RESTRICTED
WORLD TRADE WT/REG41/4
WT/REG42/4
17February 1998
ORGANIZATION(98-0555)
Original: English Committee onRegional Trade Agreements
FREE TRADE AGREEMENTS BETWEEN
THE CZECH REPUBLIC AND THE REPUBLIC OFBULGARIA
AND
THE SLOVAK REPUBLIC AND THE REPUBLIC OFBULGARIA
Questions andReplies
Thisdocument reproduces questions addressed totheParties andthejointresponses provided
bythem. Thequestions andreplies setoutbelow areorganized inaccordance withdocuments
WT/REG41/2 (Czech Republic andtheRepublic ofBulgaria) andWT/REG42/3 (Slovak Republic and
theRepublic ofBulgaria).
__________
I. BACKGROUND INFORMATION ONTHE AGREEMENT
3. Scope andProduct Coverage
Wenotethatthere isnoreference tofreetrade inagricultural products. Isthisagoal
forthese Agreements and,ifso,when dothese Parties envisage thatthismight beachieved?
Thegeneral goaloftheParties, expressed inthePreamble tothese FreeTrade Agreements,
is"toeliminate progressively theobstacles tosubstantially allthetrade" between theParties which
corresponds tothemeaning ofArticle XXIV:8(b). Chapter IIcontains provisions onexchange of
concessions onagricultural products falling within Chapters 1to24oftheHarmonized Commodity
Description andCoding System, withtheexception ofproducts listed inAnnex I(b)andincluding
theproducts listed inAnnex I(a)totheAgreement. However, liberalization oftrade inagricultural
products islimited onlytotheproducts listed inAnnexes toProtocol 2.Forfurther details onthe
exchange ofconcessions onagricultural products seereply toQuestion 7.
What percentage oftrade between theParties isaccounted forbyproducts:
- falling within Chapters 1to24oftheHarmonized Commodity Description and
Coding System?
- falling within Chapters 25to97oftheHarmonized Commodity Description and
Coding System?
- listed asexcepted?WT/REG41/4
WT/REG42/4
Page2
What aretheintentions oftheParties regarding theinclusion ofexempt products within
thescope oftheAgreement?
1996Slovak Republic Czech Republic Bulgaria
Imports from
BulgariaImports from
BulgariaImports from
Czech Republic Slovak Republic
Chapters 1to24 0.1% 24.3% 4.5% 1.0%
Chapters 24to97 99.9% 75.7% 95.5% 99.0%
There isnothing inthese Agreements which excludes anyproduct apriori .
II. TRADE PROVISIONS
1. Import Restrictions
CantheParties detail their plans forremoving charges onimports having aneffect
equivalent tocustoms duties asprovided forinAnnex II?
Allcharges having aneffect equivalent tocustoms duties onimports were abolished onthe
dateofentry intoforce ofthese Agreements. Theimport tax,referred toinAnnex II,wasabolished
asofDecember 1996.
What quantitative restrictions andmeasures having equivalent effect arepresently applied
onimports bytheParties tothese Agreements?
Grateful iftheywould outline their plans forremoval ofthese quantitative restrictions
andequivalent measures.
TheCzech Republic -Thequantitative restrictions onimports ofuranium orthorium ores,
natural orenriched uranium, waste andscrap ofpaper orpaperboard, ferrous waste andscrap listed
inAnnex IVareapplied currently. These restrictions which aremaintained forsecurity and
environmental reasons shallbeprogressively abolished bytheendofthetransition period.
TheSlovak Republic -Thequantitative restrictions onimports ofcoalandlignite listed in
Annex IVareapplied currently. These restrictions which aremaintained forsecurity andenvironmental
reasons shallbeprogressively abolished bytheendofthetransition period.
TheRepublic ofBulgaria -Allquantitative restrictions andmeasures onimports wereabolished
upon theentry intoforce oftheAgreements, withtheexception ofthose provided forinAnnex IV.WT/REG41/4
WT/REG42/4
Page3
2. Export Restrictions
What quantitative restrictions andmeasures having equivalent effect arepresently applied
onexports bytheParties tothese Agreements? Grateful iftheywould outline their plans for
removal ofthese quantitative restrictions andequivalent measures.
Allquantitative restrictions andmeasures having equivalent effect onexports wereabolished
upontheentry intoforce ofthese Agreements, withtheexception ofthose provided forinAnnex Vb.
4. Standards
Inwhat manner dotheobligations ofArticle 10differ from those oftheTechnical Barriers
toTrade (TBT) Agreement?
Intheviews oftheParties, Article 10isnotcontradicting theirobligations under theTBT
Agreement. Presently, theTBTrulesareapplied among theParties because Article 10isnotoperational
yet.
5. Safeguards
What measures, pending solution, dotheContracting Parties envisage taking todealwith
market disturbance? Would suchmeasures beWTO consistent? CantheContracting Parties
giveassurances thatsuchmeasures would notprejudice therights ofnon-parties tothisAgreement?
What criteria aretobeusedtodetermine whether a"serious disturbance" (Article 14)toagriculture
markets isbeing caused?
Asregards measures which theParties areentitled totaketodealwithmarket disturbance they
shallbeselected onacase-by-case basis. Intheselection ofsuchmeasures, priority shallbegiven
tothosewhichleastdisturbthefunctioningoftheseAgreements.ThemeasuresforeseenunderArticle14
arenotconsidered asthird country measures butmeasures relating strictly totheagricultural trade
between theParties. These measures arenotinconflict withtheWTO rulesandtheydonotprejudice
therights ofnon-Parties tothese Agreements.
WillBOPmeasuresunderArticle32beappliedinanon-discriminatorymannerandwithout
prejudice totheinterests ofnon-parties tothisAgreement?
Article 32provides thatanymeasures forbalance-of-payments purposes willbeapplied in
accordance withtheconditions established under theWTO, i.e.inanon-discriminatory manner and
without prejudice totheinterests ofthirdparties.
6. Anti-Dumping
TheFTA provides fortheapplication ofanti-dumping asoutlined inGATT Article VI.
Wenote, however, thatGATT Article XXIV:8(b) doesnotallow forthisexemption andthatthis
clause maynottherefore becompliant.
IntheviewoftheParties thismatter should beconsidered asasystematic issue. Thesense
ofArticle 26istoassure theParties aswellastheWTO Members thatanyanti-dumping measures
tobetaken would befullyincompliance withtheWTO rules.WT/REG41/4
WT/REG42/4
Page4
CantheParties explain whether there isanydifference inpractice between theobligations
under Articles 26,27and31andthemanner inwhich theywilloperate, andtheobligations of
theParties under theWTO?
TheParties believe thatthere isnocontradiction between obligations under Articles 26,27
and31oftheAgreements andthemanner inwhich theyoperate andtheParties ’appropriate obligations
under theWTO.
7. Subsidies andState-Aid
7.1 State-aid
Given thatagricultural products areexempt from theprovisions stipulated inpara.1 of
Article 23,cantheParties giveanassurance thatthere willbenoresultant discrimination against
theinterests ofnon-parties?
Itistheintention oftheParties toimplement thisArticle withrespect totheagricultural products
inconformity withtheParties obligations under theWTO Agreement onAgriculture. Uptonow, no
experience withtheapplication ofthisArticle isavailable.
7.2 State monopolies
What products arecurrently subject tostate monopolies? What proportion oftrade in
products subject tostatemonopolies iscovered bythisAgreement? Article 20suggests thatstate
monopolies currently discriminate intheir commercial decisions -cantheParties confirm that
suchmonopolies operate inamanner consistent withGATT Article XVII intheirpurchases from
andsales tothird countries?
There arenoproducts currently subject tostatemonopolies. Theprovisions ofthisArticle
maynotbeinterpreted asexempting theParties totheAgreements fromtheirobligations under GATT
Article XVII.
7.3 Rules ofcompetition
What criteria aretobeapplied inassessing whether actions prevent, restrict ordistort
competition, orwhether actions bydominant undertakings constitute anabuse oftheir position?
Arethese considerations subject tospecific legally based processes?
CantheParties giveassurances thatimplementation ofArticle 22doesnotdiscriminate
against theinterests ofnon-parties totheAgreement (particularly given that itexempts
agricultural products which "form anintegral partofanational market organization" form the
provisions stipulated inpara.1(a) ofthisArticle)?
Itshould benoted thatcompetition rules issues gobeyond thescope ofexamination within
themeaning ofArticle XXIV.
TheParties intheirnational legislation havebeenguided bycompetition rules elaborated in
theframework oftheAssociation (Europe) Agreements withtheEU.
Nofurther criteria havebeendefined yetbytheParties under theArticle 22oftheAgreements.WT/REG41/4
WT/REG42/4
Page5
TheParties legislation oncounteracting monopolistic practices grants equal rights tobusiness
entities regardless theirnationality andconsequently doesnotdiscriminate against theinterest ofnon-
Parties totheAgreements.
8. Sector-Specific Provisions
GratefulifthePartiescouldprovideasummaryoftheconcessionsonagriculturalproducts.
AretheParties currently engaged in,ordotheyintend toundertake, anynegotiations toextend
further concessions ontheproducts covered byProtocol 2?
Fortheagricultural products listed inAnnexes AandBtoProtocol 2,preferential ratesof
dutyareapplied within thelimits ofannual tariffquotas orforunlimited quantities. Forproducts listed
inthese Annexes subject toimport licensing, theimport licenses areissued automatically uptothe
quantities specified therein.
III. GENERAL PROVISIONS
1. Exceptions andReservations
What istheprecise interpretation tobeplaced ontheterm "public policy"?
Theterm"public policy" should beunderstood inthesense oftheGATT 1994 Article XX.
IV. OTHER
Arethere anymeasures orpractices ofaninternal fiscal nature establishing (directly or
indirectly) discrimination against other country notparty totheAgreement? Ifso,what are
they? Dotheprovisions ofpara.1 ofArticle 17differ inanywayfrom theprovisions ofGATT
Article III?
TheParties totheAgreement apply nomeasures orpractices ofaninternal fiscal nature
establishing discrimination against other country notparty totheAgreement. Theprovisions of
paragraph 1ofArticle 17areintended toguarantee national treatment oninternal taxation inthesense
ofArticle IIIoftheGATT.