RESTRICTEDWORLD TRADE
ORGANIZATIONWT/REG54/M/2
WT/REG56/M/2WT/REG57/M/2
17 June 1999
(99-2454)
Committee on Regional Trade Agreements
Twenty-Second Session
EXAMINATION OF FREE TRADE AGREEMENTS BETWEEN
ISRAEL AND HUNGARY; ISRAEL AND THE CZECH REPUBLIC;
AND ISRAEL AND THE SLOVAK REPUBLIC
Note on the Meeting of 3 May 1999
Chairman: Mr. Chul-Ki Ju (Korea)
1. This meeting was convened  in document WTO/AIR/1063.
2. Under Agenda Items D. IX-XI, the Committee on Regional Trade Agreements (CRTA) took
up the examinations of the Free Trade Agreements (FTAs) between Israel and Hungary; Israel and the
Czech Republic;  and Israel and the Slovak Republic.  The following topics were discussed:
 A. General Remarks
 B. Section I - Background Information on the Agreement
 - I.3 - Scope of Agreement
 - I.4 - Trade data
 
 C. Section II - Trade Provisions
 - II.5 – Safeguards
3. The Chairman said that the World Trade Organization (WTO) said that, following
consultations regarding the institutional crisis,  the CRTA would conduct its business as usual. The
meeting would deal with Agenda Item D. IX-XI on the examination of the FTAs between Israel and
Hungary, the Czech Republic and the Slovak Republic, respectively.  He proposed that the Committee
deal with the three Agreements as a group.  This would have no effect on the examination per se  as
each Agreement would be judged on its own merits and would have its own report and conclusions.
He suggested the Members indicate whether their inte rventions related to a specific Agreement or the
group as a whole.
 A. General Remarks
4. The Chairman recalled that the first round of examinations of these three Agreements had
taken place during the Committee's Twenty-First Session under his Chairmanship and minutes of that
meeting had been distributed as documents WT/REG54/M/1, WT/REG56/M/ 1 and WT/REG57/M/1.
The responses to written questions received by the Parties had recently been distributed as document
WT/REG/GEN/2.  He intended to organize the examination in following manner: first, there would be
an opportunity for general comments by the Parties and then from the Members of the Committee;
second, the meeting would turn to the specifics of the Agreements and, in so doing, the CommitteeWT/REG54/M/2
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would have information in the Standard Fo rmat documents WT/REG 54/3, WT/REG56/3 and
WT/REG57/3, respectively, to guide the debate.
5. The representative of Israel recalled that Israel's FTAs with Hungary, the Czech Republic and
the Slovak Republic had been examined in depth during the meeting of the CRTA on
11 February 1999, based on information in the Standard Format for each Agreement.  The summary
records of these meetings had been circulated as documents WT/REG54/M/1, WT/REG56/M/1 and
WT/REG57/M/1.  He thanked the Members who had shown interest and had raised questions about
these Agreements, and he also thanked the delegations of the Slovak Republic and Turkey for their
cooperation in drafting the joint answers circulated  as document WT/REG/GEN /2.  He drew attention
to the intervention that he had made during the earlier (morning) session in which he noted that thewords "most of" should have been added to the beginning of the first answer; the corrected sentence
read: "Most of the Parties to the Agreements can notify their respective Agreements to the WTO only
after having completed the notification procedures.".  He said that the written questions and answers,
the information already provided, and the additional statistical data that would be submitted in the
coming days should help the Committee make progress in the examination process.  He reiterated thatthe Agreements provided for substantial coverage of  trade between the Parties and that they were in
full compliance with WTO obligations, particularly Article XXIV of GATT 1994.  As such, these
Agreements reflected the commitment and consistency of Israel, at the bilateral, regional and
multilateral levels, to promote conditions of competition, free trade and multilateral liberalization.
 
 B. Section I - Background Information on the Agreement
 
 Section I.4 - Trade data
6. The representative of Australia noted the comment by the representative of Israel that further
trade data would be provided in the coming days and wanted to know what such data would cover.  In
particular, he asked whether the new information would include the number of Harmonised
System (HS) tariff lines for which duties had been eliminated.
7. The representative of Israel said the precise data to be submitted were still under
consideration in the capitals of the respective Parties to the Agreement, but he expected soon to be in
a position to submit further information.  Regarding the question of the number of tariff lines for
which duties had been eliminated, he noted that the issue was still under consideration within the
systemic discussion.
8. The representative of Australia noted that the issue of tariff line data was subject to the
systemic discussion and also noted that consideration was being given to the provision of the
information in the meantime; he look ed forward to receiving information.
 
 C. Section II - Trade Provisions
 
 Section 2.4 - Standards
9. The representative of Australia said that Article 22.3 of the agreement stated that, "The
Parties shall aim to reduce Technical Barriers to Trade (TBT), and, to this end, "The Parties shall
conclude, where appropriate, agreements on mutual recognition in the field of conformityassessment.".  He wanted to know whether any such  agreements had been entered into and, with the
aim to reducing technical barriers to trade, if there was any end date associated with that aim.WT/REG54/M/2
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10. The representative of Hungary said he was concerned that different procedures were being
used from those in the previous (morning) session. His delegation was prepared to enter into detailed
discussion, but he requested a few minutes for consultations.
11. The Chairman said that the procedure was a different from the earlier session since, prior to
the current meeting, he had consulted Members who had agreed to the procedure now being followed.
An important consideration had been that the work of other Committees was continuing as normal.
12. The representative of Hungary said that it was not his intention to comment on the decision of
the Chairman and acknowledged that the WTO was a member driven organization.  One source of the
misunderstanding had been that the Agenda, reflected in document WTO/AIR/1063, indicated that the
meeting currently taking place was scheduled for the morning session.  He said that, during the earliersession, his delegation had made concrete statements and had circulated documents with data relevant
to the Israel-Hungary FTA.
13. The representative of Argentina said that there really was not much difference between what
was agreed in the morning session and the work that was currently being conducted.  Issues that had
been raised thus far included provision of statistical information and the request by Australia forinformation on technical standards under Article 22.3.  Members had agreed in the earlier session that
questions would be handed over in writing within two weeks and that replies would be submitted
during the following two weeks.  He suggested that the Committee could save time if it adopted the
procedure of simply taking note of the questions and then allowing a time-period for replies to be
provided.
14. The Chairman recalled that there had been a question by the representative of Australia
regarding standards.  The representative of Israel said that authorities had held consultations on the
issue, but that no dates had yet been specified.
15. The representative of Hungary said that he wanted to go back to a previous request for the
provision of further statistical information.  He drew attention to the statistical information, circulated
during the earlier session.  These statistics included detailed information regarding trade coverage;
trade receiving MFN; and trade receiving below MFN but above zero duty rates.  This information
should make it possible to assess compliance of the Agreement with Article XXIV.  He viewed
requests for further information as not related to the Article XXIV discussion.  Accordingly, the
Parties would not, as he understood it, provide such information.
16. Responding to the representative of Hungary, the representative of Australia said that the
detailed information provided by Hungary woul d clarify the conformity of the Agreement to
Article XXIV.  However, he stated that the specific information requested by himself and other
Members was the number of tariff lines under the HS for which duties had been eliminated and said
that the new data did not provide this information.  Regarding the response by the representative of
Israel on the aim to reduce TBTs and the endpoint, he noted that there were continuing consultations,
but that they had arrived at no specific date.  The second part of the provision under standards ofArticle 22.3 read: "To this end the Parties will conclude, where appropriate, agreements on mutual
recognition in the field of conformity assessment".  He wondered whether it would be possible to
receive an update on whether any activities had occurred in relation to the striking of agreements in
the field of conformity assessment.  The representative of Israel responded that there had been no
discussion on the issue up to that point.
17. The representative of the European Communities expressed appreciation for the detailed
information that had been provided by the representative of Hungary.  He was of the view thatWT/REG54/M/2
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clarifying issues such as the treatment of products by individual HS tariff lines was an old systemic
issue and that revisiting the issue would not advance the work of the Committee.
18. The representative of India also appreciated the detailed information provided during the
morning session and said that her delegation would examine this information and return with further
questions.  However, she did not share the view expressed by the representative of Hungary that
further information beyond that already provided was not related to Article XXIV.  Her delegation
viewed the systemic discussion as integral to the examination of specific agreements and expressed
her willingness to discuss the matter further.
19. Responding to the intervention by the representative of India, the representative of Hungary
made two points.  First, he continued to believe that Article XXIV referred to trade coverage, not HS
tariff lines.  Second, while not denying that the issue was subject to the systemic discussion, he was of
the view that discussions on systemic issues had no bearing on ongoing reviews.  The representative
of the Czech Republic shared the view expressed by the representative of Hungary.  The
representative of Israel joined the view expressed by the representative of Hungary.  The
representative of the Slovak Republic supported the view expressed by the representative of Hungary.
20. The representative of Australia said that, in the absence of any concrete outcome in the
systemic debate, particularly over the meaning of "substantially all the trade", he was of the view that
the Committee could not arrive at a conclusion on the conformity of agreements with Article XXIV
and GATS Article V without meaningful statistics, including the HS tariff lines for which duties had
been eliminated.
21. Responding to the view expressed by the representative of Australia, representative of
Hungary stated that trade creating and trade distor ting effects of agreements could be measured by
trade data.
22. The representative of Australia sought clarification regarding the latest intervention made by
the representative of Hungary.  He noted that he had asked for information that would help the
Committee to make an informed decision on the conformity of the Agreements with Article XXIV,
GATS Article V and the "substantially all the trade" requirement; he asked the representative of
Hungary to clarify how the issue of trade creation and trade distortion was related to his original
intervention.
23. The representative of Hungary said that Article XXIV was complex and that it entailed many
requirements.  The Committee was dealing with the issue of whether trade information by itself
provided the basis for determining the compliance of  agreements with Article XXIV or whether the
provision of data by HS tariff line was also necessary.  His delegation viewed preferential margins on
particular HS tariff lines as irrelevant to the operation of a FTA because it was not necessary that
there be trade on all tariff lines.  It was for this reason that he viewed trade figures, and not figures on
HS tariff lines, as important in assessing the co nformity of agreements with the Article XXIV.  He
respected the differing views on the issue, but said  that, until there was agreement on the definition,
methodology and format in which the issue would be treated, his delegation was not in a position to
provide further information.
Section 2.5 -  Safeguards
24. The representative of Korea said that, according to the information provided in the Standard
Format, Parties could exempt other Parties from safeguard measures.  However, in replies to
questions, contained in document WT/REG/GEN/2, the Parties had stated in answers 3 and 4 thatWT/REG54/M/2
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safeguard measures would be applied without di scrimination between Parties and non-Parties.  He
sough clarification from the Parties on this issue.
25. The representative of Israel stated that he did not fully understand the previous question, but
said that, in the view of the Parties, the provisions regarding safeguards included in the FTAs were in
full conformity with WTO rules.
26. The representative of Korea stated that the first paragraph on page 5 of document
WT/REG54/3 stated that Article 25.2 of the Agr eement allowed Parties to exempt the products of
other Parties from safeguard measures.  However, the answers to questions 3 and 4, contained in
document WT/REG/GEN/2, said that  safeguard measures would be applied on an MFN basis and
would be done so without discrimination between Parties and non-Parties.  He considered the
statement that he had highlighted in document WT /REG54/3 and the two answers he had pointed to in
document WT/REG/GEN/2 to be incons istent, and he sought further clarification.  The representative
of Israel requested that the question by the representative of Korea be submitted in writing.
27. The Chairman considered the discussion to have been fruitful, but he noted that there
remained outstanding questions.  He said that, after written questions and answers had been
exchanged, there would be one more meeting for the examination of these Agreements and suggested
that, at such time, the Committee might request that the Secretariat embark on the drafting of reports.
The representative of Israel requested clarification on the dates for the submission of written questions
and replies.  The Chairman said that two weeks would be allowed for the submission of questions and
that a further two weeks would be allowed for the submission of replies.
28. The Committee took note of the comments.
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