RESTRICTED
WORLD TRADE WT/REG33/4
16February 1998
ORGANIZATION(98-0547)
Original: English Committee onRegional Trade Agreements
FREE TRADE AGREEMENT BETWEEN THE REPUBLIC OFSLOVENIA
AND THE REPUBLIC OFBULGARIA
Questions andReplies
Thisdocument reproduces questions addressed totheParties andthejointresponses provided
bythem. Thequestions andreplies setoutbelow areorganized inaccordance withdocument
WT/REG33/2.
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I. BACKGROUND INFORMATION ONTHE AGREEMENT
3. Scope andProduct Coverage
Wenotethatthere isnoreference tofreetrade inagricultural products. Isthisagoal
fortheSlovenia-Bulgaria FreeTrade Agreement (FTA) and,ifso,when dotheParties envisage
thatthismight beachieved?
Partofthefreetrade agreement between Slovenia andBulgaria isalsoChapter IIthatcovers
theagricultural products. Theprovisions ofChapter IIapply toagricultural products originating in
oneoftheParties totheFTA, respectively, theproducts falling within Chapters 1to24ofthe
Harmonized Commodity Description andCoding System including theproducts listed inAnnex Iof
thefreetrade agreement. However, liberalization oftrade inagricultural products islimited onlyto
theproducts listed inAnnexes totheProtocol 2duetothesensitive nature ofagricultural markets.
InProtocol 2theParties specified theconcessions theygranttoeachotherinaccordance withprovisions
ofChapter II.Further liberalization isbeing negotiated intheframework oftheCentral European
FreeTrade Agreement (CEFTA) towhich Bulgaria isgoing toaccede inthenearfuture.
What percentage oftrade between theParties isaccounted forbyproducts:
- falling within Chapters 1to24oftheHarmonized Commodity Description and
Coding System?
- falling within Chapters 25to97oftheHarmonized Commodity Description and
Coding System?
- listed asexcepted?
What aretheintentions oftheParties regarding theinclusion ofexempt products within
thescope oftheAgreement?
Products falling within Chapters 25to97oftheHarmonized Commodity Description and
Coding System account for85.3percentoftrade between theParties.WT/REG33/4
Page2
ProductsfallingwithinChapters1to24oftheHarmonizedCommodityDescriptionandCoding
System thataresubject toaconcessions account for7.2percentoftrade; products notcovered by
theFTAaccount for7.5percentoftrade.
Products listed inAnnex I(industrial products thatcount foragricultural products) account
for0percentoftrade. Thus, there isnotrade withthese products between theparties.
TheParties intend toinclude mostoftheexempt products within thescope oftheAgreement
onAccession oftheRepublic ofBulgaria totheCentral European FreeTrade Agreement.
II. TRADE PROVISIONS
1. Industrial Products
1.1 Import Restrictions
CantheParties detail their plans forremoving charges onimports having aneffect
equivalent tocustoms duties asprovided forinAnnex II?
Allcharges having equivalent effect tocustoms duties wereabolished onthedateofentry into
force oftheAgreement, including those listed inAnnex II.
What quantitative restrictions andmeasures having equivalent effect arepresently applied
onimports bytheParties tothisAgreement? Grateful iftheywould outline theirplans forremoval
ofthese quantitative restrictions andequivalent measures.
There arenoquantitative restrictions onimports andcharges having equivalent effect intrade
between Slovenia andBulgaria presently applied.
1.2 Export Restrictions
What quantitative restrictions andmeasures having equivalent effect arepresently applied
onexports bytheParties tothisAgreement? Grateful iftheywould outline theirplans forremoval
ofthese quantitative restrictions andequivalent measures.
IntheRepublic ofSlovenia therearenoquantitative restrictions andmeasures having equivalent
effect presently applied. After theabolition, asof1January 1998, ofmeasures provided forin
Annex IV,theRepublic ofBulgaria doesnotapply anyquantitative restrictions andmeasures having
anequivalent effect.
2. Agricultural Products
Wewould begrateful iftheParties could provide asummary oftheconcessions on
agricultural products. AretheParties currently engaged in,ordotheyintend toundertake, any
negotiations toextend further concessions ontheproducts covered byProtocols 2?
Forselected agricultural products originating inSlovenia, listed inAnnex A,them.f.n. rate
ofduty, applied on1January 1997, hasbeenreduced by50percentwithin thelimits ofannual tariff
quotas provided intheAnnex. Thesame customs duty, within thelimits ofthesame tariff quotas,
isapplied intheyear1998.WT/REG33/4
Page3
Forselected agricultural products originating inBulgaria, listed inAnnex B,them.f.n. rate
ofduty, applied on1January 1997, hasbeenreduced by50percentwithin thelimits ofannual tariff
quotas provided intheAnnex. Thesame customs duty, within thelimits ofthesame tariff quotas,
isapplied intheyear1998.
Customs duties onimports applicable inbothcountries listed inAnnex Cwere reduced by
50percenton1January 1997. Products listed inAnnex Carethesame products thatwereexcluded
from thescope ofChapter I-Industrial Products.
Concessions onagricultural products aretobefurther extended upon accession ofBulgaria
totheCEFTA.
5. Safeguards
What measures, pending solution, dothecontracting parties envisage taking todealwith
market disturbance? Would such measures beWTO consistent? Canthecontracting parties
giveassurances thatsuchmeasures would notprejudice therights ofnon-parties tothisAgreement?
What criteria aretobeusedtodetermine whether a"serious disturbance" (Article 14)toagriculture
markets isbeing caused?
Fornowitisnotpossible toforesee which exact measures theparties willtakewhen imports
from oneparty cause serious disturbance totheother party asthose provisions hadbeenintended to
dealwithsituations thatareunexpected orunforeseen; however, suchmeasures willbeWTO consistent.
Asthose measures willbetaken toeliminate disturbance tothemarket caused bytheconcessions granted
under theFTAtotheparty oftheagreement, suchmeasures willbedirected towards suchimports.
Oneofsuchmeasures could betheprovisional elimination of"disturbing" concessions thatweregiven
totheParty oftheAgreement. When oneParty willjudge thatimports fromotherparties caused serious
disturbance toitsmarket, thentheParties shallenterintoconsultations immediately. They willdecide,
onacase-by-case basis, ifsuchimports really caused serious disturbance tothemarket ofthatparticular
party andwilltrytofindanappropriate decision. Theparty willberequested toshow allavailable
datashowing theserious disturbance.
WillBOPmeasuresunderArticle32beappliedinanon-discriminatorymannerandwithout
prejudice totheinterests ofnon-Parties tothisAgreement?
Yes. Thetemporary measure introduced byBulgaria in1996inorder toforestall animminent
threat ofaserious decline inforeign exchange reserves andbalance-of-payments difficulties isapplied
inanon-discriminatory manner toimport goods irrespective oftheir origin. During the1997
consultations, heldinaccordance withtheterms ofreference ofArticle XII:4 ofGATT 1994, Bulgaria
wasdeemed tobeincompliance withitsWTO obligations.
6. Anti-Dumping
TheFTA provides fortheapplication ofanti-dumping asoutlined inGATT Article VI.
Wenote, however, thatGATT Article XXIV:8(b) doesnotallow forthisexemption andthatthis
clause maynottherefore becompliant.
TheParties oftheAgreement, when negotiating theFTA, havebeenoftheopinion thatdumping
within themeaning ofArticle VIoftheGATT could takeplace intheirtraderelations and,thus,have
decided toinclude suchprovisions totheAgreement. However, anyaction undertaken according to
those provisions willnotattribute anyinjury totheother countries.WT/REG33/4
Page4
CantheParties explain whether there isanydifference inpractice between theobligations
under Articles 26,27and31andthemanner inwhich theywilloperate, andtheobligations of
theParties under theWTO?
IntheArticle onGeneral Safeguard (Article 27),theParty inwhich anyproduct isbeing
imported insuchincreased quantities andunder suchconditions astocause orthreaten tocause serious
injury todomestic producers oflikeordirectly competitive products intheterritory oftheimporting
Party (thesame asintheWTO); orcause disturbance inanyrelated sector ofeconomy ordifficulties
whichcouldbringaboutseriousdeteriorationintheeconomicsituationofaregion(thishasbeenincluded
intheAgreement duetothefactthattheParties arecountries intransition andthatsome sectors of
economy orregions arestillintheprocess ofdeveloping oraregoing through restructuring) maytake
appropriate measures.
Ingeneral, there arenobigdifferences between provisions oftheFTAandWTO provisions
regarding procedure fortheapplication ofsuchmeasures. However, thedifferences thatexistarea
reflection ofthefactthattheFTAisabilateral agreement. Thus, theprocedures hadtobemodified
tosupport thebilateral relations between contracting parties.
Themain procedures are:
- Before initiating theprocedure fortheapplication ofsuchmeasures theParties shall
endeavour tosolve anydifferences between them through direct consultations.
- AParty which considers resorting tosuchmeasures shallpromptly notify theother
Party thereof andsupply allrelevant information.
- TheJoint Committee shallexamine thecaseorsituation andmaytakeanydecision
needed toputanendtothedifficulties notified bytheParty concerned.
- Themeasures shallberestricted withregard totheirextent andtotheirduration to
whatisstrictly necessary inorder torectify thesituation giving risetotheirapplication
andshall notbeinexcess oftheinjury caused bythepractice orthedifficulty in
question. Priority shallbegiven tosuchmeasures aswillleastdisturb thefunctioning
oftheAgreement.
- Such measures taken shall bethesubject ofperiodic consultations within theJoint
Committee withaview totheir relaxation assoon aspossible, orabolition when
conditions nolonger justify theirmaintenance.
- Where exceptional circumstances requiring immediate action make priorexamination
impossible, theParty concerned may, insome cases, apply forthwith theprovisional
measures strictly necessary toremedy thesituation. Themeasures shallbenotified
without delay andconsultations between theParties shalltakeplace assoonaspossible
within theJoint Committee.
Theprovisions ofArticles 26,27and31follow inprinciple therelevant WTO provisions
regarding theapplication ofsuchmeasures. Inaddition, theJoint Committee which isresponsible
forthesupervision andadministration oftheAgreement, hastheauthority toexamine suchcases.WT/REG33/4
Page5
7. Subsidies andState-Aid
Given thatagricultural products areexempt from theprovisions stipulated inpara.1 of
Article 23,cantheParties giveanassurance thatthere willbenoresultant discrimination against
theinterests ofnon-Parties?
Yes. Noprovision oftheFTAbetween Slovenia andBulgaria maybeinterpreted asexempting
theParties from their obligation under other international agreements, especially theAgreement
Establishing theWorld Trade Organization.
IV. OTHER PROVISIONS
Arethere anymeasures orpractices ofaninternal fiscal nature establishing (directly or
indirectly) discrimination against other countries notparty totheAgreement? Ifso,what are
they? Dotheprovisions ofpara.1 ofArticle 17differ inanywayfrom theprovisions ofGATT
Article III?
There arenomeasures orpractices ofaninternal fiscal nature establishing discrimination against
other countries. Theprovisions ofpara. 1ofArticle 17apply bilaterally only; however, thatdoes
notmean thattheParties willdiscriminate non-parties totheAgreement. BothParties fullyapply
provisions ofGATT Article III.
Which products arecurrently subject tostate monopolies? What proportion oftrade
inproducts subject tostate monopolies iscovered bythisAgreement? Article 20suggests that
state monopolies currently discriminate intheir commercial decisions -cantheParties confirm
thatsuchmonopolies operate inamanner consistent withGATT Article XVII intheirpurchases
from andsales tothird countries?
There arenoproducts currently subject tostatemonopolies. Theobjective ofthisArticle has
beentoclearly ensure thattherewould benodiscrimination. TheParties totheAgreement arebound
bytheexisting provisions andobligations ofArticle XVII.
What criteria aretobeapplied inassessing whether actions prevent, restrict ordistort
competition, orwhether actions bydominant undertakings constitute anabuse oftheir position?
Arethese considerations subject tospecific legally based processes?
CantheParties giveassurances thatimplementation ofArticle 22doesnotdiscriminate
against theinterests ofnon-Parties totheAgreement (particularly given thatitexempts agricultural
products which "form anintegral partofanational market organization" from theprovisions
stipulated inpara.1(a) ofthisArticle)?
Nofurther criteria havebeendefined inArticle 22oftheAgreement. Theassessment ofconduct
ofundertakings ismade onacase-by-case basis, taking intoconsideration theeffects ofcompetition
andtrade between theParties.
Parties cangiveassurance thatimplementation oftheprovision doesnotdiscriminate against
interests ofnon-parties totheAgreement.WT/REG33/4
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TheRepublic ofSlovenia -Total Imports from Bulgaria
(in1,000 US$)
H.S. Chapter 1994 1995 1996
1 - - -
2 414 232 67
3 - - -
4 - 2 -
5 5 8 -
6 - - -
7 97 1,201 479
8 11 124 68
9 23 - 2
10 - - -
11 - 36 -
12 185 175 634
13 - - -
14 - - -
15 - - -
16 - - -
17 - - 11
18 - - -
19 - - -
20 9 95 180
21 - 2 3
22 - - -
23 518 323 -
24 6 48 44
25 30 80 39
26 - - -
27 22,426 15,607 -
28 80 10 22
29 - 109 219
30 5 15 24
31 - - -
32 6 - -
33 2 5 -WT/REG33/4
Page7
H.S. Chapter 1994 1995 1996
34 - - 4
35 - - -
36 - - -
37 - - -
38 - - -
39 3 46 7
40 17 - 2
41 1,029 548 50
42 10 - 5
43 - 1 -
44 182 171 72
45 - - -
46 - - -
47 2,049 1,309 415
48 - - 1
49 - 8 -
50 - - -
51 - 40 2
52 61 - 7
53 53 - -
54 40 - -
55 64 52 120
56 - - -
57 - - -
58 - - -
59 - - -
60 - - -
61 14 17 63
62 75 39 69
63 17 8 47
64 3 - 1
65 3 1 1
66 - 3 -
67 - 11 -
68 159 398 385WT/REG33/4
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H.S. Chapter 1994 1995 1996
69 7 8 5
70 - 91 1
71 17 - -
72 9 57 11
73 141 505 485
74 20 953 -
75 - - -
76 176 85 84
77 - - -
78 - 16 -
79 66 - -
80 - - -
81 - - -
82 1 2 5
83 - - 1
84 143 305 289
85 330 123 40
86 - - -
87 8 - 64
88 - - -
89 - - -
90 5 8 7
91 - - -
92 - - 22
93 - - 3,789
94 115 208 83
95 - 3 9
96 10 2 2
97 - - -
TOTAL 28,642 23,092 7,938
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