RESTRICTEDWORLD TRADE
ORGANIZATIONWT/REG32/M/3
19 February 1999
(99-0653)
Committee on Regional Trade Agreements
Twentieth Session
EXAMINATION OF THE INTERIM AGREEMENT BETWEEN SLOVENIA
AND THE EUROPEAN COMMUNITIES
Note on the Meeting of 1 December 1998
Chairman: Mr. Chul-Ki Ju (Korea)
1. Under Agenda Item E.XIV of its Twentieth Session, as found in Airgram WTO/AIR/977 and
Corr.1, the Committee on Regional Trade Agreements (hereinafter CRTA or the Committee) resumedthe examination of the Interim Agreement between Slovenia and the European Communities.
2. The Chairman noted that the Committee had previ ously held two rounds of examinations for
this Agreement during the Committee's Sixteenth Session in February 1998 and again during the
Eighteenth Session in July 1998.  Summary records of those meetings had been distributed in the form
of documents WT/REG32/M/1-2.  He recalled that th e Parties to the Agreement had provided written
replies to a number of questions in document WT/R EG32/4.  However, due to the late circulation of
that document, delegations had not had enough time to  review it and that it would also be considered
during the meeting.  In addition, the Parties had provided written replies to questions submitted to
them which had been distributed in document WT/REG32/6.  On 7 August 1998, additional
information containing trade statistics and the timetable for the elimination of barriers had been
circulated in document WT/REG32/5.  Finally, as the questions and replies followed the structure of
the standard format (document WT/REG32/2), he suggested that it be used as a guide for thediscussion.
3. The representative of the European Commun ities, speaking also on behalf of Slovenia,
thanked the Chairman for his introduction and said that the European Communities (EC) and Slovenia
had worked together to produce answers to the addi tional written questions that they had received.
These replies had been circulated in document WT/REG32/6 and further material on trade statisticsand the timetable for dismantling trade restrictions had been submitted in July.  Members were in
possession of considerable information on the Agreement and he hoped that the factual examination
of the Agreement would be concluded during the meeting.  He noted that the discussion to be held
later that afternoon on the pan-European System of Cumulation of Origin would provide a further
opportunity for Members to explore any remaining questions they had on that issue.  He continued byhighlighting the developments that had taken place since the earlier meeting in July on the discussions
with the view towards Slovenia's accession to the EC.  While the talks had been successfully engaged,
a date for the completion of the discussions could not be advanced.  He underlined some of the key
points from the documentation: the Agreement covered all sectors; quantitative import restrictions had
been eliminated, at the latest, by 1 January 1998 that is, one year after the entry into force of theAgreement); two-way trade in industrial products was to be free of duty, at the latest, by 1 January
2001 this is, four years after the Agreement's entry into force; and no duties or other regulatory
barriers to trade with non-parties had been raised as a result of the establishment of the free-trade area.
He further stated the firm conviction of the Parties that the Agreement provided for a free-trade areaWT/REG32/M/3
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in the sense of Article XXIV of the GATT 1994 and was in full conformity with that Article.  In
conclusion, he conveyed the willingness of the Parties to address any further questions that might
have arisen from information already submitted, but st ressed that the full set of information had been
presented to the Committee.
4. The representative of Australia welcomed the data provided in document WT/REG32/6 and
noted the Parties' wish to conclude the factual part  of the examination.  However, he expressed his
delegation's inability to assess the significance of agricultural trade for Slovenia as the figures that had
been provided were only from the perspective of the EC.  Thus, it remained to be seen whether the
Agreement complied with the requirements of Article XXIV:8(b).  It was unclear what percentage of
trade would be duty-free, subject to preferences, or would remain exempt from the Agreement,
particularly in the case of Slovenia.  It was also unclear how significant the proportion of non duty-
free trade would be for Slovenia.  Until the information requested had been received, his delegationwould be unable to support the conclusion of the factual part of the examination process.
5. The representative of the United States said that data had been requested on what the
Agreement covered, what was excluded, and what was covered by better than MFN, but greater than
zero tariff preferences, including the percentage of trade and the number of tariff lines covered by
each category with a separate breakout for agricultural trade.  He pointed out that the response in pagetwo of document WT/REG32/4 did not provide a lot of  statistics, but stated that three Protocols were
applicable; one on textiles and clothing, one on products covered by the Treaty establishing the
European Coal and Steel Community, and one on the trade between Slovenia and the EC in processed
agricultural products.  It had also been noted that wine and spirits were not covered by the Agreement.
With regard to the three Protocols mentioned, he asked the Parties to explain exactly why they wereused and why those items had not been incorporated within the Agreement itself.  In addition, he
wondered if there were any types of tariff or other non-tariff restrictions within these Protocols and, if
so, he requested that a general description given.  His next question concerned the same document,
where information had been requested on the amount of  trade that was duty free, the trade that would
become duty free by the time the Agreement was fully implemented, the trade which was free of tariffquotas and quantitative restrictions, and the trade which would become free of tariff quotas and
quantitative restrictions by the time the Agreement was fully implemented.  He noted that none of
these questions had been answered and that unt il complete answers were provided, it would be
premature to conclude the factual part of the examination.
6. The representative of Japan endorsed the points made by the delegations of Australia and the
United States.  The representative of Canada joined the delegations of Australia, the United States and
Japan in their request for more complete statistics.  Many of the questions posed earlier in the
examination had originated with her delegation and she recalled that the answer contained in
document WT/REG32/4 indicated that the data was no t available.  Given that several months had
lapsed since its distribution, she hoped that the Parties could provide the requested information, so
that a more useful discussion might ensue.
7. In response to the questions raised by the United States representative, the representative of
the European Communities stated that the Protocols incorporated into the Agreement were readily
available to WTO Members for general review.  The Protocol on Coal and Steel was based on aparticular treaty which reflected the development of the EC out of various legal instruments.  With
regard to textiles and processed agricultural products, the existence of these Protocols reflected the
importance of these sectors and were based on the need to negotiate specific provisions applying tothem.  He reiterated that quantitative restrictions and import duties in the areas of textiles, coal and
steel products, as well as other industrial products would be lifted in trade between the Parties by, at
the latest, 2001.  As for processed agricultural products, the Protocol set out a number of trade
concessions which the Parties had agreed to offer on those items.  He hoped that the replies submitted
in the latest document would be sufficient to answer the question on wine.  With respect as to why theWT/REG32/M/3
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Parties had felt it necessary to negotiate a wine agreement, he said that the agreement went wider than
a mere reduction of tariffs and that, pending conclusion of negotiations between the Parties, certain
arrangements for duty-free tariff quotas remained in place.  Moving to the next question, he said that
after the transitional period no quantitative restrictions would be applied in trade between the Parties.
However, a number of tariff quotas would be applied to certain products for which details had beengiven in the Agreement's Annexes and Protocols.  On the question of statistics, he referred to the
information supplied in document WT/REG32/6 which included a detailed breakdown of trade
between the EC and Slovenia during the period 1993- 97 by Section of the Harmonized System (HS).
That information would allow delegations to make calculations regarding the percentages of trade
falling within certain groups.  His calculations show ed that large proportions of trade between the EC
and Slovenia fell into HS Chapters 25-97.  While he understood Members' appetite for information;
he recalled that the Committee's task to review the consistency of the Agreement with Article XXIV.He regretted that the statistical details necessary to answer the questions posed by delegations were
simply not available to his delegation.
8. Following up on the response given by the representative of the EC, the representative of the
United States returned to questions on the Protocols.  In reference to the trade concessions on
agricultural products, he requested that the Parties provide a summary of the restrictions that were in
place; in particular, whether there were tariff-rate quotas (TRQs); and, if so, whether they being filled
and whether there were tariffs being applied.  In addition, given that quantitative restrictions as well
as MFN tariffs were in place on textiles and steel, he asked whether there were any arrangements
beyond those stated, as he wanted to gain a clearer picture of the actual mechanisms being used within
the Protocols.
9. The representative of Japan requested a clarification on the longest transition period, if any,
for the elimination or reduction of tariffs and quotas and whether there would be any transition period
beyond ten years and, if so, on how many items.
10. The representative of Australia clarified that his earlier request for statistics was directly
pertinent to assessing whether the Agreement complied with Article XXIV.  Given that the statistics
and data included in document WT/REG32/6 were only from the perspective of the EC, he asked if he
was correct in understanding that Slovenia was unable to submit trade statistics, including those for
agriculture.
11. The representative from the European Communities replied that he would leave the response
to that question to his colleague from Slovenia.  In response to the question posed by the Japanese
representative on transition periods, he said that the answer could be found in document
WT/REG32/5.  The Agreement between the EC and Slovenia had entered into force on  1 January
1997 and the details in Section A of document WT/R EG32/5 included a timetable for the elimination
of various barriers to trade and a breakdown of info rmation according to the Protocols.  Quantitative
restrictions or other barriers to trade between the Parties would be lifted by 1 January 2001, which
was four years after the Agreement's entry into force.  He assured delegations that no products had a
transition period of longer than ten years, either in terms of customs duties or quantitative restrictions.He reiterated that the Annexes and Protocols had been with the Secretariat for some time and those
who were interested in the products contained therein could examine them in further detail.  On the
question of processed agricultural products, he indicated the existence of a positive list of items
scheduled for concessions; these could be found in the Annexes and Protocols.  Given that the
Protocol dealing with textiles had lapsed at the beginning of 1998, textiles products would, in general,be treated as industrial products after that date.
12. The representative of the United States was confused by the response given on transition
periods. The representative of the EC had said that duties and other restrictive measures would be
eliminated by 2001 on all products.  However, during the discussion on Protocols it appeared that forWT/REG32/M/3
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processed agriculture products, only those items included in the positive list would be liberalised.  He
asked if the items on the positive list would be completely free of duties, including TRQs, as of 2001
and how items not included on the list would be dealt with.  Finally, he enquired as to the nature of
the concessions granted on the items in the positive list, specifically, if there were TRQs or if other
methods were employed.
13. The representative of Slovenia asked the representative of the Australian to submit his request
for statistics in writing so that he could respond correctly.
14. The representative of Australia offered to submit his questions in writing and added that he
was specifically looking for data on the percentages of trade which would be made duty free, that
would be subject to preferences and that would remain exempt from the Agreement.  It remained
unclear how significant the proportion of duty-free trade would be to Slovenia and his delegation
would find that information useful in assessing whether the Agreement complied with therequirements of Article XXIV:8(b).  The representative of the United States added that the delegation
of Slovenia had already received the question in written form in question four on page two ofdocument WT/REG32/4.
15. The representative from European Communities expressed his surprise over the confusion and
replied that the responses provided to the Committee showed how agricultural and processed
agricultural products were treated under the Agreement.  The Agreement followed a model similar to
those agreements concluded between the EC and Cent ral and Eastern European countries.  All trade in
industrial products would be free by a given date an d agricultural and processed agricultural products
would be treated differently.  Such products were covered to the extent possible under the
commitments entered into by the two Parties, detail s of which, were in the Annexes and Protocols and
were also described in general terms in the written replies.  He did not know what new information his
delegation could provide to the Committee.  Inevitably, some products would not be fully liberalised
by the end of the transitional period.  He emphasized that Slovenia was likely to become a member of
the European Union in the future, and that at such  time, all restrictions including those on trade in
processed agricultural and basic agricultural produ cts would be dismantled.  Given that the issue of
Slovenia's membership in the European Union was not written into the Agreement, he hoped that the
Committee would remain aware of that during its consideration of the Agreement.
16. The representative of the United States said that the confusion noted by the EC representative
hinged on the answer that had been given to the Japanese representative regarding the elimination of
duties and other restrictions by the year 2001.  Based on the previous, he had had impression that
some restrictions would remain in place beyond the year 2001.  He asked whether any restrictions
would remain in place longer than ten years after the Agreement's entry into force and, if so, whetherthe EC representative would identify them.
17. The representative of the European Communities replied that the Agreement provided for the
dismantling of barriers in the industrial sector and for the exchange of additional concessions on items
in other sectors.  To the extent that the provisions existed, there was no specific timetable foreseen on
how such products would be treated.  The Agre ement provided that the Joint Committee would
regularly review the scope for taking further steps towards the full liberalisation of those sectors or
items not found in the Annexes and Protocols.
18. The Chairman suggested that those delegations interested in receiving further information
reflect on what had already been provided before formulating further questions.  He also requested
that questions be provided in written form, and in  a timely manner, so that the examination could be
expedited.WT/REG32/M/3
Page 5
19. The representative of the European Communities considered the preceeding deliberations to
have been useful and suggested that the delegation of Slovenia might be able to provide additional
information in the near future.  However, he did not see the merit in initiating a new round of
discussions.
20. The representative of the United States said that the lack of trade data from the Slovenian
delegation was a constraint to concluding the examination.  If the information was not available, that
issue might best be addressed in the examination report.
21. While recognising that the data requested from the Slovenian delegation might not be
available, the representative of Australia was of the view that it would be difficult to assess the
compliance of the Agreement with Article XXIV without it.  He suggested that the questions be put inwriting so that the Parties could confirm whether or not the information requested by his delegation
was available.  He endorsed the statement made by the United States representative that the issueraised by the lack of information could be addressed most effectively in the examination report.
22. Returning to document WT/REG32/6, the re presentative of the European Communities
pointed out a table in which the Parties had detailed the evolution of trade between them since 1993
and suggested that it provided considerable detail and responded to the questions posed by Members.
He assured the Committee that no further information was readily available to his delegation and thatthe table provided enough detail to arrive at the conclusion that substantially all the trade between the
EC and Slovenia would be free of duties and quantitative restrictions well within the ten-year period
foreseen in Article XXIV.  In 1997, 94 per cent of exports from the EC was fell outside of HS
Sections I-IV and in the other direction the figure was at 99 per cent.  With respect to the proportion
that fell within HS Sections I-IV there was a series of concessions under which duty-free trade tookplace.  He considered these figures a starting point  to come to a firm conclusion with respect to the
key test of Article XXIV.  His delegation had long deliberated on systemic issues, and on some of the
issues indirectly raised by the United States and the Australian delegations, and was well familiar with
the stage that those discussions had reached.  He reaffirmed that, based on the statistics that had been
provided, the Committee could examine the Agreement to determine its consistency withArticle XXIV and reach a conclusion.
23. The representative of the United States asked whether there were any provisions in the
Agreement regarding the adoption, by Slovenia, of EC standards concerning sanitary and
phyto-sanitary measures (SPS) and if Slovenia would adopt the import prohibitions on cattle raised
with hormones or the EC import licen sing regime for bananas.  The representative of Slovenia replied
that he would provide his delegation's position in writing.  Regarding the banana import regime and
the import prohibition on cattle raised with hormones, he stated that there were no plans to imposeany restrictions in those areas.  Also addressing the question posed by the representative of the
United States, the representative of the European Communities directed attention to document
WT/REG32/4 in which an answer had been provided stating that there were no specific provisions inthe areas of technical barriers to trade or SPS.
24. The Chairman said that the conclusion of the factual examination of the Interim Agreement
between Slovenia and the EC hinged upon the resolution of questions regarding the provision of
information.  The representative of the European Communities questioned the need for a further
meeting given that outstanding questions could be handled in written form.
25. Stating his understanding that he had already received an answer to his question on the
Slovenian delegation's intentions regarding the banana import regime and the import of cattle treatedwith hormones, the representative of the United States said that the only outstanding question was the
provision of trade data by Slovenia.WT/REG32/M/3
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26. The representative of Australia indicated that his delegation remained dissatisfied with the
information provided by Slovenia and asked whethe r the formal conclusion of the fact-finding stage
of the examination process would foreclose his delegation's option to ask follow-up questions.  If he
did not retain such an option, his delegation would insist that this concern be reflected in the
conclusions.  The representative of the United States shared the concerns of the Australian delegation
and reiterated the importance of trade data to the work of assessing the consistency of the Agreement
with Article XXIV.  He further proposed that once the written responses of the Slovenian delegation
had been circulated, an informal meeting could be convened in order to assess the need for another
formal round of examination.
27. The Chairman agreed, that after the written responses of the Slovenian delegation had been
circulated, an informal meeting could be arranged, during which it could be determined whether there
was a need for an additional formal meeting.
28. The Committee took note of the comments made.
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