RESTRICTEDWORLD TRADE
ORGANIZATIONWT/REG37/3
6 November 1998
(98-4389)
Committee on Regional Trade Agreements Original:  English
FREE TRADE AGREEMENT BETWEEN THE REPUBLIC OF SLOVENIA
AND THE REPUBLIC OF ESTONIA
Communication from the Parties
The following communication has been received from the Permanent Mission of the Republic
of Slovenia with the request that it be distributed to WTO Members.
_______________
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 the Republic of Estonia
was signed on 26 November 1996 in Tallinn, Estonia.  Due to the lengthy procedure for the
ratification of the agreements a provision was included to the Agreement that allows the Parties to
apply the Agreement on a provisional basis from 1 January 1997.
2. Type of Agreement
The Agreement that was concluded between the Republic of Slovenia and the Republic of
Estonia is a Free Trade Agreement.  The Agreemen t was concluded with the aim to further develop
economic co-operation and trade relations between countries and to participate actively in the process
of economic integration as an important dimension of the stability on the European continent and
expressing their preparedness to co-operate in seeking ways to strengthen this process, Estonia havingobjective to become a Member of the WTO.
The primary objective of the Agreement is to gradually establish a free-trade area on
substantially all their bilateral trade in accordance with the provisions of the Agreement and in
conformity with Article XXIV of the GATT 1994 and with the Understanding on the Interpretation ofArticle XXIV of the Agreement establishing the WTO.  The full plans for the reduction of customs
duties and other tariff barriers to trade to zero on substantially all the trade between the Parties are
contained in the relevant Articles, Annexes and Protocols of the Agreement.  (See attachment)
3. Scope and Product Coverage
As evident  above, the Free Trade Agreement covers trade in industrial products
(HS Chapters 25-97) and agricultural products (HS Chapters 1-24).  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/REG37/3
Page 2
The following summary indicates products which are covered by, or excluded from, the
Agreement:
(i) All products falling within H.S. Chapters 25 to 97 are covered.
(ii) All  products falling within H.S. Chapters 1-24 are covered.
The trade coverage of the products covered by the Agreement under review and agricultural
arrangements, which also form a part of the instruments creating the free-trade area, is presented in
detail in  Annex I to this note.
Products falling within Chapters 25 to 97 of the Harmonized Commodity Description and
Coding System account for 97.7 per cent of imports of all products originating in Estonia beingimported in Slovenia.
Products falling within Chapters 25 to 97 of the Harmonized Commodity Description and
Coding System account for 82.8 per cent of imports of all products originating in Slovenia being
imported in Estonia.
Products falling within Chapters 1 to 24 of the Harmonized Commodity Description and
Coding System for which the customs duties were abolished on 1 January 1997  account for 2.2 per
cent of  imports of all products originating in Estonia being imported in Slovenia and for 99.1 per cent
of imports of agricultural products originating in Estonia being imported in Slovenia (see Annex I).
Products falling within Chapters 1 to 24 of the Harmonized Commodity Description and
Coding System for which the MFN rate of duty is applied account for 0.1 per cent of  imports of all
products originating in Estonia being imported in Slovenia and for 0.9 per cent of imports of
agricultural products originating in Estonia being imported in Slovenia (see Annex I).
Products falling within Chapters 1 to 24 of the Harmonized Commodity Description and
Coding System for which the customs duties were abolished on 1 January 1997 account for 17.8 per
cent of imports of all products originating in Slovenia being imported in Estonia and for 100 per cent
of imports of agricultural products originating in Slovenia being imported in Estonia.
The FTA covers all products falling within Chapters 1 to 97 of the Harmonized Commodity
Description and Coding System.
4. Trade Data
See country specific table in Annex II to this note on development of trade between the
Slovenia and Estonia.  In addition compiled economic and trade indicators of the Slovenia and
Estonia are provided in Annex III to this note.WT/REG37/3
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II. TRADE PROVISIONS
- Industrial Products and Agricultural Products
1. Import Restrictions
1.1 Duties and chargesAll customs duties on imports and charges having equivalent effect for the products falling
within H.S. Chapters 25-97 were abolished on 1 January 1997.  The provisions concerning the
prohibition and abolition of customs duties on imports for industrial products also apply to customs
duties of a fiscal nature.
Customs duties on imports for products falling within H.S. Chapters 1-24 are reduced in
accordance with the provisions laid down in Pr otocol 1 to the Agreement. In accordance with
Annex A customs duties applied in Slovenia for the products listed in that Annex were  abolished on
1 January 1997.  In accordance with Annex B the Most Favoured National rate of duty is applied forthe products specified therein originating in Estonia. Estonia abolished on 1 January 1997 all customs
duties for agricultural products originating in Slovenia.
Customs duties referred in Protocol 1 include ad valorem  and specific customs duties and
product specific levis.
Charges having equivalent effect to customs duties on imports for agricultural products were
abolished on 1 January 1997.
The provisions concerning the prohibition and abolition of customs duties on imports for
agricultural  products also apply to customs duties of a fiscal nature.
1.2 Quantitative restrictionsAll quantitative restrictions (QRs) on imports and measures having equivalent effect were
abolished on 1 January 1997.
2. Export Restrictions
2.1 Duties and charges
All duties on exports and charges having equivalent effect were abolished upon entry into
force of the Free Trade Agreement.
2.2 Quantitative restrictionsAll QRs on exports and measures having equivalent effect were abolished on 1 January 1997.
3. Rules of Origin and Co-operation in Customs Administration
The provisions on rules of origin laid in the Protocol 2 to the Agreement are conceived for the
purpose of the Agreement.  These rules are based on the concept of pan-European cumulation whichis applied in a number of Free Trade Agreements within Europe.  As a consequence of the
implementation of this origin network, semi-finis hed products originating in a partner country linked
to the system, Slovenia and Estonia are linked to it, may now be used without restrictions for
manufacturing and processing in whatever other partner country connected to the system.  Under theWT/REG37/3
Page 4
new rules finished products originating in the European Union and exported to Estonia can be
re-exported under the agreed preferential terms (either duty-free or preferential duties in accordance to
the duty dismantling schedules established under the Agreement) to Slovenia and vice-versa.
4. Standards
4.1 Technical barriers to tradeThe Parties shall co-operate and exchange information in the field of standardization,
metrology, conformity, assessment and accreditati on with the aim of reducing technical barriers to
trade.  The Parties may conclude an arrangement for mutual recognition of test reports, certificates of
conformity and other documents directly or indirectly related to conformity assessment of productswhich are the subject of the goods exchange between  the Parties on the basis of regulation in force in
the importing state.  The Parties committed themselves to notify the technical regulations in
accordance with the provisions of the WTO Agreement on Technical Barriers to Trade.
4.2 Sanitary and phytosanitary measuresThe Parties shall apply their regulations in veterinary, plant health and health matters in a
non-discriminatory fashion and shall not introduce any new measures that have the effect of unduly
obstructing trade.
5. Safeguards
The following emergency measures and other safeguard mechanisms applicable to intra-trade
are provided for in the Agreement:
- 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 markets of the other Party, the Party concerned shall enter into consultations
immediately to find an appropriate solution.  Pending such solution, the Party concerned may take
measures it deems necessary.
- General safeguardsAny suspension of obligation in whole or in part or withdrawal or modification of the
concessions  under these provisions shall be applied in the sense of  requirements of Article XIX ofthe GATT 1994 particularly Agreement on Safeguards unless they are based on Article XX.
- 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.
No measures introduced in the framework of Articles on specific safeguards, general
safeguards or structural adjustment to the Agreement against third countries can be based on the
provisions of these Articles, since the Free Trade Agreement does not alter the Parties’ respective
rights vis-à-vis  third countries under the GATT 1994.WT/REG37/3
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- 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 shall endeavour to avoid the imposition of restrictive measures including
measures relating to imports for balance of payments purposes.
Where one of the Parties is in serious balance of payments difficulties, or under imminent
threat thereof, the Party concerned may, in accordance with the relevant provisions of the GeneralAgreement on Tariffs and Trade 1994 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
balance of payments situation.  The measures shall be progressively relaxed as balance of payments
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, wheneverpracticable, of a schedule for their removal.
6. Anti-Dumping
If a Party finds that dumping within the meaning of Article VI of the General Agreement on
Tariffs and Trade 1994 is taking place in trade relations governed by this Agreement, it may take
appropriate measures against that practice in accordance with Article VI of the General Agreement on
Tariffs and Trade 1994 and the Agreement on Implemen tation of Article VI of the General Agreement
on Tariffs and Trade 1994.  The Agreement contains provisions for the procedures for the application
of safeguard measures which are applicable to anti-dumping measures.
7. State-Aid and Countervailing Measures
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 in particular individual cases of state-aid.  AnyParty can introduce, if it considers that a part icular practice is incompatible with agreement’s
provisions,  appropriate countervailing measures in conformity with WTO.
8. Sector-Specific Provisions
Agricultural products
Without prejudice to the concessions granted in Protocol 1, the provisions of Chapter II
(agricultural products) shall not restrict in any way the pursuance of the respective agricultural
policies of the Parties or taking of any measure under such policies, including the implementation ofthe respective provisions of the Agreement on Agriculture within the framework of the WTO.
The Parties shall notify each other of changes in their respective agricultural policies pursued
or measures applied which may affect the conditions of agricultural trade between them as provided
for in the Agreement.  Prompt consultations shall be held, upon request of any Party, to examine thesituation.
Taking into account the Estonian customs tariff structure on the date of entry into force of the
Agreement, where no customs duties are applied for agricultural products, in the event that a newWT/REG37/3
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tariff regime for the imports of agricultural products is established, the Republic of Estonia may, by
way of derogation from the provisions of Article 10 of the Agreement and pursuant to the
implementation of its agricultural policy, introduce customs duties on imports on a limited number of
agricultural products originating in the Republic of Slovenia.
Customs duties on imports may be introduced by the Republic of Estonia during the first
two years following the entry into force of the Agreement and after consultations in the Joint
Committee.  If necessary, the period of two years ma y be prolonged by one year by the decision of the
Joint Committee.  These measures shall be applied for a period not exceeding three years.
In all such cases the Republic of Estonia shall ensure a sizeable margin of preference for
products originating in the Republic of Slovenia granting them treatment not less favourable, thangranted by the Republic of Slovenia to the products originating in the Republic of  Estonia.
The arrangements, concluded within the framework of the Free Trade Agreement contribute
to the development of closer integration between the economies of the Parties to the free-trade area,
without raising barriers to trade of the other WTO Members’ with the Parties to this area.
10. Other
Customs administration co-operation
The provisions on mutual assistance in customs matters laid out in Protocol 3 to the
Agreement are conceived for the purpose of the Agreement.  The main goal of Protocol 3 is that the
Parties shall assist each other in ensuring that customs legislation is correctly applied, in particular by
the prevention, detection and investigation of contraventions of this legislation.
III. GENERAL PROVISIONS
1. Exceptions and Reservations
- General exceptions
Any prohibition or restriction may be introduced in the sense of Article XX of the
GATT 1994.
- Security exceptions
The provisions on security exceptions of the Agreement are in the sense of the Article XXI of
the GATT 1994.
IV. OTHER
1. Internal Taxation
There are no measures or practices of an internal fiscal nature applied by the Parties, implying
directly or indirectly discrimination against the products of the Parties.  As an example of directtaxation one can mention income tax or corporate tax, whereas turnover tax and value-added tax are
examples of indirect taxation.WT/REG37/3
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2. State Monopolies
The provisions on state monopolies ensure that procurement or marketing of  products by any
state monopolies of commercial nature, as defined in the Article of the Agreement also include
monopolies delegated by the Parties to others.  The Parties will adjust progressively any statemonopoly of a commercial character so as to ensure that by 1 January 2001 no discrimination
regarding the conditions under which goods are procured and marketed exist between nationals of the
Parties.  The Parties are bound by their commitments under Article XVII and the Understanding on
the Interpretation of Article XVII of the GATT 1994.
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 totheir status under Article VIII of the Agreement of the IMF.  Such restrictions shall be applied on a
non-discriminatory basis.
4. Public Procurement
The Parties shall progressively develop their respective regulations for public procurement
with a view to grant suppliers of the other Part y on 1 January 1999 at the latest, access to contract
award procedures on their respective government pr ocurement markets according to the provisions of
the World Trade Organization Agreement on Government Procurement.
5. Protection of Intellectual Property
The Parties shall grant and ensure the protection of intellectual property rights on a
non-discriminatory basis, including measures for granting  and enforcing such rights.  The protection
shall be gradually improved on a level corresponding to the substantive standards of the multilateral
agreements which are specified in Annex I by 1 January 1999 at the latest.  The term intellectual
property protection is defined in the Agreement.  The Parties shall co-operate in matters of intellectualproperty.  They shall hold, upon request of any Party, expert consultations on these matters, in
particular on activities relating to the existing or to future international conventions on harmonization,
administration and enforcement of intellectual property and on activities in international
organizations, such as the Agreement Establishing the World Trade Organization, World Intellectual
Property Organization, as well as relations of Parties with third countries on matters concerningintellectual property.
6. Evolutionary Clause
A future deepening and extension of the coverage of the Agreement as provided for by this
provision may be defined by the Parties.
7. Validity and Termination
The Agreement was concluded for an indefinite period of time.  Each Party may terminate
this Agreement by a written notification to the other Party.  The termination shall take effect on the
first day of the seventh month following the date on which the notification was received by the other
Party.WT/REG37/3
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ATTACHMENT
Summary of the Structure of the Agreem ent, including Annexes and Protocols
Preamble
Objectives  Article 1
CHAPTER I - Industrial products
Scope  Article 2
Customs duties on imports and charges having equivalent effect  Article 3
Fiscal duties  Article 4Customs duties and equivalent charges on exports  Article 5
QR on imports and measures having equivalent effect  Article 6
QR on exports and measures having equivalent effect  Article 7
Information procedure draft technical regulations  Article 8
CHAPTER II - Agricultural products
Scope  Article 9
Customs duties and charges having equivalent effect Article 10
  - Protocol 1Fiscal duties Article 11
Basic duties Article 12
Customs duties on exports and charges having equivalent effect Article 13
QRs on imports and measures having equivalent effect Article 14
Concessions and agricultural. policies Article 15Special safeguards Article 16
Veterinary, Health and Phytosanitary measures Article 17
CHAPTER III - General provisions
Rules of origin and co-operation in customs administration Article 18
  - Protocols 2 and 3Internal taxation Article 19
General exceptions Article 20
Security exceptions Article 21
State monopolies Article 22
Payments Article 23Rules of competition concerning undertakings Article 24
State aid Article 25
Public procurement Article 26
Protection of intellectual property Article 27
  - Annex IDumping Article 28
General safeguards Article 29
Structural adjustment Article 30
Re-export and serious shortage Article 31
Fulfilment of obligations Article 32Procedure for application of safeguard measures Article 33
Balance of payments difficulties Article 34
Evolutionary cause Article 35WT/REG37/3
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CHAPTER IV - Institutional and final provisions
The Joint Committee Article 36
Procedures of the JC Article 37
Customs unions, free-trade areas and frontier trade Article 38
Services and investments Article 39Annexes, Protocols and Amendments Article 40
Entry into force Article 41
Validity and termination Article 42WT/REG37/3
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ANNEX I
Slovenian Trade with Estonia
(Value in US Dollars)
1997 % I-IV 1998 %
IMPORTS
Agricultural products 20,384.85 2.3 20,142.99 9.3
Annex A 20,205.75 2.2 20,142.99 9.3
Annex B 179.10 0.1 0.00 0
Industry 881,090.04 97.7 196,599.58 90.7
TOTAL 901,474.88 100 216,742.57 100
Imports from Estonia to Slovenia in 1997
Total Import At Zero
Customs DutyBetween Zero
and MFNMFN
Year 1,000
USD% 1,000
USD% 1,000
USD% 1,000
USD%
1997 901.4 100 901.2 99.98 0 0 0.179 0.02
I-IV '98 216.7 100 216.7 100 0 0 0 0WT/REG37/3
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ANNEX II - A
Slovenian Trade with Estonia
(In 1,000 of US Dollars)
1996 1997 I-V 1997 I-V 1998 1997/96 I-V 1998/97
Import 526 901 239 401 171.3 167.8
Export 1,160 2,022 639 1,003 174.3 157
Source:  Office statistical bulletin, June 1998
ANNEX II – B
The Republic of Slovenia
Total Imports from Estonia
1996 1997 I-IV 1998 H.S. Chapter
USD
1- - -
2- - -
3 - 20,205 20,142
4- - -
5- - -
6- - -
7- - -
8- - -
9- - -
10 - - -
11 - - -
12 - - -
13 - - -
14 - - -
15 - - -
16 - - -
17 - 179 -
18 - - -
19 - - -
20 - - -
21 - - -
22 - - -
23 - - -
24 55,860 - -
25 - - -
26 - - -
27 - - -
28 - - -
29 - - -
30 - 89,127 -
31 - - -
32 - - -
33 - - -
34 - - -
35 - - -
36 - - -WT/REG37/3
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The Republic of Slovenia
Total Imports from Estonia
1996 1997 I-IV 1998 H.S. Chapter
USD
37 658 - -
38 - 486 -
39 - - 10
40 880 20 216
41 - - -
42 - 90 -
43 - - -
44 50,383 41,399 -
45 - - -
46 - 361 -
47 166,084 1,309 -
48 227,408 535,886 124,698
49 261 - -
50 - - -
51 - - -
52 - - 21,039
53 - 7,680 -
54 - - -
55 - - 34,631
56 - - -
57 - - -
58 - - -
59 - - -
60 - - -
61 2,458 8,085 7,320
62 18,522 40,374 885
63 - 1,001 1,637
64 249 112,320 1,190
65 - - -
66 - - -
67 - - -
68 - - -
69 - 14 -
70 78 1,834 354
71 - - -
72 - - -
73 184 - 1,670
74 - - -
75 - - -
76 - - -
77 - - -
78 - - -
79 - - -
80 - - -
81 - - -
82 - - 84
83 - 241 -
84 - 666 96
85 3,765 2,294 133
86 - - -
87 - - -WT/REG37/3
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The Republic of Slovenia
Total Imports from Estonia
1996 1997 I-IV 1998 H.S. Chapter
USD
88 - - -
89 - - -
90 - 30,251 2,356
91 - - -
92 - - -
93 - - -
94 - 3,490 194
95 - 5,464 80
96 - - -
97 - - -
TOTAL 526,795 901,474 216,742
ANNEX III
Basic Data on Slovenia for 1997
Population 1,982,265
GDP in millions of US Dollars (data available only for year 1996) 18,858
GDP per capita in US Dollars (data available only for year 1996) 9,471
Land area (sq.km) 20,253
Imports in millions of US Dollars 9,178.7
Exports in millions of US Dollars 8,407.1
Trade balance in millions of US Dollars -771.6
Source: Monthly Bulletin of Bank of Slovenia, April 1998
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