0 0
40 0 0
50 0 0
60 0 0
70 0 0
80 0 0
90 0 7 1
10 0 0 6
11 0 0 0
12 8,943 0 0
13 0 0 0
14 0 0 0
15 0 0 0
16 0 0 0
17 78,938 18,583 57,678
18 48,508 49,311 39,784
19 0 0 0
20 33,216 0 0
21 0 0 0
22 0 44,484 2,976
23 0 0 0
24 0 0 0
25 0 0 0
26 0 0 0
27 0 67,650 0
28 0 0 0
29 254,581 232,754 277,976
30 0 2,725 500
31 0 0 0
32 83,815 112,153 88,477
33 10,077 9,862 6,633
34 18,534 0 0
35 0 0 0
36 0 0 0
37 230 250 210
38 7,628 0 10,597
39 255,537 692,444 189,141
40 1,032,717 1,197,658 1,656,342
41 307,866 346,026 199,082
42 0 454 0
43 0 0 0
44 13,126 12,132 10,753
45 0 0 0
46 0 0 0
47 78,281 0 0
48 653,077 1,706,615 2,168,851
WT/REG66/3
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HS Chapter 1996 1997 1998
49 144,562 194,067 799,898
50 0 0 0
51 352,763 54,341 0
52 0 0 0
53 0 0 0
54 118,983 0 0
55 17,394 0 0
56 24,736 16 5,108
57 0 0 0
58 0 0 5,914
59 25,178 957 41,332
60 0 0 325
61 2,060 43,075 10,467
62 56,831 77,755 232,240
63 46 232 0
64 20,797 19,902 2,592
65 0 5,541 0
66 55 0 0
67 0 0 0
68 62,225 133,535 69,881
69 35 40,248 7,693
70 124,062 433,430 194,331
71 0 3,238 0
72 69,348 1,110,209 524,024
73 40,502 41,882 21,695
74 0 0 51,163
75 0 0 0
76 929,397 140,985 40,460
77 0 0 0
78 0 0 207,784
79 22,673 70,089 0
80 0 0 0
81 0 0 0
82 56,355 118,082 114,143
83 144,528 302 143,040
84 305,873 786,801 1,270,863
85 257,775 279,649 720,807
86 3,193,543 0 0
87 0 556 159,278
88 0 28,848 0
89 0 1,954 0
90 70,838 106,063 206,483
91 0 13,669 41,220
92 0 0 0
93 0 0 0
94 183,024 332,345 246,691
95 26,372 2,918 2,742
96 3,192 21,367 2,792
97 999 0 0
Total 9,139,220 8,555,157 9,832,043
WT/REG66/3
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Imports to Slovenia for Israel
(in US$)
HS Chapter 1996 1997 1998
1 0 0 8,311
20 0 0
30 0 0
40 0 0
50 0 0
6 7,614 693 23,285
7 52,900 4,552 322
8 855,384 1,148, 957 762,787
90 0 0
10 0 0 0
11 0 0 17
12 0 1,598 207
13 0 0 0
14 0 282 0
15 97 962 0
16 0 0 0
17 0 0 0
18 0 0 0
19 352 0 694
20 9,413 48,385 19,402
21 18,027 21,702 14,800
22 367 0 272
23 0 0 0
24 0 0 0
25 46,329 59,925 0
26 0 0 0
27 0 5,742,626 123
28 5,111,034 4,355,351 4,703,030
29 1,776,704 1,388,674 2,286,817
30 154,418 306,308 655,604
31 17,656 20,158 23,197
32 1,304 2,995 12,670
33 21,930 32,362 67,215
34 12,242 5,811 3,270
35 200 0 0
36 0 0 0
37 6,594 714 102
38 88,779 167,606 182,487
39 104,488 329,979 604,480
40 6,101 120,322 62,341
41 0 0 0
42 1,963 13,053 2,861
43 0 0 0
44 882 0 18,171
45 0 0 0
46 0 0 0
47 16,360 44,491 44,469
48 513 2,419 7,978
49 32,715 24,187 34,745
50 0 0 0
51 0 0 0WT/REG66/3
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HS Chapter 1996 1997 1998
52 306,387 511,249 505,546
53 0 0 0
54 5,486 7,681 544
55 0 533 0
56 3,320 13,867 7,496
57 19 0 7,289
58 0 0 0
59 0 32,702 3,388
60 0 0 0
61 41,971 100,320 92,298
62 1,358 157,572 12,600
63 13,921 19,011 10,511
64 103 4,429 1,833
65 0 3,432 203
66 100 0 6
67 0 0 0
68 118 30,689 40,967
69 5,300 0 147
70 879 5,044 9,722
71 0 0 9
72 2,510 18,747 13,691
73 57,058 31,571 10,849
74 8 4,462 207
75 0 439 0
76 120,401 256,011 341,036
77 0 0 0
78 0 0 0
79 0 0 0
80 0 0 0
81 0 0 0
82 777,786 1,010.606 1,388,016
83 35,496 43,305 18,504
84 3,943,019 3,231,351 2,594,979
85 6,669,596 28,08l,074 18,745,881
86 0 0 0
87 71,070 3,156,037 123,232
88 3,183 830,406 7,854
89 3,878,080 0 1,971
90 1,520,706 2,623,736 366,059
91 596 4,763 4,170
92 0 0 0
93 22,826,513 18,175,319 1,680,820
94 694 135 4,333
95 5,965 535 48,286
96 17,366 2,889 8,107
97 0 0 0
Total 48,456,319 72,166,028 35,588,183
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