RESTRICTEDWORLD TRADE
ORGANIZATIONWT/REG78/M/1
19 July 2001
(01-3597)
Committee on Regional Trade Agreements
Twenty-Ninth Session
AGREEMENT BETWEEN POLAND AND THE
FAROE ISLANDS (GOVERNMENT OF DENMARK)
Note on the Meeting of 3 July 2001
Chairperson:  Ms. Margaret LIANG
1. The meeting was convened in document WTO/AIR/1568.
2. Under Agenda Item C.XIV, the Committee on Regional Trade Agreements (CRTA) took up
the examination of the Free Trade Agreement (FTA) between Poland and the Faroe Islands.  The
following topics were addressed:
A.  General Remarks
B.  Section I – Background Information on the Agreement
C.  Section II – Trade Provisions
A. G ENERAL REMARKS
3. The Chairperson noted that this was the first examination of the FTA between the Republic of
Poland and the Government of Denmark and the Home Government of the Faroe Islands.  The
notification of this Agreement was documented in  WT/REG78/N/1, and the text of the Agreement
appeared in document WT/REG78/1.  She proposed to  organize the examination by first asking the
Parties and then other Members to give any general comments.  Second, she planned to turn to thespecifics of the Agreement and use the Standard Format (WT/REG78/3) to guide the debate.  Third,
she proposed to give the floor to the Parties for their general statements.  She recalled the terms of
reference for the examination, which had been adopted on 15 October 1999 by the Council for Trade
in Goods, as contained in document WT/REG78/2.
4. The representative of Denmark explained that the principle of this Agreement was largely the
same as that of the FTA between the Faroe Islands and Estonia and that the rules of origin were also
very similar.  The Agreement established a free-trade area in conformity with GATT 1994 and
covered products from Chapter 25 to 97 of the Harmonized System, with special provisions for
certain agricultural, marine and industrial products provided for in the annexes and protocols to the
Agreement.  The Agreement had been signed on 3 November 1998 and entered into force on 1 June1999.  Since then, there had been a slight growth in  the Faroe Island’s imports from Poland although
the trade between the Parties was limited.WT/REG78/M/1
Page 2
B. S ECTION I - B ACKGROUND INFORMATION ON THE AGREEMENT
5. The representative of the United States indicated that she had a number questions that would
be later on submitted in writing.  She asked what share of overall trade and tariff lines were subjected
to duty-free trade and non-zero preferential treatm ent;  how were the preferences provided;  whether,
if  preferential trade existed,  it was also subject to tariff quotas;  and whether the trade liberalizationwould continue at a later date.
6. The representative of Australia said that Article 2 of the Agreement appeared to exclude
virtually all agricultural products from its coverage and that there were special safeguards provisions
applying to the few agricultural products that were not exempted under Article 8.  Furthermore,
special tariff treatment applied to fish and other marine products under Protocol 3 and certain
industrial products were also exempted under Annex 2.  In light of this, he asked for justification of
how this Agreement could be considered to cover "substantially all the trade".  He invited furtherinformation from the Parties to clarify his assessment.  He asked what was the proportion of pre-FTA
trade that was exempted and whether the Parties co uld provide both a copy of Annex II, which listed
industrial products exempted from the Agreement, a nd a copy of Protocol 3, which listed fish and
other marine products exempted from the Agreement.  Lastly, he asked if consideration had been
given to extending coverage to products currently exempted, as provided for by Article 30, and if so,whether there was a timeframe for advancing these discussions.
7. The representative of the European Commun ities indicated that the European Communities
had free-trade agreements with both Parties to this Agreement.  This Agreement should be seen as a
complement to the FTAs between the EC and Poland and the Faroe Islands, respectively;  it should be
noted that those three agreements taken together created a potential triangular relationship.  He alsosought clarification on the trade data, as the Faroe Islands' administration had reported difficulties
collecting data outside the fisheries sector which was their chief export sector.  He argued that tariff-
line data could be deceiving;  if 99 per cent of exports were fishery products, then trade would be
concentrated in a very limited number of tariff lines.  That would mean that it might be possible for
the Faroe Island to liberalize a substantial amount of its trade on a tariff-line basis, but to do very littleon a real trade basis.  Therefore, it was the trade that was relevant and not the tariff lines.
8. The representative of Denmark clarified that the special conditions for the products in
Annex I and II and Protocol 3 would reach the end of their transitional period on 1 January 2002, at
which point the customs duties for these products would be eliminated.  Detailed written information
on these issues would be supplied later on.
C. S ECTION II – T RADE PROVISIONS
9. The representative of the United States asked how the rules of origin would work under this
Agreement, whether they were based on the pa n-European system of cumulation and whether
products of any origin other than the Parties could  benefit from this Agreement.  The representative
of Denmark responded that the rules of origin were the same as with their Agreement with Estonia
and were very similar to the rules of origin the EFTA States had in their RTAs with Central and
Eastern European countries.  The Parties could bilaterally cumulate but there was no connection to the
pan-European system of cumulation.
10. The representative of the United States asked whether the Parties had participated in any
arrangements on the recognition of conformity assessment procedures, whether they had any mutual
recognition agreements, or whether the Parties had plans to conclude such agreements.  Therepresentative of Denmark indicated that a written response would be provided.WT/REG78/M/1
Page 3
11. The representative of the United States noted that there were some special safeguards
measures in the Agreement and asked whether any had been implemented, and if so by which Party
and on what products.  She asked if the Agreement provided any special conditions or preferential
treatment between the Parties in the application of global safeguards measures.  The representative of
Australia indicated his interest on the first question.  Replying to the questions posed, the
representative of Denmark said that none of these safeguard measures had been applied.  She
requested that the second question concerning the application of global safeguard measures besubmitted in writing.
12. The representative of the United States asked if the provisions on subsidies and State-aid had
been used in any way and whether there had been efforts by either Party to open up their procurement
processes to each other.  The representative of Australia asked which products were subject to State
monopolies under Article 15 of the Agreement.  The representative of Denmark indicated that those
questions would be replied to in written.
13. The Chairperson noted that the first round of examination of the FTA between Poland and the
Faroe Islands had allowed the Committee to clarify a number of questions, but some others were
pending.  She invited those delegations who had asked questions or who wished to ask additional
questions to forward them to the Secretariat by 10 July, at the latest.  She also asked the Parties tosubmit their replies to these questions by 4 September, to allow the Secretariat to produce a new
document containing them in time for the September meeting of the CRTA.
14. The Committee took note of the comments made.
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