RESTRICTEDWORLD TRADE
ORGANIZATIONWT/REG35/4
9 April 1999
(99-1417)
Committee on Regional Trade Agreements Original:  English
FREE TRADE AGREEMENT BETWEEN THE REPUBLIC OF SLOVENIA
AND THE REPUBLIC OF LITHUANIA
Questions and Replies
This document reproduces questions addressed to the Parties and the joint responses provided
by them.  The questions and replies set out below are organized in accordance with document
WT/REG35/3.
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I. BACKGROUND INFORMATION ON THE AGREEMENT
1. Date of Signature, Ratification and Entry into Force
We note that Slovenia is a member of CEFTA and that Lithuania is advanced in its
negotiations to become a member of CEFTA.  How will these negotiations affect the
Free-Trade Agreement (FTA) between Lithuania and Slovenia? Are there plans to make
changes to the FTA to bring it into line with CEFTA provisions?
The negotiations on accession of Lithuania to CEFTA have not yet begun and will not until
Lithuania acquires membership in WTO.  When Lithuania becomes a party to CEFTA the FTAbetween Lithuania and Slovenia will no longer be ap plied. FTA is in its structure already in line with
CEFTA provisions.
3. Scope and Product Coverage
The FTA does not appear to  eliminate duties and other regulations of commerce on
agricultural products. Protocol 2 of the agreement refer only to tariff quotas on a very limited
number of agricultural products.
That is true; nevertheless, the FTA also envisages the possibility of granting further
concessions.  Further concessions will be granted at the time of accession of Lithuania to CEFTA.
What percentage of FTA trade (both in total and by sector) between the parties (for
each party):
- has the duties eliminated?
- has other regulations of commerce eliminated?
- is given concessions (rather than having duties etc. removed)?
- is excluded from the FTA?WT/REG35/4
Page 2
All data has been provided  in Annex I to WT/REG35/31.
Please provide details on the types of products of Chapters 25-97 which are excluded
from the Agreement?  Are these products subject to MFN rates of duty?
Annex I - MFN duty - (No Imports to Slovenia in 1997)
CN Code Product Description
3502 Albumins, albuminates and other albumin derivatives
Egg albumin:
3502 11 - - Dried:
3502 11 90 - - - Other
3502 19 - - Other:
3502 19 90 - - - Other
3502 20 - Milk albumin, including two or more concentrates of whey proteins:
3502 20 10 - - Unfit, or to be rendered unfit, for human consumption
- - Other:
3502 20 91 - - - Dried (for example, in sheets, scales, flakes, powder)
3502 20 99 - - - Other
Yes, these products are subject to MFN rates of duty.
Please provide details on the types of products of Chapters 1-24 which are included in
the agreement.  Please provide details on the conc essions granted, that is the percentage of trade
(by value and tariff line) which will be duty free and that which will have tariff preferences.
Annex A - Imports into Lithuania - MFN Minus
CN Code Product description 1997 (USD)
0210 Meat and edible meat offal... -
0402 Milk powder -
040690 Cheese (emmentaler, sbrinz) -
07019059 Potatoes -
0704 Cabbages, cauliflowers -
0705 Lettuce, and chicory -
080810 Apples -
080820 Pears -
1601 Sausages -
1602 Meat preserves -
160413 Sardines -
1704 Sugar Confectionery 8,997
1905 Flour Confectionery -
2104 Soups and preparations -
2105 Ice - Cream -
2204 Wine -
                                                     
1Transitional period has ended on 1 January 1999. Thus,  customs duties have been abolished for all
industrial products, with exception of those listed in Annex I. More than 99% of trade has duties eliminated.WT/REG35/4
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Annex B - Imports into Slovenia - MFN Minus
CN Code Product description 1997 (USD)
0201 Meat of bovine -
0203 Meat of swine -
02071190 Meat of poultry -
0209 Pig fat -
0305 Fish, dried, salted or in brine; smoked fish -
0402 Diary products -
040630 Processed cheese -
070320 Garlic -
08081010 Cider Apples -
1601 Sausages -
1602 Meat preserves -
1604 Prepared or preserved fish; caviar -
1704 Sugar Confectionery -
1806 Chocolate Confectionery -
2208 Undernaturated ethyl alcohol -
 
4. Trade Data
We would appreciate trade and tariff statistics on intra FTA-trade and MFN trade
according to major products and partners.
As it can be seen in Annex II-B to WT/R EG35/3, there has been only 1,000 USD of MFN
imports into Slovenia out of 1,436,062 USD of all imports in the year 1997.  Thus, the FTA imports
amounted to 1,435,062 USD in the year 1997.
II. TRADE PROVISIONS
5. Safeguards
In spite of the very limited coverage of agricultural products in the agreement, we note
that special safeguards are also applicable to th ese products.  What is the procedure for utilising
special safeguards, and what are the "appropriate solutions" to be used?  Has the special
safeguard been used?
Special safeguard measures have not been used yet.  The parties do not expect them to be
used in the future as the trade in agriculture products is not big enough to endanger agriculture in theparties.  In the case that such measure would be needed, the parties shall apply measures that at least
hamper trade between them.
Article 28 on Structural Adjustment makes provisions for exceptional measures to be
taken concerning infant industries, or sector s undergoing restructuring or facing serious
difficulties.  Have any structural adjustment measures been taken, and if so, on what products?
How is it decided that exceptional measures can be taken?
No structural adjustment measures have been taken.  Parties may decide to introduce
structural adjustment measures after thorough analysis that must be presented to other party.  No suchmeasure can be introduced from 1 January 2001.
Can the parties explain whether there is any difference in practice between the
obligations under Articles 27, 28, 29 and 31 (General Safeguards/StructuralWT/REG35/4
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Adjustment/Re-export and Serious Shortage/Safeguards Procedures) and the manner in which
they will operate, and the obliga tions of the parties under the WTO?
The parties have no experience in introduction of measures based on Articles 27, 28, 29
and 31; however, they obliged themselves to  respect provisions of WTO and GATT 1994.
- General safeguards: any suspension of obligation in whole or in part or withdrawal or
modification of the concessions under these provisions shall be applied in the sense of
requirements of Article XIX of the GATT 1994 particularly Agreement on
Safeguards unless they are based on Article XX.
- Structural adjustment: the measures under the provisions applying to structural
adjustment may concern infant industries or sectors undergoing restructuring or
facing serious difficulties, particularly where these difficulties might lead to
important social problems.  The maximum coverage of trade represented by products
on which structural adjustment measures may be applied is defined in the relevant
Article.
The Parties introduced this Article into the Agr eement to be in line with the provisions of
European Union's association agreements where the countries undergoing restructuring have
possibility to temporarily protect mentioned sectors.
- Re-export: any export restrictions introduced under these provisions shall be applied
in the sense of the requirements of Article XI of GATT 1994 unless they are based on
Article XX.
In general there are no big differences between FTA and WTO provisions regarding
procedure for the application of such measures.  However, the differences that exist are reflection of
the fact that the FTA is a bilateral agreement.  Thus , the procedures had to be modified to support the
bilateral relations between contracting parties.
The provisions of Article 31 follow in principle the relevant WTO provisions regarding the
application of such measures.  In addition the Joint Committee, which is responsible for the
supervision and administration of the Agreement, has the authority to examine such cases.
Measures taken under the provisions of agreement can be applied only toward the party to the
agreement.  However, measures taken under the provisions of GATT 1994 have to be taken toward all
contracting parties.  The party to the bilateral agreement is no exemption.
Have any safeguard measures under Article 31 b een taken?  If so, on what products and
for what duration?
No such measures were taken.
Will balance-of-payments (BOP) measures under Article 32 be applied in a
non-discriminatory manner and without prejudice to the interests of non-parties to this
agreement?
Yes, BOP measures under Article 32 will be applied in a non-discriminatory manner and
without prejudice to the interests of non-parties to this agreement.
The Agreement provides for "specific safeguards".  Are such safeguard measures
transitional in nature?  Specifically, can  the Parties take such safeguard action at any timeWT/REG35/4
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(e.g. in the next 20 years) and is there any li mit on how long such measure remain in force
(i.e. forever)? Can such action be taken in respect of any agricultural products
(i.e. Chapters 1 24)? What is the exact nature of the measure which the parties can take?  Can
similar measures be taken for Industrial goods?
All specific safeguards are of transitional nature and can be applied only when serious
disturbance on the market occurs.  Such action can be only taken toward concessions granted under
the FTA.  The nature of the measure is decided case-by-case. No measures can be taken for industrial
products.
7. State-Aid and Countervailing Measures
We acknowledge that competition policy (Artic le 22) is not covered in explicitly by the
WTO rules.  However, certain aspects of competition are captured by various WTO rules and
we therefore would be grateful for comments on the following question.
What criteria are to be applied in assessing whether actions prevent, restrict or distort
competition, or whether actions by dominant undertakings constitute an abuse of their position?
Are these considerations subject to specific legally based processes?
No further criteria have been defined in Article 22 of the agreement.  The assessment of
conduct of undertakings is made on a case-by-case basis, taking into consideration the effects ofcompetition and trade between the parties.
Can the parties give assurance that implementation of Article 22 does not discriminate
against the interests of non-parties to the agreement (especially given that it exempts
agricultural products which "form an integral part of a national market organisation" from theprovisions stipulated in para 1 (a) of this Article)?
Parties can give assurance that implementation of this provision dose not discriminate against
interests of non-parties to the agreement.
The provisions of Article 23 on State Aid do  not apply to agricultural products, and
therefore there is no limitation under the agreeme nt on the use of State Aid for agriculture.
What is the reason that agriculture is excluded from the provisions of Article 23?
This exemption reflects the policy objectives and principles followed by Slovenia and
Lithuania in their respective agricultural and fisheries policies.  Both parties concluded the
European Agreement and therefore undertook the common principles of the EU agricultural andfisheries policy which does not explicitly exclude subsidiary control in these sectors.  Subsidies
granted under the provisions of the agreement must be WTO-consistent.
8. Sector-Specific Provisions
Article 12 concerning agricultural concession s says that the parties will examine the
possibilities of granting each other further concessions taking into account policies, the role of
agriculture in their economies and the particular sensitivities of their agricultural policies.  Has
consideration been given to the inclusion of fu rther agriculture products  within the FTA either
for provision of concessions or elimination of the duties, etc?
Due to the future accession of Lithuania to CEFTA, no consideration has been given to the
inclusion of further agriculture products within the FTA.WT/REG35/4
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IV. OTHER
2. State Monopolies
Which products are currently subject to state monopolies (Article 20)?  This Article
suggests that state monopolies might currently dis criminate in their commercial decisions.  Can
the parties confirm that such monopoli es operate in a manner consistent with
GATT Article XVII in their purchases from and sales to third countries?
There are no products currently subject to state monopolies in Slovenia.  The objective of the
Article has been to clearly ensure that there would be no discrimination. Slovenia is bound by the
existing provisions and obligations of Article XVII.
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