WORLD TRADE  
ORGANIZATION   
WT/REG226/M/2 
4 November 2011  
 
(11-5622) 
Committee on Regional Trade Agreements 
Sixty-second Session   
 
 
  
CONSIDERATION OF THE ECONOMIC INTEGRATION AGREEMENT  
BETWEEN THE EUROPEAN UNION AND ALBANIA, SERVICES  
 
Note on the Meeting of 22 and 23 September 2011 
 
Chairman:  Mr. F. Riegert (France) 
 
 
1. The 62nd Session of the Committee on Regional Trade Agreements (hereinafter 'CRTA' or 
the 'Committee') was convened in Airgram WTO/AIR/3790/Rev.1 dated 12 September 2011. 
2. Under Agenda Item D.II of this session, th e CRTA considered the Economic Integration 
Agreement between the European Union and Albani a (hereinafter the 'Agreement'), services.  
3. The Chairman said that the Agreement had entered into force on 1 April 2009.  It had been 
notified by the Parties on 7 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/515).  The text of the Agreem ent was available, together with its Annexes, 
on the Parties' official websites.  The Factual Presentation on the services aspects (document WT/REG226/3 dated 1 July 2011) had b een prepared by the Secretariat on its own 
responsibility in full consultation with the Parti es, in accordance with paragraph 7(b) of the 
Transparency Mechanism (TM) fo r Regional Trade Agreements (doc ument WT/L/671).  In addition, 
he informed Members that written questions and re plies on the Agreement had been distributed in 
document WT/REG226/4, dated 15 Se ptember 2011.  He proposed to organize the consideration of 
the Agreement by first asking the Parties and th en other Members for general comments.  The 
Committee would then turn to the specifics of the Agreement us ing the Factual Presentation to guide 
the debate.  He then proposed to go th rough the questions and replies document. 
4. The representative of Albania emphasized the importance of the current CRTA meeting, 
during which the Agreement (or the Stabilization a nd Association Agreement- SAA) in the area of 
trade in services was going be considered.  The current review followed the review on the goods 
aspects of the Agreement, which had been held in April 2008 in the same Committee.  His delegation 
considered that the RTA Transpar ency Mechanism was an important  tool to examine agreements, 
ensure the transparency of these agreements and allow all Members to assess their compatibility with 
the WTO rules.  The Agreement under consideration was of particular importance for Albania, in 
economic, as well as in political terms, thus confirmi ng its rapprochement with the European Union.  
In 2010, services had reached 58% of GDP, confirming a steady growth in recent years.  The figures 
also showed that the liberalization of services in Albania had made significant contributions to 
economic development.  
5. In his delegation's opinion the Agreement met th e standards of the WTO and upheld Albania's 
commitments to the WTO.  As part of its strategi c goal of joining the European Union, the Agreement 
guaranteed reciprocal facilities for market openi ng, essential for successful achievement of political WT/REG226/M/2 
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  and economic objectives.  The successful implementa tion of the Agreement would help to increase 
economic growth and job creation.  In recent y ears, Albania had been actively involved in the 
implementation of all its agreements and commitments  to the WTO.  Similarly, it was working on the 
full implementation of the Agreement with the EU.  Finally, he thanked Members for their interest 
and was at their disposal to answer any questions they might have. 
6. The representative of the European Union w as pleased to address the Committee to introduce 
the services aspects of the Agreement.  She tha nked the WTO Secretariat for having prepared the 
Factual Presentation, as well as for their suppor t throughout the process.  The Stabilization and 
Association Agreements were the  bedrock of the Stabilization and Association Process, which was the 
framework for EU negotiations with the Western Balkan countries, on the way to their eventual 
accession.  The SAAs represented a far-reaching cont ractual relationship between the EU and each 
Western Balkan country, entailing mutual rights a nd obligations.  Such association had high political 
value and was based on the gradual implementation of  reforms with the aim of moving closer to the 
EU.  It provided the framework for political dial ogue, promotion of trade and economic relations, 
substantial technical assistance, and a mechan ism for the implementation, management and 
monitoring of socio-economic policies.  The Agre ement had been signed on 12 June 2006.  The goods 
aspects of the Agreement had already been considered  in the Committee in April 2008.  In the current 
session, she was going to present the services aspects of  the Agreement, which had entered into force 
on April 2009.  
7. She highlighted that the Agreement provided for substantial sectoral coverage, since all 
sectors were included, with the only exception of th e establishment of air transport services, inland 
waterways transport services, and maritime cabot age services.  However, in certain cases, the 
Stabilisation and Association Council could make  recommendations for improving establishment and 
operations in those areas.  Furthermore, the Agreemen t covered all modes of su pply, with no a priori 
exclusions.  Additionally, it established the elimin ation of existing discrimin atory measures based on 
nationality (Article 46) and required that the Parties grant national treatment for the establishment and 
operation of its companies and nationals (Article 50) from the entry into force of the Agreement.  It 
also provided for the liberalization of the supply of services between the Parties and the temporary 
movement of service suppliers (Article 57).  She sai d that given that the Agreement had entered into 
force only very recently, the Parties were aware th at a number of reforms and important legislative 
changes were still required for its realization.  The EU would continue to accompany these efforts 
through technical and financial assistance.  Her de legation had provided Members with written replies 
to all questions received so far and she would e ndeavour to further clarify issues if needed, and 
answer any oral questions Members might have. 
8. The representative of the United States thanke d the Secretariat and the Parties for the 
materials provided that had enabled the current cons ideration of the Agreement.  She had a follow-up 
question regarding question 11 in the Q&A document and asked the Parties if they could provide 
examples to illustrate the phrase "connected, even  occasionally, with the exercise of official 
authority…", which was used in the Agreement.    
9. The representative of the European Union replied that the concept of the activities that were 
connected, even occasionally, with the exercise of official authority was taken directly from the 
EC Treaty and its interpretation required a closer look into case law, as the decision of whether an 
activity in a particular case was connected or not with  the exercise of official authority needed to be 
checked on a case-by-case basis.  Sh e mentioned for example that in  the most recent case regarding 
this interpretation (Case 50/08) the European Court had repeatedly held that the exception was to be 
restricted to activities which in themselves were dire ctly and specifically connected with the exercise 
of official authority.  In this respect, the Cour t had the occasion to rule that the exception did not 
extend to certain activities that were auxiliary or prep aratory to the exercise of official authority or to 
certain activities whose exercise, although involving  contacts with the administrative or judicial  WT/REG226/M/2 
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  authorities, left their discretionary and decision-making powers intact or to certain activities which did 
not involve the exercise of decision-making powers.  She added that she would be happy to provide 
other specific case-law decisions, if necessary.  She hoped that with this reply she had satisfied the 
request of the United States delegation.    
10. The representative of the United States said this was very helpful.  She had also received a 
number of follow-up questions regarding the answers provided by the Parties to the original questions 
and had provided an advanced co py of these follow-up questions to the European Union.  The first 
follow-up question related to a question that the Unit ed States had asked about clarifying the timeline 
for implementation of the services aspects of the Agreement which was related to paragraph 12 of the Factual Presentation.  The answer provided so me information and described the scheme for 
implementation, namely that some provisions would be implemented upon the entry into force of the 
Agreement and, others in five or ten years following the date of entry into force.  She was interested 
in knowing specifically which provisions of Title V would be implemented on the date of entry into 
force, which ones would be implemented in five years following the entry into force and which would be implemented in ten years after the entry into fo rce.  She said that this follow-up question would 
help provide transparency in the Agreement.  In the same area, the second follow-up question 
concerned paragraph 12 of the Factual Presentation wh ich stated that "certain provisions of Title V 
applicable to Albania are subject to a transition pe riod which is described more fully below." She said 
the sentence seemed to suggest that it was Party-specific (i.e. Albania), rather than issue-specific.   
She asked whether the Parties could address the appa rent inconsistency or clarify whether this was 
Party or issue specific.   
11. The next follow-up question concerned key personnel  and intra-corporate transferees.  In the 
original question, her delegation had asked wh ether the Agreement contained any affirmative 
obligation requiring the Parties to permit intra-cor porate transferees, since paragraph 30 suggested 
that the right to transfer employees was based on "legislation in force in the host country of 
establishment".  The answer provided by the Parti es did not mention exactly whether there were any 
obligations but mentioned immigration requirement s by the EU Member States.  She was thus 
wondering how the Agreement in legal terms advanced  the aim of allowing the entry and stay of key 
personnel.  In other words, she asked what legal obligations, if any, the Agreement created with 
respect to the entry and stay of key personnel.   Another follow-up question concerned the public 
utilities carve-out.  Her delegation had asked about the scope of an exclusion from the Agreement 
pertaining to so-called "activities that are c onnected, even occasionally, with the exercise of 
government authority" and asked how this compar ed to the horizontal carve-out in the GATS for 
public utilities.  There were two different kinds of car ve-outs: one in the Agreement and another in the 
GATS.  The follow-up question was whether the Agreement contained a public utility carve-out 
analogous to that contained in the EU's GATS schedul e; or whether these activities were subject to the 
Agreement's disciplines.  The other follow-up questi on was that the Parties had noted in their answers 
that the Agreement's exception for "activities that ar e connected, even occasiona lly, with the exercise 
of official authority" corresponded effectively w ith the GATS exclusion of "services supplied in the 
exercise of government authority".   These two phrases for these two exceptions were different and so she wondered whether the Parties could explain th e extent to which they believed these exceptions 
were coterminous, coextensive or not.  
12. Another representative of Albania thanked th e delegation of the United States for the 
follow-up questions.  Although these follow-up ques tions had not been delivered to Albania, 
specifically, she said she would try to give preliminar y answers to some of the questions.  With regard 
to the follow-up question on the implementation period for the provisions of Title V, she replied,  that 
from the Agreement's entry into fo rce the Parties had to grant national and MFN treatment for the 
establishment and supply of services under mode 3, for subsidiaries and branches in both Parties.  
With respect to the provisions to be implemente d five years after the entry into force of the 
Agreement, the Parties had agreed to allow the establishment of self-employed persons to exercise WT/REG226/M/2 
Page 4  
 
  economic activities in their respective countries.  With  regard to the provisions to be implemented ten 
years after entry into force, her delegation had to go through all the Articles of Title V to specify 
exactly which fell into this category.  Yet, she coul d say that for everything that was not specified in 
the Agreement a ten-year transition period applie d.  With regard to the second question on the 
apparent inconsistency in paragr aph 12, as far as the approximation of  legislation was concerned, the 
transition period was both Party and issue specific.  Her understanding was that the transition periods 
were Party and issue specific as long as they were related to the approximation of the legislation in 
specific areas within the Agreement.  For the rema inder, she said she would need to consult further 
and would have preliminary comments the following day.   
13. In response to the US delegation's first follo w-up question on the implementation periods for 
the provisions of Title V, the representative of the European Union replied that the provisions that 
were to be implemented upon the entry into force of  the Agreement were Articles 50.1, 50.3, 50.5(a), 
59.3(b), 61.1 and 61.2.  The provisions that were to be implemented in five years following the date of 
entry into force upon decision of the Stabilization and Association Council were Articles 50.4, 57.3 
and 61.2.  For the other provisions of Title V a ten- year transition period applied.  This was the case, 
for instance, of Articles 57.1 and 57.2.   
14. The second follow-up question by the US delegati on referred to paragraph 12 of the Factual 
Presentation which stated that "certain provisions of  Title V applicable to Albania are subject to a 
transition period which is described more fully belo w".  He recalled that for the US delegation the 
sentence suggested that the reference transition peri od was Party rather than issue specific and it had 
thus asked whether the Parties could address the appa rent inconsistency between the statement in the 
Factual Presentation and the response provided above.  He answered that there was no inconsistency.  
There were some Party-specific references, for instance, inter alia,  Article 50.1 and some 
issue-specific references, for instance Article 58.  In its third follow-up question, the US delegation 
had asked how the Agreement in lega l terms advanced "the aim of allowing the entry and stay of key 
personnel".  The original question had asked which legal obligations, if any, the Agreement created 
with respect to the entry and stay of key personnel.   He answered that the Agreement subjected the 
entry of key personnel to conditions of  entry, stay and work in the Parties' territories, which on the EU 
side allowed the entry of the category defined in th e Agreement.  Finally, the last follow-up question 
from the US concerned whether the Agreement cont ained a public-utilities carve-out analogous to that 
in the EU's GATS schedule, or whether these activiti es were subject to the Agreement's disciplines.  
The second part of the question concerned the language  used for the Parties' exceptions.  The Parties 
had already noted that the Agreement's exception fo r "activities that are connected, even occasionally, 
with the exercise of government authority" co rresponded effectively to the GATS exclusion of 
"services supplied in the exercise of government authority".  In particul ar, the US delegation had 
asked to what extent these two exceptions were coterminous;  why the Parties had used a different 
language from that contained in the GATS exception and;  whether the exception in the Agreement 
was intended to be broader than the exception in  GATS Article 1.3(b).  He replied that the 
Agreement, as previously explained, followed a di fferent logic than normal FTAs and indeed did not 
contain the public-utilities carve-out.  In the EU's opinion the exception, although with slightly 
different language had the same meaning and was ba sed on the wording used in Article 45 of the EC 
Treaty. 
15. The representative of the United States expressed  her delegation's gratitude and appreciation 
for the Parties' answers, which her delegation would study.   
16. The Chairman said that the consideration of the services aspects of the Economic Integration 
Agreement between the European Union and Albani a had allowed the Committee to clarify a number 
of questions and oral discussion of the Agr eement could be concluded in accordance with 
paragraph 11 of the TM.  If any delegations wished  to ask follow-up questions they were invited to 
forward submissions in writing to the Secretariat by 29 September 2011  and the Parties were asked to  WT/REG226/M/2 
 Page 5 
 
 
  submit replies  in writing by no later than 13 October 2011.  In accordance with paragraph 13 of the 
TM 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. 
17. The Committee took note of the comments made. 
__________