WT/REG285/4  
 
14 August 2014  
(14-4736)  Page: 1/3  
Committee on Regional Trade Agreements  Original: English  
 
 ECONOMIC INTEGRATION AGREEMENT BETWEEN THE EUROPEAN UNION AND SERBIA 
(SERVICES) 
QUESTIONS AND REPLIES 
 The following communication, dated 12 August 2014, is being circulated at the request of 
the delegations of the European Union and Serbia.  
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   This document reproduces the questions addressed to the Parties and the responses 
submitted. 
 Questions from the delegation of Thailand 
 
1.1.  Paragraph 3.3.3 Commercial presence:  
Please give details regarding the conditio n for establishing a commercial presence 
under the FTA, which was stipulated under the agreement as “... However, should the 
company, set up in accordance with the laws of a Member State or of Serbia, have only 
its registered office in the territory of the Community or of Serbia respectively, the company shall be considered a Community or a Serbian company if its operations 
possess a real and continuous link with the ec onomy of one of the Member States or of 
Serbia ”. 
The agreement provides for a right of the estab lishment of the subsidiary or branch in the 
respective territories according to the national relevant provisions. Clause regarding limiting the 
benefits of the representative offices without a real and continuous links is similar to the "substantive business operation" link in the GATS definition for juridical person. 
 
1.2.  Paragraph 3.3.4 Moveme nt of natural persons:  
Please give information regarding the EU’s  policy on the movement of workers with 
regard to the establishment of a Bilateral Labour Agreement with a dialogue partner, 
including type of work permitted and conditio ns for spouse and children to work in EU, 
etc. 
 This question does not correlate with the CRTA of the Serbia-EU Agreement but mixes 
bilateral agreements which EU Member States can retain and the SAA.  
 
Member States can maintain agreements on fr ee movement of labour, if they have them. 
The SAA commits them to improve such agreements, but does not provide for automatic free 
movement of people with the EU. 
 
1.3.  Paragraph 4.6 Government Procurement:  
i. Does Article 76 of the Agreement conc ern public procurement covering all 
trade in services for both the EU and Serbia? Is there any exception? Does it covered all trade in goods too? WT/REG285/4 
 
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  It covers in principle all public procur ement, including both goods and services. 
ii. Are the market access commitments for services and construction services 
for both the EU and Serbia under Government procurement related to or complied with their market access commitments under the Services 
Provisions? Please explain. 
The services provisions determine whether or not a given service can at all be traded, and 
under which circumstances. The public procurement article sets out specific disciplines with the 
regard of public procurement that (in the case of the procurement of services) apply in addition  to 
the services provisions.  
iii. Paragraph 4.9 states that "......Article 76.1 provides that the EU and Serbia 
consider that the opening up of the award of public contracts on the basis of 
non-discrimination and reciprocity, fo llowing in particular WTO rules is a 
desirable objective".  
a. Please explain the interpretation of the non-discrimination and reciprocity 
between the two parties, and how th e reciprocity works between the two 
parties.  
 Article 76.1 describes a future objective, not a current reality. Currently there is not yet full 
reciprocity (as one can easily discern from reading paragraphs 2 and 3 of Article 76).  
  As indicated in footnote 1 of the Factua l Presentation, Article 76.4 of the Agreement 
provides that a five year transition period gran ted to Serbia by the end of which Serbia shall 
abolish preferences to domestic bidders. That period ends on 1
st September 2018. 
 
b. Does the reciprocity apply to same good s; same service sector; and/or same 
procuring entities between the two parties? Please provide example. 
Currently there is no full reciprocity, but an imbalance in favour of Serbia. Serbian 
companies get national treatment in the EU irrespective of whether or they are established in the 
EU, whereas EU companies get national treatment in Serbia only if they are established there. In 
addition, Serbia may apply price preferences that will only gradually be phased out by 1st 
September 2018. 
 
c. Regarding the non-discrimination, in addi tion to "no less favourable treatment" 
between Serbian companies and EU companies, does the non-discrimination also apply to goods and services betw een the parties? Please explain. 
The agreement makes explicit reference to companies rather than to goods and services.  
1.4.  Paragraph 4.8 Dispute Settlement:  Some EU members such as Austria, Bulgar ia, France, Finland,  Hungary, Italy, 
Netherlands, Poland, Romania, and Spain, have established Bilateral Investment 
Treaties with Serbia, which covers Invest or-State Dispute Settlement. However, at 
present, the Agreement between the EU and Se rbia only covers State to State Dispute 
Settlement, as such, do the EU or Serbia have any future plan for the inclusion of 
Investor-State Dispute Settlement
 into the agreement? 
There are no plans to include an Investor-State Dispute Settlement mechanism in the 
EU-Serbia association agreement. 
 
1.5.  Paragraph 4.15:  
Please advise whether the "appropriate meas ures" that a Party may take, in case the 
other Party has failed to fulfil an obligat ion under the Agreement, could be adopted 
without the filing of a formal request that the dispute be resolved. Could the WT/REG285/4 
 
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  "appropriate measures" include suspension  of concessions provided under the 
Agreement? 
 The procedures under Article 129(4) and Article 130 envisage two self-standing proceedings. 
Under Article 129(4) a party can exceptionally take "appropriate measures" in case the other party 
has failed to fulfil an obligation under the Agreem ent. Accordingly, the party should normally notify 
first the Stabilisation and Association Council of such a situation and the measures that it intends to take. However, in cases of special urgency, the party may also take immediate action without 
notifying first the Stabilisation and Association Council.  
  The scope of "appropriate measures" is not further defined under the Stabilisation and Association Agreement. 
1.6.  Paragraph 4.23:  
As the "Protocol" does not preclude a party from implementing suspension of benefits 
authorized by the WTO Dispute Settlement Body, please advise whether a party could 
retaliate, pursuant to the WTO's authorization, against the other Party without 
violating the "Agreement". 
 Article 16 lit. b) of Protocol 7 to the agreemen t provides that a Party is not precluded from 
having recourse to the WTO dispute settlement mechanism under certain conditions. If a Party 
chooses to have recourse to the WTO dispute settlement mechanism, Article 16 lit. c) provides that such a party may implement the suspension of obligations authorized by the WTO Dispute 
Settlement Body (DSB). Since the Protocol is an integral part of the agreement (Article 132) it 
follows that the implementation of suspension of obligations that have been authorized by the DSB 
would not violate the agreement.  
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