RESTRICTEDWORLD TRADE
ORGANIZATIONWT/REG62/4
WT/REG63/4
21 June 1999
(99-2425)
Committee on Regional Trade Agreements Original:  English
FREE TRADE AGREEMENT BETWEEN THE CZECH REPUBLIC AND ESTONIA
FREE TRADE AGREEMENT BETWEEN THE SLOVAK REPUBLIC AND ESTONIA
Questions and Replies
This document reproduces questions addressed to the Parties and the responses submitted.
The questions and replies set out below are organized in accordance with documents WT/REG62/2
and WT/REG63/2.
_______________
I. BACKGROUND INFORMATION ON THE AGREEMENTS
1. Membership, Dates of Signature, Ratification and Entry into Force
Article XXIV:7(a) requires that regional agreements be notified promptly to the WTO.
We do not have the relevant information to ascertain whether this procedural requirement was
met and would welcome advice of the date of notification of the Agreements to the WTO.
We would welcome advice of date on which the Agreements were notified to the WTO?
The Free Trade Agreement between the Czech Republic and the Republic of Estonia entered
into force on 12 February 1998.  First information on this FTA was provided at the meeting of the
Council for Trade in Goods (CTG) on 4 February 1998.  Full notification, containing text of the
Agreement together with Protocols and Annexes, accompanied by a summary, was submitted to the
WTO Secretariat on 29 June 1998 and was subsequently circulated on 6 August 1998 in WTOdocuments WT/REG62/N/1 and WT/REG62/1, respectively.
The Free Trade Agreement between the Slovak Republic and the Republic of Estonia entered
into force on 13 March 1998.  First information on this FTA was provided at the meeting of the CTG
on 4 February 1998.  Full notification, containing te xt of the Agreement together with Protocols and
Annexes, accompanied by a summary, was submitted to the WTO Secretariat on 3 September 1998
and was subsequently circulated on 25 September 1998 in WTO documents WT/REG63/N/1 and
WT/REG63/1, respectively.WT/REG62/4
WT/REG63/4
Page 2
2. Type of Agreements
Article XXIV:5(c) outlines that an interim agreement to form an FTA should be
implemented in a reasonable length of time (i.e. ten years).  The Agreements appear to complywith this requirement (having been applie d provisionally from mid-1996 with a ten-year
implementation phase).  If there were any extens ions of this timeframe, we would wish to know
the reasons why.
There is no intention of extension of the timeframe, free-trade areas on substantially all the
trade will be established by January 1, 2001 at the latest.
Article 1.1. (Objectives) states that the Parties shall gradually establish a free-trade area
on substantially all their bilateral trade.  Grateful if the Parties could confirm the
timeframe/deadline for full implementation of  the free-trade area.  WT/REG62/2 appears to
indicate that the agreement will be implemente d by 1/1/2001 – are there any exemptions to this
deadline?
There are no exemptions.  Free trade areas will be established on 1 January 2001 on
substantially all the trade.
4. Trade Data
Article XXIV:8(b) outlines that in formin g an FTA the duties and other restrictive
regulations of commerce are eliminated on substantially all the trade between parties.  We will
need to examine protocols/annexes and further in formation (particularly statistical data) before
we can make an assessment of conformance with this requirement.
Statistical data on trade between the Parties for the years 1995, 1996 and 1997 were notified
to the WTO as a part of a Standard Format Notification and can be found in documents WT/REG62/2
and WT/REG63/2).  The Annexes and Protocols to the FTAs have been submitted to the WTO
secretariat and are available for consultation by interested members.
We would appreciate trade and tariff statistics or intra-FTA trade and MFN trade
according to major products and partners.
See Tables 1-4 in Annex.
What percentage of FTA trade between the Parties (for each party):
- has the duties eliminated – for agricultural trade?
- has the duties eliminated – for industrial trade?
- is given concessions or excluded – for agricultural trade?
- is given concessions or excluded – for industrial trade?
To what products of Estonian origin do the Czech Republic and the Slovak Republic not
grant duty-free treatment?  What does this repres ent as a percentage of (a) total bilateral trade;
(b) total bilateral agricultural trade; and c) total tariff lines?
Please provide the same information in respect of tariff preferences.
See Tables 5 and 6 in Annex.WT/REG62/4
WT/REG63/4
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II. TRADE PROVISIONS
1. Import Restrictions
1.1 Duties and charges
Please confirm that all agricultural tariff lines carry a duty-free treatment in respect of
Czech and Slovak originating goods imported into Estonia.
Yes.  (See Protocols 1 to the Agreements, paragraph 3.)
Please confirm that all tariff lines of Ch apters 25-97 are duty free in respect to
originating goods traded between the Czech Republic and the Slovak Republic and Estonia.
Yes.  All originating trade in industrial products under Chapters 25-97 is already duty free.
5. Safeguards
Have any specific actions been taken under Article 16 on agricultural products?  If so,
on which products and what was the nature of the measures taken?
No specific safeguard actions have been taken on agricultural products.
Under Article 16 on special agricultural safe guards, what measures, pending solution,
do the Parties envisage taking to deal with ma rket disturbance?  Would such measures be WTO
consistent?  Can the Parties give assurances th at such measures would not prejudice the rights
of non-parties to the Agreements?  What criteria are to be used to determine whether a “serious
disturbance” to agriculture markets is being caused?
As regards to the measures which the Parties to  the Agreements are entitled to take to deal
with market disturbance, they shall be selected on a case-by-case basis.  In the selection of such
measures, priority shall be given to those which least disturb the functioning of these FTAs.  The
measures foreseen under Articles 16 of the respective FTA are not considered as third-countrymeasures but measures relating strictly to the agricultural trade between the Parties.  These measures
are not in conflict with the WTO rules and they do not prejudice the rights of non-parties to these
FTAs.
Are the safeguard measures on  intra-trade (i.e. between th e Parties to the Agreements)
transitional in nature or can they be applied at any time and left in place for any period of time?
Safeguard measures concerning infant industries, or certain sectors undergoing restructuring
or facing serious difficulties according to Art. 30 are transitional.  There are no such measures in force
at present.  Any possible measure shall cease to apply on 1 January 2001 at the latest.
Other safeguards provided for in the FTAs (Article 29 – General Safeguards, Article 31 -
Re-Export and Serious Shortage) can be applied at any time on condition all requirements set up in
the respective Articles of FTAs have been met.
Have any general safeguards measures been taken under Article 29?  If so, on what
products and what was the measure and for what duration?
No safeguards measures under Article 29 have been taken so far.WT/REG62/4
WT/REG63/4
Page 4
Article 30 on structural adjustments makes provision 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 exceptional measures under Article 30 concerning infant industries, or sectors undergoing
restructuring or facing serious difficulties have been taken so far.
Can the Parties explain whether there is  any difference in practice between the
obligations under Articles 29, 30, 31, 33 and 16 (general safeguards/structuraladjustments/re-export and serious shortage/safeguard procedures and agricultural safeguards)
and the manner in which they will operate, a nd the obligations of the Parties under the WTO?
The Parties to the Agreements believe that there is no contradiction between obligations under
Articles 29, 30, 31 and 33 of these FTAs and the manner in which they operate and the Parties’appropriate obligations under the WTO.
Will balance-of-payments (BOP) measures under Article 34 be applied in
a non-discriminatory manner and without prejudice to the interests of non-parties to the
Agreements?
Yes, the BOP measures under Articles 34 will be applied in a non-discriminatory manner and
without prejudice to the interests of non-parties to these FTAs, in compliance with provisions of
Article XII of GATT 1994.
7. Subsidies and State-Aid
7.1 State aid
On Article 25 on state aid, have any measures been taken to deal with action which is
considered incompatible wi th this provision, and if so on what products and what was the
measure and for what duration?
No measures under Article 25 have been taken so far.
7.2 State monopolies
Which products are currently subject to state monopolies (Article 22)?  This Article
suggests that state monopolies might currently dis criminate in their commercial decisions – can
the Parties confirm that such monopolies operate in a manner consistent with GATT
Article XVII in their purchase from and sales to third countries?
In present time there are no state monopolies of trading character (with exclusive rights) in
Parties to the FTAs.
The main aim of these Articles is to ensure that the abolition of governmental restrictions on
trade between the Parties is not nullified by discriminatory behaviour in the purchasing and marketingactivities of state monopolies of a commercial character, therefore there is no contradiction with the
provisions and obligations of Article XVII of the GATT 1994.WT/REG62/4
WT/REG63/4
Page 5
7.3 Rules of competition concerning undertakings
We acknowledge that competition policy (Art icle 24) is not covered explicitly by the
WTO rules.  However, certain aspects of competition are captured by various WTO rules andwe therefore would be grateful for comments on the following questions:
- What criteria are to be applied in asse ssing 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?
At the outset it should be noted that, in our opinion, competition rules issues go beyond the
scope of examination within the meaning of Article XXIV.
Competition policy in the Czech Republic is regulated by the Act No. 63/1991 Coll. on
Protection of Competition amended by the Act No. 286/1993 Coll. and in the Slovak Republic by the
Act No. 188/1994 Coll. on Protection of Competition.  These Acts are applicable to all entrepreneurs,
as well as associations of these entrepreneurs, performing economic activities and are aimed at
protection of the competition on market relating to the trade in goods and services.  They also prohibit
conclusion of agreements and integration procedures of entrepreneurs aimed at limitation ofcompetition.  Antimonopoly Offices, both in the Czech Republic and in the Slovak Republic,
responsible for surveillance of competition policy, prohibiting agreements limiting competition by
issuing of decisions, based on provisions and conditions set out in the above-mentioned Acts.
Consequently, agreements to which such decisions apply are considered to be invalid.  These Acts
apply to horizontal as well as vertical limitations, they generally prohibit abusing of dominant positionof any undertaking and do not allow any exceptions.
Competition policy in Estonia is regulated by the Competition Act which entered into force
on 1 October 1998.  The purpose of the Act is to safeguard free competition in the extraction of
natural resources, manufacture of goods, provision of services, sale and purchase of services products,
and to prevent and eliminate the restriction of competition in other economic activities based on the
interests of free enterprise.  The Act prohibits agreements and concerted practices restrictingcompetition and abuse of dominant position, and contains provisions regarding individual exemptions
on restrictive agreements; market domination; undertaking with special or exclusive rights or natural
monopoly; State aid; merger control; unfair competition; State supervision; liability; and
implementing provisions.
Can the Parties give assurances that implementation of this provision does not
discriminate against the interests of non-parties to the Agreements (particularly given that it
exempts agricultural products which “form an integral part of a national market organisation”
from the provisions stipulated in paragraph 1(a) of this Article)?
Legislation of the Parties to the FTAs on protection of competition is based on the principle
of prohibition of any limitation/prevention, restriction or distortion of competition, grants equal rights
to business entities regardless their nationality (in all sectors and by all subjects) and consequently
does not discriminate against the interests of non-parties to the Agreements.WT/REG62/4
WT/REG63/4
Page 6
ANNEX
Table 1
Estonia's Imports of Products above US$100,000 from the Czech Republic, in 1998
HS code In thousand US$ As a percentage
of total trade
040690 106.6 0.42
190219 156.4 0.62
220210 106.6 0.42
282110 128.0 0.51
300490 327.1 1.29
340220 3789.5 14.97
391810 149.3 0.59
392010 711.0 2.81
481840 128.0 0.51
521159 142.2 0.56
560749 177.7 0.70
590110 497.7 1.97
611511 113.8 0.45
690790 369.7 1.46
690890 974.0 3.85
691010 277.3 1.10
691090 1016.7 4.02
691110 170.6 0.67
700529 412.4 1.63
701321 142.2 0.56
701331 135.1 0.53
731021 383.9 1.52
830990 547.5 2.16
844839 113.8 0.45
844849 113.8 0.45
846249 135.1 0.53
847982 199.1 0.79
848110 106.6 0.42
853110 199.1 0.79
853710 334.2 1.32
860210 149.3 0.59
860719 206.2 0.81
860799 113.8 0.45
870190 312.8 1.24
870322 1486.0 5.87
870323 1215.8 4.80
870421 291.5 1.15
870431 241.7 0.95
870899 241.7 0.95
871200 128.0 0.51
940171 319.9 1.26
940179 199.1 0.79
940540 135.1 0.53WT/REG62/4
WT/REG63/4
Page 7
Table 2
Estonia's Imports of Products above US$100,000 from the Slovak Republic, in 1998
HS code In thousand US$ As a percentage
of total trade
380830 376.8 5.39
392010 142.2 2.03
401120 177.7 2.54
481139 128.0 1.83
481810 135.1 1.93
490199 156.4 2.24
640590 177.7 2.54
640699 234.6 3.36
721012 753.6 10.78
721070 839.0 12.00
721240 945.6 13.53
830990 739.4 10.58
845011 462.1 6.61
940510 135.1 1.93
Table 3
Czech Republic's Imports of Products above US$100,000 from Estonia, in 1998
HS code In US$ As a percentage
of total trade
160413 672,753 17.94
160420 1,029,922 27.46
321410 175,449 4.68
840211 204,034 5.44
902190 277,231 7.39
Table 4
Slovak Republic's Imports of Produc ts above US$100,000 from Estonia, in 1998
HS code In US$ As a percentage
of total trade
160413 450,240 44.96
160420 311,168 31.07WT/REG62/4
WT/REG63/4
Page 8
Table 5
Tariff Treatment of Total Trade between the Parties in 1998
(Value and percentage shares)
With concessions MFN rate
Zero import duties Reduced duties Total
import
value
(Thousand
US$)Import
value
(Thousand
US$)Share
in total
imports
(%)Import
value
(Thousand
US$)Share
in total
imports
(%)Import
value
(Thousand
US$)Share
in total
imports
(%)
Imports from  Estonia
into:
- Czech Republic 3,849 3,849 100 00 0 0
- Slovak Republic 1,001 1,001 100 00 0 0
Imports into Estonia
from :
- Czech Republic 24,998.2 24,998.2 100 00 0 0
- Slovak Republic 6,988.9 6,988.9 100 00 0 0
Table 6
Tariff Treatment of Trade in Agricultural Products and Industrial Goods
between the Parties in 1998
(Percentage shares in corresponding total imports)
With concessions MFN rate
Zero import duties Reduced duties
Agricultural
productsIndustrial
goodsAgricultural
productsIndustrial
goodsAgricultural
productsIndustrial
goods
Imports from  Estonia
into:
- Czech Republic 46.2 53.8 0 0 0 0
- Slovak Republic 20.5 79.5 0 0 0 0
Imports into Estonia
from :
- Czech Republic 3.8 96.2 0 0 0 0
- Slovak Republic 1.4 98.6 0 0 0 0
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