WORLD TRADE WT/MIN(98)/ST/4
18May1998
ORGANIZATION(98-1957)
Original: English MINISTERIAL CONFERENCE
Second Session
Geneva, 18and20May1998
CROATIA
Statement circulated byH.E. Mr.Nenad Porges
Minister ofEconomy
(asanobserver)
Intoday’sworld ofinterdependence where theprocess ofcreating aglobal economy isbecoming
areality, trade liberalization hasbecome themain toolforachieving sustainable development.
Suchanewenvironment assumes atthesametimeevenmore responsibility forallgovernments
toco-operate inorder tocreate necessary political andeconomic conditions when integrating intothe
multilateral trade system.
ItisCroatia 'sbelief thatco-operation isessential ifwewanttoovercome themajor challenge
ofbalancing theneeds ofdifferent countries, thusavoiding thefeelings thattradeliberalization brings
advantages tosome anddisadvantages toothers.
Consequently, being apartofthemultilateral rule-based trading system, strengthened after
theconclusion oftheUruguay Round, institutionalized intheWorld Trade Organisation andreaffirmed
attheSingapore Ministerial Conference, hasbecome thepriority andimperative forallofus.
Having thatinmind, oneshould admit thatcreating newconditions forsustainable development
isnotaneasytaskformany developing andtransitional economies faced withnewchallenges.
Asanobserver country, Croatia shares concerns ofmany acceding countries withregard to
thesomewhat lengthy WTO accession procedure.
Oneofthemain priorities oftheGovernment ofCroatia, upon which alarge consensus has
beenbuiltinthecountry, istheaccession totheWorld Trade Organization. Thisprocess started in
October 1993, byapplying tojointheGATT system andconsequently formembership intheWTO.
Croatiahasundergonetheobligatoryprocedurestartingwiththesubmissionofthememorandum
ontheforeign traderegime, tradeinservices andintellectual property regime. After answering tomore
than600questions raised bythemembers oftheworking party, documents onallaspects andsectors
oftheCroatian economy havebeencommunicated through theWTO Secretariat forconsultations and
remarks.
Consequently, three Working Party meetings havebeenheldwiththelastinJanuary 1998.WT/MIN(98)/ST/4
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Since thesubmission ofCroatia 'sinitial offers onmarket access forbothtrade ingoods and
inservices, inthebeginning ofApril 1997, fiverounds ofbilateral negotiations were heldwiththe
15Working Party members.
TheCroatian Government hasnosecond thoughts when arguing thatevery applicant should
adhere toallmultilateral rulesandobligations oftheWTO legalsystem. However, itisourbelief that
theprocess ofevaluating acountry ’sterms ofaccession isatwowaystreet andeachcandidate should
beevaluated onanindividual basis specific tothelevelofitseconomic andsocial development.
Croatia isready toassume allthecoreobligations andrights deriving from theMarrakesh
Final Actincluding theacceptance ofsome Agreements concluded after1January 1995, suchasthe
Information Technology Agreement. Webelieve thatduring itsmultilateral andbilateral talks, Croatia
hasclearly expressed andproved inpractice itswillingness andpreparedness toliberalize itsmarket
andaccept itsobligations upon accession.
Inthatsense, strong efforts havebeenmade andmeasures undertaken following theGovernment
stabilization programme introduced fiveyears ago.Asteady record ofgoodperformance isregistered
inCroatian basic economic indicators. Industrial output isinanupswing trend, GDP growth ratein
1997 isover5percentinrealterms, theinflation ratefor1997 was3.7percent, thebudget deficit
forlastyearwaslessthan1percentoftheGDP. TheCroatian currency remains stable andforeign
exchange reserves arereaching US$5.2 billion thusalmost equalling acomparatively lowexternal debt.
TheCroatian economy isalready openandliberalized withover60percentofforeign trade toGDP
ratio.
Inthelegislative area, Croatia hasabolished, twoyears ago,thelarge bulkofinherited trade
restrictions. Thecustoms tariff regime hasbeen brought infullconformity withWTO rules and
quantitative restrictions onimports havebeenabolished. Croatia isalready taking steps intheareas
ofintellectual property rights protection, taxation, technical barriers totrade andother areas, thus
adjusting itstrade regime totheinternational rules andpractices.
However, afullysuccessful story could notbewritten insuchashort period oftime.
Duetoreasons caused bywarandaggression against itsindependence andother inherited
structural problems, typical tothecountries intransition, allsectors oftheeconomy were notable
yettoadjust toafullcompetitive environment.
Theopening oftheCroatian market hasresulted inaverylargetradedeficit ofUS$4.5 billion
in1997, oraround 20percentoftheGDP, which iscovered onlybyhalfwithservice sector surplus,
thusbringing thecurrent account deficit in1997 toaround US$2 billion, or10percentoftheGDP.
Another impact ofstructural changes wasreflected inthehighunemployment rateof16percent.This
requires additional social adjustment measures.
Those structural weaknesses aretobeaddressed byfurther economic policy measures. The
Croatian Government isdetermined nottoapply specific trade restrictive measures inorder toreduce
import andtrade deficit, butallefforts willbedirected towards export growth oriented measures.
Therefore, wecount thatCroatia 'sreasons forasking theextended transitional period forthe
application oftheWTO rulesinsome areas andforexposing some socially sensitive industries intotal
tointernational competition would beunderstood.WT/MIN(98)/ST/4
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Furthermore, Croatia understands theintention ofadmitting theremaining largetrading partners
totheWTO. However, themultilateral trading system could notbetrulyglobal ifnottailored forall,
notwithstanding thesizeofone'seconomy andmarket.
Consequently, weurgealltrading partners andmembers forabalanced approach toallacceding
countries interms oftimeframe fortheiraccession.
Taking intoconsideration that35countries areapplying forWTO membership, wesincerely
hope thattheaccession process willbeaccelerated sothatthecandidates whohaveexpressed their
readiness could become members andparticipate onanequal footing inthefuture rounds ofmultilateral
negotiations.
Croatia isconfident thattheacceleration andsimplification oftheaccession procedure would
generate greater coherency within theWTO andmark abetter cornerstone forfuture liberalization
ofworld trade.
Inthatcontext, theaimofthisConference, being thefurther implementation oftheexisting
Uruguay Round agreements andresults oftheSingapore Ministerial Conference, isonlycomplementary
totheenlargement oftheWTO membership.
Such anapproach canonlystrengthen theimplementation oftheexisting Agreements and
obligations andpromote astable foundation forthefuture policies andactivities oftheWorld Trade
Organization inthenextmillennium.
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