Proposal for a Council Decision establishing the Community position within the General Council of the World Trade Organization on the accession of Montenegro to the World Trade Organization
Date: 2008-12-22
Institutions: European Commission
Subjects: Montenegro, World Trade Organisation, enlargement of an international organisation, the EU's international role

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COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 22.12.2008 
COM(2008) 883 final 

Proposal for a 

COUNCIL DECISION 

establishing the Community position within the General Council of the World Trade 
Organization on the accession of Montenegro to the World Trade Organization  

(presented by the Commission) 

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EXPLANATORY MEMORANDUM 

BACKGROUND  

Members of the World Trade Organization (WTO) and Montenegro have reached the 
concluding  stage  of  agreement  on  the  terms  for  Montenegro's  accession  to  the 
organization.  This  comes  after  4  years  of  negotiations,  which  began  when 
Montenegro submitted its application to join the WTO in December 2004. A Council 
Decision is necessary approving the terms of Montenegro's accession, before the EU 
can formally support Montenegro's entry into the WTO. A summary of the terms of 
accession is set out below.  

Bilateral trade commitments on goods and services between the EU and Montenegro 
are embodied in a preferential trade agreement which is part of the Stabilisation and 
Association  Agreement  (SAA)  signed  on  15  October  2007.  The  trade  part  (Interim 
Agreement) has been applicable since 1 January 2008. Montenegro is also a potential 
candidate for accession to the EU.  

OUTCOME FOR INDUSTRIAL AND AGRICULTURAL GOODS 

Montenegro's tariff schedule mirrors the EU tariff structure in HS 2007 classification 
on an 8 digit level, but it is expressed across the board in 10-digits. All tariff lines 
will be bound. All tariffs are expressed in an ad-valorem manner. Applied Duty rates 
are at a total simple average of 4.19%. The total simple average of the Initial Bound 
Rates (IBR) is 5.04%. The total simple average of Final Bound Rates (FBR) obtained 
is 4.92%. All sectors show average bound rates below 10%. The sectors with peaks 
include paper as well as leather and fur (22%) and fish (30%). All other tariff lines 
are offered at levels lower or equal to 15%. For 131 tariff lines the FBR is different 
from  the  IBR.  The  implementation  periods  are,  respectively,  4  and  5  years. 
Montenegro will fully participate in all sectoral agreements – except for a few very 
sensitive lines (paper, steel).  

On  agricultural  goods,  applied  duties  are  at  12.08%  and  the  average  of  the  IBR  is 
20.97%,  which  will  be  reduced  to  17.65%.  For  agriculture,  760  tariff  lines  have 
implementation periods of, respectively, 4 and 5 years. The highest rates are butter, 
at 60%. 

OUTCOME FOR SERVICES  

Montenegro is undertaking commitments allowing for market access and competition 
between  domestic  and  foreign  services  suppliers  in  practically  all  sectors  and  sub-
sectors, which will bring benefits both to the Montenegrin economy and to the EU. 
Foreign services suppliers will face  no quantitative or  discriminatory  restrictions in 
key services sectors such as: 

•  professional services 

•  the vast majority of business services  

•  postal & courier services (in line with the EC schedule) 

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•  telecommunications services 

•  construction services 

•  distribution services 

•  education services 

•  environmental services 

•  the  vast  majority  of  financial  services  (with  a  transition  period  for  some 

subsectors) 

•  tourism services, and 

•  part of transport services. 

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The  few  sectors  for  which  Montenegro  is  not  undertaking  commitments  include 
social services and transport services (internal waterways transport, space transport, 
part  of  air  and  rail  transport  and  pipeline  transport).  Montenegro  is  also  not  taking 
any commitments on audiovisual services. Montenegro retains limitations on cross-
border  supply  for  medical  and  dental  services,  veterinary  services  and  services 
provided by midwives, nurses and paramedical personnel; also for building cleaning 
insurance  services, 
services,  photographic  services,  packaging  services.  For 
Montenegro retains limitations on cross-border supply similar to those of the rest of 
WTO members and will allow direct branching only as of 2012. 

PROTOCOL COMMITMENTS 

In the final, multilateral stage of the accession process, WTO Members collectively 
sought to ensure the basic compatibility of Montenegro's trade laws and institutions 
with WTO rules and agreements, setting these out in the Protocol of Accession and 
Working Party Report. The following issues are of particular interest to the EU:  

Trading Rights 

In  Montenegro,  registered  foreign  persons  have  the  right  to  engage  in  importation 
and  exportation  under  the  same  conditions  as  domestic  persons.  From  the  date  of 
WTO accession Montenegro will ensure that its laws and regulations relating to the 
right to import and export goods and their implementation will be in full conformity 
with WTO obligations.  

Import Licensing System 

Montenegro has brought its import licensing procedures into compliance with WTO 
rules, including the Agreement on Import Licensing Procedures. Montenegro gave a 
commitment  that  it  would  administer  and  apply  its  tariff  rate  quotas  and  tariff 
exemptions  in  conformity  with  the  WTO  Agreement  and  the  agreement  on  Import 
Licensing. 

Trade Related Investment Measures 

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From the date of WTO accession, Montenegro will apply its investment regime in a 
non-discriminatory manner to imports from all WTO Members and to domestically 
produced goods, in compliance with the WTO Agreement, including the Agreement 
on Trade Related Investment Measures (TRIMS). Montenegro has inter alia adopted 
a  new  Law  on  Tobacco  that  abolished  the  requirement  for  each  manufacturer  to 
purchase a specific quantity of domestically processed tobacco.  

Intellectual Property Rights  

As  regards  geographical  indications,  Montenegro  provides  for  co-existence  of 
geographical  indications  with  prior  trademarks  under  certain  circumstances  in 
accordance with Article 17 of the TRIPS Agreement. Montenegro also provides the 
same protection of rights to geographical indications to nationals of WTO members 
as  was  provided  to  Montenegrin  nationals.  Regarding  data  protection,  Montenegro 
provides  protection  for  pharmaceuticals  and  for  agrochemicals.  On  enforcement  of 
intellectual  property  rights,  Montenegro  has  implemented  comprehensive  rules  that 
also include special border measures in line with TRIPS requirement. 

Sanitary and phytosanitary measures (SPS) 

Montenegro does not have a single enquiry point at present, but adopted a Regulation 
on Notification Procedures of SPS measures in January 2008 to comply with the SPS 
Agreement.  The  enquiry  point  will  be  responsible  for  providing  information,  inter 
alia,  on  Montenegro's  WTO  membership  and  participation  in  international  sanitary 
and phytosanitary organizations, including the Codex Alimentarius, the International 
Office  of  Epizootics,  the  International  Plant  Protection  Convention  as  well  as  any 
SPS measure adopted or proposed within its territory.  

RECOMMENDATION  

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In submitting the terms of accession of Montenegro to the WTO for approval by the 
Council,  the  Commission  commends  these  terms  as  representing  a  balanced  yet 
ambitious  package  of  market  opening  commitments,  which  will  bring  substantial 
benefits to Montenegro and its WTO trading partners alike. 

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Proposal for a 

COUNCIL DECISION 

establishing the Community position within the General Council of the World Trade 
Organization on the accession of Montenegro to the World Trade Organization  

THE COUNCIL OF THE EUROPEAN UNION, 

Having regard to the Treaty establishing the European Community, and in particular Article 
133 (1) and 133 (5) in conjunction with the second subparagraph of Article 300(2) thereof, 

Having regard to the proposal from the Commission, 

Whereas: 

(1) 

(2) 

(3) 

(4) 

On  10  December  2004,  the  Government  of  Montenegro  applied  for  accession  to  the 
Agreement establishing the World Trade Organization (WTO), pursuant to Article XII 
of that Agreement.  

A Working Party on Montenegro's accession was established on 15 February 2005 in 
order to reach agreement on the terms of accession acceptable to Montenegro and all 
WTO Members. 

The Commission, on behalf of the European Communities and Montenegro concluded 
their bilateral negotiations on trade in goods and services in April 2008.  

Accession to the WTO is expected to make a positive and lasting contribution to the 
process of economic reform and sustainable development in Montenegro.  

(5) 

The Protocol of Accession should therefore be approved. 

(6) 

Article  XII  of  the  Agreement  establishing  the  WTO  provides  that  the  terms  of 
accession are to be agreed between the acceding Member and the WTO, and that the 
Ministerial Conference of the WTO approves the terms of accession on the WTO side. 
Article  IV.2  of  the  Agreement  establishing  the  WTO  provides  that  in  the  intervals 
between meetings of the Ministerial Conference its functions shall be conducted by the 
General Council. 

(7) 

Accordingly,  it  is  necessary  to  establish  the  position  to  be  taken  by  the  Community 
within the General Council, 

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HAS DECIDED AS FOLLOWS:  

Sole Article 

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The position to be taken by the Community, within the General Council of the WTO, 
on the accession of Montenegro to the WTO is to approve the accession.  

This position shall be expressed by the Commission on behalf of the Community. 

Done at Brussels, […] 

For the Council 
The President 
[…] 

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