WORLD TRADE  
ORGANIZATION  WT/TPR/M/155 
18 January 2006 
 (06-0210) 
Trade Policy Review Body 
28 and 30 November 2005  
 
 
 
TRADE POLICY REVIEW 
 
ROMANIA 
 
Minutes of Meeting  
 
Chairperson:  H.E. Mr. Don Stephenson (Canada) 
 
 
Page 
 
I. INTRODUCTORY REMARKS BY THE CHAIRPERSON 3  
II. OPENING STATEMENT BY THE REPRESENTATIVE OF ROMANIA 4  
III. STATEMENT BY THE DISCUSSANT 6  
IV. STATEMENTS BY MEMBERS 8  
V. REPLIES BY THE REPRESENTATIVE OF ROMANIA AND ADDITIONAL 
COMMENTS 11  
VI. CONCLUDING REMARKS BY THE CHAIRPERSON 15  
 
 
Note:   Advance written questions by WTO Memb ers and the replies provided by Romania are 
reproduced in document WT/TPR/M/155/Add.1 and will be available online at:  
http://www.wto.org/english/tr atop_e/tpr_e/tp_rep_e.htm.  
   WT/TPR/M/155 
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  I. INTRODUCTORY REMARKS BY THE CHAIRPERSON 
1. The third Trade Policy Review of Romania was held on 28 and 30 November 2005.  The 
Chairperson (H.E. Mr. Don Stephenson) welcom ed the delegation of Romania, headed by 
H.E. Mr. Iuliu Winkler, Minister Delegate for Trade, and the discussant H.E. Dr. Manzoor Ahmad (Pakistan).  As usual, the discussant would speak in his personal capacity and, in accordance with 
established procedures, had made available in adva nce a broad outline of the themes he intended to 
raise (document WT/TPR/D/131). 
2. The Chairperson recalled the purpose of the Trad e Policy Reviews and the main elements of 
the procedures of the meeting.  The Report by Romania was contained in document WT/TPR/G/155 and that of the Secretariat in document WT/TPR /S/155.  Copies of advance written questions, 
submitted by:  Japan;  Switzerland;  Hong Kong, Ch ina;  the Republic of Korea;  Turkey;  the 
United States;  Mexico;  Canada;  and Brazil had b een transmitted to the delegation of Romania.  
These questions and the replies provided by the delegation of Romania are reproduced in WT/TPR/M/155/Add.1. 
3. From the two reports prepared for this meeting, it was clear that during the period under 
review, Romania had achieved a virtuous co mbination of high GDP growth and falling 
unemployment, inflation, and fiscal deficit.  None theless, Romania faced several long-run challenges, 
including building a competitive market economy fo r the purpose of its integration into the EC, 
planned for 2007.  Members would be interested in  learning more about the way Romania intended to 
take up this challenge. 
4. During the period under review, Romania had con tinued liberalizing its trade regime, albeit 
through a network of preferential agreements en compassing 38 partners.  Improvement of Romania's 
multilateral commitments, both on goods and services, would enhance the predic tability of its trade 
regime and its business environment fo r attracting further FDI inflows. 
 WT/TPR/M/155 
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  II. OPENING STATEMENT BY THE RE PRESENTATIVE OF ROMANIA 
5. The representative of Romania
 appreciated Members' interest in this important meeting for 
Romania.  This third Trade Policy Review allowed Romania to share the results of its Government's 
strategy.  The Government's endeavour to ensure Romania's fair and profitable integration into the 
world trade and economy had been largely suppor ted by its internationa l agreements and WTO 
commitments. 
6. Since Romania had become an original Member of the WTO in 1995, all WTO-related 
legislation had applied directly in Romania and had been the main tool for drafting trade policy 
regime.  During the last ten years, Romania's trad e policy review proved that it had fully complied 
with its WTO commitments. 
7. Romania had used its commitments under th e Uruguay Round to better define the policy 
space for its Government within the strategy of further developing its economy and preparing it for 
accession to the EC, and enhancing foreign trade.   This strategy helped multilateralism and 
regionalism to support one another and made trade a strong instrument in the development strategy.  
In this context, a successful conclusion of the D oha Round was important to promote a more dynamic, 
open, and equitable global economy through further tr ade liberalization, improved market access, and 
the strengthening of the multilateral trading system. 
8. Observing the rules and obligations assumed in negotiations was an important feature of 
Romania's trade policy; a rules-based multilateral tr ading system was important in designing trade 
policy and economic development.  In this re gard, Romania had witnessed sustained economic 
growth, due mainly to foreign trade, which ha d been its most dynamic macroeconomic indicator 
during the last 15 years; its role as engine of development had been possible due to the increasing 
openness of Romania's market.  Therefore, it was important to look not just for freer trade, but also for rules designed to ensure stab ility, predictability, and fairness.  This was not an easy task in 
Romania's dialogue with the business community and Members when trying to ensure fair competition for Romania's exports. 
9. Romania had enforced a liberal trade policy seeking to have its economy act in accordance 
with multilaterally agreed mechanisms and rules, and to encourage the development of a competitive 
economic environment capable of promoting the implementation of market rules.  The process was aimed at transforming the econom y into a market economy and ensuring a competitive environment 
for producers, focusing on the active involvement of Romania's economy in globalization. 
10. Another important policy objective, as a me ans for complementing and reinforcing 
participation in the multilateral trading system, was Romania's integration process to the EC.  
Regional trade liberalization was a preparation for th e speeding up of multilateral trade liberalization;  
observing the rules within Romania's regional agre ements enhanced the enforcement of the WTO 
rules.  Romania had signed the EC Accession Treaty in April 2005.  It was focused on completing the necessary reforms to comply with its accession process commitments. 
11. Romania's overall current economic situati on and prospects indicated vigorous economic 
growth and macroeconomic stability.  In 2005, growth had been driven by domestic demand and 
investments, and average GDP growth of 5.7% wa s expected; over the next few years, an average 
growth rate of 5.5%-6% was estimated which would diminish the economic disparities between 
Romania and the EC member states.  In 2005, the slight increase in domestic demand would be offset by further growth in gross fixed capital formati on supported by greater structural reforms and FDI 
boom.  FDI had gone up due to the recently gain ed investment grade and prospects of EC 
membership.  The current account deficit had fluc tuated during 1999-04; its financing had become 
easier due to improving borrowing cond itions and steady FDI inflows.  WT/TPR/M/155 
 Page 5 
 
 
  12. Romania's external trade flows continued to be  the most dynamic macroeconomic indicator.  
Foreign trade had had a positive impact on the econo my.  Several factors explained why imports had 
grown faster than exports:  further upgradin g and retooling of the economy had boosted import 
demand for capital goods;  increase in industry outpu t had required higher impor ts of raw materials 
and intermediate goods;  and shar per household demand for durables had led to higher imports of 
consumer goods.  The increase in oil and gas pri ces had also had an impact.  The EC remained 
Romania's main trading partner.  Trade with a ll FTA preferential partners represented 83% of 
Romania's exports and 70% of its imports.  No majo r changes had occurred in trade flows with other 
regions since 1999.  Romania's future expor t performance should undoubtedly be based on 
competitive advantages, developing the capacity and competency of its export sector, and promoting 
an economy that could thrive under free trade in an increasingly global marketplace. 
13. Since 1990, FDI had reached over €15 billion.  In 200 5, €3 billion were expected to be added;  
more substantial increases were expected after accession to the EC.  FDI was a source of capital, know-how, technology and management skills, and stimulated economic growth. Romania had to 
become a better contender for absorbin g FDI, especially export-oriented FDI. 
14. SMEs played an important role as a basis for developing a modern and dynamic economy.  It 
was important to raise their competitiveness.  SMEs  contributed to GDP formation and job creation, 
and boosted export growth.  They could react flexibly in highly competitive markets and adapt quickly to structural and cyclical changes in the global economy.  Supporting SMEs was important for counteracting the negative effects of structural ad justment and industry restructuring, generating 
economic and social alternatives, a nd consolidating the middle class.  The Government's actions were 
aimed at creating and improving the institutional, le gislative, and financial framework favourable to 
the development of SMEs and of private initiative. 
15. On 1 January 2005, Romania had shifted from progr essive taxation to a 16% flat tax on profit 
and income, and the economy had responded very positively.  The purchasing power of most of 
citizens had increased, and consumption growth had allowed a 25% rise in VAT collection.  Revenue 
from customs duties had increased by over 30% in 2005. 
16. Romania's strategic focus, therefore, needed to be on competitive advantages; developing the 
capacities and competencies of its exports sector;  attracting local and foreign investment;  and 
fostering an economy that could thrive under free trade in an increasingly global marketplace.  Competitive advantages did not arise from protect ionism, quotas, and preferential market access, 
which could negatively affect economic performance. 
17. The Government was determined to comply strictly with its WTO commitments, as 
transparency and predictability were essential.  To  this end, consultations  were organized annually 
with the business society;  their results were corre lated with the Government's overall strategy of 
development and materialized in the trade regi me for the following year.  Romania was also 
determined to pursue its reform policies to stre ngthen the market economy, give new impetus to 
economic development, and better prepare its integra tion to the EC's economic structures.  Romania's 
participation in the multilateral ne gotiations sought to further liberalize trade through measures that 
ensured a balance between the Members' rights an d obligations, and enhanced the reform process 
under way.  As regards trade defence measures, Romania preferred prudential measures instead of 
imposing barriers to trade. 
18. Romania's efforts could be more successful with Members' support.  Romania's review 
represented a supplementary evaluation of its trade policy and might support the Government's efforts 
in pursuing its development strategy. WT/TPR/M/155 
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  III. STATEMENT BY THE DISCUSSANT 
(i) Overall performance 
19. The discussant
 stated that there had been dynamic economic growth and macroeconomic 
stability in Romania, since 1999.  Almost every ec onomic indicator had impr oved.  From a severe 
recession in the late 1990s, GDP had grown at aroun d 5% annually and had accelerated to 8.3% in 
real terms in 2004;  as a result, GDP per capita had mo re than doubled in 2004.  Inflation, which had 
averaged 12% per month in 1993 and was hovering at 41% in 2000, had now declined to about 7.5% 
per year.  The public deficit was less than 1% of GDP (down from 4% in 2000). 
20. There had also been strong growth in trade, w ith imports growing at a much faster pace than 
exports.  Merchandise exports had increased fro m US$11.2 billion in 2000 to US$18.9 billion in 
2004.  Exports of higher-value-added products (e.g. machinery, cars, chemicals, plastics, and steel 
products) had increased.  Merchandise imports had risen from US$13.1 billion in 2000 to 
US$24.3 billion in 2004 due to increased imports of machinery and transport equipment. 
21. Since 1999, FDI inflows had quadrupled to reach over €4 billion in 2004.  This was all the 
more commendable as they had remained at l ess than €500,000 through most of the 1990s.  
(ii) Key reforms 
22. There was obviously a well coordinated amb itious economic reform programme.  Despite 
difficulties due to a transition period, Romania had c ontinued to pursue a liberal trade policy based on 
multilateral rules.  The objective of integration in to the EC and aligning its trade and economic 
policies, as well as active support from the IMF and th e World Bank, had helped to pursue the reform 
policies.  As a result, Romania had been able to address deep-rooted structural problems built over 
previous decades.   
23. Continued trade policy liberalization had in cluded the introduction of a new import/export 
licencing system, abolition of an import surcharge, a simplified tariff structure, and lower MFN tariffs.  Although the MFN tariff had been reduced to 17.5% in 2005, this did not give the actual 
picture of Romania's tariff.  Since about three qua rters of its imports were from the EC, or other 
preferential partners with import tariffs at 5%-6%, Romania's tariff was therefore in the same range as 
many developed countries.   
24. Romania had never resorted to its trade remedi es legislation (anti-dumping, countervailing or 
safeguard measures).  Furthermore, trade restrictiv e measures, such as local-content requirements, had 
been removed in 2003 ahead of schedule. 
25. Trade facilitation had been given full attention.   Customs procedures had been simplified and 
were based on risk profiling;  as a result, clear ance time had been reduced to an average of 
30 minutes. 
26. The scope of financial reform s was also very impressive.  The capital account had been 
liberalized, and the leu had recently been redenomin ated to stimulate the use of modern payment 
methods and to simplify other financial transactions. 
27. Since 1999, the privatization programme had been reinvigorated.  Its focus had been changed 
from SMEs to larger state-owned enterprises.  As a result, the financial burden on the national budget 
had been reduced considerably.  Its success could be judged from the privatization portfolio that had 
fallen from 9,137 enterprises (end 1999) to 1,044 (J une 2005). The major beneficiaries had been  WT/TPR/M/155 
 Page 7 
 
 
  services, including banking, transportation, energy, and telecommunications.  The ending of certain 
monopolies, such as telecoms, had resulted in exceptional growth for these markets.    
28. Industrial competitiveness had improved throu gh increasing the role of R&D and improving 
professional training and labour employment.    
29. There were also extensive reforms in agriculture .  Restitution of agricultural and forestry land 
had been almost finalized.  A well-coordinated polic y for raising agricultural productivity, quality, 
and competitiveness was under way. 
(iii) Scope for improvement 
30. Despite extensive reforms, Romania was still ra nked rather low in international performance 
indexes. For example, it ranked 125th out of 155 countries and was classified as mostly unfree in the 
2005 Index of Economic Freedom;  its 2004 UNDP Hu man Development Index was above the world 
average, but below the average of Central and Eastern Europe. 
31. In some key sectors, Romania's performance could be much better.  For example, despite 
offering a rich tapestry of tourist attractions, Roma nia's tourism revenue had remained low in 2004.  
In other important areas (e.g. fisheries), productivity had declined.  
32. In general, Romania's achievements had been outst anding.  It had fully prepared itself for its 
accession to the EC.  Despite initial difficulties, it s transformation from a centrally planned to a 
market economy was now going well.  Romania could be taken as a good model by other WTO 
Members to reform their economic and trade environment.  WT/TPR/M/155 
Page 8  
 
  IV. STATEMENTS BY MEMBERS 
33. The representative of Japan
 noted that Japan appreciated Romania's promotion of economic 
reform and trade liberalization, and recovery of macroeconomic stability.  It hoped that Romania 
would improve its increasing external account deficit.  It also appreciated that Romania had promoted 
private enterprises and privatization, and encouraged it to promote privatization in financial services.  
Romania's accession to the EC would help to furthe r liberalize its trade and investment regime.  
However, Japan was concerned that  Romania's agreements and trade regime would be influenced by 
its accession, and hoped that Romania would reca ll GATT Article XXIV and GATS Article 5.  Japan 
welcomed Romania's measures to in crease FDI.  However, there was still room for improvement (e.g. 
excessive bureaucracy, law enforcement problems).  Japan hoped that a more investment-friendly 
environment would be soon established in Romania. 
34. The representative of Switzerland  said that Switzerland and Romania had developed solid 
economic ties.  He referred to their growing bila teral trade, resulting from Romania's considerable 
progress in macroeconomic stabilization, disinflation, and structural reforms.  Swiss investment in Romania was reasonable but could be  expandable;  good g overnance together with stable political and 
economic conditions were crucial for substantial and sustainable investment.  The representative 
highlighted Switzerland's support to Romania's ec onomic transition with more than SwF 10 million 
since 1996, and its Centre for Sustainable Development of Enterprises to assist SMEs. 
35. The representative of Hong Kong, China
 said that Hong Kong, China and Romania had 
enjoyed harmonious trade relations in recent years with growing bilateral trade.  Hong Kong, China 
hoped that Romania's accession to the EC would fu rther facilitate its trade with non-EC trading 
partners.  It appreciated Romania's efforts to comp ly with its WTO obligations and its attachment to 
the DDA.  Hong Kong, China welcomed Romania's effo rts in liberalizing its tariff regime.  Romania 
had reduced its simple average MFN tariff rate but should continue to liberalize trade (e.g. reducing 
the escalation in its tariff structure, narrowing the ga p between applied and boun d rates to enhance the 
predictability of its tariff re gime, and reducing bound rates in the NAMA);  Romania had also 
eliminated its surcharge on imports and a fee on electronic processing of customs declarations.  Hong 
Kong, China encouraged Romania to step up its effo rts to harmonize its standards with international 
or regional standards.  It appreciated Romania's me asures to address some of its structural problems in 
services.  Given the contribution of services to Romania's GDP and employment, continued services liberalization would be crucial for its economic development.  Hong Kong, China encouraged 
Romania to participate more actively in th e services negotiations by considering offering 
commitments in maritime transport services;  it looked forward to Romania's initial offer. 
36. The representative of the Republic of Korea
 said that bilateral trade between Korea and 
Romania had grown rapidly.  Korea was also an important investor in Romania.  Korea commended Romania for its structural reform and macro-stabil ization efforts. It appreciated the reforms to 
enhance transparency and predictability of Ro mania's laws, as well as to improve the business 
environment.  Romania had continued to liberalize it s trade by binding all its tariff lines, acceding to 
the WTO Information Technology Agreement, and re ducing applied MFN rates.  Positive steps in 
customs procedures had also been taken.  Although the application of the EC CET would reduce tariff 
differentials between preferential and MFN rates – still substantial for some tariff lines – further 
reduction in MFN rates would help to promote trade with non-FTA partners.  Korea welcomed 
Romania's measures to improve its government pr ocurement regime, and would welcome Romania 
expanding its market access opportunities and upgrading its system.  Although Romania had 
strengthened its institutional and le gal framework for IPR protection,  Korea wished to see further 
actions to strengthen enforcement.  
37. The representative of the United States
 highlighted Romania's economic reform and 
restructuring, and the degree of privatization since 1999.  Important steps in trade liberalization had  WT/TPR/M/155 
 Page 9 
 
 
  had positive results:  GDP growth had been im pressive; inflation had declined steadily;  
unemployment had been cut in half;  and FDI inflow s were picking up.  The representative referred to 
the expanding bilateral trade between the United States and Romania, and the stock of U.S. investment in Romania:  Romania's internal reforms and trade liberalization were creating new opportunities for traders and investors.  Despite co nsiderable progress, there was room to improve 
Romania's trade and investment regime and to build  on the structural reforms.  The United States was 
interested in hearing of any plans for further pr ivatization, in learning more about Romania's new 
action plan to improve IPR enforcement;  and any news on its initiatives to improve the transparency 
of its trade regime.  The representative noted with interest the most important lesson learned by Romania during this review was the need to "assume  responsibility for action" in the pursuit of trade 
agreements.  
38. The representative of Turkey
 said that Romania was Turkey's most important trading partner 
in the Balkans.  He referred to their wide ra nge of economic agreements , the volume and composition 
of their bilateral trade, and Turkey's investment into Romania.  Since 1999, Romania had achieved an 
impressive macroeconomic performance, had continue d to liberalize its trade regime, and had opened 
its economy.  Recent efforts (eliminating the import surcharge, simplifying the tax system, reform of 
the import licence regime, improving IPR legisl ation, and liberalizing telecommunications) had 
underlined Romania's willingness to fully integrate into the global economy and comply with the multilateral trading system.  The acceleration of priva tization, the adoption of an action plan for the IT 
sector and SMEs, the liberalization of the capita l account, and the adoption of a new inflation 
programme had improved Romania's competitiveness and integration.  Turkey hoped that the 
agricultural strategy would further open Romania's agriculture to competition, and the liberalization 
of the oil, natural gas, and electricity markets w ould eliminate their burden on public finances.  The 
representative referred to Turkey's negotiations w ith Romania on several energy projects.  Romania's 
accession to the EC would further liberalize its ec onomy;  and Members would benefit from the more 
competitive, diversified, and dynamic economy. 
39. The representative of Canada
 commended Romania for its wid espread economic reforms that 
had led to solid growth since 2000.  He referred to  the growing bilateral trade between Canada and 
Romania and their relationship in electricity produ ction.  Romania's commitment to ensure trade 
liberalization had created a more open and predicta ble framework for trade and investment, and had 
helped to prepare its accession to the EC.  Howe ver, Canada was worried about the breakdown of 
discussions on a possible aid agreement between the IMF and Romania;  Romania could have more 
difficulty in attracting high FDI.  Canada supported Romania's accession to the EC, and hoped it 
would take into account its WTO obligations and bila teral trading relations in its accession process.  
In this regard, Canada was seriously concer ned about the way EC technical requirements 
implemented by Romania affected Canada's pork exports;  it hoped that a mutually satisfactory 
solution could be reached.  Despite weaknesses in some areas, Romania's economic gains since 1999 
were impressive.  
40. The representative of the Separate Customs Te rritory of Taiwan, Penghu, Kinmen and Matsu  
(Chinese Taipei) referred to the volume and compositi on of the bilateral trade between Chinese Taipei 
and Romania.  He commended Romania for engagi ng in an ambitious econom ic reform programme 
that had already borne fruit as Romania's economic outlook was brightening.  He encouraged further reforms along the same path.  Since Romania w as aligning its trade regime to the EC's, the 
representative wished to know whether Romania planned to impose anti-dumping, countervailing or 
safeguard measures, and how it would harmonize its trad e regime in this area with the EC's as the EC 
imposed a number of anti-dumping measures. 
41. The representative of Brazil
 commended Romania for its continued efforts since 1999 to 
stabilize its economy, which had led to high econo mic growth.  Brazil encouraged Romania in the 
implementation of its economic reform progra mme, which should address governance problems and WT/TPR/M/155 
Page 10  
 
  burdensome administrative regulations.  At the same  time, a reinvigorated privatization programme 
was under way.  Since 1999, Romania had continued to liberalize its trade regime focusing on export 
promotion (e.g. by eliminating an import surcharge,  lowering the simple average MFN tariff rate, and 
applying entirely ad valorem  rates).  However, there was still some tariff escalation, and there would 
be changes in the tariff when Ro mania adopted the EC CET.   
42. The representative of Mexico
 referred to his delegation's advance questions on services.  
Trade between Mexico and Romania was limited.  Since Romania's market was growing, it should 
continue its regulatory and economic reforms to enab le greater future integration, which might be 
stronger once it acceded to the EC.  Mexico was con cerned about the possible effects on its exports to 
Romania of the alignment of Romania's regulatory framework to the EC's.  It hoped that Romania's 
accession to the EC would not hamper its WTO rights and obligations. 
43. The representative of India  commended Romania for its economic and structural reforms.  
Romania and India enjoyed friendly relations and th ere was huge potential for bilateral collaboration. 
44. The representative of Bulgaria  said that Romania, since 1999, had gone through a decisive 
period in advancing towards a functioning market ec onomy.  Economic recove ry had continued since 
2000.  Romania's most important policy objective was the process of integration into the EC, which 
complemented and reinforced its regional and multilate ral integration.  Romania and Bulgaria enjoyed 
friendly relations in all economic spheres.  Roma nia was a strong supporter of the multilateral trading 
system;  its regional and bilateral trade agreements  were complementary, useful tools for market 
liberalization and structural reforms. 
45. The representative of Pakistan  commended Romania for its reforms, despite unfavourable 
circumstances.  He highlighted the similariti es in policy reforms and implementation between 
Romania and Pakistan.  Romania and Pakistan enj oyed excellent cooperation, and efforts to enhance 
their bilateral trade were under way.   
46. The representative of th e European Communities  said that cooperation between the EC and 
Romania had been strong and stepped up through Ro mania's accession process. Crucial developments 
had taken place in Romania over the last 15 years.  Romania had embarked on efforts to establish a 
new political system based on a different economic mode l.  Its efforts had further liberalized trade and 
fostered growth and development.  Regional trad e liberalization was essential for opening markets 
and taking advantage of trade in relation to developm ent.  Joining the EC was not just of benefit to 
Romania but to third countries, as third-country exporters would enjoy simplified and enhanced access to Romania's market. 
47. The representative of Romania
 informed the Members that the momentum of Romania's 
economy was more evident in the last few years.  WT/TPR/M/155 
 Page 11 
 
 
  V. REPLIES BY THE REPRESENTATIVE OF ROMANIA AND ADDITIONAL 
COMMENTS 
48. The representative of Romania  said that when answering the advance written questions, 
Romania was guided by the rules and practice of the TPR mechanism, and was confident that this exercise would not be used for purposes other th an those for which it was designed for.  The 
Government's reform was aimed at creating a mo dern democratic society and a market economy 
through an improved and comprehens ive legislative framework and taking all measures to enforce it.  
This showed a firm political decision aimed at incr easing transparency, predictability, coherence, and 
uniformity.  This also implied increasing the institu tional responsibility, relia bility, and capacity to 
respond to economic signals.  Romania's recent progress  in trade policy should be judged in light of 
the economic and social costs of the reform process.   In pursuing its strategy, the Government had put 
an important weight on fully observing Romania's international commitments.  Another important 
concern was ensuring the necessary capital and inv estment in the economy.  The macroeconomic 
climate was now stable and balanced.  The recent changes in Romania's legal provisions were not 
discretionary, as they complied with internati onal standards and its accession to the EC.  The 
Government's programme was aime d at maintaining a stable macroeconomic environment (steady 
GDP growth; continued disinflation; decisive actions  in privatization; job creation; attracting new 
investments; and more efficient participation in international trade).  
(i) Economic environment 
49. One of Romania's main objectives had been to im prove the investment climate;  the more FDI 
was attracted, the more sustained economic developm ent would be secured.  The Agency for Foreign 
Investment (ARIS) was responsible for implemen ting the Government's policy for promoting and 
attracting FDI.  The Government and ARIS were fully aware of the importance of the structural difficulties;  the progress in Romania's legal framework proved that these were being addressed with care and determination.  Furthermore, corruption,  excessive bureaucracy, and law enforcement were 
among the highest priorities of the Government's  programme for 2005-08.  The 2004 Fiscal Code 
covered Romania's foreign investment regime.  In th e last years, Romania's efforts to develop private 
entrepreneurship and attract FDI had focused on identifying and reducing the administrative barriers 
for operating a business;  increasing the transpar ency of the investment policy framework; and 
improving communication between the Governme nt and the business community.  Various 
investment incentive schemes were also equally ava ilable to foreign and domestic investors.  Their 
main requirements were:  making an investment;  cr eating new jobs;  using the asset facilities for that 
specific activity;  and developing the activity for a period twice as long as the incentives period. 
50. FDI could help to develop and modernize Ro mania's economic infrastructure, determine a 
positive spin-off effect in economy, and create jobs .  ARIS was granting an endorsement to foreign 
citizens requesting a long-term visa for developi ng commercial activities in Romania.  The visa 
requirements were related to technical-economic  documentation.  Depending on the sector, foreign 
ownership approval was granted by the Nationa l Bank of Romania; the National Securities 
Commission; the Ministry of Transport, Constructi on, and Tourism;  the National Agency for Mineral 
Resources; the National Audiovisual Council; and the Ministry of Finance.  There was no restriction regarding the share of foreign capital or nationality of investors.  The current policy on the business 
environment focused on supporting private invest ors and encouraging free initiative and market 
development.  The action plan for 2005-06 was ai med at continuing to simplify the administrative 
procedures;  consolidating the regulatory framework;  and minimizing bureaucracy and diminishing 
corruption. Measures included in creasing transparency and dialogue efficiency between the 
Government, the business environment, and the civil society;  assessing the impact of fiscal measures, 
and administrative and procedural costs on the invest ment climate;  monitoring the simplification of 
administrative procedures and regulations fo r the business environment;  amending company WT/TPR/M/155 
Page 12  
 
  legislation to apply corporative governance principles and harmonize it with intern ational legislation;  
and increasing the Government's level of public responsibility. 
51. A market economy needed an adequate mix of prudent monetary policy and administrative 
measures in order to preserve financial stability a nd enhance the effectiveness of the monetary policy 
instruments with a view to maintaining a stable aggregate price level.  Annual inflation rate was 
expected to range between 8.1% and 8.3%.  Disi nflation would continue in 2006, mainly due to a 
gradual reduction in excess demand (assuming increasi ngly austere fiscal and income policies, and 
monetary policy tightening) and to further favourab le developments in th e Leu exchange rate on 
import prices.  Ensuring a competitive environment led to consumer satisfaction and to efficient 
allocation of resources, as economic growth and employment were stimulated.  
52. Romania was generally meeting the commitments  and requirements in antitrust arising from 
its accession process to the EC.  Antitrust enforcement was characterized by the pro-active role of the 
Competition Council, which was determined to follow a more deterrent sanctioning policy, to prevent 
competition distortions, and to better use investigation tools.   
53. Privatization had progressed since 1999.  Ov er 8,000 enterprises had been privatized, 
including some "non-privatizable" companies, i.e.  those in which the State had no decision-making 
power, since they were under judicial authority or the liquidators.   
54. The current account deficit had increased to 7.6% of GDP.  However, nearly half of this had 
been attributed to the change in the calculati on methodology.  In 2004, FDI and privatization had 
ensured its financing.  The experience of some of  the new EC members showed that strengthening 
external credibility increased FD I and other capital streams, which provided significant funding for 
imports.  Even though FDI largely financed the current  account deficit, it would no longer be left to 
widen by resorting to additional stimulan ts associated with consumption growth. 
(ii) Trade policy measures 
55. Export and import of goods were free in Romani a, without prior licensing requirements, 
except for specific products subject to Decision No. 1526/2003.  Romania intended to implement an 
import licencing scheme for certain agricultural produc ts to monitor imports trends and origins, but 
not to restrict the quantity of imports.  
56. Romania had concluded the negotiations for its accession to the EC in 2004, and had ratified 
the Accession Treaty.  Its accession implied that the few bilateral and regional agreements incompatible with its commitments vis-à-vis  the EC would have to be denounced.  Except for the 
Association Agreement with the EC, FTAs conc luded by Romania were aimed at creating a 
preferential trade area.  Preferential trade had not affected trade with other WTO Members, which had 
registered further diversification and high growth rates.   
57. Romania's customs commission complied fully with its tariff schedule commitments.  
Eliminating other duties and charges was being anal ysed.  In order to improve customs procedures 
and ensure correct and non-discriminatory applica tion, the aim of the National Customs Authority 
was to take on the EC's customs regulations in a single Act.  The new Customs Code would improve 
customs activities, simplify procedures, and facilitate trade. 
58. Contracting authorities and entities dealing with wa ter, energy, transport, and postal services 
had to apply the provisions of the Public Procurem ent Law to award a contract.  The most efficient 
way to handle public procurement was online.   WT/TPR/M/155 
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  59. Emergency Ordinance No. 194/2002 covered wo rk permits, visas, and the immigration 
system in the context of mode 4 supply of services.  Participation in an in surance company established 
in Romania was not limited (Law No. 32/2000).  Ro mania's strategy concerning future commitments 
in the services negotiations was under consideration.  
60. Law 11/1991 (unfair competition), as modified by Law 298/June 2001, transposed TRIPS 
Article 39.  Patents had a term of 20 years.  On trade mark and geographical indications, opposition to 
the registration of a trade mark might be filed with in three months of publication, if a person had a 
legitimate interest based on an earlier IPR that might be in conflict with the geographical indication.  
The action plan for implementing IPRs enforcemen t was aimed at improving the legal framework and 
strengthening the administrative capacity of the institutions involved. 
(iii) Sectoral policies 
61. The Strategy for the Sustainable Development of  Agriculture and Food Industry (2004-25) 
was aimed at developing agricultural output and th e sector's orientation.   The Government was 
concentrating on structural reforms to increase co mpetitiveness.  The structural reforms for 2005-08 
consisted in developing a middle class in the rura l area by transforming subsistence farms into 
market-oriented farms, through access to investment , capacity building, and consultancy;  better 
functioning and organization of the agricultural markets;  organizing producers' groups;  and 
diversifying and developing production.   
62. The mining strategy was aimed at eliminating all subsidies for metal, mineral, and coal mines, 
as well as closing non-viable mines, mitigating environmental impact, and attracting private 
investment.  Subsidies had already decreased in 2005.  The mining restructuring process was 
associated with measures and project s to reduce the social impact.  Among the privatization projects 
were three energy complexes;  five lignite open pi ts;  a number of open pits and mines that might 
become profitable due to the evolution of cooper a nd gold in international markets;  and there was 
interest in privatizing five salt mines.  A project had been started to monitor the environmental risks 
related to mining. A feasibility stud y would be carried out to monitor operational and closed mines in 
order to asses the environmental risks and establish the technologies to address these.  A project for 
environmental rehabilitation of tailing ponds and landfills was under discussion. 
63. The national energy strategy was aimed at ensuring supply and coping with environmental 
needs.  Coal would remain an important sour ce of energy.  Production of lignite would be 
concentrated in the most cost-efficient and favourab le areas.  Domestic production of natural gas and 
oil would decrease due to limited reserves.  The use of  hydropower would be intensified, the nuclear 
energy programme would continue, and the use of  renewable energy would be encouraged.  The 
energy reform also included a price policy:  in elect ricity, cross-subsidies from industrial to residential 
consumers had been eliminated, and tariffs had in creased stepwise to improve the viability of the 
subsector.  A full cost recovery reform had been implemented to cover the short-run marginal costs 
and to provide a positive cash flow.  The end-user average electricity price had increased during 2005 
from US$35 to US$91/MWh.  
64. Reform of prices and tariffs for natural gas was aimed at avoiding cross-subsidies between 
different categories of customers, implementin g a new tariffication system, and stimulating 
investment in the sector.  The annual average price had been increased to US$90/tcm in 2005.  
65. A draft law on tourism proposed the definition of areas with complex tourism potential and 
high value, and areas with high tourism potentia l.  The National Authority for Tourism was 
elaborating the strategy to develop tourism.  For 2007-13, tourism would be  developed according to 
the strategy in the national development plan and sectoral and regional operational programmes. WT/TPR/M/155 
Page 14  
 
  (iv) Other comments  
66. The representative responded to a request from Jap an for further information on privatization 
in Romania.  He informed the Swiss delegation that Romania understood the importance of improving 
its legal environment to increase the compe titiveness of SMEs, and Hong Kong, China that 
telecommunications had already been fully opened to competition, and that close to 90% of EC 
standards had been transposed to Romania's.  Rega rding some U.S. concerns, he said that rules for 
authorization of State aid were in line with the EC's rules and practices;  and the Government was 
taking steps to enhance the enforcement of meas ures to address piracy and counterfeiting.  He 
informed the delegation of Canada that there was no concern related to Roma nia's relationship with 
IMF, and the Government was fully determined and capable of ensuring the measures needed to 
maintain macroeconomic stability.  The representativ e thanked Chinese Taipei for its appreciation of 
Romania's attitude in trade defence measures;  the principle of a single market was one of the reasons 
for which all EC trade defence measures would apply to goods entering Romania's customs territory.   
67. The discussant
 referred to the changes in the TPR mech anism, and said that if Members felt 
that Romania's trade policies and practices were not in line with the WTO rules and regulations, they 
could ask questions.  He referred to the clarific ations by the representative of Romania on:  
(i) Romania's investment incentives scheme;  (ii)  the share of foreign capital or nationality of 
investors;  (iii) the "non-privatizable" companies;  (iv)  Romania's import/export regime and its intention to implement an import licencing system fo r certain agricultural products to monitor import 
trends and origin, but not to restrict the quantit y of imports;  (v)  the incompatibility of a few 
Romania's bilateral and regional ag reements with its commitments vis-à-vis  the EC;  (vi) the 
preferential trade regime and the difference betw een MFN and preferential rates;  (vii) customs 
procedures and charges;  (viii) transparency in  public procurement;  (ix) work permits and 
immigration;  (x) insurance;  (xi) patents and IPRs;  and (xii) the agricultural reforms. 
68. The representative of Japan
 expressed continued concerns about Romania's accession to the 
EC in the context of the incompa tibility of a few of its agreements vis-à-vis  its commitment to the EC. 
69. The representative of the United States  said that more details on the action plan for IPR 
enforcement would be appreciated. 
70. The representative of Romania  assured Japan that Romania's accession to the EC would open 
its market to third countries, without multilateral trade negotiations.  Romania would take over the 
EC's commitments on services and Romania's market would be much more open to third parties.  The action plan for IPRs was aimed at improving the le gislative framework.  Romania's legislation was in 
line with the European directives, the TRIPS Agre ement, and the treaties to which Romania was a 
party, but it was aware of the efforts it had to carry  out in enforcement.  The plan also stressed 
cooperation between all the entities responsible for enforcement. 
71. The representative thanked all Members who had shown their interest in the TPR procedure 
and had asked questions regarding Romania's trade po licy.  Romania was grateful to the EC and U.S. 
diplomacy in Bucharest, Brussels, Washington, and Ge neva for their constant help to the Romanian 
authorities to achieve their strategic objectives. 
  WT/TPR/M/155 
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  VI. CONCLUDING REMARKS BY THE CHAIRPERSON 
72. This third Trade Policy Review of Romania ha s allowed us to improve our understanding of 
the developments in its trade and related policies since its previous Review in 1999, and of the 
challenges that lie ahead. Our dialogue has been thorough and comprehensive, stimulated by the 
participation of the Minister delegate for Trade, Mr . Iuliu Winkler, and his delegation.  Our thanks are 
also due to our discussant, Ambassador Manzoor Ahmad, for his insightful contribution to our 
discussions, and to the Members who have c ontributed to the success of this review. 
73. Members welcomed Romania's positive overall economic performance during the last few 
years, with high GDP growth, and falling unemploymen t, inflation and fiscal deficit.  They noticed 
that the ongoing reforms are contributing to the establishment of a competitive market economy, and 
encouraged Romania to continue its structural reforms, so as to address governance problems and 
improve its business environment.  The reforms, toge ther with increased investment in infrastructure 
and in human capital, would help to further stabili ze the economy, with a particular attention to the 
external current account. 
74. Members noted Romania's commitment to the multilateral trading system. Some Members 
indicated that integration into the EC, planned fo r 2007, constitutes Romania's paramount objective;  
its trade is increasingly made under bilateral and regional agreements and its trade regime is 
progressively aligned on the EC's.  Some Members remarked that Romania's trade would gain from 
further tariff reforms that should, inter alia , reduce the margins between applied and bound MFN 
rates, mainly on agricultural products.  They pr aised Romania's wide-ranging 2004-25 strategy to 
restructure agriculture, but called attention to the insulation of the sector from competition as a result 
of its limited coverage by Romania's preferential trade agreements.  
75. Members also commended Romania for the step s being taken to address inefficiencies in 
mining, energy, and manufacturing, including the enact ment of new laws and privatization to reduce 
State involvement in the economy. Members noted that further liberalization of services may improve the efficiency of Romania's economy and the co mpetitiveness of its exports, especially by reducing 
costs related to financial services, telecommunications, and transport.  
76. Members sought clarification on other issues, not ably: customs procedures; internal taxation; 
import and export licensing; contingency trade remedies; standards and SPS measures; export and investment incentives; public procurement; and protection of intellectual property rights.  
77. Members expressed their appreciation for the r esponses to their questions as provided by the 
Romanian delegation. 
78. In conclusion, Members value Romania's effo rts to improve its economic environment.  
I encourage Romania to continue improving its mu ltilateral commitments, both on goods and services, 
with a view to providing its trade regime with great er predictability and credibility.  Trading partners 
can help by ensuring that their markets are fully open to Romania's exports. 
 
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