WORLD TRADE  
ORGANIZATION   
WT/REG129/M/3 
7 July 2011 
 (11-3351) 
Committee on Regional Trade Agreements 
Sixty-first Session  
 
 
 
CONSIDERATION OF THE ECONOMIC INTEGRATION AGREEMENT  
BETWEEN THE EUROPEAN UNION AND THE FORMER YUGOSLAV  
REPUBLIC OF MACEDONIA, SERVICES  
 
Note on the Meeting of 28 June 2011 
 
Chairman:  Mr. F. Riegert (France) 
 
 
1. The 61th Session of the Committee on Regional Trad e Agreements (hereinafter 'CRTA' or the 
'Committee') was convened in Airgram WTO/ AIR/3754, and corrigendum 1 dated 17 May and 
21 June 2011.  
2. Under Agenda Item B.VI of this session, the CRTA considered the Economic Integration 
Agreement between the European Union (EU) and the Former Yugosla v Republic of Macedonia 
(FYROM) (hereinafter the 'Agreement'), services.  
3. The Chairman said that the Agreement had en tered into force on 1 April 2004 and had been 
notified by the Parties on 2 October 2009 to the WTO under GATS Article V:7(a) as an Agreement 
providing for the liberalization of trade in services within the meaning of Article V of the GATS (document S/C/N/514).  The text of the Agreement w as available, together with its Annexes, on the 
Parties' official websites.  The Factual Presen tation, services aspects, (document WT/REG129/5 dated 
15 April 2011) had been prepared by the Secretaria t on its own responsibility in full consultation with 
the Parties, in accordance with paragraph 7(b) of the Transparency Mechanism (TM) for Regional 
Trade Agreements (document WT/L/671).  Also he  informed Members that written questions and 
replies on the Agreement had been distributed in document WT/REG129/6, dated 22 June 2011.  He 
proposed to organize the consideration of the Agre ement by first asking the Parties and then other 
Members for general comments.  The Committee woul d then turn to the specifics of the Agreement 
using the Factual Presentation to guide the de bate.  He proposed to go through the Factual 
Presentation section by section, and then look at the questions and replies document. 
4. The representative of the Former Yugoslav Repub lic of Macedonia thanked the Secretariat for 
the excellent and detailed Factual Presentation which clearly reflected the commitments and 
obligations of the Parties under consideration by th e Committee.  He also thanked the EU delegation 
for its cooperation and support.  He emphasized that  the EU was a very important trade partner with 
close cooperation in many areas.  The Agreement,  or the Stabilization and Association Agreement 
between the EU and FYROM, was signed on 9 Apr il 2001.  The background of the Agreement went 
back to November 2000 when the stabilization and association process between EU and Western 
Balkans countries had been launched.  The Agreemen t represented an important step forward in his 
country's preparation for EU membership.  It had entered into force in 2004 and had led to a further 
aligning of the national legislation with the EU  regulatory framework.  Th e Agreement was FYROM's 
first regional trade agreement whic h contained provisions on trade in services.  It had taken into 
account the sensitivity of the economy and would be  fully implemented over a transitional period of 
ten years divided into two successive stages.  The purpose of dividing the process into two stages was WT/REG129/M/3 
Page 2  
 
  to provide progressive implementation of the provi sions of the Agreement focusing on certain areas 
during the first stage including Title V that related to services.  In 2009, progress had been evaluated 
by the European Commission with a proposal for a Decision on the transition to the second stage.  A 
Stabilization and Association Council had been established under the Agreement assisted by a 
Committee, composed of representatives from th e Parties.  The Committee had created sub-
commissions in specific areas that  held annual meetings to suppor t the country's efforts towards 
approximation of its legislation and to improve economic cooperati on with the EU.  He said that 
FYROM's share in total exports and imports of ser vices was small, at 0.03% of total world exports 
and imports respectively in 2008.  Trade in services had grown slowly but steadily.  The share of trade 
in services with respect to total foreign trade had fluctuated betw een 2000 and 2008, from 16.2% in 
2000 to 21.2% in 2008.  In 2009, exports and imports of services amounted to €618.3 million and 
€590.3 million, respectively. Contrary to 2008 when exports (15.4%) and impor ts of services (19.8%) 
expanded, services exports and imports declined in 2009 by 9.9% and 13.4%, respectively.  Between 
2001 and 2005, FYROM had been a net importer of commercial services but since 2006, it had run a 
surplus on its services trade balance.  Transport, tourism and business services were the largest source 
of total exports and imports of services, suggesting that trade in services may be poorly diversified. 
5. He added that since the implementation of th e Agreement his country had achieved a high 
degree of trade liberalization due to harmonization w ith EU legislation, thus resulting in deeper and 
more fluid trade and investments.  Growth of the ser vices sector had been influenced by foreign direct 
investments.  EU Member States had been an important source of foreign direct investments in sectors such as banking, telecommunications, and trade and distribution, with an estimated €2,512.5 million 
of investment stock in 2009.  In the same year, th e share of FDI from EU Member States in total FDI 
had been 79.9%.  The trade policy objective of th e FYROM in services was to contribute to the 
creation of the necessary conditions to ensure econo mic growth and the modernization of its economy 
so as to ensure its competitiveness.  The trade po licy of openness and liberalization was directed 
towards achieving a better inclusion into the world economy, so as to benef it from specialization of 
international markets.  His delegation believed that  sustained economic and investment liberalization 
was the best way for any country to foster innova tion, attract advanced technology and strengthen 
domestic sources of growth.  The Agreement had established transparent rules, commitments not to increase restrictions in the Parties' services market s, and allowed further improvements in trade in 
services through successive stages.  The Agreement refl ected the constant intention of the FYROM to 
strengthen bilateral relations and to  move forward the integration process with the EU.  Bilateral and 
regional trade agreements, served to strengthen the multilateral framework too.  He highlighted the 
importance of a stable, predictable and rules-b ased international trading system, and remained 
committed to the multilateral process in the WTO. 
6. The representative of the European Union said he was pleased to introduce the services 
aspects of the Agreement (Stabilisation and Associat ion Agreement) between the EU and the Former 
Yugoslav Republic of Macedonia.  He thanked the WTO Secretariat for preparing the Factual 
Presentation of the Agreement, as well as for thei r support throughout this important process.  The 
Agreement was signed on 9 April 2001 and its ulti mate objective was to align the legislative 
framework of the FYROM with the regulatory frame work of the EU, as a precursor to eventual EU 
membership.  He recalled that the FYROM was an  official candidate for EU membership.  The 
Stabilization and Association Agreements provided a framework for political dialogue, promotion of 
trade and economic relations, substantial t echnical assistance, and a mechanism for the 
implementation, management and monitoring of socio-economic policies.  It was an essential 
contractual framework to strengthen relations with the EU, and ultimately to prepare the FYROM for 
EU membership.   
7. He then turned to the key elements of th e services aspects of the Agreement, which had 
entered into force in April 2004.  The goods aspects of the Agreement had already been examined in 
the Committee between 2004 and 2005.  The Agreemen t provided for substantial sectoral coverage,  WT/REG129/M/3 
 Page 3 
 
 
  since all sectors were included, with the only excepti on of air transport, inland waterways transport, 
and maritime cabotage services.  However, the Stabilization and Association Council could make 
recommendations for improving establishment and operati ons in those areas too.  The Agreement also 
covered all modes of supply (cross-border, establishm ent and temporary movement of persons), with 
no a priori exclusions.  It established the elimination of existing discriminatory measures based on 
nationality (Article 44) and required that Parties grant national treatment for the establishment and 
operation of companies and nationals (Article 48) following the Agreement's entry into force.  The Agreement also provided for the lib eralization of the supply of serv ices between the Parties and the 
temporary movement of service suppliers (Article 53).  He pointed out that the FYROM had recently achieved good progress in the area of financial and postal services as well as in the free movement of 
capital.  Work on the mutual recognition of prof essional qualifications had also started.  The 
Agreement was to be fully implemented over a tran sitional period of ten years, divided into two 
stages.  The FYROM had been implementing all the commitments undertaken  under the Agreement, 
which was a key priority of the accession partners hip.  The country continued to fulfil all the 
commitments foreseen under the first stage of implementation of Title V (Movement of workers, 
establishment supply of services and capital) and on that basis the EU had made in October 2009 a 
proposal on transition to the second stage of the Associ ation, pursuant to Article V of the Agreement.  
The EU was aware that a number of reforms and im portant legislative changes were still required but 
they were still within the transitional period for eseen for the completion of the Agreement.  To 
conclude, he said that the EU would continue  to accompany the FYROM in its efforts through 
technical and financial assistance. He looked forw ard to a fruitful discussion in the Committee and 
would endeavour to answer all questions from Members.  
8. The representative of the United States expressed his appreciation to the EU, the FYROM and 
the Secretariat for the information provided on the Agreement.  He asked for additional information 
regarding the two stages of implementation and in particular,  about the criteria that had been 
considered in deciding the current stage of implem entation.  He also asked what had happened since 
October 2009 with respect to the proposal from the EU to move to the second stage of implementation 
and whether this had happened.  
9. The representative of the European Union said th at during the first stage the focus was on 
Titles III, V, VI and VII (regional co-operation, movement of workers, establishment, supply of 
services and capital, approximation of laws and law enforcement, and justice and home affairs) while 
during the second stage other Titles were monitored:  political dialogue, cooperation policies and 
financial cooperation.  Regarding the question on whether the process was in the second stage, he said 
the answer was negative.  They we re in the process of moving to th e second stage but they were not 
yet there:  the EU had presented the proposal wh ich was under consideration in their institutional 
processes.   
10. The Chairman said that the consideration of the services aspects of the Economic Integration 
Agreement between the European Union and th e Former Yugoslav Republic of Macedonia had 
allowed the Committee to clarify a number of ques tions and oral discussion of the Agreement could 
be concluded in accordance with paragraph 11 of the Transparency Mechanism.  If any delegations 
wished to ask follow-up questions they were i nvited to forward submissions in writing to the 
Secretariat by 6 July 2011  and the Parties were asked to submit replies  in writing by no later than 
20 July 2011.  In accordance with paragraph 13 of the Transparency Mechanism all written 
submissions, as well as minutes of the meeting would be circulated promptly, in all WTO official 
languages, and would be made available on the WTO website. 
11. The Committee took note of the comments made. 
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