RESTRICTEDWORLD TRADE
ORGANIZATIONWT/REG34/3
10 November 1998
(98-4424)
Committee on Regional Trade Agreements Original:  English
FREE TRADE AGREEMENT BETWEEN THE REPUBLIC OF SLOVENIA
AND THE REPUBLIC OF LATVIA
Communication from the Parties
The following communication has been received from the Permanent Mission of the Republic
of Slovenia with the request that it be distributed to WTO Members
_______________
I. BACKGROUND INFORMATION ON THE AGREEMENT
1. Date of Signature, Ratification and Entry into Force
The Free Trade Agreement between the Republic of Slovenia and the Republic of Latvia was
signed on 22 April 1996 in Riga, Latvia. Latvia already ratified the Agreement in June 1996.
Slovenia will ratify it in the near future.  Due to the lengthy procedure for the ratification of the
agreements a provision was included to the Agreement that allows the Parties to apply the Agreement
on a provisional basis from 1 August 1996.
2. Type of Agreement
The Agreement that was concluded between the Republic of Slovenia and the Republic of
Latvia is a Free Trade Agreement.  The Agreement was concluded with the aim to create favourable
conditions for the development and diversification of trade between countries and for the promotion
of commercial and economic co-operation in areas of common interest on the basis of equality,mutual benefit and international law and to participate actively in the process of economic integration
in Europe.  The Parties are expressing their preparedness to co-operate in seeking ways and means to
strengthen this process.
The primary objective of the Agreement is to gradually establish a free-trade area by
progressively eliminating the obstacles to substantially all their trade in accordance with the
provisions of the Agreement and in conformity with those of the GATT and the WTO.  The full plans
for the reduction of customs duties and other tariff barriers to trade to zero on substantially all the
trade between the Parties are contained in the relevant Articles, Annexes and Protocols of the
Agreement.  (See attachment)
3. Scope and Product Coverage
As evident above, the Free Trade Agreement covers trade in industrial products
(HS Chapters 25-97, with the exception of the prod ucts listed in Annex I) and agricultural products
(Protocol A, including the products listed in Annex I).  The Agreement also contains provisions,
inter alia , on state-aid, state monopolies, competition, public procurement, intellectual property rightsWT/REG34/3
Page 2
and dumping. The Parties have also expressed their readiness to discuss the extension of the scope of
the Agreement to the areas not currently covered (evolutionary clause).
The products excluded from the coverage of the Chapter I (Industrial Products) of the
Agreement  listed in Annex I  are products falling within Chapters 1 to 24 (“agricultural products”) inthe nomenclature preceding the Harmonized Desc ription and Coding System (H.S.), but were
transferred at the time of the introduction of the Harmonized System into H.S. Chapters 25 to 97
(“industrial products”).  These products listed in Annex I are thus products which are excluded from
the application of provisions of the Agreement relating to industrial products.  However, the products
are covered by the provisions relating to agricultural products in Articles 2 and 3 of the Agreement.
The Republic of Slovenia and the Republic of Latvia apply a similar system in their relations with the
European Community.
The following summary indicates products which are covered by, or excluded from, the
Agreement:
(i) All products falling within H.S. Chapters 25 to 97 are covered.
(ii) The products contained in Protocol B (agricultural products) are  covered.
The trade coverage of the products covered by the Agreement under review and agricultural
arrangements, which also form a part of the instruments creating the free-trade area, is presented in
detail in Annex I to this note.
Products falling within Chapters 25 to 97 of the Harmonized Commodity Description and
Coding System account for 97.2 per cent of imports of all products originating in Latvia being
imported in Slovenia.
Products falling within Chapters 25 to 97 of the Harmonized Commodity Description and
Coding System account for 96.84 per cent of  imports of all products originating in Slovenia being
imported in Latvia.
Products falling within Chapters 1 to 24 of the Harmonized Commodity Description and
Coding System for which the customs duties have been decreased within the limits of quotas since
1 August 1996 account for 0 per cent of  imports of all products originating in Latvia being importedin Slovenia and for 0 per cent of imports of agricultural products originating in Latvia being imported
in Slovenia (see Annex I).
Products falling within Chapters 1 to 24 of the Harmonized Commodity Description and
Coding System for which the MFN rate of duty is applied account for 2.8 per cent of  imports of all
products originating in Latvia being imported in Slovenia and for 100 per cent of imports of
agricultural products originating in Latvia being imported in Slovenia (see Annex  I).
The FTA covers substantially all the trade between the Republic of Slovenia and the Republic
of Latvia in products originating in these territories.
4. Trade Data
See country specific table in Annex II to this  note on development of trade between Slovenia
and Latvia.  In addition compiled economic and trade indicators of Slovenia and Latvia are providedin Annex III to this note.WT/REG34/3
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II. TRADE PROVISIONS
Industrial Products
1. Import Restrictions
1.1 Duties and chargesAll customs duties on imports and charges having equivalent effect for the products falling
within H.S. Chapters 25-97, with the exception of the products listed in Annex I, were abolished on
1 August 1996.
The provisions concerning the prohibition and abolition of customs duties on imports also
apply to customs duties of a fiscal nature.
1.2. Quantitative restrictions
All quantitative restrictions (QRs) on imports and measures having equivalent effect were
abolished on 1 August 1996.
2. Export Restrictions
2.1 Duties and chargesAll duties on exports and charges having equivalent effect were abolished upon entry into
force of the Free Trade Agreement, with the following exceptions:
(a) Slovenia  abolished on erga omnes basis all export charges equivalent to customs
duties on 1 January 1998;
(b) Latvia  shall abolish export duties for products specified in Annex II at the latest on
1 January 1999.
2.2 Quantitative restrictionsAll QRs on exports and measures having equiva lent effect were abolished on 1 August 1996.
3. Rules of Origin and Co-operation in Customs Administration
The provisions on rules of origin laid out in Protocol B to the Agreement are conceived for
the purpose of the Agreement.  These rules are based on the concept of pan-European cumulation
which is applied in a number of Free Trade Agreements within Europe.  As a consequence of the
implementation of this origin network, semi-finis hed products originating in a partner country linked
to the system, Slovenia and Latvia are linked to  it, may now be used without restrictions for
manufacturing and processing in whatever other partner country connected to the system.  Under the
new rules finished products originating in the European Union and exported to Latvia can be
re-exported under the agreed preferential terms (either duty-free or preferential duties in accordance to
the duty dismantling schedules established under the Agreement) to Slovenia and vice-versa.WT/REG34/3
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4. Standards
4.1. Technical barriers to trade
The Parties shall co-operate and exchange information in the field of standardization,
metrology and certification with the aim of reducing t echnical barriers to trade.  The relevant bodies
of the Parties shall elaborate the rules of mutual recognition of the accreditation of testing and
calibration laboratories and certification bodies and product and quality systems certificates of
conformity issued in the Parties.  Such rules shal l include the rules of mutual recognition of the type
of approval of measuring equipment which are issued in the Parties and procedures for recognition of
the results of the measurements, calibration and conformity with requirements.
4.2. Sanitary and phytosanitary measures
The Parties shall apply their regulations in veterinary, plant health and health matters in a
non-discriminatory fashion and shall not introduce any new measures that have the effect of unduly
obstructing trade.
5. Safeguards
The following emergency measures and other safeguard mechanisms applicable to intra-trade
are provided for in the Agreement:
- Re-export and serious shortageAny export restrictions introduced under these provisions shall be applied in the sense of the
requirements of Article XI of the GATT 1994 unless they are based on Article XX.
- Balance of payments difficultiesAny measures for balance-of-payments purposes shall be applied in accordance with the
provisions of the GATT.
6. Anti-Dumping
The Parties may only take anti-dumping measures in accordance with the Agreement on
Implementation of Article VI of the GATT 1994.  The Agreement contains provisions for the
procedures for the application of safeguard measures which are applicable to anti-dumping measures.
7. State-Aid and Countervailing Measures
Any aid granted by a Party or through State re sources in any form whatsoever which distorts
or threatens to distort competition by favouring certain undertakings or the production of certain
goods shall be, insofar as it may affect trade be tween the Parties, incompatible with the proper
functioning of the Agreement, and in particular, the Parties shall not maintain or introduce export aid
as listed in Annex V to the Agreement in trad e between the Parties.  The Parties shall ensure
transparency of state-aid measures by exchanging information upon the request of either Party.  Any
Party can introduce, if it considers that a partic ular practice is incompatible with the Agreement’s
provisions, appropriate countervailing measures in conformity with the procedure laid down in theArticle on Procedure for the Application of Safeguard Measures.WT/REG34/3
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8. Sector-Specific Provisions
Agricultural products
The Parties declared their intention to foster, insofar as their agricultural policies allow, the
harmonious development of trade in agricultural and fisheries products.
The Parties granted each other concessions on trade in agricultural and fisheries products
falling within Chapters 1 to 24 of the Harmonized Commodity Description and Coding System and
the products listed in Annexes I, II and III as provided for in Protocol A.
Annexes I and II provide for reduction of customs duties by 50 per cent within the limits of
tariff quotas;  Annex I provides for reduction by Latvia, Annex II provides for reduction by Slovenia.
Annex III provides for abolishment of customs duties and charges having equivalent effect
applicable in both Parties for fishery products, with exemptions specified in Annex III.
For products within Chapters 1 to 24 of  the Harmonized Commodity Description and Coding
System the most-favoured-nation duty is applied, unless otherwise specified in the Annexes to this
Protocol on 1 August 1996.
The Agreement provides better access conditions for those products.  Furthermore, the
Agreement abolishes customs duties and measures having equivalent effect for the number of
fisheries products.
The Parties agreed to assess, two years after the entry into force of the Agreement, within the
Joint Committee the effects of the concessions given for products in Protocol A and may decide onpossible changes to the mutual concessions and product coverage.
III. GENERAL PROVISIONS
1. Exceptions and Reservations
- General exceptions
The Agreement shall not preclude prohibitions or restrictions on imports, exports, or goods in
transit justified on grounds of public morality, public policy or public security;  the protection of
health and life of humans, animals, or plants; the protection of the environment;  the protection ofnational treasures of artistic, historic or archaeological value;  the protection of intellectual property;
or the rules relating to gold or silver.  Such prohibitions or restrictions shall not, however, constitute a
means of arbitrary discrimination or a disguised restriction on trade between the Parties.
- Security exceptionsNothing in the Agreement shall prevent a Party from taking any measure which it considers
necessary to prevent the disclosure of information contrary to its essential security interests;  for the
protection of its essential security interests or for the implementation of international obligations or
national policies:  relating to the traffic of arms, ammunition and implements of war, provided thatsuch measures do not impair the conditions of competition in respect of products not intended for
specifically military purposes, and to such traffic in other goods, materials and services as is carried
on directly or indirectly for the purpose of supp lying a military establishment; or relating to theWT/REG34/3
Page 6
non-proliferation of biological a nd chemical weapons, nuclear weapons or other nuclear explosive
devices;  or taken in time of war or other serious international tension.
IV. OTHER
1. Internal Taxation
There are no measures or practices of an internal fiscal nature applied by the Parties, implying
directly or indirectly discrimination against the products of the Parties.  As an example of direct
taxation one can mention income tax or corporate tax, whereas turnover tax and value-added tax are
examples of indirect taxation.
2. State Monopolies
The provisions on state monopolies ensure that procurement or marketing of products by any
state monopolies of commercial nature, as defined in the Article of the Agreement also includemonopolies delegated by the Parties to others.  The Parties shall 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 will exist between nationals of the Parties.  These goods shall be
procured and marketed in accordance with commercial considerations.
3. Payments
The Agreement provides freedom of payments relating to trade and transfer of such payments
to the territory of the Party where the creditor resides.  They include a commitment to refrain from
any exchange or administrative restrictions on grant, repayment or acceptance of credits coveringcommercial transactions.
4. Public Procurement
The Parties progressively developed their respective regulations for public procurement and
have granted suppliers of the other Party on 1 August 1996, access to contract award procedures on
their respective government procurement markets according to the provisions of the World TradeOrganization Agreement on Government Procurement.
5. Protection of Intellectual Property
The Parties grant and ensure the protection of intellectual property rights on a
non-discriminatory basis, including measures for granting  and enforcing such rights.  The term
intellectual property protection is defined in the Agreement.  In the field of intellectual property the
Parties, on 1 August 1996, granted to each other's nationals and companies treatment no less
favourable than that accorded to nationals and companies of any other country under international
agreements.
6. Evolutionary Clause
A future deepening and extension of the coverage of the Agreement as provided for by this
provision may be defined by the Parties.WT/REG34/3
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7. Validity and Termination
The Agreement was concluded for an indefinite period of time.  Each Party may terminate
this Agreement by a written notification to the other Party.  The termination shall take effect
six months after the date on which the notification was received by the other Party.WT/REG34/3
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ATTACHMENT
Summary of the Structure of the Agreem ent, including Annexes and Protocols
Preamble
Objectives Article 1
Scope Article 2
  - Annex I (industrial products that count as agricultural)
  - Protocol A
Trade in agricultural products Article 3
Rules of origin and co-operation in customs matters Article 4
  - Protocol BCustoms duties on imports Article 5
Charges equivalent to customs duties on imports Article 6
Fiscal duties Article 7
Customs duties and equivalent charges on exports Article 8
  - Annexes II and IIIQRs on imports or exports and measures having equivalent effect Article 9
National treatment Article 10
Internal taxation Article 11
General exceptions Article 12
Payments Article 13Public procurement Article 14
Protection of intellectual property Article 15
Rules of competition concerning undertakings Article 16
State aid Article 17
State monopolies Article 18Technical regulations Article 19
Dumping Article 20
Emergency action on imports of a particular product Article 21
Re-export Article 22
Balance of payments difficulties Article 23
Procedure for the application of safeguard measures Article 24
Security exceptions Article 25The Joint Committee Article 26
Procedures of the JC Article 27
Evolutionary clause Article 28
Services and investments Article 29
Fulfilment of obligations Article 30Annexes and Protocols Article 31
Customs unions, free-trade areas and frontier trade Article 32
Amendments Article 33
Entry into force Article 34
Provisional application Article 35Withdrawal Article 36WT/REG34/3
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ANNEX I
Slovenian Trade with Latvia
(Value in US Dollars)
1996 % 1997 % I-IV 1998 %
IMPORTS
Agricultural products 128,261.76 8.29 86,754.41 2.8 0.00 0
Annex II 0.00 0 0.00 0 0.00 0
Annex III 37.45 0.01 0.00 0 0.00 0
Industry 1,410,889.73 91.7 2,977,182.83 97.2 808,732.58 100
TOTAL 1,539,190.94 100 3,063,937.25 100 808,732.58 100
Import from Latvia to Slovenia
(Value in 1,000 US Dollars)
Total Import At Zero
Customs DutyBetween Zero
and MFNMFN
Year 1,000
USD% 1,000
USD% 1,000
USD% 1,000
USD%
1996 1,539.2 100 1,410.8 91.6 0 0 128.2 8.4
1997 3,063.9 100 2,977.2 97.2 0 0 86.7 2.8
I-IV '98 808.7 100 808.7 100 0 0 0 0
Latvian Trade with Slovenia
(Value in 1,000 Dollars)
Imports from Slovenia to Latvia
Year 1996 1997 I-III 1998
1,000 US$ % 1,000 US % 1,000 US$ %
Agriculture 28.2 0.75 100.7 3.16 57.5 6.64
Industry 3,735.9 99.25 3,090.3 96.84 808.1 93.36
TOTAL 3,764.1 100.00 3,191 100.00 865.6 100.00WT/REG34/3
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ANNEX II – A
Slovenian Trade with Latvia
(In 1,000 of US Dollars)
1996 1997 I-V 1997 I-V 1998 1997/96 I-V 1998/97
Import 1,539 3,064 1,145 1,405 199.1 122.7
Export 4,244 3,380 1,504 1,373 79.6 91.3
Source:  Office statistical bulletin, June 1998
Latvian Imports from Slovenia
(In 1,000 of US Dollars)
1996 1997 I-III 1997 I-III 1998 1997/96 I-III 1998/97
Import 3,764 3,191 862 866 84.8 100.4
Source:  Central Statistical Bureau of LatviaWT/REG34/3
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ANNEX II – B
The Republic of Slovenia
Total Imports from LatviaThe Republic of Latvia
Total Imports from Slovenia
1996 1997 I-IV 1998 1996 1997 I-III 1998H.S.
Chapter
USD
1- - - - - -
2- - - - - -
3- - - - - -
45 1 - - - --
5- - - - - -
6- - - - - -
7- - - - - -
8- - - - - -
9 - - - - 2,000 20,100
10 - - - - - -
11 - - - - - -
12 - - - - - -
13 - - - - - -
14 - - - - - -
15 - - - - - -
16 37 - - - - -
17 - 182 - - 4,800 -
18 - - - - 200 -
19 - - - - - -
20 - - - - - -
21 - - - 21,000 - 200
22 - - - - - -
23 - - - - - -
24 - 4,334 - 7,200 93,700 37,200
25 - - - 37,900 - -
26 - - - 100 - -
27 - 1,707 - - - -
28 - - - 900 - -
29 29,320 24,200 - - - -
30 - 66,592 - 1,528,100 1,811,900 552,600
31 - - - - - -
32 3,048 - - 13,600
33 - - - 8,500 39,900 6,900
34 517 1,500 3,100 2,000
35 - - - 14,700 - -
36 - - - - - -
37 - - - - - -
38 - 72 - 300 - -
39 8,715 11,690 1,289 46,300 1,200 -
40 180 144 - 41,200 17,000 600
41 240 27,654 - 73,100 - -
42 - 204 - 700 - -
43 - - - - - -
44 431,024 1,025,500 384,755 119,400 20,500 -
45 - - - 1,100 - -
46 - - - - - -
47 - - - - - -WT/REG34/3
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The Republic of Slovenia
Total Imports from LatviaThe Republic of Latvia
Total Imports from Slovenia
1996 1997 I-IV 1998 1996 1997 I-III 1998H.S.
Chapter
USD
48 17 55,842 1,822 92,500 287,100 128,100
49 20 1,693 - 11,500 16,500 3,400
50 - - - - - -
51 - - - - - -
52 128,158 82,239 - - - -
53 331,700 590,610 121,664 - - -
54 - - - - - -
55 - - - - - -
56 102 - - 13,400 200 -
57 - - - 33,100 - -
58 - - - - - -
59 - - - 66,900 118,300 54,900
60 - - - - - -
61 7,683 1,214 1,288 100 6,400 -
62 7,338 57,716 9,962 12,900 3,700 5,900
63 144 258 - 9,400 3,000 100
64 - 12,132 - 400 9,100 2,000
65 - 804 - - 700 -
66 - - - - - -
67 - - - - - -
68 716 - - 23,000 700 -
69 - - - 46,200 35,600 -
70 169,563 1,036,678 274,215 46,200 500 -
71 - - - - - -
72 - - - 1,300 - -
73 117,534 210 259 492,700 6,600 -
74 - - - 6,600 200 -
75 - - - - - -
76 726 599 - 42,800 300 -
77 - - - - - -
78 - - - - - -
79 - - - 100 200 -
80 - - - - - -
81 - - - - - -
82 23,449 8,262 - 11,300 9,800 -
83 31 7 - 22,600 61,800 -
84 204,584 5,275 251 128,300 414,400 12,400
85 38,586 7,265 7,377 186,500 17,900 1,600
86 - - - - - -
87 23,981 - - 33,700 22,100 -
88 752 - - - - -
89 - - - - - -
90 4,841 268 - 46,100 200 -
91 - - - - - -
92 - - - - - -
93 - - - - - -
94 6,573 39,885 5,331 510,500 175,900 -
95 - 100 - 2,700 5,400 -
96 - - - 2,300 100 -
97 - 600 - 5,400 - -
TOTAL 1,539,190 3,063,937 808,732 3,764,100 3,919,000 865,600WT/REG34/3
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ANNEX III
Basic Data for 1997
Slovenia Latvia
Population 1,982,265 2,479,900
GDP in millions of US Dollars
(*data available only for year 1996)18,858* 5,352
GDP per capita in US Dollars
(*data available only for year 1996)9,471* 2,141
Land area (sq.km) 20,253 64,589
Imports in millions of US Dollars 9,178.7 2,720.7
Exports in millions of US Dollars 8,407.1 1,671.5
Trade balance in millions of US Dollars -771.6 -1,049.2
Source: Monthly Bulletin of Bank of Slovenia, April 1998
Central Statistical Bureau of Latvia
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