RESTRICTEDWORLD TRADE
ORGANIZATIONWT/TPR/G/71
5 June 2000
(00-2179)
Trade Policy Review Body Original:  English
TRADE POLICY REVIEW
POLAND
Report by the Government
Pursuant to the Agreement Establishing the Trade Policy Review Mechanism
(Annex 3 of the Marrakesh Agreement Establishing the World Trade
Organization), the policy statement by the Government of Poland is attached.
Note: This report is subject to restricted circulation and press embargo until the end of the meeting
of the Trade Policy Review Body on Poland.Poland WT/TPR/G/71
Page 3
TABLE OF CONTENTS
Page
I. THE ECONOMIC AND TRADE POLICY ENVIRONMENT 4
(1) M ACROECONOMIC PROCESSES 4
(2) C OMPETITION POLICY 5
II. DOMESTIC POLICY DEVELOPMENTS AFFECTING TRADE 6
III. TRADE POLICY REGIME 7
(1) T RADE POLICY DIRECTIONS IN THE 1990 S 7
(2) R EGIONAL AGREEMENTS 7
(3) I MPLEMENTATION OF THE WTO A GREEMENTS RELATING TO TRADE IN
GOODS 8
(4) T RADE POLICY INSTRUMENTS 9
(i) Tariffs 9
(ii) Non-tariff measures 11(iii) Other trade measures 13
(5) N
OTIFICATIONS UNDER WTO A GREEMENTS 13
IV. DEVELOPMENTS IN TRADE AND INVESTMENT FLOWS 17WT/TPR/G/71 Trade Policy Review
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I. THE ECONOMIC AND TRADE POLICY ENVIRONMENT
(1) MACROECONOMIC PROCESSES
1. Since the previous trade policy review in 1992, Poland – despite several changes of
governments and coalitions – has been continuously and resolutely building up the open market
economy which is ready and able to cope with the competitive pressure of the world economy. To
achieve those goals a consensus on general directions of the economic policy has been reachedbetween the main political parties. Poland has proved that it displays all characteristics of democracy,
having stable institutions, which guarantee the rule of law. This is the key point making
transformation and existence of the functioning market economy possible.
2. By the end of 1999 prices, trade and capital flows were liberalized and an enforceable legal
system is in place. In such an environment, with few barriers to market entry and exit, a well-developed financial sector is being built. In consequence the efficiency of the economy has been
improving and the macroeconomic stability has been achieved.
3. It is necessary to stress that during the whole period of transformation, the common efforts of
society were supported by the international organizations like IMF, World Bank, OECD, European
Union and WTO. Poland's membership in these organizations and association with the EU hasaccelerated the process of transformation and made it irreversible.
4. Since 1993 Poland has introduced a wide range of legal reforms concerning the financial
sector (law on the central bank, banking law, exchange law, legislation in the fields of securities,
capital markets, insurance and acquisitions by foreigners), privatization (new Privatization Act
enacted in 1996), etc.
5. By the end of 1999 over 70% of state-owned enterprises were included in the privatization
process; in 1999 71% of total employed persons worked in the private sector (46% in 1993) and theyproduced respectively 61% and 38% of gross value added. In agriculture 98% of the total employment
falls to the private sector. The same figure for industry is 70% (41% in 1993). The persons employed
in the private sector produced almost 100% of the output in agriculture and 70% in industry (31% in
1993), however in industry only 58% of total investment outlays were directed to the private sector
(34% in 1993).
6. Privatization caused changes in the structure of economy: in 1989 agriculture (according to
the ISIC classification) produced 13% of total gross value added, industry and construction 52% and
services 35%, then in 1993 respectively 7%, 39% and 54% and in 1998: 5%, 36%, 59%. During ten
years of transformation the share of agriculture in total value added fell by 8 percentage points, of
industry by 16 points and the share of services rose  by 24 points. Similar structure of gross value
added can be observed in developed market economies.
7. All those facts have improved the reliability of the Polish economy among international
financial institutions, thus attracting foreign investors to Poland. Between 1993 and 1999 the stock of
foreign direct investments exceeded US$37 billion (from the beginning of transformation nearly
US$39 billion, according to the Polish Agency for Foreign Investment) and rose from US$0.9 billionin 1993 to US$8.3 billion in 1999.
8. Foreign direct investments have considerably supported total investment outlays which
doubled in volume terms between 1993 and 1999 (see Chart 1). The recovery in investment outlays
induced considerable growth in individual consum ption expenditures (by more than 40% during last
six years) and both investment and consumption ca used more than proportional rise in volume ofPoland WT/TPR/G/71
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imports - by more than 250%. The rise in investment and investment imports was accompanied by the
increase of productivity of gross capital formation and in productivity of labor. Respective figures are
18% and 25%. At the same time, the growth of volume of exports was not sufficient - it increased by
190%. Hence, current account balance turned from a small surplus to the deficit (US$11.6 billion) in
1999, i.e. 7.6% of the GDP, threatening the monetary policy of the National Bank of Poland, which
led, according to the inflation target of the NBP, to  a considerable slow down of the rise of prices. In
1993 the annual rate of growth of the consumption price index was 35% and only 7.3% in 1999. All
those facts together with the strong zloty caused the Gross Domestic Product to increase by 44%
between 1993 and 1999.
9. Presented figures and tendencies allow to expect that a steady and balanced growth will be
achieved in the next years, if a special care is taken of the current account balance.
Chart I
Volume growth of the main economic categories in Poland
between 1993 and 1999
(1993 = 100)
                              1993     1994    1995   1996     1997    1998    1999
(2) COMPETITION POLICY
10. As border protection has been gradually lowered and privatization has been put into effect,
protection of competition has become more important. Competition rules are covered in Poland bytwo laws.
11. The prevention of monopolistic practices is regulated by the Law of 24 February 1990 with
amendments. The objective of the law is to create conditions for the development of competition, to
ensure protection of economic entities against monopolist practices and defend the interests of
consumers. The issue of unfair competition is regulated by the Law of 16 April 1993. The two statutesbelong to different branches of the law: the Unfair Competition Law is within the field of private law,
while the Anti-Monopoly legislation is within public law. The Anti-Monopoly legislation is
concerned with anti-competitive activity which has adverse consequences for a large number of100120140160180200220240260280300Invest. Co n s. GDP
Imports Exports Inflation
.WT/TPR/G/71 Trade Policy Review
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competitors or for the operation of a particular market, while the Unfair Competition Law is to protect
the individual interests of competitors and customers rather than the market itself.
12. In 2000 the Government has passed to the Parliament a draft law on protection of competition
and consumers which is to replace the present Anti-Monopoly Law. It contains several amendments
concerning rights and obligations of entrepreneur s. One of new essential provisions concerns the
possibility of introduction of block and statutory exemptions.
II. DOMESTIC POLICY DEVELOPMENTS AFFECTING TRADE
13. Privatization of the state-owned enterprises has played a key role in the economic
transformation. The experience of 1990-1999 confirm appropriateness of the "Polish privatization
strategy", which consists of a comprehensive utilization of various privatization paths and adjustment
of programs and procedures to the specifics of a given area of economy, to the situation of particularenterprises and the demand from the side of investors. These features must entail an offensive attitude
on the part of the state rather than a passive waiting for purchase offers from particular businesses.
14. As a result of presented attitude, until the end of December 1999, 1,846 applications for direct
privatization had been approved and 1,723 (93.3% of total) enterprises had been privatized. At the
same time 1,466 state-owned enterprises had been commercialized (capital or equity privatization).And together, since the beginning of the privatization process, stocks/shares of 912 State Treasury
companies were made available.
15. The privatization process has considerably affected exports development – the share of the
private sector exports in the total exports increased from 43.8% in 1993 to 81.0% in 1999.
16. The role of foreign investors in privatization cannot be overestimated. For example, in 1999
the total receipts from privatization exceeded US$3.3 billion and foreign investors spent around
US$2.7 billion (i.e. 33% of the total foreign direct investments) on stakes and shares in the state-owned enterprises. For comparison, revenues from Polish investors amounted to around
US$120 million.  Remaining investment went to greenfield projects and the rest was allocated through
acquisitions and mergers.
17. The consistent privatization policy has been supported by well-coordinated monetary policy
led by the National Bank of Poland and the efficient fiscal policy led by the Ministry of Finance. Itallowed:
- to decrease the growth of the CPI from a three digit figure in the beginning of the
1990s to 7.3% in 1999. The medium-term goal announced by the Monetary Policy
Council is to reduce inflation to the level not exceeding 3-4% annually by 2003;
- to enter a phase of rapid economic growth: 5.4% annually in average between 1993
and 1999;
- to diminish step by step the crawling rate of the zloty - to zero in the April 2000. It
means the exchange rate of the Polish zloty is freely floating now.Poland WT/TPR/G/71
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III. TRADE POLICY REGIME
(1) TRADE POLICY DIRECTIONS IN THE 1990 S
18. Since the beginning of the 1990s Poland’s trade policy has been characterized by a broad
process of regional and multilateral liberalization. In subsequent years Poland negotiated several free
trade agreements with its trading partners and implemented the multilateral agreements of the
Uruguay Round.
19. Foreign trade liberalization has become a key instrument for building a market economy
system and integrating Poland’s economy into the world economy. A broad opening of Polish
economy to the world economy has been an important component of the transformation package
implemented since autumn 1989.
20. Import liberalization was considered as an important instrument to accelerate price reform, to
encourage competition, reduce inflation and, by these means, to overcome the inefficiencies of central
planning and ensure adequate market functioning. Increased competition resulting from import
liberalization was also to speed up demonopolization, improve resource allocation, generate
economies of scale, attract the FDI and thus to cont ribute to faster growth. It was also expected that
import liberalization would stimulate the upgrading of the national economy technological level and,subsequently, enhance export potential.
21. The integration with the European Communities due to its economic, technological and
political potential was to play the most important role. CEFTA agreement was motivated first of all by
expected economic benefits related to trade liberalization and enhanced by close geographical
position of the member countries. This Agreement was also necessary to avoid discrimination of
mutual trade that would have resulted from bilateral free trade agreements of individual CEFTA
countries with the EU. Other free trade agreements have constituted the elements of the adjustmentprocess of Poland’s trade policy to the future adoption of EU common external relations.
22. Parallel to regional liberalization Poland actively participated in the Uruguay Round
negotiations and submitted its own contributions. Since the entering into force of the WTO Poland has
been vigorously implementing the Uruguay Round Agreements. The comprehensive rules on
economic relations have created a benchmark for policy making in Poland, i.e. they have been playingthe role of an external anchor for the systemic transformation in Poland.
(2) R
EGIONAL AGREEMENTS
23. The Europe Agreement on association with the European Communities was signed on 16
December 1991. It has provided for the gradual creation of free trade area in industrial trade, modest
reduction of trade barriers in agricultural trade, progressive liberalization in trade in services and flowof capital, as well as the approximation of Polish laws to the EC acquis communautaire. Its
commercial part entered into force on 1 March 1992 and other provisions on 1 February 1994. In
1993 free trade areas began to be created with CEFTA and EFTA countries on the basis of respective
agreements.
24. In the next years new free trade agreements were negotiated with other partners (see Table 1).
All of them are modeled after the trade part of the Europe Agreement and concentrate on the creation
of free trade areas in industrial products and certain liberalization of agricultural trade.
25. By 1 January 1999, tariffs had been abolished on almost all industrial products imported from
the EU (except mainly for cars; tariffs on these items are to be removed by 1 January 2002) and on theWT/TPR/G/71 Trade Policy Review
Page 8
majority of industrial products coming from other countries - parties to free trade arrangements.
Remaining tariffs will be eliminated under all free trade agreements by the beginning of 2002, at the
latest.
Table 1
Free trade agreements negotiated by Poland with its trading partners in the 1990s
Country Date of signing Date of entering into force
European Communities Europe Agreement establishing an Association
between the Republic of Poland, of the one part,and the European Communities and their Member
States, of the other part – 16 December 1991Commercial part (Interim Agreement on
Trade and Trade Related Matters betweenthe Republic of Poland and European
Community and European Coal and Steel
Community entered into force on
1 March 1992 (Dz. U.
a 1992 No 17, item 69),
and the whole Europe Agreement on1 February 1994.( Dz. U. 1994 No 11, item
38)
CEFTA Central European Free Trade Agreement concluded
between the Czech Republic, Republic of Hungary,Slovak Republic and Republic of Poland, signed on
21 December 1992, Dz. U. 1994 No. 129, item 6371 March 1993
EFTA
(Iceland, Liechtenstein, Norway,
Switzerland)Agreement between the Republic of Poland and
Member States of the European Free Trade
Association signed on 10 December 1992, Dz. U.
1994 No. 129, item 63915 November 1993
Republic of Slovenia Agreement on accession of the Republic of
Slovenia to CEFTA signed on 25 November 19951 January 1996
Republic of Lithuania Free trade agreement between the Republic of
Poland and the Republic of Lithuania signed on
27 June 1996, Dz. U. 1996 No 158, item 8071 January1997
Republic of Romania Agreement on accession of the Republic of
Romania to CEFTA signed on 12 April 19971 July 1997
Republic of Bulgaria Agreement on accession of the Republic of
Bulgaria to CEFTA signed on 17 July 19981 January1999
Republic of Latvia Free trade agreement between the Republic of
Poland and the Republic of Latvia signed on
28 April 1997, Dz. U. 1999 No 63, item 7091 June 1999
Republic of Estonia Free trade agreement between the Republic of
Poland and the Republic of Estonia signed on
5 November 1998Not ratified yet, applied provisionally since
1 January 1999
State of Israel Free trade agreement between the Republic of
Poland and the State of Israel signed on
21 July 1997, Dz. U. 1999 No 63, item 7071 June 1999
Faeroe Iceland Free trade agreement between the Republic of
Poland and the Kingdom of Denmark and Faeroe
Icelands, signed on 3 November 1998, Dz. U. 1999
No 63, item 7051 June 1999
Republic of Turkey Free trade agreement between the Republic of Poland
and the Republic of Turkey signed on 4 October 19991 May 2000
a Dziennik Ustaw – Official Gazette of the Republic of Poland.
(3) IMPLEMENTATION OF THE WTO A GREEMENTS RELATING TO TRADE IN GOODS
26. Poland became a founding member of the WTO on 1 July 1995, however the first tariff cuts
on industrial imports from WTO members were introduced on 1 January 1995. Tariff commitments
on industrial products included binding of 96% of ta riff lines (main exceptions being motor vehicles,
oil and linen products) and an average reduction of tariffs level by 38%. Agricultural products were
subject to tariffication, tariff binding and then reduction of tariffs by 36% over six years.Poland WT/TPR/G/71
Page 9
27. Most tariff reductions on industrial products entered into force in 3-5 annual stages, the last
cuts on most sensitive items (including textiles) will become effective in 2001. Tariffs on agricultural
products were reduced in 6 equal installments by the beginning of 2000.
28. Poland also participated in the Informa tion Technology Agreement of 1997. Under this
Agreement additional tariff cuts were implemented on computers, semiconductors,
telecommunication equipment, software, etc.
(4) TRADE POLICY INSTRUMENTS
(i) Tariffs
29. After the suspension of most tariffs in the first half of 1990 – aimed mainly at combating
extremely high inflation – Poland introduced new customs tariff in August 1991. The then introduced
customs duties – mostly unchanged – became the basis for tariff reductions negotiated later with manytrading partners.
30. As a result of regional and multilateral liberalization the level of tariffs has decreased
substantially. The average weighted tariff on all industrial imports amounted to 2.2% in 1999. About
two thirds of industrial imports (imports from the EU and other countries covered by free trade
agreements) have been duty free since the beginning of 1999. Thus, the average tariffs on remainingimports (from countries subject to MFN duty and fr om developing countries subject to GSP scheme)
amounted to 5.5% (Table 2).
31. Tariffs on agricultural products remain higher than on industrial goods. The weighted average
duty (including suspensions) on agricultural imports from the EU reached 18.1% in 1999, 11.6% on
imports from CEFTA countries and 12.7% on other agricultural imports.
32. Poland offers GSP preferences to 45 developi ng countries (DEVs) with a lower GDP per
capita than itself and to 49 countries considered as least-developed countries (LDCs). Tariff rates on
imports from DEVs amount to 80% of the MFN leve l. Imports from LDCs are duty free. However,
certain products considered as sensitive ones are excluded from the concession schemes for DEVs and
LDCs, including some agricultural and textile products, cosmetics, cars.
33. The level of tariff protection, apart from preferences offered to trade partners, is also affected
by duty suspensions and tariff quotas within which a reduced or zero per cent customs rate applies.Suspensions have been applied occasionally on agricultural products in shortage on domestic market
and on certain industrial components and supplies in order to reduce the costs of manufacturing, e.g.
on raw materials and parts for textile, leather, petrochemical, electronic and paper industries. Tariff
quotas result from Poland’s WTO commitments (on agricultural products) or free-trade agreements
(e.g. on motor vehicles), or are introduced autonomously for economic and social reasons (e.g. onpharmaceutical products, bunker fuel, gluten-free foodstuffs for children). With the general reduction
of the level of import tariffs the number of autonomous suspensions and tariff quotas has been
decreasing.WT/TPR/G/71 Trade Policy Review
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Table 2
Average weighted import tariffs in Poland in 1999(in %, according to the 1998 commodity pattern of imports)
Without suspensions Including suspensions
HS Description EU CEFTA Other
countriesTotal EU CEFTA Other
countriesTotal
I-XXI Total 2.3 1.8 7.1 3.5 2.3 1.8 6.5 3.3
I-IV Agricultural products 18.2 11.6 13.0 16.0 18.1 11.6 12.7 15.8
V-XXI Non-agricultural
products0.8 0.5 6.1 2.3 0.8 0.5 5.5 2.2
I Live animals and
animal products26.2 15.1 13.9 22.8 26.2 15.1 13.9 22.8
II Vegetable products 11.5 11.0 4.3 7.9 11.4 11.0 3.9 7.7
III Fats and oils 18.5 3.9 12.6 13.7 17.6 3.9 12.4 12.8
IV Processed foodstuffs,
beverages and tobacco20.4 15.9 23.0 20.5 20.4 15.9 22.7 20.4
V Mineral products 0.7 1.7 0.9 1.2 0.7 1.6 0.8 1.2
VI Chemical products 0.1 0.0 5.1 1.0 0.1 0.0 4.6 0.9
VII Plastics, rubber and
related products0.00 0.0 7.5 1.3 0.0 0.0 6.8 1.1
VIII Leather, skin and
related products0.00 0.0 16.6 3.5 0.0 0.0 15.9 3.4
IX Timber and timber
products0.00 0.0 4.8 1.4 0.0 0.0 4.5 1.3
X Wood pulp, paper and
board0.00 0.0 3.7 0.3 0.0 0.0 2.7 0.2
XI Fabrics and fabric
products0.03 0.2 10.7 2.8 0.0 0.2 10.5 2.7
XII Shoes, hats, and cups 0.0 0.0 14.9 6.7 0.0 0.0 14.9 6.8
XIII Glass, stone products,
cement0.0 0.0 21.2 14.0 0.0 0.0 21.2 14.0
XIV Pearls, precious stones 0.0 0.0 6.4 0.6 0.0 0.0 6.2 0.5
XV Non-precious metals 1.3 1.6 8.9 2.4 1.1 1.6 7.4 2.2
XVI Machinery and
equipment0.0 0.00 6.0 1.5 0.0 0.0 4.7 1.2
XVII Transport equipment 6.1 1.3 12.0 7.7 6.1 1.3 11.7 7.6
XVIII Measure and
controlling equipment0.0 0.0 6.7 2.9 0.0 0.0 6.4 2.8
XIX Arms and ammunition 0.0 0.0 24.4 12.7 0.0 0.0 24.4 12.8
XX Various manufactures 0.0 0.0 9.4 2.7 0.0 0.0 9.4 2.7
XXI Works of art 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Source: Calculations of the Ministry of Economy .
34. In order to enjoy preferential access to the Polish market foreign exporter is required to
present documents confirming the origin of the product from the country eligible for preferences. In
the case of the European Union, EFTA, CEFTA, th e Baltic countries and Turkey, the system of pan-
European cumulation of rules of origin applies. The system facilitates the refund of customs duties on
components originating in any of these countries and used in the production of export goods.
35. The currently negotiated Poland’s membership in the EU and the future adoption of the EU
external tariff will affect significantly the level of import tariffs. Tariffs on industrial products will bereduced. Applied tariff protection of agricultural products will decrease or increase depending on thePoland WT/TPR/G/71
Page 11
product. Polish import tariffs are lower than the EU external tariffs on cereals, milk products, bananas,
some fruits etc. Higher tariffs are on products like tobacco, most alcoholic beverages, apples, certain
types of potatoes, certain meat products, black tea, etc.
36. The adoption of the EU preferences system for DEV and LDC will extend substantially the
number of countries eligible for tariff preferences.
(ii) Non-tariff measures
(a) Quantitative restrictions and administrative measures
37. Quantitative restrictions are applied in Poland to a very limited extent. The most restrictive
measures – prohibitions – have been used for the protection of the health of consumers and animals
(in imports of some food products imported from certain European countries), the protection of the
environment (in imports of certain used vehicles and bodies and chassis for such vehicles, two-strokeengines and vehicles equipped with such engines) or  the protection of genetic material (in exports of
live geese and goose eggs). The prohibition applied to imports of used combine harvesters introduced
in July 1994 was lifted on 1 January 1997. Ban on imports of spirits and unflavored vodkas
introduced in 1991, by force of the WTO Agreement on Agriculture, was abolished on 1 July 1995.
38. In connection with accession to international conventions on substances damaging the ozone
layer, Poland applies until the end of 2001 a temporary ban or automatic registration of turnover with
abroad in these substances and in goods containing such substances.
39. Some restrictions in foreign trade result from political reasons, to mention the ban on the
exports of land anti-infantry mines or particularly tight control of turnover in some goods and
technologies.
40. The quotas introduced for the protection of the domestic industry have been systematically
liberalized. Import quotas introduced on some goods in 1991 were gradually increased and thenabolished: on alcohol and tobacco products on 1 July 1995 as a result of the tariffication of non-tariff
barriers in trade of agricultural products, on petrol, fuel oil and heating oil at the beginning of 1997. In
1998-1999 Poland also removed quantitative restrictions in exports of raw skins and hides wastes and
ferrous and non-ferrous scrap and waste introduced in 1993-1994 in order to secure the raw materials
for the steel and leather industries.
41. Poland applied quotas on exports of textiles and clothing as a result of the agreements signed
with the United States, Canada, the EC and Norway within the MFA. The restrictions on exports to
the EU and Norway were abolished at the e nd of 1997. The quotas in Polish exports to the
United States and Canada will be continued by the end of 2004. More favorable regulations
concerning exports of textiles and clothing to the EU and Norway were possible thanks to the signingof free trade agreements. The limits in exports to Turkey introduced in January 1996 followed the
entry into force of the customs union of this country with the EU and expired with the abolishment of
quotas in exports to the EU.
42. Foreign trade in specific products still needs special licences but since 1992 the number of
goods subject to this requirement has been steadily decreasing. At present licences are required for thefollowing items: arms and ammunition for purposes other than military or police use, explosives and
pyrotechnic materials (in imports and exports), alcoholic beverages, tobacco products, oil products as
well as parts for industrial assembly of cars and tractors (in imports). The licences are issued by the
Ministry of Economy to all operators that fulfill the criteria established in the relevant legislation.WT/TPR/G/71 Trade Policy Review
Page 12
43. Some goods require a permit for imports or exports. These are goods covered by quotas,
automatic or non-automatic registration of turnover, goods which require a license to be object of
foreign trade.
(b) Measures against unfair and excessive imports
44. With a decreasing border protection the Polish industry has been facing a growing foreign
competition. At the same time Polish exporters have met market access barriers in many countries,mainly anti-dumping proceedings and duties. Such e xperience has resulted in a greater interest of
Polish producers in searching similar remedies against foreign competition.
45. Respective measures are available under new laws on the protection of the Polish customs
territory against excessive imports and imports at dumped prices which came in force at the beginning
of 1998, in compliance with WTO principles and other international agreements signed by Poland.Relevant procedures are undertaken by the Minister of Economy upon a documented complaint
submitted by domestic producers representing at least 25% of the domestic production of a given
product. Thought the Minister can undertake a procedure ex officio , he hardly ever does it in practice.
46. The protective measures against dumped or excessive imports may be applied only when
certain requirements are met i.e. the proving in a specia l investigation an injury and/or its threat to the
domestic industry and its casual link with disputed imports. The safeguard measures should be treated
as exceptional and be progressively liberalized. Decisions on the adoption of protective measures are
taken by the Minister of Economy after consultation with the President of the Competition and
Consumers Protection Office.
47. So far Poland has not conducted any anti-subsidy actions, as it has not adopted yet the anti-
subsidy law in conformity with the WTO rules. Th e respective draft law has been worked out by the
Government and passed to the Parliament. It should be enacted by the end of 2000.
(c) Anti-dumping measures
48. Since the last review Poland initiated four anti-dumping investigations. Three of them
concerned non-WTO members (China and Belarus). In 1999, under the Law of 11 December 1997 on
Protection against Dumped Imports into the Polish Customs Territory, an anti-dumping investigation
was initiated against a German producer exporting X-ray films. It has not been completed yet.
(d) Safeguard measures (Article XIX GATT type)
49. Safeguard measures within the meaning of Article XIX GATT 1994 and the Agreement on
Safeguards have been the most often applied commercial defense instrument in Poland, especially
since the entrance into force in 1998 of the new law on protection against excessive imports. Under
the previous safeguard provisions of the Customs Law of 1989 there were three safeguard actionstaken in Poland. Two of them were conducted on a non-discriminatory basis (certain types of motor
vehicles and used harvester-threshers) and one on a selective basis (urea and ammonium nitrate
originating in six ex-Soviet republics). Most of 8 cases initiated under the new law were applied on a
selective basis with reference to regional agreements or bilateral agreements with non-WTO
countries. The only exception was a safeguard proceeding against excessive imports of coated steelsheets initiated on erga omnes  basis in June 1999.Poland WT/TPR/G/71
Page 13
(iii) Other trade measures
(a) Special safeguard in imports of textiles and clothing
50. In 1999, under the Law of 11 December 1997 on Protection of Polish Customs Territory
against Excessive Imports of Certain Textiles and Clothing, three safeguard investigations were
initiated: against imports of textured yarn of polyester originating in Turkey, synthetic fibers from
Republic of Korea and Taiwan, and certain acrylic yarn from Lithuania.
(b) Special safeguard in imports of agricultural products
51. Under the Law of 28 June 1995 on the Principles, Conditions, and Procedure of Imposing
Additional Customs Duties on Certain Imported Agri cultural Products, Poland may impose additional
duties on imports of the majority of agricultural products covered by tariffication (ca 70% of all tariff
lines for agricultural products). The Law which is modeled after the special safeguard clause of theWTO Agreement on Agriculture, became effective upon Poland's accession to the WTO. The duty
may be imposed by the Minister of Economy on the motion of the Ministry of Agriculture and Rural
Development provided a certain fixed threshold volume is exceeded or an import price is 10% lower
than the threshold price. The volumes in question as well as a list of agricultural products, which may
be subject to customs duties in a given year, are updated depending on the situation in the country andon foreign markets. In practice, the additional duties were introduced periodically on imports of cut
flowers, pork, poultry, flavor, wheat grain, sugar, starch, hop cones.
(c) Protection against balance-of-payments disturbances
52. A temporary import surcharge of 6% was introduced in the end of 1992 in view of perceived
threat of deterioration of the balance of payments situation. It was introduced consistently with the
procedures established under Article XII of GATT by a Decree of the Minister of Finance and applied
as an additional turnover tax until 4 July 1993. Thereafter it was transformed by a Decree of theCouncil of Ministers into a separate customs dut y. Since 1 January 1994 the instrument was replaced
by the import surcharge based on the Act adopted by Parliament, used as a separate border tax levied
on all imports. The surcharge amounting to 6% in 1994 was gradually reduced (to 5% in 1995 and 3%
in 1996) and eliminated by the beginning of 1997. The surcharge was applied to all sources of
imports, including trading partners with whom Poland’s trade relations were based on GATTArticle XXIV.
(5) N
OTIFICATIONS UNDER WTO A GREEMENTS
(a) Agreement on Textiles and Clothing
53. Under the WTO Agreement on Textiles and Clothing, which became effective on
1 January 1995, Poland has submitted the list of products included in the first and second phases ofintegration into GATT 1994 comprising over 36% of the volume of imports in 1990.
(b) General Agreement on Trade in Services (GATS)
54. The Polish economy could be included into a group of the most dynamic developing
economies in the world. Its feature is a permanently increasing role of services sector. This sector has
become the most important activity for the Polish economy given its share in employment and itscontribution to GDP. Changes emerging on the Polish market prove that Poland has been starting to
become similar to the service economy's model that characterises developed countries.WT/TPR/G/71 Trade Policy Review
Page 14
55. The process of the liberalization of economy has been continued steadily. The existing
measures which constitute either limitations to the market access or national treatment principle are
subject to removal. An example is the elimination of restrictions regarding form of economic activity
of foreign service suppliers. Foreign entities could now pursuit economic activity in a form of
branches and representative offices. The remaining barriers to establishment will cease on
1 January 2001.
56. Poland declares the active participation in the round of multilateral services negotiations
which has started 1 January 2000. Poland does not exclude from the scope of negotiations either
modes of supply or services sector. Poland thinks the key element of negotiations will be a
modification of the schedules of specific commitments and lists of MFN exemptions. This process
will be based on a removal of existing restrictions for foreign services and service suppliers in theform of barriers to market access and national treatment limitations.  Poland, in particular, takes part in
the talks aiming at developing universal principles concerning qualification requirements, procedures,
technical standards and licensing requirements which will be binding in the whole services sector.
Poland participates in work concerning an implementation of relevant GATS rules that will govern
the issues of government procurement and subsidies in the services sector. Poland is interested indevelopment of emergency safeguards mechanism, too.
57. Poland undertook a number of commitments under the WTO General Agreement of Trade in
Services (GATS). They covered 54 sectors and included among others: construction,
telecommunications, business services, financial services, and tourism and transport services.
1  In the
majority of cases Poland’s commitments comprised binding of the existing level of access to the
Polish market. It is worth stressing that the level of actual liberalization of access to services sector in
Poland is higher than that negotiated with economic partners.
58. Poland took active part in the subsequent negotiations on selected services sectors. Under the
Agreement on Basic Telecommunications signed in 1997 Poland undertook commitments covering
such areas of services as: telephony, transmission of telex, telegraph and fax data, lease of lines,
television and radio broadcasting, cellular telephony, satellite telecommunication. As regards access
to the market of all telecommunication services, th e commitments provide that a license or permit for
making the services may be issued exclusively for agents registered in Poland.
59. No restrictions have been imposed on most telecommunication services provided on a cross-
border basis (i.e. from outside Poland) or in the form of consumption of services by Polish entities
abroad. Foreign entities having their seat in Poland are not allowed to provide international telephony,
telex and telegraph services till the end of 2002. The liberalization of telex and telegraph servicesprovided by foreign legal persons has been offered since 1 January 2000.
60. Under the Agreement on Financial Services (1995 and 1997)
2, Poland has undertaken
commitments on the following types of financial serv ices: holding deposits, loans, services involved
with payments and money orders, guarantees and banking securities (excluding guarantees and
commitments by the State Treasury), intermediation in  the issue of all kinds of securities (excluding
those issued by the State Treasury), services provided by trust funds. In the case of most services
Poland did not assume obligations in the field of  market access for cross-border services (i.e.
possibility of consuming services rendered abroad by citizens of a country; the availability of such
services is linked to the possibilities of transferri ng foreign exchange assets abroad). As regards these
                                                     
1 Document GATS/SC/71, 15 April 1994.
2 The list of Poland’s modified commitments in the field of financial services is included in the
document GATS/SC/71/Suppl. 1, 28 July 1995.Poland WT/TPR/G/71
Page 15
services, Poland assumed very limited commitments in the mode of services provided on the Polish
territory by foreign natural persons.
61. For the above kinds of services Poland has not assumed liberalization commitments either in
the field of market access, or in national treatment as regards both cross-border services and access to
services abroad. The only exception to this approach  is the limited assumption of commitments in the
scope of cross-border services and foreign consumption, for services in the field of providing andtransferring financial information and processing of financial data. A reservation has been adopted for
the last kind of services that their provision or utilization requires intermediation of the public
network or another authorized operator.
62. The largest scope of commitments in access to the market of financial services refers to
services provided by foreign legal persons having their commercial representations in Poland, onwhich some limitations have been imposed in connection with the binding national regulations and
application of the so-called providence principle (e.g. a bank can be established exclusively in a form
of a joint-stock company and upon obtaining a permit).
63. Similar limitations have been introduced in the case of services provided by foreign natural
persons having their representations in Poland. However, this restriction is of no major practicalrelevance, and only of an indicative value in view of the fact that liberalization commitments have not
been assumed as regards the market access for services provided by foreign natural persons in Poland.
64. On the other hand, the national treatment principle has been secured in reference to the third
and fourth modes of providing financial services, which means that foreign entities will be allowed to
provide financial services on the Polish mark et on an equal footing with Polish entities.
65. Apart from that, a reservation was made supplementing the opportunities for introduction of
new regulations motivated by providence reasons, which may amend the binding regulations orintroduce new regulations. Nevertheless, it has been assured that the application of these regulations
will be fully consistent with the provisions of th e Annex to GATS referring to financial services.
(c) Agreement on Subsidies and Countervailing Measures
66. In February 1996 Poland notified the application or the possibility of application of five types
of export subsidies: income tax allowance on account of investment related to exports, income taxallowance up to the level of a half of receipts from exports for entities operating in special economic
zones, programs of financial support for credit guar antees and program of support for export contracts
insurance by the Export Credits Insurance Corporation (KUKE).
3
67. In accordance with the provision of the Agreement concerning the transitional period, all
these subsidies should be either abolished or adjusted to WTO rules by the end of 2001. The first typeof the investment incentives was eliminated on 1 January 2000. Taxpayers who before
31 December 1999 obtained the right to apply such incentives may use them till the end of 2002.
Income tax allowances for entities in special economic zones still apply but no new such zones will be
created.
68. In March 1998 Poland submitted a notification in accordance with Article 25 of the
Agreement on Subsidies
.4 This document covered specific subsidies applied in the manufacturing
sector in 1996 (12 types of subsidies) and agricultural subsidies applied in 1994-1996 (four types of
                                                     
3 WTO document G/SCM/N/9/POL, 23 February 1996.
4 WTO document G/SCM/N/25/POL, 10 March 1998.WT/TPR/G/71 Trade Policy Review
Page 16
subsidies). Moreover, the notification included four types of export subsidies notified earlier in
accordance with Article 29 of the Agreement on Subsidies.
(d) Agreement on Trade-Related Investment Measures (TRIMs)
69. On 28 September 1995 Poland notified one investment measure inconsistent with the TRIMs
Agreement, i.e. income tax rebate for purchase of cash equipment registering VAT. This measure
resulted in a higher income tax rebate for the purchasers of domestic cash equipment as compared tothe purchasers of that manufactured abroad (equipment is considered as domestically produced if
imported components do not exceed 60% of the total cost of production).
5 As of 1 January 1997, the
tax rebate has been uniformed with respect to all cash registers in accordance with the obligation of
national treatment provided for in paragraph 4 of Article 3 of GATT 1994. Therefore Poland, pursuant
to Article 5.2 of the Agreement on TRIMs, terminated measures notified under Article 5.1 of theAgreement on TRIMs.
6
(e) Agreement on Agriculture
70. In the field of agriculture export subsidies are applied only to sugar and occasionally to meat
exported to the CIS. The value of those subsidies is much below the amount provided for in Poland’s
Schedule under the WTO Agreement on Agriculture.
(f) Agreement on the Application of Sanitary and Phytosanitary Measures
71. Pursuant to this Agreement Poland has established the National Enquiry Point located at the
Ministry of Agriculture and Rural Development, Department of Agriculture Production. Since the
adoption of this Agreement Poland has submitted to the Committee on Sanitary and Phytosanitary
Measures 22 notifications on sanitary measures and three notifications on phytosanitary measures.
Few of them related to emergency measures undertaken in order to protect human, animal and plant
life or health and most notifications provided for information on the rules and principles of import andexport of certain animals and plants.
(g) Agreement on Trade-Related Intellectual Property Rights (TRIPS)
72. Polish Government is determined to ensure consequently the intellectual property protection.
Polish legislation has provided for the growing level of the protection since 1994 when the new Law
on Copyright and Related Rights was adopted.
73. Poland has submitted to the Council for TRIPS its intention to avail itself of the right, under
Article 65.3 of the TRIPS Agreement, to delay the date of the application of the provisions of the
Agreement other than Articles 3, 4 and 5. During the transitional period Polish legislation has been in
full conformity with the binding provisions of th e TRIPS Agreement (Articles 3, 4 and 5 of the TRIPS
Agreement).
74. In 1998, Polish legislation on copyright and related rights as well as legislation on
enforcement related to copyright and related rights were reviewed. Poland has subjected itself to the
review though was availing itself of the transitional period under Article 63.3 of the TRIPS
Agreement. The review has proved conformity of the Polish legislation in these areas with the TRIPS
Agreement except for some provisions.
                                                     
5 WTO document G/TRIMS/N/1/POL/1, 6 October 1995.
6 WTO document G/TRIMS/AN/1/POL/1/Add.1, 16 December 1996.Poland WT/TPR/G/71
Page 17
75. One of the examples of the conformity with the TRIPS Agreement is a Regulation on the
procedure and operating principles for Customs Authorities for withholding goods in case of
suspected violation of provisions of intellectual , commercial and industrial property, issued in
February 1999 by the Council of Ministers in order to introduce amendments necessary to fulfil
requirements of the Section 4 of the TRIPS Agreement.
76. The level of Polish protection of intellectual property rights will go beyond the requirements
of the TRIPS Agreement due to Poland’s accession to the European Union.
IV. DEVELOPMENTS IN TRADE AND INVESTMENT FLOWS
77. In 1999 Poland imported goods worth roughly US$46 billion while it exported US$27 billion
worth. This accounted for 0.62% of world trade (0.76% of world imports and 0.48% of world
exports). Poland’s imports have increased more than 2½-fold since 1993 and exports have roughlydoubled over the same period. However, both Pola nd’s exports and imports declined somewhat in
1999 in comparison to the previous year. Poland’s exports suffered from the Russian financial crisis
(exports to Russia went down by 65% between 1998 and 1999).
78. The openness of the Poland’s economy measured by the ratio of trade transactions to GDP
has been increasing relatively slowly. From 1993 to 1999 Poland’s imports grew up at a faster pacethan exports: 16.0% per annum against 11.7%. Cons idering that Poland’s GDP grew up at an annual
rate of 9.1% (in dollar terms) during this period, the share of Polish imports to GDP increased in
1993-1999 from 20.7% to 29.8%, while the respective figures for exports were 15.5% and 17.8%.
Chart II
Polish foreign trade
(Billions of dollars)
79. For many years the main trading partners of Poland have been the EU member states. In
1993, the second year after the entry into force of the trade part of the Europe Agreement, the
majority of Poland’s trade was carried out with the EU: 69% of all exports were destined for the EU
market and 65% of all imports originated from this market. Between 1993 and 1999, the EU share in
Poland’s trade did not change.
80. When ranked according to importance of trading partners (i.e. adding up the overall value of
exports and imports), the first three places were occupied by Germany, Italy and France. Germany was
the single most important trading partner absorbing more then one third of Poland’s exports and making01020304050
1 993 1 994 1 995 1 996 1 997 1 998 1 999-20-1 6-1 2-8-40
Balance (R Scale)
Exports (L Scale)
Imports (L Scale)WT/TPR/G/71 Trade Policy Review
Page 18
25% of Poland’s imports. Among the 15 main trading partners of Poland accounting for 80% of total
foreign trade, ten partners were the EU member states.
81. In 1993-1997 Poland’s exports to the CIS grew  by 40% per annum and the share of those
partners reached the record level of 15% of tota l Polish exports in 1997. Russian crisis adversely
affected Polish exports to CIS in 1998 and 1999, the re sult being the decline to the level of the trade
value in 1995.
82. The creation of the CEFTA has resulted in the inte nsification of Polish trade with the countries
which signed this agreement. Poland’s trade with the CEFTA partners has been increasing much faster
then the average. In 1993-1998 the value of exports to CEFTA partners expanded three times and
imports four times.
83. In 1999, 82.9% of Poland’s exports consisted of manufactured products, whereas the
corresponding figure in 1993 was only 73.6%. Miscellaneous manufactured goods accounted for
almost half of the exports. Exports of machinery and transport equipment recorded the highest
increase over the analyzed period, i.e. 18.7% annually and their share increased from 21% in 1993 to
30.2% in 1999. Poland’s exports of raw materials developed three times slower than total exports. The
pattern of Poland’s imports by main product groups is fairly similar to that of exports. In 1999, forexample, 82.8% of Poland’s purchases were in the form of manufactured products, almost half of
which were machinery and transport equipment. This group of products has also recorded the highest
increase from 1993 (21.1% p.a.).
Table 3
Poland’s trade by main partner country in 1993 and 1999
(US$ million and per cent)
Exports Imports Balance
Value
(US$
million)Share
(%)Annual
change
(%)Value
(US$
million)Share
(%)Annual
change
(%)Value
(US$ million)
1999 1993 1999 99/93 1999 1993 1999 99/93 1993 1999
World 27 407 100.0 100.0 11.7 45 911 100.0 100.0 16.0 -4 691 -18 504
EU-15 19 326 69.2 70.5 12.0 29 826 64.8 65.0 16.1 -2 409 -10 499
  Germany 9 904 36.4 36.1 11.5 11 583 28.1 25.2 14.0 -146 -1 679
  Italy 1 792 5.2 6.5 15.9 4 297 7.8 9.4 19.6 -728 -2 505
  France 1 328 4.2 4.8 14.4 3 134 4.3 6.8 25.5 -209 -1 805
EFTA-4 561 1.9 2.0 13.2 1 145 3.6 2.5 9.0 -419 -585
CEFTA-6 2 237 5.4 8.2 19.6 3 071 4.3 6.7 25.1 -36 -834
  Czech. Rep 1 041 2.4 3.8 20.4 1 472 1.9 3.2 27.0 -8 -431
  Hungary 539 1.2 2.0 20.7 624 0.9 1.4 24.8 9 -86
Other CECsa857 1.0 3.1 34.7 318 0.9 0.7 11.5 -22 539
CIS 1 823 7.3 6.7 9.9 3 301 9.0 7.2 11.8 -657 -1 477
  Russia 710 4.6 2.6 1.6 2 676 6.8 5.8 13.2 -627 -1 965
  Ukraine 703 1.3 2.6 24.6 339 1.1 0.7 9.1 -13 365
United States 755 2.9 2.8 10.7 1 643 5.2 3.6 9.1 -564 -888
China 133 1.2 0.5 -3.5 1 219 1.2 2.7 31.8 -60 -1 086
Rep. of Korea 54 0.3 0.2 4.9 1 179 0.9 2.6 33.3 -125 -1 125
Japan 43 0.3 0.2 -2.0 927 1.8 2.0 30.7 -281 -884
Other 1 618 10.4 5.9 1.6 3 284 8.5 7.2 12.8 -120 -1 666
a Albania, Estonia, Latvia, Lithuania, Bosnia-Herzegovina, Croatia, Serbia and Montenegro, Macedonia.
Source:  Foreign Trade Data Center.Poland WT/TPR/G/71
Page 19
Table 4
Poland’s trade by product groups in 1993 and 1999(US$ million and per cent)
Exports Imports
Product group Share Share
(SITC Rev.3)Value
(US$
million)(%)Annual
change
(%)Value
(US$
million)(%)Annual
change
(%)
1999 1993 1999 99/93 1999 1993 1999 99/93
Total (0-9) 27 407 100.0 100.0 11.7 45 911 100.0 100.0 16.0
Raw materials (0-4) 4 691 26.3 17.1 3.9 7 795 28.2 17.0 6.6
  Food, beverage and tobacco (0+1) 2 430 10.9 8.9 7.8 2 905 10.5 6.3 6.6
  Crude materials excluding fuels (2+4) 885 5.7 3.2 1.6 1 609 5.2 3.5 8.6
  Mineral fuels (3) 1 377 9.7 5.0 0.0 3 281 12.5 7.1 5.8
Manufactured articles (5-8) 22 710 73.6 82.9 13.9 38 035 71.5 82.8 18.9
  Chemicals (5) 1 696 6.8 6.2 9.9 6 584 13.3 14.3 17.5
  Machinery and transport equipment (7) 8 278 21.0 30.2 18.7 17 544 29.6 38.2 21.1
  Misc. manufactured articles (6+8) 12 736 45.8 46.5 11.9 13 907 28.6 30.3 17.1
Commodities and transaction n.e.s (9) 6 0.0 0.0 9.7 82 0.3 0.2 7.8
Source: Foreign Trade Data Center.
84. The increase of manufactured goods in total Poland’s trade has resulted primarily from the
rapid development of exports and imports of road vehicles which were the main goods traded in 1999.
Overall, the trends in foreign trade have revealed  the growing share of manufactured goods with high
added value.
Table 5
Poland’s trade by main products in 1999(US$ million and per cent)
SITC Value Share Cumulation
Rev. 3 Types of products (US$ million) (%) (%)
Exports
78 Road vehicles 2 278 8.3 8.3
84 Clothing and clothing accessories 2 200 8.0 16.3
82 Furniture, bedding, mattresses 1 966 7.2 23.5
77 Electrical machinery 1 884 6.9 30.4
69 Manufactures of metals 1 518 5.5 35.9
Imports
78 Road vehicles 4 348 9.5 9.5
77 Electrical machinery 3 044 6.6 16.1
74 General industry machinery and equipment 2 647 5.8 21.9
65 Textile yarns, fabrics and related products 2 574 5.6 27.5
33 Petrol and petroleum products 2 524 5.5 33.0
Source:  Foreign Trade Data Center.
85. Apart from road vehicles Poland’s exports included mainly clothing, furniture, electrical
machinery and manufactures of metals. The main import items were also road vehicles, electrical and
general industrial machinery and equipment, textile yarns and fabrics (some of them were destined for
further processing) and petroleum products. These items accounted for one third of Poland’s totalexport and import transactions.WT/TPR/G/71 Trade Policy Review
Page 20
86. The inter-industry trade index, calculated at HS four-digit level has shown a steady increase
since 1995, mainly due to rapidly growing exports and imports of road vehicles and electrical
machinery.
Chart III
Intra-industry trade index
87. With imports expanding faster than exports Poland’s trade has recorded a growing deficit.
The deficit of US$4.7 billion doubled till 1996 and then rapidly increased in 1997 reaching the level
of US$18.4 billion in 1999. Out of that US$2.6 billion were raw materials, US$0.5 billion food and
agricultural products and US$15.3 billion manufactured goods. At the one-digit level of SITC, the
largest deficit was recorded in 1999 for machinery and transport equipment, chemicals and mineralfuels, with respective figures of US$9.3 billion, 4.9 billion and 1.9 billion.
88. In 1998 the value of foreign direct investme nt amounted to US$10 billion. At the end of 1998
the list of major foreign investors in Poland (projects worth above US$1 million) included 714 foreign
investors from 34 countries. In terms of the value of invested capital Germany with US$3 billion was
the major investor in Poland. The following ranks were occupied by American firms (US$4.9 billion)
and investors from France (US$2.4 billion), Italy, th e United Kingdom, the Netherlands, international
companies and investors from the Republic of Korea.
89. According to the end-1998 data, manufacturing attracted the largest amount of foreign
investment – US$15.9 billion (58.3 percent of the total va lue of foreign investment stock), first of all in
manufacturing of food products, beverages and tobacco (US$4.5 billion), transport equipment
(US$3.6 billion), products of other non-metallic mate rials (US$2.6 billion), including products of wood
and clothing. Investments were al so made in manufacturing of pape r, publishing and printing sectors,
manufacturing of chemicals a nd chemical products, of elect ric and optical equipment.
90. Companies with the foreign share play an importa nt role in Poland’s foreign trade, as can be
seen from their shares in Poland’s total exports and imports. In the case of exports, their share rose from
25.0% in 1994 to 47.9% in 1998. In imports, the respective shares were 32.9% in 1994 and 53.4% in
1998.35,1 34,837,944,850,252,656,1
0102030405060
1993 1994 1995 1996 1997 1998 1999Poland WT/TPR/G/71
Page 21
Table 6
Foreign direct investment inflow to Poland in 1990-1998(US$ million)
Foreign direct investment inflow
Year in foreign
currenciesin-kind
contributionstotal
(2+3)Re-invested
profitsForeign
investors’ creditsTotal capital
inflow
(4+5+6)
1 23456 7
1990 51 17 68 20 88
1991 177 91 268 66 25 359
1992 298 135 433 154 91 678
1993 892 217 1 109 199 407 1 715
1994 884 212 1 096 382 397 1 875
1995 1 807 298 2 105 888 666 3 659
1996 2 845 314 3 159 244 1 095 4 498
1997 2 663 453 3 116 25 1 767 4 908
1998 4 323 281 4 604 -264 2 025 6 365
Source:  National Bank of Poland.
__________