WORLD TRADE
ORGANIZATIONWT/REG131/3
30 April 2002
(02-2449)
Committee on Regional Trade Agreements Original:  English
FREE TRADE AGREEMENT BETWEEN SLOVENIA
AND BOSNIA AND HERZEGOVINA
Communication from Slovenia
I. BACKGROUND INFORMATION ON THE AGREEMENT
1. Date of signature, ratification and entry into force
The Free Trade Agreement between the Republic of Slovenia and Bosnia and Herzegovina
was signed on 3 October 2001 in Zenica, Bosnia and Herzegovina.  The Republic of Slovenia ratified
the Agreement on 21 December 2001.  Bosnia and Herzegovina will ratify it in the near future.  Aprovision was included to the Agreement that allows the Parties to apply the Agreement on a
provisional basis from 1 January 2002.  The Agreement has not entered into force yet.
2. Type of agreement
The agreement that was concluded between the Republic of Slovenia and Bosnia and
Herzegovina is a Free Trade Agreement.
The main objectives of the Agreement are to promote the harmonious development of
economic relations between the Parties and thus to foster in the Parties the advance of economic
activity, the improvement of living and employment conditions, and financial stability;  then to
provide fair conditions of competition for trade between the Parties and finally, to contribute by theremoval of barriers to trade, to the harmonious development and expansion of world trade.
The primary objective of the Agreement is to establish free trade area in a transitional period
ending on 31 December 2004  in accordance with the provisions of the Agreement and in conformity
with those of the GATT 1994, in particular Arti cle XXIV, and the Agreement Establishing the WTO.
The full plans for the reduction of customs duties and other tariff barriers to trade to zero on all the
trade between the Parties are contained in the relevant Articles of the Agreement.
A summary of the structure of the Agreement, including Protocol 1, can be found in Annex 1.
3. Scope
The Free Trade Agreement covers trade in all industrial products  (HS Chapters 25 – 97 of
the Harmonised Commodity Description and Coding System, HS) and all agricultural products  (HS
Chapters 1 - 24)  without any exception.
The Agreement also contains provisions, inter alia, on state aid, state monopolies,
competition, public procurement, intellectual property rights and dumping.  The Parties have also
expressed their readiness to discuss the extension of the scope of the Agreement to the areas not
currently covered (evolutionary clause).WT/REG131/3
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Products falling within HS Chapters 25 to 97 of the account for 96.9 per cent of imports of all
products originating in Bosnia and Herzegovina being imported in Slovenia (see Annex 2).
Products falling within HS Chapters 1 to 24 account for 3.1 per cent of imports of all products
originating in Bosnia and Herzegovina being imported in Slovenia (see Annex 2).
4. Trade data
See country specific tables in Annex 2 on deve lopment of trade between Slovenia and Bosnia
and Herzegovina.  In addition, compiled economic and trade indicators of the Slovenia and Bosnia
and Herzegovina are provided in Annex 3 to this note.
II. TRADE PROVISIONS
1. Import restrictions
1.1 Duties and charges
Customs duties on imports shall be abolished in accordance with the provisions laid down in
Article 4 of the Agreement.
Slovenia abolished the customs duties on imports of all agricultural and all industrial products
originating in Bosnia and Herzegovina on 1 January 2002.  Slovenia does not apply charges having
equivalent effect and import duties of a fiscal nature.
Bosnia and Herzegovina will progressively reduce the customs duties on imports as well as
charges having equivalent effect and import duties of a fiscal nature for all agricultural and industrialproducts originating in Slovenia  in accordance with the following timetable:
- on 1 January 2002 to 70 per cent of their value;
- on 1 January 2003 to 50 per cent of their value;
- on 1 January 2004 to 30 per cent of their value;
- on 1 January 2005 the remaining duties will be abolished.
The Parties shall not introduce new customs duties on imports, charges having an effect
equivalent to customs duties on imports and import duties of a fiscal nature in trade between them.
1.2. Quantitative restrictions
All quantitative restrictions (QRs) on imports and measures having equivalent effect were
abolished by both Parties on 1 January 2002.
The Parties shall not introduce new QRs on imports and measures having equivalent effect.
2. Export restrictions
2.1. Duties and charges
All customs duties on exports and charges having equivalent effect were abolished on
1 January 2002.WT/REG131/3
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The Parties shall not introduce new customs duties on exports, charges having an effect
equivalent to customs duties on exports and export duties of a fiscal nature in trade between them.
2.2. Quantitative restrictions
All QRs on exports and measures having equivalent effect were abolished by both Parties on
1 January 2002.
The Parties shall not introduce new QRs on exports and measures having equivalent effect.
3. Rules of origin
The preferential treatment under this Agreement shall be granted only upon the submission of
a proof of origin of goods issued in the exporting country in accordance with Protocol 1 concerning
the definition of the concept of "originating products" and methods of administrative cooperation.
Rules of origin are harmonised with the European preferential rules of origin.  However, these rules
do not have provisions on diagonal cumulation of origin but only the bilateral cumulation of origin.
Thus, the Parties do not apply the concept of the Pan-European cumulation.
4. Standards
4.1. Technical barriers to trade
The rights and obligations of the Parties relating to technical regulations or standards and
related measures shall be governed by the WTO Agreement on Technical Barriers to Trade.
The Parties shall co-operate and exchange information in the field of conformity assessment,
standardisation, metrology and accreditation with the aim of reducing and/or eliminating technical
barriers to trade.
The Parties shall conclude an agreement on mutual recognition of test reports, certificates of
conformity and other documents directly or indirectly related to conformity assessment of the
products which are the subject of trade between the Parties.
4.2. Sanitary and phytosanitary measures
The Parties shall apply their regulations in veterinary, phytosanitary and sanitary matters, in
particular in the exchange of information on infectious animal diseases, quarantine diseases, plant
pests and weed, taking into account the WTO Agreement on the Application of Sanitary and
Phytosanitary Measures.
The Parties shall apply their regulations in veterinary, phytosanitary and sanitary matters in a
non-discriminatory fashion and shall not introduce any new measures that have the effect of unduly
obstructing trade.
The measures related to the veterinary and sanitary control between the Parties shall be
adjusted to the relevant legislation of the EU.
5. Safeguards
The following emergency measures and other safeguard mechanisms applicable to intra-trade
are provided for in the Agreement:WT/REG131/3
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- Specific safeguards
Given the particular sensitivity of the agricultural markets, if imports of products originating
in a Party, which are the subject to concessions granted under the Agreement, cause serious
disturbance to the market or to its domestic regulatory mechanisms in the other Party, both Partiesshall enter into consultations immediately to find an appropriate solution.  Pending such solution, the
Party concerned may take measures it deems necessary.  Such measures cannot be applied toward
third counties.
- General safeguardsWhere any product is being imported in such increased quantities and under such conditions
as to cause or threaten to cause serious injury to domestic producers of like or directly competitive
products in the territory of the importing Party, or serious disturbances in any related sector of the
economy or difficulties which could bring about serious deterioration in the economic situation of a
region, the Party concerned may take appropriate measures under the conditions and in accordance
with the procedure for the application of safeguard measures laid down in Article of the Agreement.Such measures cannot be applied toward third counties.
- Structural adjustmentThe 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 measures may not be applied after 1 January 2005.  Such measures cannot be applied toward
third counties.
No measures can be introduced against third countries on the basis of  Articles on Specific
safeguards, General safeguards or Structural adjustment of the Agreement, since the Free Trade
Agreement does not alter the Parties’ respective rights vis-à-vis  third countries under the GATT 1994.
- Re-export and serious shortage
Any export restrictions introduced under these provisions shall be applied in the sense of the
requirements of Article XI of the GATT 1994 unless they are based on Article XX.
- Balance of payments difficulties
The Parties endeavour to avoid the imposition of restrictive measures including measures
relating to imports for balance of payments (BOP) purposes.
Where one of the Parties is in serious BOP difficulties, or under imminent threat thereof, the
Party concerned may, in accordance with the relevant provisions of the GATT 1994 and the WTO,adopt restrictive measures, including measures related to imports, which shall be of limited duration
and may not go beyond what is necessary to remedy the BOP situation.  The measures shall be
progressively relaxed as BOP conditions improve and they shall be eliminated when conditions no
longer justify their maintenance.  The Party concerned shall inform the other Party forthwith of their
introduction and, whenever practicable, of a schedule for their removal.
Any measures for BOP purposes shall be applied in accordance with the provisions of the
GATT 1994 in particularly the Understanding on Ba lance-of-Payments Provisions of GATT 1994.WT/REG131/3
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6. Anti-dumping and countervailing measures
The Parties may only take anti-dumping measures in accordance with the Agreement on
Implementation of Article VI of the GATT 1994.  The Agreement contains provisions for the
procedures for the application of safeguard measures which are applicable to anti-dumping measures.
7.  Subsidies and State-aid
Any actions taken in accordance with the State-aid provisions of the Free Trade Agreement
will be in accordance with the relevant provisions of  the WTO.  The Parties ensure transparency in the
area of state aid by reporting annually to each other on the total amount and the distribution of the aid
given and provide the information on aid schemes and on  particular individual cases of state aid.
Any Party can introduce, if it considers that a particular practice is incompatible with Agreement’s
provisions, appropriate measures in conformity with the GATT 94 and the WTO.
8. Sector-specific provisions
In the Agreement there is no sector specific provisions.
The arrangements concluded within the framework of the Agreement contribute to the
development of closer integration between the economies of the Parties of the Agreement, without
raising barriers to trade with the other WTO Members.
9. Other
- Customs administration co-operation
In the Agreement there is no provisions on mutual assistance in customs matters.  Mutual
assistance in customs matters between Slovenia and Bosnia and Herzegovina is regulated by a
separate agreement concluded between Slovenia and Bosnia and Herzegovina.
III. GENERAL PROVISIONS
1. Exceptions and reservations
- General exceptions
This Agreement shall not preclude prohibitions or restrictions on imports, exports or goods in
transit justified on grounds of public morality, public policy or public security;  the protection ofhealth and life of humans, animals or plants;  the protection of national treasures of artistic, historic or
archaeological value;  the protection of intellectual property;  the rules relating to gold and silver, or
the protection of environment or the conservation of exhaustible natural resources, if such measures
are made effective in conjunction with restrictions on domestic production or consumption.  Such
prohibitions or restrictions shall not, however, constitute a  means of arbitrary discrimination or adisguised restriction on trade between the Parties.
- Security exceptionsNothing in the Agreement shall prevent a Party from taking any measure which it considers
necessary to prevent the disclosure of information contrary to its essential security interests;  for the
protection of its essential security interests or for the implementation of international obligations or
national policies relating to the traffic in arms, ammunition and implements of war, provided that suchWT/REG131/3
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measures do not impair the conditions of competition in respect of products not intended for
specifically military purposes, and to such traffic in other goods, materials and services as is carried
on directly or indirectly for the purpose of supplying a military establishment;  or relating to the non-
proliferation of biological and chemical weapons, nuclear weapons or other nuclear explosive devices;
or taken in time of war or other serious international tension.
2. Accession
There is no provision on the accession of any other country to the Agreement.
3. Dispute settlement procedures
In the Agreement there is no special provisions on dispute settlement.  According to the
Agreement direct consultations between the Parties should be a mechanism for solving any disputes
between the Parties (i.e. safeguard measures).
4. Relation with other trade agreements
The Agreement does not establish any specific relation with other bilateral, plurilateral or
multilateral trade agreements.
On the other hand the Agreement shall not prevent the maintenance or establishment of
customs unions, free trade areas or arrangements for frontier trade to the extent that these do notnegatively affect the trade regime of the Parties and in particular the provisions concerning rules of
origin provided for by this Agreement.
5. Institutional framework
There were no intergovernmental or supranational institutions created to operate the
Agreement.
The implementation of the Agreement is superv ised and administered by the Joint Committee
composed of the representatives of the Parties.  The Joint Committee shall meet whenever necessary
but at least once a year.  The Joint Committee may take decisions in the cases provided for in this
Agreement.  On other matters it may make recommendations.
IV. OTHER
1. Internal taxation
The Parties shall refrain from any measures or practices of an internal fiscal nature implying
directly or indirectly discrimination against the products of the Parties.  As an example of direct
taxation one can mention income tax or corporate tax, whereas turnover tax and value added tax are
examples of indirect taxation.
2. State monopolies
The Parties shall adjust progressively any state monopoly of a commercial character so as to
ensure that by the end of the transitional period no discrimination regarding the conditions under
which goods are procured and marketed exists between nationals of the Parties.  The provisions on
state monopolies ensure that procurement or marketing of products by any state monopolies ofWT/REG131/3
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commercial nature, as defined in the Article of the Agreement also include monopolies delegated by
the Parties to others.
3. Payments
The Agreement provides freedom of payments relating to trade and transfer of such payments
to the territory of the Party where the creditor resides.  They include a commitment to refrain from
any exchange or administrative restrictions on grant, repayment or acceptance of credits covering
commercial transactions.  The Parties have reserved the right to apply exchange restrictions connected
with the granting or taking up of short and medium term credits to the extent permitted according to
their status under the IMF.  Such restrictions shall be applied on a non-discriminatory basis.
4. Public procurement
The Parties consider the liberalization of their public procurement markets as and objective of
this Agreement.  The Parties shall therefore progress ively adjust their respective rules, conditions and
practices for public procurement with a view to grant suppliers of the other Party access to contractaward procedures on their respective public procurement markets.
The Parties shall endeavour to accede to the relevant Agreements under the GATT 1994 and
the WTO.
5. Protection of intellectual property
The Parties shall in accordance with their national legislation grant and ensure protection of
intellectual property rights to the nationals companies and institutions of the other Party as well as to
their legal successors under the same conditions applicable for the domestic nationals, companies andinstitutions.  Standards of protection shall not be lower than that arising from the Bern Convention,
Rome Convention and Paris Convention.
6. Evolutionary clause
A future deepening and extension of the coverage of the Agreement, as provided for by this
provisions, may be defined by the Parties.
7. Validity and denouncement
The Agreement was concluded for an indefinite period of time.  Each Party may denounce
this Agreement by a written notification to the other Party.  The Agreement shall be terminated on thefirst day of the seventh month after the date on which the other Party received the notification.
In case of the termination of the Agreement by one of the Parties on the grounds of the
accession to the EU, the termination shall take effect one day before the date of the accession of the
respective Party to the EU.  In this case the Agreement shall be denounced at least six months beforethe date of the accession of the respective Party to the EU.  The other Party shall renounce any
compensation vis-à-vis  the enlarged EU or vis-à-vis  the Party withdrawing from the Agreement.WT/REG131/3
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ANNEX 1
Summary of the Structure of the Agreement
Preamble
Objectives Article 1
CHAPTER I – Product coverage
Scope Article 2
Basic duties Article 3
Customs duties on imports, charges having equivalent effect andimport duties of a fiscal natureArticle 4
Customs duties on exports, charges having equivalent effect and
export duties of a fiscal natureArticle 5
QRs and measures having equivalent effect Article 6
Elimination of technical barriers to trade Article 7Agricultural policy Article 8
Specific safeguards Article 9
Sanitary and phytosanitary measures Article 10
CHAPTER II - General provisions
Rules of origin and co-operation in customs administration Article 11 and Protocol 1
Internal taxation Article 12
General exceptions Article 13
Security exceptions Article 14
State monopolies Article 15Payments Article 16
Rules of competition concerning undertakings Article 17
State aid Article 18
Public procurement Article 19
Protection of intellectual property Article 20
Dumping Article 21
General safeguards Article 22Structural adjustment Article 23
Re-export and serious shortage Article 24
Fulfilment of obligations Article 25
Procedure for the application of safeguard measures Article 26
Balance of payments difficulties Article 27Evolutionary cause Article 28
Joint Committee Article 29
Procedures of the Joint Committee Article 30
Services and investments Article 31
Customs unions, free trade areas and frontier trade Article 32Annexes, protocols and amendments Article 33
Entry into force Article 34
Provisional application Article 35
Validity and denouncement Article 36WT/REG131/3
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ANNEX 2
Slovenian Trade with Bosnia and Herzegovina
(in thousand of US dollars)
Index Share
2000 2001 2001/2000 2000 2001
IMPORTS 57,980 62,413 107,6 100 100
Industrial products
(HS 25 – 97) 55,876 60,453 108,2 96,4 96,9
Agricultural products(HS 1 – 24) 2,103 1,960 93,2 3,6 3,1
EXPORTS 374,150 397,399 106,2 100 100
Industrial products(HS 25 – 97) 289,214 298,088 103,1 77,3 75,0
Agricultural products
(HS 1 – 24) 84,935 99,310 116,9 22,7 25,0
Source:  Statistical Office of the Republic of Slovenia
Bosnian Trade with Slovenia
(in thousand of US dollars)
Index
2000*2001**2001/2000
IMPORTS 427 411 96
EXPORTS 52 78 150
Source:  * IMF – Trade Statistics 2001
 ** Agency for Statistics of the Federation of Bosnia and Herzegovina and Customs
Administration of the Republic of Srpska
Slovenian Trade with Bosnia and Herzegovina
(in thousand of US dollars)
Total imports Total exports H.S.
Chapter 2000 2001 2000 2001
01 0 0 19 98
02 0 0 1,808 3,071
03 2 0 342 266
04 154 224 16,105 20,033
05 0 0 38 30
06 0 5 109 14
07 280 576 389 415
08 641 484 1,322 1,544WT/REG131/3
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Total imports Total exports H.S.
Chapter 2000 2001 2000 2001
09 41 2 325 234
10 24 8 377 417
11 0 0 790 602
12 166 158 964 1,020
13 0 0 55 34
14 0 0 3 1
15 0 0 1,792 2,637
16 0 0 13,503 13,343
17 7 4 1,042 1,030
18 99 1 545 680
19 45 11 1,171 1,139
20 121 141 2,428 2,272
21 14 34 4,306 5,647
22 90 86 35,838 42,200
23 0 0 1,114 1,449
24 418 225 553 1,134
25 320 450 565 338
26 26 21 9 7
27 2,577 851 9,104 6,245
28 639 586 3,039 3,388
29 197 152 505 476
30 145 109 13,167 15,160
31 4 29 87 129
32 30 20 13,079 13,656
33 65 6 10,331 9,793
34 13 88 3,539 4,165
35 3 0 1,399 1,610
36 1 0 953 812
37 0 1 1,179 998
38 56 148 2,895 3,004
39 419 331 16,398 18,106
40 121 189 8,641 9,011
41 9,741 9,189 1,852 4,231
42 1,201 2,650 337 3,338WT/REG131/3
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Total imports Total exports H.S.
Chapter 2000 2001 2000 2001
43 28 63 7 109
44 11,796 13,149 9,685 9,405
45 0 0 10 7
46 58 67 3 17
47 125 239 864 682
48 1,386 1,049 17,707 25,546
49 56 19 774 633
50 0 0 50 31
51 18 0 587 941
52 30 4 1,482 1,559
53 0 0 48 29
54 46 25 1,595 2,310
55 44 6 2,783 1,516
56 2 1 644 689
57 23 2 357 260
58 16 11 809 751
59 9 1 6,200 10,961
60 13 0 377 550
61 895 1,219 2,037 2,208
62 5,802 6,902 3,656 3,572
63 292 188 593 559
64 5,334 7,420 6,920 7,779
65 2 4 63 74
66 1 10 92 70
67 0 0 1 1
68 280 738 5,158 4,519
69 81 74 2,787 2,920
70 46 32 1,901 2,318
71 10 5 503 495
72 3,625 1,310 5,025 5,367
73 2,350 1,821 11,168 9,119
74 866 852 684 801
75 0 0 34 35
76 568 1,200 6,934 6,346WT/REG131/3
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Total imports Total exports H.S.
Chapter 2000 2001 2000 2001
78 16 21 32 40
79 35 83 141 153
80 5 0 15 15
81 0 0 9 1
82 267 272 2,443 2,436
83 11 4 4,452 5,090
84 2,211 3,268 44,723 40,508
85 604 927 31,140 28,537
86 0 6 88 110
87 817 1,336 6,626 6,286
88 0 0 0 0
89 0 0 39 125
90 12 32 4,937 4,288
91 0 3 731 936
92 4 0 14 41
93 0 23 17 20
94 2,497 3,210 13,879 11,440
95 10 17 462 326
96 10 2 820 1,046
97 18 22 27 42
TOTAL 57,980 62,413 374,150 397,399WT/REG131/3
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ANNEX 3
Basic Data for 2001
Slovenia Bosnia and
Herzegovina
Population 1,992,035 3,700,000*
GDP (in millions of US dollars) 18,122** 4,400
GDP per capita (in US dollars) 9,105* 1,025
Land area (sq. km) 20,273 51,209Imports (in millions of US dollars) 10,144.5*** 2,800
Exports (in millions of US dollars) 9,251.7*** 1,000
Trade balance (in millions of US dollars) - 892.8*** - 1,800
*       Estimate USAID 1999.
**     Data available only for year 2000.*** Provisional data.
Source for Slovenia: Monthly Bulletin of  Bank of Slovenia, December 2001 Statistical Office of the
Republic of Slovenia
Source for BiH: USAID (U.S. Agency for International Development)
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