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mt/-COMMISSION OF THE EUROPEAN COMMUNITIES 
C0M(92) 177 final 
Brussels, 4 May 1992 
Proposal for a 
COUNCIL DECISION 
on the conclusion by the European Economic Community of an 
Agreement between the European Economic Community and Estonia on 
trade and commercial and economic cooperation 
(presented by the Commission) 
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EXPLANATORY MEMORANDUM 
1. The attached proposal for a Council Decision is the legal instrument 
for the conclusion of the Agreement on Trade and Commercial and 
Economic Cooperation between the European Economic Community and the 
European Atomic Energy Community and the Republic of Estonia. 
2. Exploratory talks between Commission and Estonian experts took place 
between November 1991 and February this year in Brussels. 
3. On the basis of directives adopted by the Council on 4 November 1991 
there were a number of informal meetings between Community and Estonian 
representatives, which resulted in a formal negotiating session in 
Brussels on 27 February this year, at which the Agreement was 
initialled. 
Regarding the initialled text, which is attached to the proposal for a 
Decision, the following should be noted: 
(a) it contains no financial protocol or financial undertakings; 
(b) the respect for democratic principles and human rights is an 
essential aspect of the Agreement (Article 1); 
(c) ECSC products and textile and clothing products falling within 
Section XI of the Harmonized System are not covered by the 
Agreement (Article 3); 
(d) the Community and Estonia reaffirm their undertaking to accord 
each other most-favoured-nation treatment under the GATT, and the 
Community also undertakes to abolish quantitative restrictions 
specific to Estonia (Article 8); 
(e) as regards commercial cooperation, Estonia also undertakes to 
guarantee effective, suitable protection of intellectual and 
commercial property and to accede to the relevant international 
conventions (Article 13(3)); 
(f) economic cooperation is focused on the sectors listed non-
exhaustively in Article 15 with a view to establishing economic 
links and increasing trade between the two parties: it is also 
designed to support structural changes in the Estonian economy; 
(g) the Community undertakes to support Estonia's applications to 
accede to international organizations and conventions 
(Article 17); 
(h) Article 18 sets up a Joint Committee and lays down its 
responsibilities: the Committee will monitor the proper working of 
the Agreement and recommend measures that it deems appropriate to 
achieve the aims of the Agreement. 
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(i) the Agreement is concluded for an initial period of ten years, 
tacitly renewable each year: it may be denounced by means of the 
usual procedure, and suspended with immediate effect, totally or 
partially, should there be serious infringement of essential 
provisions of the Agreement. 
4. Since Articles 113 and 235 of the Treaty provide the legal basis for 
the Agreement, the opinion of Parliament is required. 
5. It is proposed to sign a joint declaration on political dialogue 
when the Agreement is signed. 
6. The Council is asked to adopt the attached proposal for a Council 
Decision on the conclusion of an Agreement on Trade and Commercial and 
Economic Cooperation between the Community and Estonia. 
1 
PROPOSAL FOR 
A COUNCIL DECISION 
of 
on the conclusion by the European Economic Community of an 
Agreement between the European Economic Community and Estonia on 
trade and commercial and economic cooperation 
THE COUNCIL OF THE EUROPEAN COMMUNITIES 
Having regard to the Treaty establishing the European Economic 
Community, and in particular Articles 113 and 235 thereof, 
Having regard to the proposal from the Commission, 
Having regard to the opinion of the European Parliament, 
Whereas the conclusion of the Agreement between the European Economic 
Community and on trade and commercial and economic cooperation is 
necessary for the achievement of the Community's objectives in the field 
of external economic relations; whereas this Agreement should be 
approved on behalf of the European Economic Community; 
Whereas it appears that certain measures of economic cooperation 
provided for by the Agreement exceed the powers of action provided for 
in the Treaty, and in particular those specified in the field of the 
common commercial policy, 
HAD DECIDED AS FOLLOWS: 
Article 1 
The Agreement between the European Economic Community and Estonia on 
trade and commercial and economic cooperation is hereby approved on 
behalf of the European Economic Community. 
The text of that Agreement is attached to this decision. 
Article 2 
The President of the Council shall give the notification, provided for 
in Article 21 of the Agreement. 
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Article 3 X 
The Commission assisted by representatives of the Member States, shall 
represent the Community in the joint committee set up by Article 18 of 
the Agreement. 
Done at Brussels, 
For the Council 
The President 
c 
Brussels, 27 February 1992 
DRAFT AGREEMENT 
between the European Economic Community and the Republic of Estonia on 
trade and commercial and economic cooperation 
THE EUROPEAN ECONOMIC COMMUNITY, 
hereinafter called the "Community, of the one part, and 
THE REPUBLIC OF ESTONIA, 
hereinafter called "Estonia", of the other part, 
CONSIDERING the importance of establishing and expanding trade links 
between the Community and Estonia, 
DESIROUS of creating favourable conditions for a substantial and 
harmonious development and diversification of trade and the promotion of 
commercial and economic cooperation in areas of mutual interest on the 
basis of equality, non-discrimination, mutual benefit and reciprocity, 
AWARE of the particular importance of foreign trade and other forms of 
international economic cooperation for the economic and social 
development of each of the Contracting Parties, 
AWARE of the importance of giving full effect to all the provisions and 
principles of the CSCE process, and in particular those set out in the 
Helsinki Final Act, the concluding documents of the Madrid, Vienna and 
Copenhagen meetings, and those of the Charter of Paris for a new Europe, 
particularly with regard to the rule of law, democracy and human rights, 
as well as those of the Bonn CSCE Conference on Economic Co-operation, 
RECOGNIZING the importance of guaranteeing the rights of ethnic and 
national groups and minorities, in accordance with the undertakings made 
within the context of the CSCE, 
AWARE of the importance of strengthening their democratic institutions 
and of supporting the process of economic reform in Estonia, 
BELIEVING that a further impetus should be given to the trading and 
economic relationship between the Community and Estonia by establishing 
contractual links which will contribute to progress towards the 
objective of an association agreement in due course, when conditions are 
met, and to further development of relations between them, 
TAKING INTO ACCOUNT the favourable implications for trade and economic 
cooperation between the Contracting Parties of reform under way in 
Estonia, 
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HAVE DECIDED to conclude this Agreement and to this end have designated 
as their Plenipotentiaries: 
THE EUROPEAN ECONOMIC COMMUNITY: 
THE REPUBLIC OF ESTONIA: 
WHO, having exchanged their full powers, found in good and due form, 
HAVE AGREED AS FOLLOWS: 
TITLE I 
Genera 1 
Article 1 
Respect for the democratic principles and human rights established by 
the Helsinki Final Act and the Charter of Paris for a new Europe 
inspires the domestic and external policies of the Community and Estonia 
and constitutes an essential element of the present agreement. 
Article 2 
Within the framework of their respective laws and regulations, the 
Contracting Parties undertake to facilitate and promote: 
the harmonious development and diversification of trade between 
them; 
the development of various types of commercial and economic 
cooperation. 
They therefore confirm their resolve to consider favourably, each for 
its own part, suggestions made by the other Party with a view to 
attaining these aims. 
TITLE II 
Trade and commercial cooperation 
Article 3 
1. This Agreement shall apply to trade in all products originating in 
the Community and in Estonia with the exception of products covered by 
the Treaty establishing the European Coal and steel Community and of the 
textiles and apparel covered by Section XI of the Harmonized System. 
2. The provisions of this Agreement may be supplemented if necessary by 
sectoral agreements or arrangements concluded between the Community and 
Estonia. In particular, a separate agreement for textile products will 
be negotiated. LA 
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Article 4 
Unless otherwise specified in this Agreement, trade and other commercial 
cooperation between the Contracting Parties shall be conducted in 
accordance with their respective laws and regulations. 
Article 5 
1. The Contracting Parties shall accord each other most-favoured-nation 
treatment in all matters regarding: 
- customs duties and charges of any kind imposed on or in connection 
with importation or exportation, 
- the method of levying such duties and charges, 
all rules and formalities in connection with importation and 
exportation, including provisions relating to customs clearance, 
transit, warehousing and transhipment, 
taxes and other internal charges levied directly or indirectly on 
imported products, 
- methods of payment and the transfer of such payments, 
- the regulations affecting the sale, purchase, transport, 
distribution and use of goods on the domestic market. 
2. The provisions of paragraph 1 shall not apply to: 
(a) advantages accorded to adjacent countries in order to facilitate 
frontier traffic; 
(b) advantages accorded with the aim of creating a customs union or a 
free trade area or pursuant to the creation of such a union or area; 
(c) advantages accorded to particular countries in accordance with the 
General Agreement on Tariffs and Trade and other international 
arrangements in favour of developing countries. 
Article 6 
Without prejudice to the rights and obligations stemming from 
international conventions on the temporary admission of goods which bind 
both sides, 
the Contracting Parties shall furthermore grant each other reciprocal 
exemption from"import charges and duties on goods admitted temporarily, 
in the instances and according to the procedures stipulated by any other 
international convention on this matter binding only one of them. 
Account shall be taken of the conditions under which the obligations 
stemming from such a convention have been accepted by the Contracting 
Party in question. 
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Article 7 
Estonia shall grant imports of products originating in the Community 
treatment which is non-discriminatory in relation to products 
originating in other countries, as regards the application of 
quantitative restrictions, the granting of licences and access to the 
foreign currency needed to pay for such imports. 
Article 8 
1. Without prejudice to Article 7, each of the Contracting Parties 
shall grant imports of products originating in the other the highest 
degree of liberalization generally extended to third countries. To that 
end, the specific quantitative restrictions applying to imports from 
Estonia into the Community shall be eliminated-
2. For the purposes of this Agreement, "specific quantitative 
restrictions" shall mean those quantitative restrictions applied by the 
Community to imports originating in Estonia under Regulation (EEC) 
No 3420/83, which concerns products other than those to which 
quantitative restrictions are applied under Regulation (EEC) No 288/82. 
Article 9 
The Parties shall inform each other of any changes in their tariff or 
statistical nomenclature or of any decision taken in accordance with the 
procedures in force concerning the classification of products covered by 
this Agreement. 
Article 10 
Goods shall be traded between the contracting Parties at market-related 
prices. 
Article 11 
1. The Contracting Parties shall consult each other if any product is 
being imported into the territory of one of them in such increased 
quantities or on such terms as to cause or threaten to cause serious 
injury to domestic producers of like or directly competing products. 
2. The Contracting Party claiming serious injury or threat thereof 
shall request consultations by notification in writing and shall provide 
the other Party with all the relevant information required for a 
detailed examination of the situation. 
3. The consultations requested pursuant to paragraph 1 shall be held 
with a view to seeking mutually satisfactory solutions and with due 
regard for the fundamental aims of the Agreement; they shall be 
completed not later than 30 days from the date of notification of the 
request by the Party concerned, unless the Parties agree otherwise. 
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4. If, as a result of such consultations, it is agreed that the 
situation referred to in paragraph 1 exists, exports shall be limited or 
such other action taken, possibly with regard to the price at which 
these exports are sold, as will prevent or remedy the injury. 
5. If, following action under paragraphs 1 to 4, agreement is not 
reached between the Contracting Parties, the Contracting Party which 
requested the consultations shall be free to restrict the imports of the 
products concerned to the extent and for such time as is necessary to 
prevent or remedy the injury. The other Contracting Party shall then be 
free to deviate from its obligations towards the first Party in respect 
of substantially equivalent trade. 
6. In critical circumstances, where delay would cause damage difficult 
to repair, such preventive or remedial action may be taken provisionally 
without prior consultation, provided consultations are held immediately 
after such action is taken. 
7. In the selection of measures under this Article, the Contracting 
Parties shall give priority to those which cause the least disturbance 
to the functioning of this Agreement. 
8. Where necessary the Contracting Parties may hold consultations to 
determine when the measures adopted pursuant to paragraphs 4 to 6 shall 
cease to apply. 
Article 12 
1. This Agreement shall not preclude prohibitions or restrictions on 
imports, exports or goods in transit justified on grounds of public 
morality, public policy or public security, the protection of life and 
health of humans, animals or plants, the protection of industrial, 
commercial and intellectual property, or rules relating to gold or 
silver or imposed for the protection of national treasures of artistic, 
historic or archaeological value. 
Such prohibitions and restrictions must not, however, constitute a means 
of arbitrary discrimination or disguised restrictions on trade between 
the Contracting Parties. 
2. This Agreement shall not preclude the taking of action justified on 
grounds of protection of essential security interests: 
(a) relating to fissionable materials or the materials from which they 
are derived; 
(b) relating to traffic in arms, ammunition and implements of war and to 
such traffic in other goods and materials as is carried on directly 
or indirectly for the purpose of supplying a military establishment; 
(c) taken in time of war or other emergency in international relations 
or to allow it to comply with obligations it has accepted in 
connection with the maintenance of international peace and security. 
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Article 13 
1. The Contracting Parties shall make every effort to promote, expand 
and diversify their trade on the basis of non-discrimination and 
reciprocity. In the spirit of this Article, the Joint Committee 
established under Title V of this Agreement will attach special 
importance to examining ways of encouraging the reciprocal and 
harmonious expansion of trade. 
2. In furtherance of the aims of this Article and within the limits of 
their respective powers, the Contracting Parties agree on the necessity 
to improve favourable business regulations and facilities for each 
other's firms or companies on their respective markets, inter alia by 
taking steps: 
to ensure the publication and facilitate exchanges of commercial and 
economic information on all matters which would assist the 
development of commercial and economic cooperation, for example: 
- general and sectoral import arrangements, 
economic and commercial law, including regulations on markets, 
companies and investment, 
macroeconomic information and statistics, including production, 
consumption and foreign trade statistics, 
to facilitate the establishment and operation of each other's 
companies, 
- to encourage trade promotion activities, 
to provide natural and legal persons of the other Party with 
guarantees of their individual and property rights, such as 
non-discriminatory access for that purpose to courts and appropriate 
administrative bodies of the Community and Estonia. 
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3. Estonia will take measures guaranteeing an effective and adequate 
protection of intellectual, industrial and commercial property, at a 
level similar to that which exists in the Community, and will adhere to 
international Conventions on intellectual, industrial and commercial 
property. 
4. The Contracting Parties undertake to facilitate, within the limits 
of their respective powers, administrative cooperation between the 
appropriate authorities in matters relating to customs, in particular in 
the following areas: 
vocational training, 
simplification of customs documentation and procedures, and 
prevention and detection of infringements of the rules on customs 
matters, including the rules governing import quotas. 
Article 14 
Within the limits of their respective powers, the Contracting Parties: 
shall encourage the adoption of arbitration for the settlement of 
disputes arising out of commercial and cooperation transactions 
concluded by companies, enterprises or economic organizations of the 
Community and those of Estonia, 
agree that when a dispute is submitted to arbitration, each party to 
the dispute may freely choose its own arbitrator, irrespective of 
nationality, and that the presiding third arbitrator or the sole 
arbitrator may be a citizen of a third state, • 
shall encourage recourse to the arbitration rules developed by the 
United Nations commission on International Trade Law (Uncitral) and 
to arbitration by any centre of a state signatory to the -Convention 
on Recognition and Enforcement of Foreign Arbitral Awards concluded 
in New York on 10 June 1958. 
TITLE III 
Economic cooperation 
Article 15 
1. In the light of their respective economic policies and objectives, 
the Contracting Parties, within the limits of their existing powers, 
shall foster economic cooperation on as broad a base as possible in all 
fields deemed to be in their mutual interest. 
The objectives of such cooperation shall be, inter alia: 
to reinforce and diversify economic links between the Contracting 
Parties, 
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to contribute to the development of their respective economies and 
standards of living, 
- to open up new sources of supply and new markets, 
to encourage cooperation between economic operators with a view to 
promoting joint ventures, licensing agreements, and other forms of 
industrial cooperation to develop their respective industries, 
- to encourage scientific and technological progress, 
to support structural changes in the Estonian economy which will 
increase and diversify trade in goods and services with the 
Community, 
- to encourage the participation of small and medium-sized enterprises 
in trade and industrial cooperation. 
2. In order to achieve these objectives, the Contracting Parties shall 
make efforts to encourage and promote economic cooperation in areas of 
mutual interest, in particular in the following sectors: 
industry, including the textiles and apparels'' sectors, 
agriculture, including agro-industry, 
fisheries, 
- science and technology in areas in which the Contracting Parties are 
active and which they consider to be of mutual interest, 
- telecommunications, 
energy, including the saving of energy and the development of new 
sources of energy, 
m ining and production of building materials, 
environmental protection, including protection from water and air 
pollution and industrial accidents, and the management of natural 
resources; also taking into account environmental requirements in 
other policy areas such as industry, agriculture, energy, transport, 
transport, communications and the running of ports, 
tourism and other service activities, 
economic, monetary, banking, insurance and financial services, 
development of human resources and training, 
health, 
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economic policy, 
standards, 
statistics. 
3. To give effect to the objectives of economic cooperation and within 
the limits of their respective powers, the Contracting Parties shall 
encourage the adoption of measures aimed at creating favourable 
conditions for economic and industrial cooperation, including: 
the facilitation of exchanges of commercial and economic 
information, 
the development of a favourable climate for investment, notably by 
the extension by the Member States of the Community and Estonia of 
arrangements for investment promotion and protection, in particular 
for the transfer of profits and the repatriation of invested 
capital, and also of agreements on the avoidance of double taxation, 
exchanges and contacts between persons and delegations representing 
commercial or other appropriate organizations, 
the organization of seminars, fairs or exhibitions, symposia and 
business weeks. 
- the encouragement of activities contributing to technical competence 
in specific fields, notably commercialization. 
Article 16 
Without prejudice to the relevant provisions of the Treaties 
establishing the European Communities, this Agreement and any action 
taken pursuant to it shall in no way affect the powers of the Member 
States of the Community to undertake bilateral activities with Estonia 
in the field of economic cooperation and to conclude, where appropriate, 
new economic cooperation agreements with Estonia. 
TITLE IV 
Accession to international organizations and conventions 
Article 17 
The Community undertakes, within the limits of its powers, to support 
the accession of Estonia to international organizations and conventions 
to which the Community is a party, in order to enable Estonia to become 
more active in the world economic system. 
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TITLE V 
Joint Committee 
Article 18 
1. A Joint Committee shall be set up, comprising representatives of the 
Community, on the one hand, and representatives of Estonia on the 
other. 
The Joint Committee shall formulate recommendations by mutual 
agreement between the Contracting Parties. 
The Joint Committee shall, as necessary, adopt its own rules of 
procedure and programme of work. 
The Joint Committee shall meet once a year in Brussels and Tallinn 
alternately. Special meetings may be convened by mutual agreement, 
at the request of either Contracting Party. The Joint Committee 
shall be chaired alternately by each of the Contracting Parties. 
Wherever possible, the agenda for meetings of the Joint Committee 
shall be agreed beforehand. 
The Joint Committee may decide to set up working parties to assist 
it in carrying out its duties. 
2. The Joint Committee shall ensure the proper functioning of this 
Agreement and shall devise and recommend practical measures for 
achieving its objectives, keeping in view the economic and social 
policies of the Contracting Parties. 
3. The Joint committee shall endeavour to find ways of encouraging the 
development of trade and commercial and economic cooperation between 
the Contracting Parties. in particular, it shall: 
examine the various aspects of trade between the Parties, 
notably its overall pattern, rate of growth, structure and 
diversification, the trade balance and the various forms of 
trade and trade promotion, 
make recommendations on any trade or economic cooperation 
problem of mutual concern; 
seek appropriate means of avoiding possible difficulties in 
the fields of trade and cooperation and encourage various 
forms of commercial and economic cooperation in areas of 
mutual interest; 
consider measures likely to develop and diversify trade and 
economic cooperation, notably by improving import 
opportunities in the Community and in Estonia; 
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exchange information on macroeconomic plans and forecasts 
for the economies of the Contracting Parties which have an 
impact on trade and cooperation and, by extension, on the 
scope for developing complementarity between their 
respective economies and also on proposed programmes of 
economic reform; 
examine the situation concerning the procedures for the 
award of contracts for supplying goods and services 
following an international invitation to tender; 
exchange information on amendments to and developments in 
the laws, regulations and formalities of the Contracting 
Parties in the areas covered by this Agreement; 
examine favourably ways of improving conditions for the 
development of direct contacts between firms established in 
the Community and those established in Estonia; 
formulate and submit to the authorities of both Contracting 
Parties recommendations for resolving any problems that 
arise, where appropriate by means of the conclusion of 
arrangements or agreements. 
TITLE VI 
General and final provisions 
Article 19 
Subject to the provisions of Article 16, the * provisions of this 
Agreement shall replace the provisions of agreements concluded between 
Member States of the Community and Estonia where the latter provisions 
are either incompatible with or identical to the former. 
Article 20 
This Agreement shall apply, on the one hand, to the territories in which 
the Treaty establishing the European Economic Community is applied and 
under the conditions laid down in that Treaty and, on the other, to the 
territory of the Republic of Estonia. 
Article 21 
This Agreement shall enter into force on the first day of the second 
month following* the date on which the Contracting Parties notify each 
other that the legal procedures necessary to this end have been 
completed. The Agreement is concluded for an initial period of ten 
years. The Agreement shall be automatically renewed year by year 
provided that neither Contracting Party gives the other Party written 
notice of denunciation of the Agreement six months before it expires. 
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However, the two Contracting Parties may amend the Agreement by mutual 
consent in order to take account of new developments, notably the 
situation which would arise from the accession of Estonia to the General 
Agreement on Tariffs and Trade. In the latter case, the Contracting 
Parties shall prepare together the amendments to this Agreement 
necessary to take account of the protocol of accession of Estonia to the 
General Agreement. If the Parties are unable to agree on this subject 
they reserve the right to denounce this Agreement. 
The parties reserve the right to suspend this Agreement in whole or in 
part with immediate effect if a serious violation occurs of the 
essential provisions of the present agreement. 
Article 22 
This Agreement is drawn up in duplicate in the Danish, Dutch, English, 
French, German, Greek, Italian, Portuguese, Spanish and 
Estonian languages, each text being equally authentic. 
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FICHE D'INCIDENCE 
IMPACT DE LA PROPOSITION SUR LES P.M.E 
ET SUR LE MARCHE DE L'EMPLOI 
L'incidence économique éventuelle du présent accord ne saurait être 
qu'indirecte et tributaire des recommandations du Comité Mixte institué 
dans le cadre de celui-ci. Il n'est donc pas possible de procéder à une 
évaluation précise des effets économiques de l'accord. 
FICHE FINANCIERE 
Le présent accord n'a pas d'implications budgétaires directes. 
/]°) 
ISSN 0254-1475 
COM (92) 177 final 
DOCUMENTS 
EN 02 li 
Catalogue number: CB-CO-92-192-EN-C 
ISBN 92-77-43808-8 
Office for Official Publications of the European Communities 
L-2985 Luxembourg