Note:    Advance written questions by WTO Members and replies provided by the Slovak Republic to
these questions and to other questions raised during the meeting are reproduced in document
WT/TPR/M/91/Add.1.WORLD TRADE
ORGANIZATIONWT/TPR/M/91
9 January 2002
(02-0098)
Trade Policy Review Body
21 and 23 November 2001
TRADE POLICY REVIEW
SLOVAK REPUBLIC
Minutes of Meeting
Chairperson:  H.E. Mr. Pekka Huhtaniemi (Finland)
Page
I. INTRODUCTORY REMARKS BY THE CHAIRPERSON 3
II. OPENING STATEMENT BY THE REPRESENTATIVE OF
THE SLOVAK REPUBLIC 4
III. STATEMENT BY THE DISCUSSANT 6
IV. STATEMENTS BY MEMBERS OF THE TRADE POLICY REVIEW BODY 9
V. REPLIES FROM THE REPRESENTATIVE OF THE SLOVAK REPUBLIC
AND ADDITIONAL COMMENTS 14
VI. CONCLUDING REMARKS BY THE CHAIRPERSON 15WT/TPR/M/91
Page 3
I. INTRODUCTORY REMARKS BY THE CHAIRPERSON
1. The second Trade Policy Review of the Slovak Republic was held on 21 and
23 November 2001.  The Chairperson welcomed the delegation of the Slovak Republic, headed by
H.E. Mr. Peter Brno, State Secretary of Economy, and the discussant, Mr. Claes Ljungdahl (Sweden).
As usual, the discussant would speak in his personal capacity and, in accordance with established
procedures, he had made available in advance a broad outline of the themes he intended to raise
(document WT/TPR/D/70).
2. The Chairperson recalled the purpose of Trade Policy Reviews and the main elements of the
procedures of the meeting. The Report by the Government of the Slovak Republic was contained in
document WT/TPR/G/91 and that of the Secretaria t in document WT/TPR/S/91.  Copies of advanced
questions, submitted by Canada; the European Union; Hong Kong, China; Japan; and the
United States were transmitted to the delegation of the Slovak Republic.  Replies to written questionswere provided during the meeting by the delegation of the Slovak Republic.  These and other
questions raised during the meeting are reproduced in WT/TPR/M/91/Add.1.WT/TPR/M/91
Page 4
II. OPENING STATEMENT BY THE REPRESENTATIVE OF THE SLOVAK 
REPUBLIC
3. The representative of the Slovak Republic recalled that, despite of difficulties experienced in
1998 and 1999, Slovakia had pursued throughout the review period its transformation into a market-
based economy.
4. In May 1999, the Government had adopted a recovery programme to correct internal and
external imbalances, to stabilize the economy and to restart structural reforms. This programme aimedat reducing the Government deficit; reforming the public sector; restructuring the banking sector; and
privatizing remaining state-owned enterprises.  Prud ent fiscal policy, including reduced administration
expenditure, social welfare and improved revenue mobilization, had been implemented. Cost recovery
had been adopted to further strengthen equilibrium between demand and supply, and to promote free
market price deregulation in housing, energy and other utilities, public transport, postal services andtelecommunications.
5. Acceleration of privatization together with the strengthening of the legal and institutional
framework had played an important role in the restructuring process. Restructuring and privatization
of network industries, including Transpetrol, Slovak bus transportation companies, electricity
companies, water and sewerage companies, Slovak Gas Industry, Slovak Insurance Agency, healthcare facilities and Railways of the Slovak Republic had been restored, while restructuring and
privatization of large state-owned banks, i.e., the Slovak Savings Bank, the General Credit Bank,
Investment and Development Bank had been successfully completed. The Government had also made
a range of crucial economic policy commitments, in particular in the context of an IMF Staff
Monitored Programme and an Enterprise and Financial Sector Adjustment Loan with the World Bank.
6. Existing legislation had been reviewed and amended and new regulations had been adopted to
better respond to the rapidly changing international trading environment. New government bodies,such as the State Aid Office, the Office of Public Procurement, the Telecommunication Office and the
Financial Market Authority had been established. Further steps to enhance transparency and access to
information in relation to government administration had been undertaken, through the adoption of the
Law on Public Access to Information; as of 1 Ja nuary 2001, the Commercial Register was available
on Internet.
7. Foreign Direct Investment (FDI) played a crucial role in achieving sustainable long-term
development and economic growth. Therefore, the Slovak Government had adopted a set of
investment incentives to attract foreign investors, improve the business environment, and change the
unfavorable situation of low FDI inflow into the Slovak economy, which lagged significantly behind
its neighboring countries. As a result, in 1999 and 2000 the Slovak economy had stabilized.
8. The Slovak Republic remained committed to the transformation into a fully-fledged market-
based economy, integrated into the international trading system. Macroeconomic stability and
microeconomic measures had created a basis for rapid, healthy and sustainable economic growth.
Increased  FDI inflow, resulting from renewed inve stors' confidence, was the signal that the economic
policy adopted by the Government had placed the Slovak economy on the right track.
9. The dominant position in the structure of foreign capital inflows was taken mainly by FDI
(76.9%) instead of financial credits, which had prevailed in the 1996-1998 period (80% of the total
medium- and long-term resources).  A significant role had been played by foreign investors in large
companies (Slovak Telecom, VSŽ Košice and Slovnaft). The Slovak Republic's accession to the
OECD in December 2000, and its improved rating by international rating agencies underlined theseWT/TPR/M/91
Page 5
positive developments. High unemployment, a deteriorating trade situation and further enhancement
of the functioning of the judicial sector remained to be addressed.
10. International trade was a key element for further economic growth, and trade policy was a
significant part of the overall foreign and economic strategy of the Slovak Republic.  The Slovak trade
regime was open, transparent and predictable, and its industrial and agricultural tariffs were ad
valorem and bound, mostly at applied rates.  Contingency measures had been applied very sparingly.
The Slovak Republic supported the strengthening of the international trading environment asembodied by the WTO, and considered this to be a precondition for sustainable global development,
economic growth and social peace.
11. The Slovak Republic had fully and timely implemented its Schedule of concessions, as agreed
in the Uruguay Round, and had actively participated in the negotiations on the Information
Technology Agreement and the Pharmaceuticals Initiative.  The Slovak Republic had fulfilled all itsobligations under the Agreement on Agriculture. Market access, through reduction of import duties,
had been gradually improved in accordance with its Schedule of concessions.  As a result, the Slovak
Republic was among countries with the lowest tariffs in agriculture.  Domestic support and export
subsidies foreseen in its Schedule had not been fully exploited.  The Slovak Republic applied
reasonable levels of protection and support to agriculture and foodstuffs, in accordance with its WTOcommitments.  Agriculture and food processing i ndustries were exposed to liberalization and
competition in both domestic and international markets.  Given the vulnerable and unpredictable
character of agriculture, stemming from climatic and geographic conditions as well as continuation of
the painful reform process, non-trade aspects had to be taken into consideration.
12. The Slovak Republic had also made efforts to strengthen protection and enforcement of
intellectual property rights.  Laws and amendments had been adopted to increase protection of
copyrights and related rights, patents, industrial designs, trade marks, and topography of integratedcircuits.  The amendment to the Customs Law and the adoption of the Act on Measures against
Infringement of Intellectual Property Rights on Imports, Exports and Re-exports of Goods was a
further step in that direction.  The Slovak Republic strongly supported liberalization initiatives in the
services sector, and actively participated in negotiations on basic telecommunications and financial
services, thus improving its Schedule of specific commitments.
13. The Slovak Republic had consistently supported the strengthening of the multilateral trading
system, the promotion of further trade liberalization, and the interface between trade and trade-related
issues and policies. Therefore, the Slovak Republic welcomed the successful conclusion of the Fourth
WTO Ministerial Conference at Doha, as it was the appropriate response to these challenges.
14. The Slovak Republic was a signatory of various multilateral and regional liberalization
initiatives;  it applied GSP, based on the principles of generality, non-discrimination and non-
reciprocity, and granted duty-free access to all products originating in LDCs. It had also concluded
free trade agreements with CEFTA countries (Poland, Hungary, Slovenia, Czech Republic, Romania
and Bulgaria), and with EFTA countries (Switzerland, Norway, Iceland, and Liechtenstein). It had
also entered into free trade agreements with the Republic of Latvia, Republic of Estonia, Israel,Republic of Lithuania and Republic of Turkey, and most recently with Croatia. The Customs Union
between the Slovak Republic and the Czech Republ ic and the Europe Agreement, aiming at EU
membership for 2004, remained top priorities for the Slovak Republic.
15. In conclusion, he noted that the Slovak Republic had undertaken liberalization in compliance
with WTO rules, and that it had helped to reinvigorate the pace of economic reform and the adoptionof the necessary, although difficult, decisions and policies. Bilateral and regional initiatives did not
undermine his country's commitment to the multilateral trading system.WT/TPR/M/91
Page 6
III. STATEMENT BY THE DISCUSSANT
16. The discussant (Mr. Claes Ljungdahl)  recalled that the Slovak Republic was an active WTO
Member, that was negotiating its membership to the European Union (EU), and had recently joined
the OECD.
17. Since its previous TPR, in 1995, the Slovak Republic had made impressive progress in its
transformation into a market-based economy, and was increasingly integrated into the world economy.
However, between 1997 and 1999, the Slovak economy had collapsed; macro-economic imbalancesand stalled structural reforms had undermined grow th and international confidence, culminating in a
currency crisis in 1998. In 1999, the Government had introduced an ambitious fiscal plan based on
expenditure cuts, increases in indirect taxes and administered prices, while making efforts to reform
the financial sector. Fiscal tightening, reduction in households' purchasing power and hardening
budget constraints had led to a sharp decline in domestic demand in 1999 and 2000. A strongimprovement in net trade performance had partly offset the impact on aggregate demand. In
1999-2000, GDP had grown around 2% per year. Balance of payments difficulties had eased.
Economic recovery looked promising, with a GDP expected to grow by over 3% in 2001. The Slovak
Republic's economic situation remained fragile, and acute fiscal pressures persisted. Unemployment
remained at some 20%. The discussant sought information on measures taken to reduceunemployment.
18. The reform agenda was driven by the goal of EU membership;  harmonisation with the EU
was well advanced. The 2001 report of the Europe an Commission stated that the Slovak Republic
should be able to cope with the EU competitive pre ssures in the near future, provided that structural
reforms be implemented. An ambitious programme in the banking sector, including the adoption of an
amendment to the Act on Bankruptcy and Compensation, the reduction of the tax burden on natural
persons and legal entities, and the improvement of conditions for FDI, had been launched. Since 1999,the privatisation, including of state-owned monopolies, had been revitalised, and made more
transparent. Finance and telecommunications had been priority areas. Nevertheless, the Slovak
economy had not generated the industrial restructuring envisaged to substantially raise economic
efficiency because of poor corporate governance, diffuse shareholder control and inadequate
bankruptcy laws. Privatisation had to be pursued to establish effective institutional and commercialpractices, including adoption of  bankruptcy legislation and enterprise restructuring. Decisions to
facilitate the establishment of foreign and domestic firms, and to create a competitive market were
welcomed. FDI inflows had to be encouraged as it pl ayed a vital role in long term development and
sustainable growth.
19. Corruption persisted, and made business in the Slovak Republic costly. This might explain the
fact that the Slovak Republic registered the lowest FDI inflows of Central Europe. The Government
was aware about this, and had adopted a plan against corruption. He sought information on concrete
steps taken to address corruption, and measures to attract more FDI.
20. Merchandise trade (imports and exports) averaged 64% of GDP in 2000, a 17% increase since
1995. The geographic pattern of Slovakia's merchandise trade had changed with imports from the EUrising since 1995, and the share of imports from the Czech Republic declining. Germany was the
largest supplier. On exports, he noted that the EU had become the largest export market. In 2000, the
EU accounted for almost 59% of total merchandise exports and 49% of total imports. The Slovak
Republic was also interested in trading with other continents.
21. As a result of preferential trading agreements, especially with the EU, most of Slovakia's trade
(74% of total imports in 2000) occurred at non-MFN tariff rates. He mentioned that since 1995, theWT/TPR/M/91
Page 7
Slovak Republic had increased its network of preferential trade agreements, and that preferential
liberalization had outpaced multilateral liberalization.
22. The Slovak Republic had signed a customs unions agreement with the Czech Republic
providing, inter alia , for a common external tariff. Such customs union was due to be dismantled once
one of its members, or both, joined the EU. Th e Slovak Republic had also concluded free trade
agreements with the EFTA countries, and was a member of CEFTA:  he recalled that free trade
agreements should be a guarantor of economic stability in the region. The Slovak Republic was alsogranting MFN treatment to WTO Members and parties of bilateral agreements and granted GSP to
developing countries.
23. The Slovak Republic was harmonising its standards and technical regulations with those of
the EU. Several laws, simplifying the testing and standardisation process, had been enacted, and
mutual recognition agreements with several partners had been concluded. Preferential tradeagreements together with regional initiatives had helped to further open the Slovak domestic market.
However, they might distort trade and investment patterns and detract from multilateral objectives.
The Slovak Republic had made multilateral commitments, including in basic telecommunications and
financial services under the GATS, demonstrating its commitment to the multilateral trading system.
He sought information on the relationship between regional trade policy and global liberalisationefforts.
24. He noted that the Slovak Republic had a comple x state aid system, and that aid had increased
over the last couple of years. Relevant legislation focused on direct assistance to facilitate industrial
restructuring, and measures included grants, tax concessions and state guarantees, and prohibited state
aid above a certain threshold when it restricted or threatened competition;  sectoral exemptions
existed. Approximately one quarter of the subsidies went to agricultural enterprises. Lack of
transparency was a problem, while limits imposed on state aid appeared, in some cases, to be arbitraryand high. The discussant sought information on steps taken in relation to transparency and reduction
of state aid.
25. The Government had strengthened its competiti on policies by amending relevant legislation,
and increasing the independence of the Antimonopoly Office, which administrated competition
legislation. The Antimonopoly Office had introduced: (i) a notice setting out details for calculatingturnover, and (ii) a notice establishing conditions for notification of industry concentration. A number
of provisions had also been revised in order to remove ambiguities of interpretation of certain
provisions, and to better ensure compliance by administrative bodies and municipalities. He asked
about expected effects from a strengthened competition legislation, and future measures to improve its
enforcement.
26. Since 1995, the Government had ratified WIPO treaties on Internet protection and had joined
the Patent Law Treaty.  It had also made change s to harmonize legislation with the EU. A number of
EU directives, including most aspects of intellectual property legislation, and regulations had been
implemented. The Slovak Republic had not requested any transitional periods from the EU on
intellectual property. Problems persisted with regard to enforcement of customs legislation aslegislative changes had failed to remedy the perm ission of monetary compensation for infringements,
making it difficult to obtain adequate damages in copyright cases. The Slovak Republic was,
therefore, on the U.S. watch list of countries un able to provide adequate intellectual property
protection. He sought information on planned actions to improve enforcement of intellectual property
legislation.
27. The share of agriculture in GDP had declined from 6,6% to 4,1%. Nevertheless, agriculture
still played an important role and many rural communities depended heavily on it.  Privatization ofWT/TPR/M/91
Page 8
farms was almost complete. Measures to be taken in consistency with EU Common Agriculture Policy
(CAP) heavily influenced agricultural policies of the Slovak Republic. Although the SlovakRepublic's trade regime was generally open, agriculture was an exception to the rule. The 2001 MFN
tariff average was 13,4% (WTO definition), while the average rate for non- agricultural goods was
3%. The Slovak Republic was a net importer of agricultural products and tariffs on agricultural
imports were relatively high, reaching 100% for certain products. Promoting food self-sufficiency,
based on protection of the agriculture sector, could prevent the Slovak economy from benefiting fromtrade liberalisation. Support to agriculture was a policy priority, and as a result agriculture was a major
beneficiary of state aid. Farm assistance was pr ovided through price support and export subsidies.
Slovak agriculture was said to be currently ineffective by Western standards. He sought views on the
effects of EU membership on agricultural policy.
28. In 2000 , services accounted for 73% of Slovak GDP. The Slovak Republic had privatised part
of its services sector. It succeeded in privatising a large part of its banking sector, with privatization of
the largest State controlled banks well advanced. The banking system had become more competitive,
and the regulatory and supervisory framework for the banking sector had improved significantly.
Privatization efforts also concerned telecommunications. Ownership of Slovak Telecom had been
divested overseas, and the State's monopoly over basic telecommunications was to end in 2003. A
Telecommunications Office had been established to facilitate privatization and safeguard competition.
Progress had also been made in transport and insurance sectors. Since the removal of the insurance
monopoly, the market and the number of insurance companies had grown substantially. The
Government had made great efforts in privatizing the services sector, which since 1999, was more
transparent. Programmes had also been revitalised. He sought information on the privatization
experience in this sector.
29. In conclusion, the discussant recalled that accession negotiations to the EU had been a driving
force in the Slovak Republic's economic reform, while its OECD membership in December 2000 had
helped to enhance international credibility and conf idence in its reform agenda. He then noted that
high unemployment and corruption remained to be tackled, and due to its structural reforms, the
Slovak Republic was on the right track towards a stable economy and EU accession. Success
depended on its political stability. The Swedish Presidency that ended on 1 July 2001, had made theEU enlargement a top priority. The EU members had come a long way in that direction, and looked
forward to the Slovak Republic's membership, and future contribution, including in trade policy. He
believed that an enlarged Europe would benefit the WTO, which relied on market integration and co-
operation amongst nations.WT/TPR/M/91
Page 9
IV. STATEMENTS BY MEMBERS OF THE TRADE POLICY REVIEW BODY
30. Members welcomed the delegation of the Slovak Republic headed by the State Secretary of
the Ministry of Economy.  They appreciated Slovakia's commitment to the multilateral trading system
and its on-going reforms to liberalize trade and investment and to restore macro-stability, especially
fiscal consolidation. They noted favourably its renewed privatization efforts in banking,
telecommunications and other key sectors.  Slovakia's legislation and commercial codes had changed
considerably, mainly due to its bid for EU accession.  Members welcomed Slovakia's determination tomake its trade-related legislation conform with WTO commitments.
31. The representative of the European Union (EU) referred to the Slovak Republic impressive
integration into Europe and the world economy following irreversible democratic and economic
reforms.  The Slovak Republic had embarked on economic restructuring significantly later than its
Central European neighbours, but was now a functioning market economy, and had caught up with theVisegard countries in the EU accession negotiations that started for Slovakia in February 2000.  The
Government's austerity package in early 1999 had contributed to growth and lower inflation, but fiscal
discipline remained crucial. Slovakia needed to take appropriate measures to reduce its alarming
unemployment levels.
32. The comprehensive bilateral Europe Agreement, had operated since February 1995.  It
formally defined EU-Slovak relations by establishing trade, economic, business and financial rules
and regulations.  Special arrangements covered trade in several sectors, especially services and
agriculture, as well as for aligning legislation on intellectual property, competition and public
procurement.  The Agreement on reciprocal concessions for agricultural products became effective in
July 2000, pending the conclusion of an Additional Protocol to the Europe Agreement. He recalled
that Slovak-EU economic and trade policies had converged in full compatibility with the WTO, and
that Slovak-EU trade relations did not divert trad e. The Slovak Republic accession to the EU would
create trade for the benefit of all trading part ners and opportunities for further multilateral
liberalization.  He also argued that no link existed between EU accession and rising agricultural
assistance, and that in any case accession would be in accordance with their WTO agricultural
commitments and Article XXIV.
33. The representative of Hong Kong, China showed  his appreciation for the efforts made by the
Slovak Republic to keep the pace of trade liberalization, despite the financial crisis of 1998-99.
Average MFN rates had been reduced to 6% in 2001, and the Information Technology and
Telecommunications sectors had been further liberalized. These reforms clearly contributed to the
Slovak Republic economic recovery and to increase foreign investment.  The Slovak Republic had not
resorted to trade remedies during economic downtur ns to protect lingering domestic industries. Hong
Kong, China encouraged the Slovak Republic to continue in that direction. Hong Kong, China also
noted that the Slovak Republic legislation recognized anti-competitive effects of anti-dumping
measures, and required evaluation by the Antimonopoly Office before their imposition.  The best
means to ensure global and regional liberalization was to extend preferences on a non-discriminatory
basis. Hong Kong, China invited the Slovak Republic to simplify its tariff system by eliminatingseasonal duties, rounding off duties and reducing the many different rates, to align its standards with
regional and international norms, and to make its government procurement procedures more
transparent.
34. The representative of the United States recalled that the United States was the fourth largest
investor in the Slovak Republic, that the two countries had recently signed an Open Skies agreement
and that the U.S. Government was a significant provider of bilateral aid to the Slovak Republic. She
then noted that the Slovak Republic had continued its transition into a market-based economy; and
that the private sector now generated above 85% of GDP.  Macroeconomic and structural reforms,WT/TPR/M/91
Page 10
since 1998, provided a base for long-term prosper ity, and for the integration of the Slovak Republic
into European and multilateral organizations.  The Slovak Republic had signed the InformationTechnology Agreement; made further concessions under the Pharmaceutical Initiative; and
participated in the extended WTO negotiations on basic telecommunications and financial services.
The Slovak Republic intended to join the WTO Agreement on Government Procurement by end-2002,
and the Agreement on Trade in Civil Aircraft before its accession to the EU.  The Slovak Republic
still faced important problems, such as unemployment, rural poverty and budget deficit.  She notedthat commercial courts were overburdened, and that, although the Slovak Republic was enacting new
laws to protect intellectual property, further improvements were needed.  Protection for undisclosed
information was inadequate, and copyright protection, especially controls on illegal imports from
neighbouring countries was inadequately enforced.
35. The representative of Canada noted that the introduction of widespread reforms, and a liberal
trade regime, had helped the Slovak Republic to recover from the 1998 currency crisis.  Trade reforms
had included lower average MFN tariffs; greater harmonization of policies and technical standards
with the EU's;  improved customs efficiency;  strengthened competition and intellectual property
protection; and extension of incentives and national treatment to foreign investment.  Economic
prospects were positive, but unemployment remained high.  Improved governance and an effectivesocial safety net would help share the benefits of trade liberalization equitably.  Canada encouraged
the Slovak Republic to further liberalize agriculture. Farm support fluctuated considerably, and
exceeded Slovakia's AMS levels, when measured by the PSE methodology.
36. The representative of Japan noted with satisfaction that the economic and trading relations
between the two countries were sound.  In spite of problems faced in  transforming into a market
economy, the Slovak Republic had a promising economic outlook.  Japan appreciated trade and
investment liberalization efforts, and encouraged the Slovak Republic to pursue economic reforms.Average MFN tariffs had fallen to 6.1% in 2001, while a large gap between preferential tariff applied
to the Czech Republic, the EU, the EFTA, and CEFTA Members, and MFN duties disadvantaged
Japanese exporters.  Japan asked the Slovak Republic to reduce this gap.  Although unavoidable for
balance-of-payments reasons, frequent use of import surcharges hurt Japanese exporters.  Slovak
Republic's should therefore consider the effect of such surcharges, before deciding on imposing them.Japan appreciated efforts made to simplify testing and certification requirements, and also to
harmonize standards, technical regulations and co nformity testing procedures, including with the
EU's. Japan sought confirmation that such resolutions applied uniformly to imports and no longer
impeded trade.
37. The representative asked if the Slovak Republic had banned imported GMO food, and if so,
what had the ban's rationale and legal basis been.  He also asked if the sale of domestically-produced
GMO food had been also prohibited.  Japan understood the special problems facing the agriculture
sector, including the high cost of structural adjustment during transition, and believed that an
international framework, in which various types of agriculture could co-exist should be established.
Japan appreciated that the Slovak Republic endorsed the concept of multifunctionality of agriculture,including food security, environmental preservation and rural development.
38. The representative of New Zealand welcomed significant progress made by the Slovak
Republic in its transition to a market economy, despite major difficulties.  New Zealand was
concerned that distorting trade and production policies, including price support, direct payments and
export subsidies remained in agriculture;  she showed similar concern that blue box payments hadrecently been introduced.  She then noted that agricultural assistance, as measured by the OECD's
Producer Support Estimate, had increased from a very low 1% in 1996 to 22% in 2000.  Tariff
escalation also remained on many primary products, and agricultural rates were, on average, three
times those of non-agricultural duties.  Although tariffs were ad valorem , duty exemptions, higherWT/TPR/M/91
Page 11
seasonal rates on certain products and fractional duties blurred transparency.  Tariff rate quotas
remained largely underfilled; while average utilisation rates had fallen from 45% in 1998 to 34% in2000.
39. While she acknowledged that EU accession had an important bearing on the Slovak Republic
trade policies, the representative of New Zealand felt that agriculture functioned best when based on
an open trading system whereby farmers freely responded to market signals.  Farmers' reliance on
increased support would inevitably cause production inefficiencies and higher costs for taxpayers andconsumers.  New Zealand encouraged the Slovak Republic to extend non-trade-distorting policies to
agriculture.  New Zealand believed that the policy of farmers producing 90% of domestic
consumption was unlikely to achieve national food security as food self-sufficiency and food security
were not synonymous.  Reliance on supported domestic production could reduce food security and
harm the environment.  Slovakia should consider boosting food security through a liberal tradingregime, providing reliable access to food from  many sources.  Although New Zealand also
acknowledged non-trade objectives in agriculture, including rural development and environmental
protection, it believed that these objective should be pursued through targeted, transparent and
non-trade distorting policies, in the framework of the Green Box.
40. The representative of India noted the Slovak Republic's progress towards a market economy,
since 1995, as well as the increase in inward foreign investment and exports. Noting that
unemployment rate was 20%, India asked for details on the Slovak Government's long-term plans for
tackling the twin problems of unemployment and rural poverty.  The Slovak Republic had excessively
used preferential trading agreements.  India believed that access process should be in compliance with
WTO rules, and that no trade diversion should derive thereof.  India asked how the Slovak Republic
would balance its multilateral and regional demands, and on how it intended to multilateralize regional
preferences.  India then noted that, in spite of tariff bindings and ad valorem  duties, substantial tariff
escalation existed, along with duty exemptions, hi gh seasonal rates on certain flowers, fruits and
vegetables, and, inter alia , fractional duties.  The representative sought further details on the self-
declared certification scheme introduced for manufacturers and importers.  He noted that the Slovak
Republic's GSP Scheme exempted many sensitive products such as fertilizers, carpets and most
footwear, and duty levels were generally above prefer ential duties provided regional trading partners.
India encouraged the Slovak Republic to make its GSP scheme more developing country-friendly, and
to extend it to all products of interest to developing countries.
41. The representative of the Czech Republic referred to the important Customs Union between
the two countries.  He noted the Slovak Republic's strong support to market access-issues, and rule-
making that reflected the public concerns.  The Slovak Republic was fully committed to themultilateral trading system, despite the importance of preferential trade, and its objective of EU
accession.  The Slovak Republic's trade regime was very open, and preferential tariffs were low.  Non-
tariff barriers were the barest minimum.  The Slovak Republic had joined various multilateral sectoral
initiatives and scheduled valuable market access concessions since 1995.  Structural reforms,
including an improved regulatory framework, pr omoted competition, enterprise restructuring and
provided legal security and predictability for economic agents.
42. The representative of Poland referred to their strong bilateral relations, including within
CEFTA.  The Slovak Republic had become an OECD member in early 2000, and had commenced EU
accession negotiations.  Poland supported the Slovak Republic's EU accession, in line with
multilateral trade liberalization and benefiting all trading partners.
43. The representative of Romania noted the recent improved economic performance of the
Slovak Republic, and stated that EU accession would help its macro economic and structural reforms.
He noted that the Slovak Republic had an open trade regime, and believed in further liberalization, asWT/TPR/M/91
Page 12
shown by its multilateral commitments and transparent trade policy developments, including
elimination of tariffs on certain information technology and pharmaceutical products, and in theextended WTO negotiations on basic telecommunications and financial services. The Slovak Republic
had resisted protectionist pressures during difficult economic times, and had complemented
multilateral and regional liberalization in compliance with WTO rules. Regional agreements aided
global liberalization, and helped transitional economies build comparative advantages and strengthen
their economies.  The bilateral agreement betwee n the two countries and their CEFTA membership
had created trade.
44. The representative of Norway acknowledged the Slovak Republic's structural reforms along
with its OECD membership. These developments wo uld accelerate EU and global integration.  The
EFTA-Slovak Republic trade agreement had worked well.  Slovakia's tariff structure lacked
transparency and needed to be simplified.  Norway encouraged the Slovak Republic to continueprivatizing public corporations and noted that it had progressed in implementing EU directives on
government procurement. Norway welcomed the Slovak Republic's intention to join the Government
Procurement Agreement in 2002, and noted that the Slovak Republic was now an observer.  Norway
also welcomed the fact that Slovakia planned to liberalize basic telecommunication services by 2003.
45. The representative of Switzerland noted that three key developments had occurred since 1995.
First, privatization remained a key policy objective of the Slovak Republic, and remarkable progress
had been achieved, especially in banking.  Secondly, further investment liberalisation and
implementation of OECD standards had encouraged greater FDI.  Thirdly, the import surcharge that
protected the balance-of-payments was terminated on schedule from 1 January 2001. Import
surcharges, although a convenient short-term measure, did not address the real economic causes of
external deficits.  Switzerland noted the Slovak Republic's active participation in the WTO, as well as
liberalisation of trade through regional trade agreements, such as the agreement with EFTA States,including Switzerland.  Preferential agreements contributed significantly to regional integration, and
mutually supported the multilateral trading system.
46. The representative of Australia commended the Slovak Republic's sound macroeconomic
management, administrative reforms, financial restructuring and targeted public investment in
infrastructure.  A transparent privatization programme had aided inward foreign direct investment,which had increased five-fold in 2000.  The pace of economic and administrative reform was largely
driven by its bid for EU accession.  Austerity measures had addressed unsustainable budget deficits,
and official growth prospects of 3% for 2001 were impressive given the difficult global economic
environment.  The Slovak Republic's external posit ion was of concern.  While FDI inflows would help
alleviate the large current account deficit, this could be offset by slowed export growth in its mainmarkets.  Diversifying trade and investment re lations would, therefore, become increasingly
important. The Slovak Republic had substantially liberalised trade in goods with the EU and with
other central European countries, including on certain agricultural products.  Australia hoped that
Slovakia would recognize the benefits of free trade in agriculture, and apply that experience within the
WTO.  Australia encouraged the Slovak Republic to ensure that preferential trade agreementsremained outward-looking, and complemented a strong rules-based multilateral trading system.
47. The representative of Hungary noted that impressive economic and institutional reforms
carried out in successfully transforming into a market economy, had helped the Slovak Republic to
integrate into the world economy and the multilateral trading system.  The import surcharge
introduced from June 1999 to protect its balance-of-payments was terminated on schedule fromJanuary 2001. Foreign trade was important for the Slovak Republic's economic growth, and its
economy had achieved a high level of openness.  Stabilization measures had reduced the current
account deficit, helped by fast export growth under the Europe and CEFTA Agreements. European
integration promoted economic development, offering renewed opportunities for comprehensive trade,WT/TPR/M/91
Page 13
investment and other economic reforms that would also benefit the Slovak Republic's trading partners.
EU accession would not distort trade.  Hungary and the Slovak Republic were strategic partners withgood bilateral relations, including within CEFTA. In May 2001, Slovakia introduced annual import
quotas (for four years) on sugar as safeguard measures which had practically stopped Hungarian
exports.
48. The representative of Croatia referred to the longstanding good relations between the two
countries, which shared difficulties of transforming to a market economy.  After the serious economic
downturn, macroeconomic and structural reforms had contributed to the Slovak Republic's economic
recovery.  Its open and transparent WTO-consistent trade regime with low tariffs and few non-trade
barriers, even during difficult economic times, played a substantial role.  Croatia supported the Slovak
Republic's approach to trade liberalisation as it combined multilateral and regional integration, and in
particular EU accession.  Croatia believed that acknowledged multilateral and WTO-consistentregional and bilateral initiatives were complementary. Croatia had signed a bilateral Free Trade
Agreement with the Slovak Republic in November 2001, to enter into force as of January 2002.
49. The representative of Mauritius commented on the difficulties in transforming into a market
economy, and Slovakia's impressive strides since 1995. Despite high unemployment, social indicators
had improved and GDP per capita stood at US$3,500 in 2000. The private sector now accounted forover 80% of GDP. Merchandise trade had risen sharply. Mauritius viewed regional initiatives as
building blocks towards multilateral integration. This was clearly the case for the Slovak Republic.  Its
trade and economic reforms were driven overwhelmingly by the objective of EU accession, and the
economy had achieved a high degree of openness.  Mauritius sympathized with the special difficulties
confronted by the Slovak Republic in agriculture, and appreciated its support for non-trade concerns
and for special and differential treatment on trade in agricultural products.  The Slovak Republic
should take into consideration its agricultural negotiations, the concerns of single commodity nationsand of small island economies.  While the two countries traded little, Mauritius hoped this would
change after the Slovak Republic's EU accession, and adoption of its preferential agreements,
including the EU GSP scheme.
50. The representative of Bulgaria stated that trade relations between the two countries were
based on a free trade agreement signed in 1995, on Bulgaria's accession to CEFTA in 1999, and that
bilateral trade had doubled since 1995.  The Slovak Republic had taken on additional multilateral
commitments during the review period, and faced serious challenges into transforming to a market
economy, but had taken appropriate economic measures.  Bulgaria encouraged the Slovak Republic to
continue with its liberalization and economic reforms.WT/TPR/M/91
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V. REPLIES FROM THE REPRESENTATIVE OF THE SLOVAK REPUBLIC AND 
ADDITIONAL COMMENTS
51. The Chairperson invited the representative of the Slovak Republic to focus his responses on
three main themes: (i) economic environment;  (ii) trade policies and measures;  and (iii) sectoral
policies and measures.
(i) Economic environment
52. The representative of the Slovak Republic presented his delegation's initial written responses
on the economic environment (WT/TPR/M/91/Add.1).
53. The representative of India welcomed the Slovak Republic's replies to questions submitted by
his delegation.
(ii) Trade policies and measures
54. The representative of the Slovak Republic presented his delegation's initial written responses
on trade policies and measures (WT/TPR/M/91/Add.1).
55. The representative of Canada stated that his country shared the concerns expressed by the
United States in its written question concerning the PECA. He welcomed the Slovak Republic's
intention to join the GPA, and looked forward to  commencing negotiations to that end. Canada was
pleased to learn from the Slovak delegation that, contrary to the information in the Secretariat report,no ban currently existed on food containing Genetically Modified Organisms (GMOs). The
representative asked whether the mandatory labelling requirements on food containing GMOs had
been notified to the Committee on Technical Barriers to Trade, and whether the Slovak Republic
could provide scientific justification for these requirements. He welcomed the Slovak Republic
delegation's commitment to provide a response at a later stage.
56. The representative of the United States welcomed the Slovak Republic's replies to his
delegation's questions.
(iii) Sectoral policies and measures
57. The representative of the Slovak Republic presented his delegation's initial written responses
on sectoral policies and measures (WT/TPR/M/91/Add.1).
58. The Chairman sought further clarification on protection of the manufacturing sector.
59. The representative of the Slovak Republic stated that the manufacturing sector was privatized,
and open to international players, including small and medium enterprises.
60. The Chairman referred to the TPR programme for 2002 contained in document WT/TPR/106.WT/TPR/M/91
Page 15
VI. CONCLUDING REMARKS BY THE CHAIRPERSON
61. We have had an open and very informative discussion of the trade policies and practices of
the Slovak Republic. Members appreciated the opportunity to gain a much better understanding of the
Slovak Republic's trade-related policies, especially at a time when substantial reforms were being
made.  Our improved understanding has been very much helped by the frankness and contribution of
the Slovak delegation, and I thank them for that.
62. Members commended the Slovak Republic's impressive progress in transforming to a market
economy, with trade and investment liberalization as major features of this process.  It is now seen as
a functioning market economy, becoming increasingly integrated into the world economy. The Slovak
Republic has substantially increased its multilateral commitments in the WTO during the review
period.
63. Members noted the gains in macro stabilization, including fiscal consolidation, since the late
1990s.  Although unemployment remains high, the economy is beginning to recover, and prospects are
promising.  Members noted that despite past economic difficulties, the Government has not resorted to
protectionist measures nor trade remedies, and indeed  it has taken further steps to liberalize its trade
regime.
64. Structural reform has been revitalised. The Slovak Republic's overall legislative and
institutional framework is being strengthened, includ ing important commercial changes, such as to the
bankruptcy procedures.  Members generally agreed that many of these positive outcomes are linked to
Slovakia's EU accession plans, and referred to the substantial achievements in these negotiations thus
far.  Members also supported the active and more transparent privatization programme covering key
sectors, such as telecommunications and banking.
65. Members agreed that the Slovak Republic plays a full role in the WTO but some wondered
how the Slovak Republic would balance its regional arrangements with its multilateral commitments,
and advised that regional integration should not detract from its multilateral liberalization, including in
agriculture.  Some members were concerned about the possible negative impact of Slovakia's regional
integration on third countries, noting that most of its trade was non-MFN due to a relatively large
number of preferential trade agreements. They urged the Slovak Republic to continue pursuing
multilateral liberalization to narrow the gap between preferential and MFN tariffs.
66. Members commented favourably on overall low tariffs, although noting that transparency
could be improved by further rationalization, such as reducing tariff escalation and removing duty
exemptions as well as higher seasonal duties on certain agricultural products. Members welcomed the
fact that the import surcharge, maintained for ba lance-of-payments reasons, had been terminated on
schedule from 2001.  The Slovak Republic also has relatively few non-tariff barriers.
67. Several Members appreciated the special non-trade concerns confronting the Slovak Republic
on agriculture.  However, some urged the Slovak Republic to extend its liberalisation efforts to
agriculture, which receives relatively high tariff and other assistance.  Several delegations noted that
Slovakia's agricultural assistance as measured by the OECD had increased substantially since 1996.
They questioned the use by the Slovak Republic of food self-sufficiency policies based on agriculturalassistance to achieve food security.
68. Members were impressed with the developments towards liberalization of the services sector.
Key sectors, such as banking, insurance, telecommunications and transport, had been deregulated and
exposed to greater competition, including from foreign sources.  Privatization no longer excludesWT/TPR/M/91
Page 16
sensitive state-owned monopolies. Members encouraged Slovak Republic to continue with its
privatization efforts.
69. Members also sought additional details in a number of specific areas, including:
• efforts to stem corruption and improve governance;
• the system of state aid and its control;
• use of investment incentives;
• changes in intellectual property protection and efforts to improve enforcement;
• government procurement procedures;
• standards and efforts at regional and international harmonization, and the self
certification scheme for manufacturers,
• improving the operation of commercial courts;
• role of the Antimonopoly Office;
• under-utilisation of tariff quotas on agricultural products;
• issues related to imports of GMO food; and
• improving the coverage and benefits of the GSP scheme.
70. Written and oral replies by the Slovak delegation helped clarify the issues raised by Members,
and contributed to their improved understanding of the country's current trade policies and measures.
The Slovak Republic also undertook to send additional information on some matters.
71. In conclusion, this successful Review has highlighted on-going liberalization was a means of
improving economic efficiency and of further integrating the Slovak Republic into the world
economy.  The Slovak Republic's commitment to the multilateral trading system is well recognized.Along with Members, I encourage the Slovak Republic to continue to pursue such open policies. We
all welcome the Slovak Republic's strong support to the WTO as well as its role in Doha for further
multilateral trade negotiations. Liberalization on all fronts would continue to benefit the Slovak
Republic, and help alleviate any adverse effects of  its regional trade arrangements on other Members.
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