RESTRICTED  WORLD  TRADE  
ORGANIZATION  WT/TPR/S/155 
24 October 2005  
 
(05-4776) 
Trade Policy Review Body  
   
 
  
 
TRADE POLICY REVIEW 
 
ROMANIA 
 
Report by the Secretariat 
 
  
 
This report, prepared for the third Trad e Policy Review of Romania, has been 
drawn up by the WTO Secretariat on its own responsibility.  The Secretariat has, 
as required by the Agreement establishing the Trade Policy Review Mechanism 
(Annex 3 of the Marrakesh Agreement Establishing the World Trade 
Organization), sought clarification from Romania on its trade policies and 
practices. 
 
Any technical questions arising from this report may be addressed to 
Mr. Ricardo Barba (tel: 022/739 50 88 or fax: 022/739 57 65) or 
Mr. Jacques Degbelo (tel: 022/739 55 83).  
 
Document WT/TPR/G/155 contains the policy statement submitted by Romania. 
 
 
 
Note: This report is subject to restricted circ ulation and press embargo until the end of the first 
session of the meeting of the Trade Policy Review Body on Romania. Romania WT/TPR/S/155 
 Page iii 
 
 
 CONTENTS 
Page 
SUMMARY OBSERVATIONS vii 
 (1) T HE ECONOMIC ENVIRONMENT  vii 
 (2) I NSTITUTIONAL FRAMEWORK  vii 
 (3) T RADE POLICY INSTRUMENTS  viii 
 (4) S ECTORAL POLICIES  ix 
 (5) T RADE POLICY AND TRADING PARTNERS  x 
I. ECONOMIC ENVIRONMENT 1 
 (1) M AJOR FEATURES OF THE ECONOMY  1 
 (2) R ECENT ECONOMIC DEVELOPMENTS  2 
 (3) T RADE PERFORMANCE AND INVESTMENT  4 
 (i) Trade in goods and services 4  (ii) Foreign direct investment 9 
 (4) O
UTLOOK  10 
II. TRADE AND INVESTMENT REGIMES 11 
 (1) G ENERAL FRAMEWORK  11 
 (2) L AWS AND REGULATIONS  12 
 (3) P OLICY OBJECTIVES  14 
 (4) T RADE AGREEMENTS  15 
 (i) WTO  15  (ii) Regional agreements  18 
 (iii) Bilateral agreements  22 
 (iv) Other preferential trade arrangements  23 
 (5) I
NVESTMENT FRAMEWORK  23 
III. TRADE POLICIES AND PRACTICES BY MEASURE 26 
(1) I NTRODUCTION  26 
(2) M EASURES DIRECTLY AFFECTING IMPORTS  27 
(i) Registration and documentation 27 
(ii) Customs procedures, clearance, and valuation 28 (iii) Rules of origin 30 
(iv) Tariffs, other duties, and taxes 30 
(v) Import prohibitions, restriction, and licensing 38 (vi) Contingency trade remedies 40 
(vii) Standards and other technical regulations 41 
(viii) Public procurement 46 (ix) Local-content requirements 47 
(x) Other measures 47 
 (3) M
EASURES DIRECTLY AFFECTING EXPORTS  48 
(i) Registration and documentation 48 
(ii) Export taxes 48 WT/TPR/S/155 Trade Policy Review 
Page iv 
 
 
 Page 
(iii) Export prohibitions, controls, and licensing 48 
(iv) Export subsidies, finance, assistance, and promotion 48 
(v) Free zones 49 (vi) Other measures 50 
 (4) M
EASURES AFFECTING PRODUCTION AND TRADE  50 
(i) Incentives 50 (ii) Public enterprises and privatization 52 
(iii) Competition policy and price controls 53 
(iv) Protection of intellectual property rights 55 
IV. TRADE POLICIES BY SECTOR 60 
 (1) O
VERVIEW  60 
 (2) A GRICULTURE AND RELATED ACTIVITIES  60 
 (i) Main features 60 
 (ii) Policy developments 61 
 (iii) Selected products 63 
 (3) M INING AND ENERGY  67 
 (i) Overview 67 
 (ii) Mining 67 
 (iii) Energy 68 
 (4) M ANUFACTURING  71 
 (i) General 71 
 (ii) Selected industries 72 
 (5) S ERVICES  75 
 (i) Overview 75 
 (ii) Financial services 75 
 (iii) Telecommunications and postal services 78  (iv) Transport 81 
 (v) Tourism 86 
REFERENCES   89 
APPENDIX TABLES  91 Romania WT/TPR/S/155 
 Page v 
 
 
 CHARTS 
Page 
I. ECONOMIC ENVIRONMENT 
I.1 Structure of merchandise exports and imports, 1995-04 7 
I.2 Direction of merchandise trade, 1995-04 8 
III. TRADE POLICIES AND PRACTICES BY MEASURE 
III.1 Breakdown of applied MFN tariffs, 2005 32 
III.2 MFN tariff distribution by ISIC sector, 2005 33 
III.3 Tariff escalation by ISIC 2-digit industry, 2005 33 
IV. TRADE POLICIES BY SECTOR IV.1 Romania's MFN tariff by ISIC classification, 2005 78 
TABLES 
I. ECONOMIC ENVIRONMENT  
I.1 Main economic indicators, 1999-04 3 
I.2 Balance of payments, 1995-04 5 
I.3 Foreign direct investment, 1999-04 9 
II. TRADE AND INVESTMENT REGIMES  
II.1 Main trade-related legislation in Romania, 2005 13 
II.2 Romania's selected notifications to the WTO, as of July 2005 15 
II.3
 WTO dispute settlement cases involving Romania, 1995-05  18 
III. TRADE POLICIES AND PRACTICES BY MEASURES III.1 Structure of MFN tariffs in Romania, 1999-05 26 
III.2 Summary analysis of Romania's MFN tariff, 2005 31 
III.3  MFN and preferential si mple average tariffs, 2005 34 
III.4 Prohibition of imports and transit on SPS grounds 43 
III.5 Decisions taken by the Competition Council, 2001-04 55 
III.6 Romania's participation in international IPR agreements, 2005 57 
IV. TRADE POLICIES BY SECTOR  
IV.1 Production of cereals, 1999-04 64 
IV.2 Energy exports and imports, 1999-04 69 IV.3 Selected telecommunication indicators, 1999-04 79 
IV.4 Selected transport statistics, 2000 and 2004 81 WT/TPR/S/155 Trade Policy Review 
Page vi 
 
 
 Page 
APPENDIX TABLES 
I. ECONOMIC ENVIRONMENT 
AI.1 Structure of merchandise exports, 1995-04 93 
AI.2 Destination of exports, 1995-04 94 
AI.3 Structure of merchandise imports, 1995-04 95 
AI.4 Origin of imports, 1995-04 96 
III. TRADE POLICIES AND PRACTICES BY MEASURES 
AIII.1 Applied MFN tariff averages by HS2, 2005 103 
AIII.2 Tariff quotas on imports from preferential origins, 2005 101 AIII.3  Excise taxes on imports, 2005 104 
AIII.4 Majority state-owned companies to be privatized by AVAS, June 2005 106 
IV. TRADE POLICIES BY SECTOR  AIV.1 Applied MFN tariffs, by ISIC Rev.2 category, 2005 109 
AIV.2 Summary of Romania's specifi c commitments in services 112 
  
 
 
 Romania WT/TPR/S/155 
 Page vii 
 
 
 SUMMARY OBSERVATIONS 
(1) T HE ECONOMIC ENVIRONMENT  
1. Since its second Trade Policy Review 
(TPR), in 1999, Romani a has made renewed 
stabilization efforts, which have contributed to 
a positive combination of high economic growth (an average real GDP growth rate of 5.3% over 2000-04, up from 0.5% during 1992-99), falling inflation (from 54.8% in 
1999 to 9.3% in 2004) and a lower fiscal 
deficit (4% of GDP in 2000 and 1.1% in 2004).  However, the external current account deficit reached a peak of 7.6% of GDP in 2004.   
2. Romania is in the midst of an 
ambitious economic ref orm programme.  Its 
objective is to further stabilize its economy;  it is also meant to address governance problems that remain key issues in Romania's planned accession to the European Communities (EC) 
in 2007. These problems, together with 
burdensome administrative regulations, and frequently changing tax and accounting rules and procedures, explain why Romania's potential for attracting investment remains largely untapped and low by regional 
comparison. To address this situation, a "one-
stop-office" for the registration of companies, and the Romanian Agency for Foreign Investments (ARIS) have been established recently, and various taxation laws have been 
consolidated into a single Fiscal Code. 
Romania has also taken further steps to capital-account convertibility. To simplify monetary transactions, a redenomination of Romania's national currency (the Leu) was 
introduced on 1 July 2005, dropping four 
zeros. 
3. Romania is a lower-middle income 
country, with a GDP per capita of US$2,638 in 2003 (up from US$1,585 in 1999);  25% of its population living below the poverty line. 
Services is the most important contributor to 
GDP, followed by manufacturing and agriculture. The importance of mining, quarrying and energy is limited, despite Romania's significant reserves of natural 
resources (e.g. crude oil, natural gas, and coal). In addition, over a quarter of Romania's land area is covered by forests, and it has 
about 3,500 lakes;  these have facilitated 
significant electricity generation. 
4. Romania's export base is relatively 
diversified. In general, since 2000, the importance of manufactured exports has 
increased; while the share of food, and to a 
lesser extent that of mining products, has declined. Machinery and transport equipment, textiles and clothing products, and iron and steel are the main exports. About two thirds of Romania's exports go to the EC, Italy being 
the major single export market. Goods 
imports, which are dominated by machinery and transport equipment, largely originate in the EC (55.4% of total merchandise imports in 2004), led by Italy. Romania's services trade 
account registered a deficit of €213 million in 
2004, after small surpluses during 2002-03.  
(2) I
NSTITUTIONAL FRAMEWORK  
5. Since its previous Review, Romania's 
overall institutional framework for trade policy formulation has remained broadly 
unchanged. The Ministry of Economy and 
Commerce (MEC), formerly the Ministry of Industry and Commerce, continues to formulate, administer, and coordinate Romania's trade policies. Depending on the 
nature of the issues, the MEC consults with 
relevant ministries and other institutions that take part directly or indirectly in trade policy formulation and/or implementation. The views of the private sector, including NGOs, are 
taken into consideration throughout the 
process, on an ad hoc basis. 
6. Romania has been enacting and/or 
amending its domestic legislation on, inter alia, imports and exports, standards and technical regulations, public procurement, 
state aid, competition policy, intellectual 
property rights, mining, petroleum, natural gas, electricity, insurance, telecommunications, postal services, and WT/TPR/S/155 Trade Policy Review 
Page viii 
 
 
 transport to meet its obligations under the EC 
acquis communautaire and the WTO Agreements. 
7. A contracting party to the GATT since 
14 November 1971, Romania became an 
original Member of the WTO on 1 January 1995. Romania is a member of the Plurilateral Agreement on Trade in Civil Aircraft, and joined the Information Technology Agreement 
(ITA) in 2000. It is an observer to the 
Plurilateral Agreement on Government Procurement (GPA). It grants at least MFN treatment to all its trading partners. 
8. Romania participates in several 
regional trade arrangements, among which 
the Europe Agreement is its priority. 
Accordingly, it is aligning its preferential regime progressively with that of the EC.  Romania has a trade agreement with the European Free-Trade Association (EFTA), is 
a member of the Central European Free-Trade 
Agreement (CEFTA), and has bilateral free-trade agreements with countries in South East Europe, as well as with Turkey and Israel. In total, Romania provides tariff preferences to 38 partners. In addition, Romania participates 
in the Black Sea Economic Cooperation 
(BSEC). 
(3) T
RADE POLICY INSTRUMENTS  
9. Since its last Review, Romania has 
continued to liberalize its trade regime.  It 
ceased to apply an import surcharge as from 1 
January 2001, and an ASYCUDA fee at the end of 2004.  Goods imported into Romania 
are subject to four types of duties: customs tariffs;  excise duties; value-added tax (VAT); 
and a 0.5% customs commission, which does 
not apply to preferential trading partners. The tariff is Romania's main trade policy instrument;  the simple average MFN tariff rate declined from 19.8% in 1999 to 17.5% in 2005. Both applied and bound tariffs are 
entirely ad valorem; this will change once 
Romania joins the EC, since it will adopt the EC common external tariff (CET).  10. In aggregate, Romania's applied MFN 
tariff displays positive escalation from first-stage processed products to fully processed products. Escalation is most pronounced in 
food and beverages, and textiles and apparel, 
giving rise to relatively high effective rates of protection. The only cases where escalation is mixed, are: wood products (negative from first-stage processed goods to semi-finished 
products, and positive from the latter to 
finished goods), paper and printing, and chemicals and plastics (positive from first-stage processed products to semi-finished goods and negative from semi-finished goods to fully processed goods). 
11. To simplify and harmonize its tax 
system with the EC's, Romania recently modified its legislation on excise duties and VAT. Excise duties are levied on five categories of products: alcoholic beverages, 
tobacco products, petroleum products, 
electricity, and a general category of other products including jewellery, perfumes, some electronic products, coffee, and motor vehicles. Three VAT rates apply:  zero, 9% (down from 11% in 2003), and the standard 
rate of 19% (down from 22% in 2003). 
12. Romania's import licensing system is 
no longer applied for the management of quantitative restrictions, goods imported as economic governmental aid, or countertrade. 
In general, import licen ces are maintained on 
health, sanitary, phytosanitary and environmental grounds, and under international conventions to which Romania is a signatory.  Romania has also undertaken 
minimum access commitments through tariff 
quotas on 12 categories of agricultural products. However, as Romania's applied MFN tariffs have been lower in these sectors than its in-quota tariffs, it has not made use of its MFN tariff quotas. 
13. Romania has continued to promote 
exports, including through free zones. In addition, it has incentives programmes for direct investments with significant impact on the economy, industrial parks, disadvantaged Romania WT/TPR/S/155 
 Page ix 
 
 
 zones, and small and medium-sized enterprises 
(SMEs). The incentives include duty, tax concessions, and, upon  approval by the 
Competition Council, state aide. Investment 
(domestic and foreign) is also promoted at the 
local level. 
14. In order to increase efficiency and 
improve resource allocation, a reinvigorated privatization programme is in progress in 
many economic activities,  including banking, 
energy, transport, and telecommunications. Nevertheless, the Government still has a direct influence on the economy, mainly through certain state-owned enterprises (SOEs), some of which are sheltered from competition and 
are supported by  public revenue. 
15. Romania has taken steps to further 
align its legislation with the TRIPS Agreement and the relevant EC legislation, to improve protection of intellectual property rights 
(IPRs). 
(4) S
ECTORAL POLICIES  
16. Agriculture is an important sector in 
the Romanian economy, contributing about 13% to GDP, and employing  31% of the 
labour force. Romania is implementing a 
2004-25 agriculture strategy aimed at 
ensuring food security and self-sufficiency through, inter alia, completing the privatization of state farms; promoting rural development; and transforming small-scale 
agricultural farms into viable holdings. 
Average tariff protection in agriculture (ISIC, Revision 2, definition) is 16.2%. The limited coverage of agricultural products in Romania's preferential trade agreements 
delays their exposure to greater competition. 
17. Romania is rich in minerals, with the 
largest production of crude oil and natural gas in Central and Eastern Europe, and significant reserves of coal; it is a leading electricity producer in the region. However, outstanding 
arrears in mining and energy impose a big 
burden on the budget (almost 10% of GDP in 2003).  The sector is being restructured to give private enterprises an increasingly important 
role, with a view to addressing the sector's inefficiencies and p reparing it for EC 
accession. Under recent laws, the petroleum, 
natural gas, and electricity markets are being 
further liberalized. Applied MFN tariffs average 5.2% in mining and quarrying. 
18. The manufacturing sector is relatively 
diversified in Romania. Major industries 
include textiles and clothing, iron and steel, 
and automotive and electrical machinery, which have experienced rapid growth over the last few years. As a result, the sector's contribution to GDP increased to about 23%, and it attracted almost two thirds of Romania's 
FDI inflows during 1991-04. Private 
ownership in manufacturing has increased, mainly due to the recent acceleration in privatization. However, the sector continues to benefit from government support. Tariff 
protection in manufacturing averages 17.7%, 
with tariffs ranging up to 220% on a category of mixtures of odoriferous substances.   
19. Services is Romania's most important 
sector in terms of contribution to GDP (about 54%);  it employs over one third of the labour 
force. Romania has taken measures to address 
some of the structural problems in the sector; notably, the financial services supervisory framework has been strengthened, and Romtelecom's monopoly in the fixed telephone 
market was terminated at the end of 2002. 
Several SOEs in the services sector have been privatized. Nevertheless, Romania's infrastructure needs to be upgraded, roads in particular. Further liberalization of services 
should improve the efficiency of other 
economic activities and the competitiveness of Romania's exports, especially by reducing costs related to financia l services, telecoms, 
and transport. Under the General Agreement on Trade in Services, Romania made 
commitments in several services categories, 
but maintains some MFN exemptions, including in transport services. WT/TPR/S/155 Trade Policy Review 
Page x 
 
 
 (5) T RADE POLICY AND TRADING 
PARTNERS  
20. The gradual liberalization of 
Romania's trade regime has helped it to 
participate actively in the multilateral trading 
system. Accession to the EC by 2007 is the principal political and ec onomic priority of 
the Government. By and large, the process of EC accession has improved market access 
opportunities for Romanian products, mainly 
in Europe, and particularly for industrial goods, and has supported the transition of Romania's economy from a centrally planned to a market-oriented economy. Nonetheless, Romania's trade regime should gain from 
further liberalization. The reduction of its 
MFN tariffs should facilitate its EC accession process, and further diversify its trading partners away from countries with which it is trading on a preferential basis. Moreover, 
Romania could improve the predictability of its trade regime by reducing the gap between its applied MFN and bound tariffs, mainly on 
agricultural products. 
21. To implement and enforce the 
widespread legislative reforms undertaken as part of Romania's accession to the EC, further strengthening of its administrative capacity is 
required. This would enable Romania to reap 
the widest benefits from the reform process; Romania may gain from further technical assistance in this respect. The benefits of Romania's ongoing liberalization reforms would be reinforced significantly if improved 
market access were provided by its MFN 
trading partners.