RESTRICTEDWORLD TRADE
ORGANIZATIONWT/REG/GEN/2
20 April 1999
(99-1600)
Committee on Regional Trade Agreements Original:  English
FREE TRADE AGREEMENTS BETWEEN TURKEY AND HUNGARY;
ROMANIA;  ISRAEL;  LITHUANIA
FREE TRADE AGREEMENTS BETWEEN ISRAEL AND HUNGARY;
THE CZECH REPUBLIC;  THE SLOVAK REPUBLIC
Questions and Replies
This document reproduces questions addressed to the Parties and the joint responses provided
by them.
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1. GATT Article XXIV:7(a) stipulates that, "Any contracting party deciding to enter into a
customs union or free-trade area, or an interi m agreement leading to the formation of such a
union or area, shall promptly notify the Contracting Parties …".  It is our understanding that
once the Agreement has been signed by the Parties, it is consider ed that the contracting parties
have decided to enter into such customs union, and that any notification made afterwards
beyond the date of signing is not in conformity with the said GATT Article.
We note that the Agreement between Turkey  and Israel, as well as the Agreement
between Israel and Slovak, were notified more th an one year after actually coming into force.
Thus, we would like to express our concern over th e lateness in notification, which, in turn, is
not in conformity with GATT Article XXIV:7(a).
The Parties to the Agreements can notify their respective Agreements to the WTO only after
having completed the ratification procedures.
Notwithstanding, this issue is currently under consideration in the systemic discussion.
Therefore, the Parties can not accept any unilateral interpretation before an agreed solution has been
found.
In addition, in the case of the Agreement between Turkey and Israel, the Parties, on 11 June
1997, informed the Council for Trade in Goods of  the signature of the Agreement (G/C/M/20).WT/REG/GEN/2
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2. We consider that if the coverage of any item  is below 90 per cent - such as in the cases of
Hungary's imports from Turkey, Romania's imports from Turkey or Turkey's imports from
Hungary where, in 1996, coverage was at 69 per cent, or in the case of Israel's imports from
Hungary, where such figure was 88 per cent - that this might be the result of exceptional items,
and thus not be in conformity with GATT Article XXIV:8(b).  Please explain why there aresome cases where trade coverage fell below 90 per cent.
The aim of a free-trade area agreement according to Article XXIV:4 is "… to facilitate trade
between the constituent territories …".
The cited figures relate to years before creating the respective free-trade area agreements.
The Parties entered into these Agreements in order to expand and strengthen trade relations betweenthe constituent Parties.
Notwithstanding, the issue of substantially all trade is under the systemic review, the Parties
reject any unilateral interpretation of this notion before having a decision on this matter reached.
The Parties believe that the Agreements satisfy Article XXIV of GATT 1994 and the
requirements of paragraph 8(b) specifically.
However, the Turkish statistics related to importation from Israel, Romania, Lithuania and
Hungary are provided below.
Trade Covered -
Turkey's Imports1994
%1995
%1996
%1997
%
Israel 97 96 97 -
Romania - 89 80 90
Lithuania - 99 98 98
Hungary - 93 69 94
The year 1996, was an extraordinary case for Turkish imports originating in Hungary and the
trade coverage reached 69 per cent.  This was due to a temporary increase in imports of wheat not
covered by the Agreement resulting from the bad weather and crop conditions in Turkey.
3. Please clarify whether the provisions on safeguard measures in the Agreements will be
applied without discrimination to the Parties and the non-parties?
Yes.
4. When applying the safeguard measures according to GATT Article XIX and to the
Agreement on Safeguards, are these measures enforced on the rule of non-discrimination?
Yes.WT/REG/GEN/2
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5. What is the relationship between the pr ovisions on safeguard measures in the
Agreements and the related provisions of the WTO Agreement?  Are the provisions the same or
are there differences between the two?  If the safeguard measures according to GATT
Article XIX and to the Agreement on Safeguards are not applied to the Parties and are thus
applied in a form which is not in conformity with Article 2:2 of the Agreement on Safeguards,this will then become a source of concern.
The provisions on safeguards included in the free-trade area agreements are in full conformity
with the WTO Agreements.
The Parties maintain the right to introduce safeguard measures that relate to intra-preferential
trade if the injury or the threat of injury is caused by this trade.
6. Please explain whether the provisions on ru les of origin in each Agreement require high
value-added conditions that would not become restrictive measures to the non-parties.
In the view of the Parties, the preferential rules of origin do not constitute part of the
conformity test of Article XXIV of GATT 1994.  The details provided were for information only.
Notwithstanding this, the Parties are of the view that the preferential rules of origin in the
respective Agreements do not constitute any restrictions vis-à-vis  third parties.
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