RESTRICTEDWORLD TRADE
ORGANIZATIONWT/REG55/4/Add.1
26 June 2000
(00-2582)
Committee on Regional Trade Agreements Original:  English
FREE  TRADE AGREEMENT BETWEEN CROATIA AND SLOVENIA
Questions and Replies
Addendum
The following communication has been received from the Permanent Mission of Slovenia,
with the request that it be distributed to the WTO Members.
_______________
I. BACKGROUND INFORMATION ON THE AGREEMENT
3. Scope and Product Coverage
At the initial discussion of this Agreement,  the Parties were asked to provide statistical
information related to the coverage of the Ag reement.  The Parties provided information on
trade for only the first quarter of 1998.  Is more recent (full year 1998, 1999) data also
available?   We are concerned that the trade co verage does not meet the "substantially all the
trade" requirement.  We are also concerned th at significant trade is subject to non-zero
preferences.  Are such preferences provided vi a tariff-rate quotas (TRQs)?  How are the levels
set?  Do the levels grow?
Statistical information on trade between Slovenia and Croatia for 1998 and 1999 and some
economic indicators for 1999 are enclosed (see Annexes I and II).
Trade with the products covered by the Free Trade Agreement (FTA) is shown in detail in
Annex III.
As from 1 January 2001 zero customs duty will be applied to all industrial products falling
within Chapters 25 to 97 of the 1996 Harmonized Syst em (HS) , with the exemption of products listed
in Annex I to the Agreement (tariff code 3502).  According to data for 1999 these products cover
88 per cent of all trade between the Parties (see Annex III).
Additionally, in 1999, imports of certain agricultural products, listed in Annexes A and B to
Protocol 2 to the FTA, for which the customs duties have been reduced within the limits of TRQs,
accounted for 9 per cent of total imports of products originating in Croatia being imported into
Slovenia (Annex B) and 10 per cent of total imports of products originating in Slovenia being
imported into Croatia (Annex A) (see Annex III).  The levels of TRQs are defined in Annexes A andB to Protocol 2 to the FTA.  The annual quotas have been set in accordance with the actual mutual
trade within agricultural products.  They do not increase.
Imports of industrial products plus imports of agricultural products listed in Annexes A and B
to Protocol 2 to the FTA represent 97 per cent and 98 per cent respectively of the trade between theWT/REG55/4/Add.1
Page 2
Parties under zero customs duty or reduced customs duty within the limits of the TRQs.  These data
clearly show that the FTA covers "substantially all the trade" between the republic of Slovenia and the
Republic of Croatia in products originating in these territories.
4. Trade Data
It would be appreciated if the data regarding the coverage of trade could be provided
based on tariff lines.
The tariff lines covered by the Agreement are clearly seen from the basic text of the
Agreement and the Annexes to it (WT/REG55/1) as well as from the data provided within the
Background information on the Agreement (WT/REG/55/2).  All tariff lines falling withinHS Chapters 25 to 97 are covered (with only one exemption:  3502 – albumins).  For all these
products customs duties will be abolished at the latest on 1 January 2001 (zero customs duty rate will
be applied).  These products cover 86 per cent of the total trade between the Parties.
Within HS Chapters 1 to 24 the tariff lines covered by the Agreement are specified in the
Protocol 2 to the Agreement (Annexes A and B).  These tariff lines cover the majority of the trade in
agricultural products between the Parties.  For these products customs duty rates between zero and
MFN are applied.  Other tariff lines that are not co vered by the Agreement represent only very small
percentage of the trade between the Parties (4 per cent).  For these products MFN duty rates are
applied.
We would like to request some further information/clarification on what percentage of
FTA trade (for industrial products and agriculture) between the Parties (for both Parties) is
given concessions (rather than having duties etc. removed) or excluded?
Statistical information on trade between Slovenia and Croatia for 1998 and 1999 and some
economic indicators for 1999 are enclosed (see Annexes I and II).
Trade with the products covered by the Free Trade Agreement (FTA) is shown in detail in
Annex III.
As from 1 January 2001 customs duties to all industrial products falling within 1996
HS Chapters 25 to 97 will be abolished, with the exemption of products listed in Annex I to the FTA
(tariff code 3502).  Customs duties will be abolished for 100 per cent of FTA within industrial
products.  According to data for 1999 these products cover 88 per cent of the trade between the Parties
(see Annex III).
Additionally concessions are given to certain agricultural products listed in Annexes A and B
to Protocol 2 to the FTA for which the customs dut ies have been reduced within the limits of TRQs.
According to data for 1999 concessions are given to 72 per cent and 82 per cent respectively, of the
trade within agricultural products between the Parties or 9 per cent and 10 per cent respectively, of the
total trade between Slovenia and Croatia.WT/REG55/4/Add.1
Page 3
II. TRADE PROVISIONS
3. Rules of origin and Co-operation in Customs Administration
Why this FTA does not apply to the Pan-Euro pean Cumulation of Rules of Origin?  Is
this simply because the Croatian regulation do es not cover the provisions contained therein?
Pan-European cumulation of the Rules of Origin is applied only among the countries
(30 countries) which have concluded a preferential agreement between them.  For instance:  Slovenia
has concluded such agreements with all 29 countries being included in the Pan-European cumulation.
Croatia has not concluded a preferential agreement with any country within the system of the
Pan-European cumulation yet, except with Slovenia.
5. Safeguards
Document WT/REG55/2 states that the safeguard mechanism is applicable to
intra-trade.  Is this mechanism also applicable to global trade?  If so, will it be applied both to
the parties and non-parties alike?
The safeguard mechanism is indeed meant to be applied only to intra-trade.  It can not be
applied to a non-party.  Until now, not a single safeguard has been applied.
IV. OTHER
4. Government Procurement
Do the Parties intend to accede to the Government Procurement Code?
Slovenia is going to accede to the WTO Government Procurement Agreement while Croatia
is still negotiating its accession to the WTO.
6. Evolutionary Clause
Are there plans for companion agreements on services?
Agreements on services are not planed in the framework of the Agreement.
Could the parties indicate whether their membership in this agreement limit in any way
their ability to make concessions in multilateral negotiations?
There are no such provisions that could hinder the multilateral negotiations.WT/REG55/4/Add.1
Page 4
ANNEX I
Slovenian Trade with Croatia
(US$)
1998 1999 Index 1999/1998
Imports 431,529,862 443,975,185 102,9
Exports 815,307,635 671,384,655 82,3
Slovenia – Total Imports from Croatia by HS Chapter, 1998-99
(US$)
HS 96 Chapter 1998 1999
01 24,503 40,504
02 917,608 760,380
03 1,675,459 1,795,747
04 4,005,603 3,581,651
05 6,673 13,691
06 73,593 29,630
07 404,322 505,235
08 1,897,766 1,467,894
09 218,383 594,194
10 3,446,843 2,102,646
11 218,920 91,067
12 426,629 273,457
13 164,518 153,663
14 33,900 43,313
15 5,835,360 3,628,728
16 5,170,045 3,919,996
17 1,425,263 1,256,436
18 3,349,094 2,975,629
19 9,492,847 8,548,606
20 1,083,080 1,085,455
21 9,686,211 9,080,143
22 2,691,192 2,296,290
23 7,508,355 3,216,334
24 1,489,470 4,596,352
25 3,589,884 4,597,232
26 160,585 268,566
27 89,499,824 122,839,079
28 4,292,219 3,716,216
29 823,502 1,157,242
30 24,248,978 19,228,881
31 24,596,993 22,452,197
32 1,735,082 1,665,346
33 879,966 1,002,019
34 1,223,130 1,515,641
35 364,529 377,288
36 195,165 172,641
37 326,363 126,112
38 3,741,696 2,782,345WT/REG55/4/Add.1
Page 5
HS 96 Chapter 1998 1999
39 20,269,450 20,815,109
40 1,759,681 1,485,625
41 6,241,383 6,338,699
42 225,014 131,107
43 479 1,010
44 21,257,192 25,977,328
45 175 1,132
46 112,799 69,552
47 1,769,097 1,370,122
48 15,450,934 15,575,156
49 7,864,556 4,895,587
50 0 0
51 128,585 39,187
52 2,749,554 2,708,720
53 0 1,234
54 375,590 328,142
55 521,654 194,626
56 85,813 208,810
57 27,507 4,031
58 187,053 135,103
59 539,300 274,221
60 608,398 585,059
61 6,705,898 5,843,535
62 8,962,725 6,780,719
63 1,810,668 2,067,612
64 1,943,356 1,390,406
65 29,608 5,785
66 56,450 9,280
67 8,278 93,185
68 1,857,928 1,943,965
69 2,793,799 2,844,031
70 8,237,731 9,768,486
71 198,295 119,713
72 6,599,229 4,351,968
73 13,783,074 12,791,384
74 3,245,507 2,380,255
75 9,203 3,340
76 4,514,123 3,929,117
77 0 0
78 425,062 427,478
79 8,553 35,010
80 16,349 43
81 77,962 27
82 1,176,620 1,414,036
83 1,596,668 1,682,102
84 14,228,340 18,264,345
85 21,581,445 19,768,918
86 276,467 235,735
87 23,527,763 21,239,712
88 0 1,003
89 65,743 126,320WT/REG55/4/Add.1
Page 6
HS 96 Chapter 1998 1999
90 3,846,970 4,593,473
91 3,787 13,581
92 16,889 49,112
93 4,473 13,632
94 4,602,813 5,029,199
95 138,754 121,329
96 2,077,311 1,530,384
97 4,254 9,565
TOTAL 431,529,862 443,975,185
Croatian Trade with Slovenia
(US$)
1998 1999 Index 1999/1998
Imports 721,924 616,102 85,3
Exports 432,435 463,419 104,9
Croatia – Total Imports from Slovenia by HS Chapter, 1998-99
(US$)
HS CHAPTER 1998 1999
1 155,033 85,644
2 2,498,434 2,803,351
3 90,718 66,404
4 14,555,113 10,643,057
5 44,003 13,957
6 168,990 282,597
7 310,328 100.000
8 1,437,715 3,252,593
9 576,758 505,609
10 806,894 879,940
11 930,124 516,345
12 1,751,033 1,726,526
13 98,553 78,051
14 191,448 164,807
15 5,138,120 3,062,900
16 11,923,418 10,066,450
17 1,376,823 909,018
18 793,030 1,055,512
19 6,084,680 6,302,148
20 6,579,767 4,733,697
21 11,201,979 10,904,627
22 12,825,225 12,352,030
23 1,712,002 1,412,273
24 0 9,092
25 5,184,525 3,466,309
26 776,580 413,268
27 5,532,905 3,382,660
28 10,998,568 10,316,970
29 4,115,815 2,970,988WT/REG55/4/Add.1
Page 7
HS CHAPTER 1998 1999
30 49,519,956 48,791,804
31 466,041 385,454
32 15,572,331 16,287,174
33 11,738,127 10,393,534
34 7,369,190 3,807,740
35 3,430,635 2,167,003
36 1,437,733 1,188,961
37 1,442,098 1,292,889
38 6,428,125 5,821,727
39 31,700,926 29,285,387
40 19,831,476 20,509,055
41 1,152,551 749,758
42 301,941 337,584
43 16,999 22,533
44 36,755,030 28,832,057
45 72,716 14,997
46 6,499 867
47 322,742 441,477
48 50,455,133 92,935,349
49 13,043,321 10,351,748
50 8,046 8,208
51 1,299,755 982,284
52 3,991,434 3,224,564
53 62,251 163,066
54 3,306,375 2,348,229
55 3,279,105 2,471,468
56 3,241,988 2,974,587
57 332,750 92,891
58 514,720 526,513
59 1,480,975 1,025,606
60 1,432,215 1,381,530
61 5,333,938 5,220,317
62 16,221,975 13,771,339
63 6,308,048 3,809,245
64 7,321,997 7,919,033
65 99,499 194,373
66 136,812 137,058
67 41,391 28,096
68 12,647,625 10,029,908
69 4,367,700 3,707,435
70 4,833,453 3,984,024
71 586,709 339,215
72 10,276,101 6,474,561
73 21,341,563 18,651,065
74 1,581,428 1,194,533
75 253,477 289,684
76 7,553,865 6,039,112
78 409,358 127,523
79 482,773 398,860
80 5,032 8,800
81 4,540 3,972
82 3,645,767 2,921,827
83 10,213,628 9,289,247WT/REG55/4/Add.1
Page 8
HS CHAPTER 1998 1999
84 38,422,683 72,001,599
85 18,177,045 39,024,290
86 176,452 43,274
87 27,352,121 15,300,417
88 9,452 0
89 3,125,487 3,343,870
90 12,230,590 3,570,458
91 1,135,000 332,547
92 8,573 51,258
93 37,468 79,535
94 35,191,398 33,459,883
95 1,646,809 1,090,868
96 1,100,332 786,505
97 5,774 6,281
99 8,351,209 3,538,325
Total  Imports 721,923,974 516,101,535
ANNEX II
Basic Data for 1999
Slovenia Croatia
Population 1,987,755 4,501,000
Land area (sq. km) 20,273 56,538
GDP (millions of US$) 20,011 20,176
GDP per capita (in US$) 10,078 4,482
Imports (millions of US$) 9,954 7,777
Exports (millions of US$) 8,546 4,280
Trade balance (millions of US$) 1,408 -3,498
Source:  Monthly Bulletin of Bank of Slovenia, April 2000
Croatian Central Bureau of Statistics
ANNEX III
Imports of Slovenia from Cr oatia by Product Groups, 1998-99,
(US$)
1998 % 1999 %
Agricultural products 61,280,439 14 52,072,631 12
Not covered by FTA 17,690,119 4 14,679,855 3
Annex B to Protocol 2 43,590,320 10 37,392,776 9
Industrial products 370,249,423 86 391,902,554 88
neither C, D, or E (tariffs
abolished)308,646,190 71 331,056,424 75
Annex C 12,568,743 3 14,313,785 3
Annex D 15,994,133 4 14,778,494 3
Annex E 33,040,357 8 31,753,851 7
Total imports 431,529,862 100 443,975,185 100WT/REG55/4/Add.1
Page 9
Imports of Slovenia from Croatia, 1998-1999
by The Rate of Customs Duties
Total imports At zero
customs dutyBetween zero
and MFNMFN
US$ % US$ % US$ % US$ %
1998 431,529,862 100 308,646,190 71 105,193,553 24 17,690,119 4
1999 443,975,185 100 331,056,424 75 98,238,906 22 14,679,855 3
Imports of Croatia from Slov enia by Product Groups, 1998-99,
(1,000 US$)
1998 % 1999 %
Agricultural products 81,250 11 72,553 12
  Not covered by FTA 15,982 2 12,741 2
  Annex A to Protocol 2 65,268 9 59,812 10
Industrial products 640,674 88 543,549 88
  neither A or B (tariffs
  abolished)463,372 64 384,497 62
  Annex A 160,372 22 145,961 24
  Annex B 16,930 2 13,091 2
Total imports 721,924 100 616,102 100
Imports of Croatia from Slovenia, 1998-99
by The Rate of Customs Duties
Total imports At zero
customs dutyBetween zero
and MFNMFN
1,000 US$ % 1,000 US$ % 1,000 US$ % 1,000 US$ %
1998 721,924 100 463,372 64 242,570 34 15,982 2
1999 616,102 100 384,497 62 218,864 36 12,741 2
__________