Source: EURLEX
Language: en
Format: md

20. 10. 88 Official Journal of the European Communities No C 271/9

AGREEMENT

on trade and commercial and economic cooperation between the European Economic
Community and the Hungarian People's Republic

THE EUROPEAN ECONOMIC COMMUNITY,

and

THE HUNGARIAN PEOPLE'S REPUBLIC,

CONSIDERING the traditional trade and economic links between the European Economic Community,
hereinafter called 'the Community' and the Hungarian People's Republic, hereinafter called 'Hungary';

TAKING INTO ACCOUNT the favourable implications for trade and economic relations between the
Contracting Parties of their respective economic situations and policies;

DESIROUS of creating favourable conditions for the harmonious development and diversification of trade
and the promotion of commercial and economic cooperation on the basis of equality, non discrimination,
mutual benefit and reciprocity;

HAVING REGARD to the particular importance of foreign trade for each of the Contracting Parties and
for their economic and social development;

HAVING REGARD to the importance of giving full effect to the Final Act of the Conference on Security
and Cooperation in Europe and the Concluding Document of the Madrid Meeting;

REAFFIRMING the international commitments of the parties, in particular those arising from the General
Agreement on Tariffs and Trade (GATT), including the Protocol of Accession of Hungary;

RECALLING Hungary's membership of the International Monetary Fund and the World Bank;

BELIEVING that the time is opportune to give further impetus to the trading and economic relationship
between the Community and Hungary;

RECOGNIZING that the Hungarian People's Republic and the European Economic Community desire to
establish extensive contracutal links with each other which will complement and extend the relations
already existing between the two Parties:

HAVE DECIDED to conclude this Agreement and to this end have designated as their plenipotentiaries:

HAVE AGREED AS FOLLOWS:

TITLE I

Commercial cooperation

_Article 1_

The Contracting Parties reaffirm their commitment to
accord each other most-favoured nation treatment in

accordance with the General Agreement on Tariffs and
Trade (GATT) and the Protocol of Accession of
Hungary thereto.

_Article 2_

1. This Agreement shall apply to trade in all products
originating in the European Economic Community or in
Hungary with the exception of the products covered by
the Treaty establishing the European Coal and Steel
Community.

2. Unless otherwise specified in this Agreement trade
and other commercial cooperation between the
Contracting Parties shall be conducted in accordance
with their respective regulations.

_Article 3_

1. This Agreement shall not affect the provisions of
the existing Agreements concerning trade in textile
products between Hungary and the Community, nor of
any such agreements subsequently concluded.

Furthermore, in the event that the Community invokes
paragraph 24 of the Protocol extending the arrangement
regarding international trade in textiles of 31 July 1986,
the provisions of the said arrangement shall apply to the
products in question.

No C 271/10 Official Journal of the European Communities 20. 10. 88

Not later than six months before the expiry of the
Agreements concerning trade in textile products referred
to above, the Contrating Parties shall consult each other
with a view to determining the arrangements to be
applied to trade in textile products after the expiry of the
said Agreements.

2. This Agreement shall not effect specific agreements
or arrangements covering agricultural products in force
between the Contracting Parties, or any successor

agreements or arrangements.

_Article 4_

1. Each Party will accord the highest degree of
liberalization which they generally apply to third
countries to imports of the other's products taking into
account all the provisions of GATT and of the Protocol
of Accession of Hungary thereto.

2. To this end the Community undertakes to abolish
the quantitative restrictions referred to in Article 4 (a) of
the Protocol of Accession of Hungary to GATT in
accordance with the provisions set out in the Protocol to
this Agreement.

_Article 5_

The parties undertake to examine the possibility of
increasing their mutual trade by the abolition, reduction
or other modification of tariffs in conformity with their
obligations under the GATT.

_Article 6_

Taking into account the importance of their trade in
agricultural products and the implications of multilateral
negotiations in the GATT framework, the Contracting
Parties shall examine in the joint committee referred to
in Title III of this Agreement, the possibility of granting
each other reciprocal concessions on a product by
product basis in the field of trade in agricultural products
on the basis of Article 1 above.

_Article 7_

1. The Contracting Parties shall consult each other if
any product is being imported in trade between the
Community and Hungary in such increased quantities,
or under such conditions as to cause or threaten serious

injury to domestic producers of like or directly
competitive products.

2. The Contracting Party requesting the consultations
will supply the other Party with all the information
required for a detailed examination of the situation.

3. The consultations requested pursuant to paragraph
1 will be held with due regard for the fundamental aims
of the Agreement and will be completed not later than
30 days from the date of notification of the request by
the Party concerned, unless the Parties agree otherwise.

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, which may
include action, if possible, with respect to the price at
which the exports are sold, as will prevent or remedy the
injury.

5. If, following action under paragraphs 1 to 4 above,
agreement is not reached between the Contracting
Parties, the Contracting Party which requested the
consultation 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, on the condition that consultation shall be
effected immediately after taking such action.

7. In the selection of measures under this Article, the
Contracting Parties should 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, 5 and 6 shall cease to apply.

9. Either Contracting Party may refer any
disagreement arising out of the adoption of safeguard
measures pursuant to this Article to the Contracting
Parties of the GATT in accordance with Article 5 of the

Protocol of Accession of Hungary to the GATT
provided that the procedures in this Article have been
fully implemented.

_Article 8_

The Contracting Parties will inform each other of any
modification in their tariff or statistical nomenclature or

any other decision concerning the classification of
products covered by this Agreement.

_Article 9_

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 firms, enterprises and economic organizations of the Community
and those of Hungary,

— agree that when a dispute is submitted to arbitration
each party to the dispute may freely choose its own
arbitrator, irrespective of his nationality, and that the

20. 10. 88 Official Journal of the European Communities No C 271/11

presiding third arbitrator or the sole arbitrator may
be a citizen of a third State,

— shall encourage recourse to the arbitration rules
elaborated by the United Nations Commissions 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 done at New York on 10 June 1958.

_Article 10_

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 III of
this Agreement will attach special importance to
examining ways of encouraging the reciprocal and
harmonious expansion of trade.

2. To this end the Contracting Parties agree to ensure
the publication of comprehensive data on commercial
and financial issues including production, consumption
and foreign trade statistics, and information in
accordance with Article X of GATT.

3. The Contracting Parties agree that counter trade
practices may create distortions in international trade
and they should be regarded as temporary and exceptional.

For this reason they agree not to impose counter-trade
requirements on companies established in Hungary or
the Community nor to compel them to engage in such
trade practices.

Nevertheless, where firms or companies decide to resort
to counter-trade operations, the Contracting Parties will
encourage them to furnish all relevant information to
facilitate the transaction.

4. In furtherance of the aims of this Article, the
Contracting Parties agree that they shall maintain and
improve favourable business regulations and facilities for
each other's firms or companies on their respective
markets _inter alia_ as indicated in the Annex.

TITLE II

Economic cooperation

_Article 11_

1. In the light of their respective economic policies
and objectives, the Contracting Parties shall foster
economic cooperation on as broad a base as possible in
all fields deemed to be in their mutual interest.

The objective of such cooperation shall be, _inter alia:_

— to reinforce and diversify economic links between the
Contracting Parties,

— to contribute to the development of their respective
economics 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.

2. In order to achieve these objectives, the
Contracting Parties shall make efforts to encourage and
promote economic cooperation in particular in the
following sectors:

— industry,

— mining,

— agriculture, including agro-industries,

— scientific research in designated sectors in which the
Contracting Parties are or may be engaged,

— energy, including the development of new sources of

energy,

— transport,

— tourism,

— environmental protection and the management of
natural resources.

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 on all matters which would

assist the development of trade and economic
cooperation,

— the development of a favourable climate for
investment, joint ventures and licensing arrangements
notably by the extension by the Member States of the
Community and Hungary of arrangements for
investment promotion and protection, in particular
for the transfer of profits and repatriation of invested
capital, on the basis of the principles of non-discrimination and reciprocity,

— exchanges and contacts between persons and delegations representing commercial or other relevant
organizations,

— the organization of seminars, fairs, business weeks or
exhibitions,

No C 271/12 Official Journal of the European Communities 20. 10. 88

activities involving the provision of technical expertise
in appropriate areas,

the promotion of exchange of information and
contacts on scientific subjects of mutual interest in
accordance with each other's laws and policies.

_Article 12_

Without prejudice to the relevant provisions of the
Treaties establishing the European Communities, the
present agreement and any action taken thereunder shall
in no way affect the powers of the Member States of the
Community to undertake bilateral activities with
Hungary in the field of economic cooperation, and to
conclude, where appropriate, new economic cooperation
agreements with Hungary.

TITLE III

Joint committee

_Article 13_

1. (a) A joint committee shall be set up, comprising
representatives of the Community, on the one
hand, and representatives of Hungary on the
other.

(b) The joint committee shall formulate recommendations by mutual agreement between the
Contracting Parties.

(c) The joint committee shall, as necessary, adopt its
own rules of procedure and programme of work.

(d) The joint committee shall meet once a year in
Brussels and Budapest alternately. Special
meetings may be convened by mutual agreement,
at the request of either Contracting Party. The
office of chairman of the joint committee shall be
held alternately by each of the Contracting
Parties. Wherever possible, the agenda for
meetings of the joint committee will be agreed
beforehand.

(e) The joint committee may set up specialized
sub-committees to assist it in the performance of
its tasks.

2. (a) 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.

(b) 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 the 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 any
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 Hungary,

exchange information on macro-economic
plans and forecasts for the economies of the
two 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 economic development

programmes,

seek methods of arranging and encouraging
exchange of information and contracts in
matters relating to cooperation in the
economic field between the Contracting
Parties on a mutually advantageous basis, and
work towards the creation of favourable

conditions for such cooperation,

examine favourably ways of improving
conditions for the development of direct
contacts between firms established in the

Community and those established in Hungary,

formulate and submit to the authorities of

both Contracting Parties recommendations for
solving any problems that arise, where appropriate by means of the conclusion of
arrangements or agreements.

TITLE IV

General and final provisions

_Article 14_

1. This Agreement shall not affect or impair the rights
and obligations of the Parties under the GATT and the
Protocol of Accession of Hungary to the GATT.

20. 10. 88 Official Journal of the European Communities No C 271/13

2. Subject to the provisions concerning economic
cooperation in Article 11, the provisions of this
Agreement shall be substituted for provisions of
Agreements concluded between Member States of the
Community and Hungary to the extent to which the
latter provisions are either incompatible with or identical
to the former.

_Article 15_

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
hand, to the territory of the Hungarian People's
Republic.

_Article 16_

This Agreement shall enter into force on the first day of
the month following the date on which the Contracting
Parties have notified each other that the legal procedures
necessary to this end have been completed. The
Agreement shall be concluded for an initial period of 10

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.

However, the two Contracting Parties may amend the
Agreement by mutual consent in order to take account
of new developments.

The Protocol and the Annex attached to this Agreement
shall form an integral part thereof.

_Article 17_

This Agreement is drawn up in duplicate in the Danish,
Dutch, English, French, German, Greek, Italian,
Portuguese, Spanish and Hungarian languages, each text
being equally authentic.

_For the Council_

_of the European Communities_

_For the Government_

_of the Hungarian People's Republic_

_ANNEX RELATING TO ARTICLE 10 OF THE AGREEMENT_

The regulations and facilities referred to in Article 10 of the Agreement are in Hungary, _inter_ _alia,_ the
following:

— non-discriminatory application of Hungary's import licensing system in accordance with its international commitments,

— the non-discriminatory administration of Hungary's global quota for consumer goods and the provision
of all necessary information relating thereto,

— non-discriminatory treatment by Hungary when awarding contracts for goods or services as a result of
World Bank or other international competitive tenders,

— non-discriminatory procedures for the establishment of offices in Hungary, the renting of business
premises, the import of necessary equipment and furniture for operating offices or branches, the
recruitment, management and salary levels of staff for such offices and the movement of staff, access to
communication facilities and to the publicity media (press, radio and television) and to retail distribution networks,

— the legal protection by Hungary of intellectual property rights for both products and processes in
accordance with the international conventions to which Hungary is a signatory namely, the Paris
Convention for the Protection of Industrial Property, as revised at Stockholm on 14 July 1967 and the
Universal Copyright Convention of 6 September 1952, as revised at Paris on 24 July 1971.