RESTRICTEDWORLD TRADE
ORGANIZATIONWT/REG36/2
18 January 2000
(00-0207)
Committee on Regional Trade Agreements Original:  English
FREE TRADE AGREEMENT BETWEEN THE FORMER YUGOSLAV
REPUBLIC OF MACEDONIA AND SLOVENIA
Communication from the Parties
The following communication has been received from the Permanent Mission of the Republic
of Slovenia with the request that it be distributed to WTO Members.
_______________
I. BACKGROUND INFORMATION ON THE AGREEMENT
1. Date of Signature, Ratification and Entry into Force
The Free Trade Agreement (FTA) between the Republic of Slovenia and the Former
Yugoslav Republic of Macedonia (FYROM) was signed on 1 July 1996 in Skopje, the FYROM.  Due
to the lengthy procedure for the ratification of the Agreement a provision was included that allows the
Parties to apply it provisionally.  The Parties apply the Agreement provisionally from
1 September 1996.  The Republic of Slovenia ratified the Agreement on 21 September 1999, while
the FYROM had ratified it previously.
2. Type of Agreement
The Agreement was concluded between the Republic of Slovenia and the FYROM is a
free trade agreement.  The Agreement was concluded with the aim to strengthening economic
co-operation and foster the intensification of mutually beneficial trade relations among thetwo countries, as well as to contribute to the process of integration in Europe.
The main objective of the Agreement is to establish a free-trade area in a transitional period
ending on 1 January 2000 in accordance with the provisions of the Agreement and in conformity with
those of GATT 1994, in particular Article XXIV and the Agreement Establishing the WTO.  The fullplans for the reduction of customs duties to zero on substantially all the trade between the Parties are
contained in the relevant Articles, Annexes and Protocols of the Agreement.
3. Scope and Product Coverage
As evident above, the FTA covers trade in industrial products (Chapters 25-97 of the
Harmonized System, HS) and agricultural products (Protocol 2).  The Agreement also contains
provisions, inter alia , on state aid, state monopolies, competition, government procurement,
intellectual property rights and dumping.  The Parties have also expressed their readiness to discuss
the extension of the scope of the Agreement to the areas not currently covered (evolutionary clause).WT/REG36/2
Page 2
The following summary indicates products which are covered by the Agreement:
(a) All products falling within H.S. Chapters 25 to 97 are covered;(b) The products contained in Protocol 2 (agricultural products) are covered.The trade of the products covered by this Agreement and of agricultural arrangements, which
also form a part of the instruments creating the free-trade area, is presented in detail in Annex I.
Products falling within Chapters 25 to 97 of the HS account for:
- 82.1 per cent of imports of all products originating in Slovenia being
imported in The FYROM, and
- 76 per cent of imports of all products originating in the FYROM being
imported in Slovenia
Products falling within Chapters 1 to 24 of the HS for which customs duty of zero is implied
account for:
- 10 per cent of imports of all products originating in Slovenia being imported
in the FYROM, and
- 23 per cent of imports of all products originating in the FYROM being
imported in Slovenia.
The FTA covers substantially all the trade between the Republic of Slovenia and the FYROM
in products origination in these territories.
4. Trade data
See country specific tables in Annex II on development of trade between Slovenia and the
FYROM.  In addition, compiled economic and trade indicators of Slovenia and the FYROM are
provided in Annex III.
II. TRADE PROVISIONS
Industrial Products
1. Import Restrictions
1.1 Duties and charges
The liberalization of industrial products is asymmetrical.  Slovenia abolished all import
customs duties to products originating in the FY ROM at the entry into force of the Agreement,
whereas the FYROM reduced customs duties on imports originating in Slovenia in accordance with
the provisions laid down in Protocol 1 to the Agre ement.  The Protocol 1 contains Annexes 1, 2, and 3
that determine the reduction of customs duties applied in the FYROM to products originating in
Slovenia.  The final date of the abolishment of duties for products listed in Annexes 1, 2 and 3 is1 January 2000.  For the products not listed in Annexes 1, 2 and 3 the customs duties were abolished
on 1 September 1996.WT/REG36/2
Page 3
All special customs duties on imports were abolished on 1 September 1996, except 1 per cent
charge of fee registration in the FYROM.  Slov enia has already proposed to the FYROM to change
that Article in a sense that the FYROM would eliminate this 1 per cent charge of fee registration at
latest until the end of the transition period.
The provisions concerning the prohibition and abolition of customs duties on imports also
apply to customs duties of a fiscal nature.
1.2 Quantitative restrictionsAll quantitative restrictions on imports and measures having equivalent effect were abolished
at the entry into force of the Agreement.
2. Export Restrictions
2.1 Duties and measures
All export duties and measures having equivalent effect were abolished at the entry into force
of the Agreement.
2.2 Quantitative restrictions
All quantitative restrictions on exports and measures having equivalent effect were abolished
at the entry into force of the Agreement.
3. Rules of Origin and Co-operation in Customs Administration
The provision on rules of origin are laid down in Protocol 3 to the Agreement.  The basis for
setting the rules of origin of goods under the Agreement was provided in principle in the Agreement
on Economic Co-operation between the countries, signed in 1992, which anticipated the application of
the rules used by the European Community in trad e with the two countries on the day this Agreement
was signed.  This Protocol could be replaced with bilateral harmonized preferential rules of origin, if
both Parties would agree upon.  The negotiations on the replacement of the rules of origin with
harmonized preferential rules are going on.
4. Standards
4.1 Technical barriers to trade
The Parties shall co-operate and exchange information in the field of standardization,
metrology, assessment of conformity and accreditation with the aim of reducing technical barriers to
trade.  The Parties may conclude an agreement on mutual recognition of test reports, certificates of
conformity and other documents directly or indirectly related to conformity assessment of products
which are the subject of the trade between the Parties on the basis of regulation in force in theimporting country.
4.2 Sanitary and phytosanitary measuresThe Parties shall apply their regulations in veterinary, the health of plants and people, in
particular to the information system that deals with the development of infectious diseases of
domestic animals, quarantine diseases, plant pests and weed, as well as in the adjustments of similar
documents in trade and transportation of goods.  They shall apply their regulations in a non
discriminatory way and shall not introduce any new measures that would needlessly obstruct trade.WT/REG36/2
Page 4
5. Safeguards
The following emergency measures and other safeguard mechanisms applicable to intra-trade
are provided in the Agreement:
(i) Specific safeguard measures
Because of the particular sensitivity of the agricultural and food product markets, if imports of
products originating in a Party, which are the subject of concessions granted under the Agreement,
cause serious disturbance to the markets of the other Party, the Parties shall enter into consultations
immediately to find an appropriate solution.  Pending such solution, the Party concerned may take
measures it deems necessary.
(ii) General safeguard measuresWhere any product is being imported in such increased quantities and under such conditions
that is causes serious injury to domestic producers of like or directly competitive products in theterritory of the importing country, or serious disturbances in any related sector of the economy or
difficulties which could bring about serious deteri oration in the economic situation of a region, the
Party concerned may take appropriate measures under the conditions and in accordance with the
procedure laid down in the Article on Procedure for the application of safeguard measures to the
Agreement.
(iii) Structural adjustmentThe measures under the provisions applying to structural adjustment may concern infant
industries, or certain sectors undergoing restructuring or facing serious difficulties, particularly wherethese difficulties produce important social problems.  The maximum coverage of trade represented by
products on which structural adjustment measures may be applied is defined in the relevant Article.
Such measures cannot be applied toward third countries.  The measures may not be applied after
1 January 2000.
(iv) Re-export and serious shortage
When compliance with the provisions of Articles on Customs duties and special customs
duties on exports (Article 7) and on Quantitative restrictions on exports and measures having
equivalent effect leads to:
- Re-export towards a third country against which the exporting Party maintains for the
product concerned quantitative export restrictions, export duties or measures or
charges having equivalent effect; or
- A serious shortage, or threat thereof, of a product essential to the exporting Party;
and where the situations referred to above give rise or are likely to give rise to major difficulties for
the exporting Party, that Party may take appropriate measures under the conditions and in accordance
with the procedures laid down in the Article on Procedure for the application of safeguard measures.
(v) Balance-of-payments (BOP) difficultiesThe Parties shall endeavour to avoid the introduction of restrictive measures including
measures relating to restriction on imports for BOP purposes.  Where a Party is in serious BOP
difficulties, or under imminent threat thereof, the Party concerned may, in accordance with theWT/REG36/2
Page 5
relevant provisions of the GATT adopt restrictive measures, including measures related to imports,
which shall be of limited duration and may not go beyond what is necessary to remedy the BOP
situation.  The measures shall be progressively relaxed as BOP conditions improve and they shall be
eliminated when conditions no longer justify their maintenance.
6. Anti-dumping
The Parties may only take anti-dumping measures in accordance with the Article VI of the
GATT 1994.  The Agreement contains provisions for the procedures for the application of safeguards
which are applicable to anti-dumping measures.
7. State-aid and Countervailing Measures
Any actions taken in accordance with the state provisions of the FTA will be in accordance
with the relevant provisions of the GATT.  The Parties shall ensure transparency in the area of state
aid, inter alia by reporting annually to the Joint Commission on the total amount and distribution of
the aid given and by providing to the other Party, upon request, information on aid programmes andon individual cases of State aid.  Any Party can introduce, if it considers that a particular practice is
incompatible with provisions of the Agreement, appropriate measures in conformity with the GATT.
8. Sector-specific Provisions
- Agricultural products
The Agreement abolishes, within the limits of tariff quotas set out annually, customs duties on
a number of agricultural products, thereby providing better access conditions for those products.  The
concessions are granted in Protocol 2 to the Agreement, to which two annexes are attached.  Annex 1contains concessions whereby the customs duties on imports applicable in Slovenia for the products
originating in the FYROM listed in that Annex were abolished at the entry into force of the
Agreement, within the limits of tariff quotas set out in the Annex.  Annex 2 contains concessions
whereby the customs duties on imports applicable in the FYROM for the products originating in
Slovenia listed in that Annex were abolished on the date of entry into force of the Agreement, within
the limits of quotas set out in the Annex.
The quantities within the limits of tariff quotas set out in Annexes 1 and 2 to Protocol 2 refer
to the first year of application of the Agreement, i.e. until 31 December 1996.  The quantities for the
following years shall be set out by the Joint Commission in the middle of November, upon the
proposal of the responsible ministries of both Parties.  For the products not listed in Annexes 1 and 2
within the limits of quotas, Most Favoured Nation rates of duty are applied.
Furthermore, the Parties shall examine the possibilities of granting each other further
concessions, taking into account the role of agriculture in their economies, the development of trade in
agricultural and food products between them, the particular sensitivity of the agricultural and food
products, the rules of their agricultural policy and the consequences of the multilateral tradenegotiations under the GATT.WT/REG36/2
Page 6
III. GENERAL PROVISIONS
1. Exceptions and Reservations
(i) General exceptions
The Agreement shall not preclude prohibitions or restrictions on imports, exports or goods in
transit justified on the grounds of public morality, public policy or public security; the protection of
human, animal or plant life or health; the protection of national treasures possessing artistic, historic
or archaeological value; protection of intellectual property or rules relating to gold or silver or
environmental protection, including of conservation of natural resources if such measures are in
relation to restrictions in domestic production or consumption and if they are in accordance with
international agreements.  Such prohibitions or restrictions shall not, however, constitute means of
arbitrary discrimination or a disguised restriction on trade between the Parties.
(ii) Security and protection exceptionsNothing in the Agreement shall prevent a Pa rty from introducing any measure which it
considers necessary to prevent the disclosure of data contrary to its essential security interests; for the
protection of its essential security interests or for the implementation of international obligations or
national policy relating trade in arms, ammunition and military equipment, provided that such
measures do not impair the conditions of competition in respect of products not intended for
specifically military purposes, and to trade in other goods, materials and services the purpose of whichis direct or indirect supply of the military; or relating to the non proliferation of biological and
chemical weapons, nuclear weapons or other nuclear explosive devices; or war time or other serious
international tension.  In accordance with legislation valid in both countries on the types of goods to
which a licence system applies for import or export in accordance with international agreements and
conventions, the responsible bodies in both countries shall issue licences for import or export.  In the
event of international trade in goods which pollute the environment of people and which originate in
the Parties, the Parties shall apply the provisions and regulations prescribed by international
agreements and conventions.
IV. OTHER
1. Internal Taxation
The Parties shall refrain from any measure or practice of an internal fiscal nature applied by
the Parties, implying directly or indirectly, an unequal distinction between the products originating in
the Parties.
2. State Monopolies
The provisions on State monopolies ensure that procurement or marketing of products by any
State monopoly of a commercial character, as defi ned in the Article of the Agreement also include
monopolies delegated by the Parties to others.  The Parties will adjust progressively any Statemonopoly of a commercial character so as to ensure that by the end of the fifth year after the entry
into force of the Agreement no discrimination regarding the conditions under which goods are
procured and marketed exists between nationals of the Parties.WT/REG36/2
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3. Payments
The Agreement provides for payments relating to trade in goods and the transfer of such
payments to the territory of the Party where the creditor resides free from any restrictions.  The Parties
shall refrain from any exchange or administrative restrictions on the grant, repayment or acceptance ofshort and medium term credits to trade in goods in which a resident participates.  The Parties reserve
the right to apply exchange restrictions on the grant or acceptance of short and medium terms credits
related to trade in goods to the extent permitted according to their status under the International
Monetary Fund.  Such restrictions shall be applied in a non-discriminatory manner and shall be
eliminated when conditions no longer justify their maintenance.
4. Government Procurement
The Parties shall develop their respective regulations for government procurement with a
view to grant suppliers of the other Party, by the end of transitional period, access to contract award
procedures on their respective government procurement markets according to the provisions of the
Agreements on Government Procurement conc luded within the World Trade Organization.
5. Protection of Intellectual Property
The Parties shall grant and ensure the protection of intellectual property rights on a
non-discriminatory basis, including measures for granting and enforcing these rights.  The termintellectual property is defined in the Agreement.  The Parties shall co-operate  in the issues relating to
intellectual property.  They shall hold, upon request of any Party, expert consultations on those issues,
in particular on activities, relating to the existing or future international conventions on
harmonization, administration and enforcement of intellectual property and on activities in
international organizations, such as the World Intellectual Property Organization, as well as issues onAgreement on the Trade-Related Aspects of Intellectual Property Rights.
6. Evolutionary Clause
The Agreement provides that the Parties may define a future developing and deepening of
relations, as well as extension of the coverage of the Agreement.
7. Validity and Withdrawal
The Agreement was concluded for an unspecified period of time.  Each Party may withdraw
from the Agreement by submitting a written notification to the other Party.  The withdrawal shall take
effect on after six months after the day of notification.
As from the entry into force of the Agreement, the provisions of Articles 3, 4 and 5 and the
second paragraph of Article 7 of the Agreement on Economic Co-operation between the Republic of
Slovenia and the FYROM, signed in 1992 in Ljubljana, ceased to be in force.WT/REG36/2
Page 8
ATTACHMENT
Summary of the Structure of the Agreem ent, Including Annexes and Protocols
Preamble Article 1
Objectives
CHAPTER I – Industrial Products
Scope Article 2
Customs duties on imports Article 3 and Protocol 1
(Annex 1, Annex 2, Annex 3)
Basic duties Article 4
Special customs duties Article 5
Fiscal duties Article 6Customs duties and special customs duties on exports Article 7Quantitative restrictions on imports and measures having equivalent effect Article 8Quantitative restrictions on exports and measures having equivalent effect Article 9
Elimination of technical barriers to trade Article 10
CHAPTER II – Agricultural ProductsScope Article 11
Exchange of concessions Article 12 and Protocol 2
(Annex 1, Annex 2)
Concessions and agricultural policy Article 13Specific safeguard measures Article 14Sanitary and Phytosanitary measures Article 15
CHAPTER III – General Provisions
Rules of origin of goods and co-operation in customs administration Article 16
Internal taxation Article 17General exceptions Article 18Security and protection exceptions Article 19
State monopolies Article 20
Payments Article 21Rules of competition concerning undertakings Article 22State aid Article 23Government procurement Article 24Protection of intellectual property Article 25
Dumping Article 26
General safeguard measures Article 27Structural adjustment Article 28Re-export and serious shortage of goods Article 29Fulfilment of obligations Article 30Procedure for the application of safeguard measures Article 31
Balance-of-payments difficulties Article 32
Evolutionary clause Article 33The Joint Commission Article 34Procedures of the Joint Commission Article 35Trade relations governed by this and other Agreements Article 36Annexes, Protocols, Changes and Amendments Article 37WT/REG36/2
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Entry into force Article 38
Provisional application Article 39Validity and withdrawal Article 40
Withdrawal of some articles of the Agreement on Economic Co-operation Article 41WT/REG36/2
Page 10
ANNEX I
Slovenian Trade with the FYROM1
(Thousands of USD)
Imports 1998 %
Agricultural products 11,260 24
Not covered by FTA 450 1
Annex 1 10,811 23
Industrial products 35,673 76
Total 46,933 100
Imports from the FYROM to Slovenia, 1998
(Thousands of USD)
Import %
Total 46,933 100
O which:
At zero customs duty 46,483 99
MFN 450 1
ANNEX II
The FYROM Trade with Slovenia1
(Thousands of USD)
Imports 1998 %
Agricultural products 28,763 17.9
Not covered by FTA 12,656 7.9
Annex 2 16,107 10
Industrial products 131,878 82.1
Annex 1 21,591 13.4
Annex 2 - -
Annex 3 67 0.04
Total 160,641 100
Imports from Slovenia to the FYROM, 1998
(Thousands of USD)
Import %
Total 160,641 100
of which:
At zero Customs duty 126,327 78.6
Between zero and MFN 21,658 1
MFN 12,656 7.8
Source: Statistical Office of the Republic of Slovenia
                                                     
1FTA is applied provisionally.WT/REG36/2
Page 11
Trade by HS Chapter
(USD)
The Republic of Slovenia
Import from the FYROMThe FYROM
Export from Slovenia H.S.
Chapter
1997 1998 I-V 1999 1997 1998 I-V 1999
1 682 332 0 0 7,525 0
2 0 24,959 0 6,812,982 7,276,823 1,464,393
30 0 0 0 0 0
4 9,508 146,255 25,487 2,925,240 3,771,400 1,823,204
5 0 0 0 2,956 379 0
64 2 7 5 0 0 0 0
7 1,189,575 2,040,097 353,120 124,058 24,366 0
8 250,803 196,900 16,055 108 0 16,206
9 323,011 584,007 64,835 56,352 54,927 2,957
10 2,443 9,908 5,213 10,652 5,320 6,619
11 0 0 0 11,767 15,675 4,174
12 95,762 96,046 43,543 146,641 123,005 124,779
13 0 0 0 0 8,403 1,417
14 7,218 11,573 1,348 24 48 0
15 8 0 0 157,608 290,565 77,904
16 0 21,347 0 8,758,771 7,305,041 2,536,597
17 73,617 97,683 61,628 431,942 322,468 134,240
18 169,222 267,331 78,163 913,275 951,361 217,876
19 836,152 705,302 160,838 1,584,876 1,217,491 503,082
20 897,636 943,011 275,906 267,100 307,011 218,023
21 35,598 40,344 14,041 1,801,214 1,604,116 632,096
22 10,496,365 3,045,345 220,658 379,924 513,491 150,022
23 0 0 0 133,446 246,469 134,853
24 1,215,491 3,029,775 771,245 3,899,550 4,716,850 1,228,771
25 591,561 495,709 224,757 76,178 19,143 7,096
26 26,274 0 0 4,868 4,002 0
27 15,884 2,313 8,631 654,384 729,136 381,149
28 0 3,576 4,720 1,783,733 1,550,968 461,282
29 53,467 41,744 15,699 489,856 447,309 125,151
30 1,662,945 1,566,920 594,496 17,358,245 17,021,121 8,100,488
31 0 0 0 13,178 48,689 35,202
32 3,359 0 2,290 2,214,729 2,261,234 713,166
33 116,088 52,763 24,398 10,233,532 7,152,757 2,070,343
34 1,743 1,042 920 1,899,563 1,726,072 641,296
35 0 0 0 758,976 674,023 170,618
36 0 0 0 0 88,615 40
37 4,492 3,565 23 475,801 498,617 171,469
38 247,297 200,111 70,361 1,368,549 1,317,333 494,077
39 104,400 184,202 58,738 2,824,099 3,642,778 1,583,531
40 37,927 46,523 1,153 5,356,788 5,043,312 1,493,727
41 190,155 16,497 0 29,430 55,877 20,576
42 88,060 15,715 11000 170,839 105,941 7,850
43 21,508 25,725 24,992 0 0 17,256
44 1,336,991 1,255,464 381,544 10,658,749 13,149,224 2,701,009
45 0 0 0 7,725 9,222 7,274
4 6 0000 0 0
4 7 0000 0 0
48 136,212 123,365 16,720 8,557,546 10,133,385 3,527,955
49 2,334 40 25 568,633 173,290 178,963
50 0 0 0 0 2,533 13,444
51 2,688 13,766 1,394 257,854 560,721 36,988
52 110,939 132,715 20,217 1,103,583 1,210,040 263,705
53 0 0 0 3,281,318 2,618,413 498,361WT/REG36/2
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The Republic of Slovenia
Import from the FYROMThe FYROM
Export from Slovenia H.S.
Chapter
1997 1998 I-V 1999 1997 1998 I-V 1999
54 3,580 14,330 89,229 1,055,266 750,010 288,351
55 782,399 198,849 268,559 1,590,074 1,521,857 175,320
56 0 0 0 606,265 870,691 354,464
57 35,341 0 2,598 5,438 21,062 1,940
58 135,169 87,778 28,414 45,468 33,630 11,226
59 5,034 0 27 321,617 473,772 93,402
60 475,860 111,936 75,825 52,198 190,648 36,992
61 534,349 616,792 211,650 967,596 1,314,367 459,415
62 3,127,861 3,005,218 936,840 1,361,342 1,769,697 585,518
63 921,031 559,899 178,378 310,799 399,505 67,066
64 1,417,154 606,518 255,462 1,280,907 1,514,025 505,022
65 0 70 253 6,409 17,449 824
66 0 0 0 2,170 29,821 408
6 7 0000 0 0
68 509,828 88,837 25,765 710,419 696,448 173,111
69 1,039,051 1,045,469 445,391 230,884 398,820 79,411
70 235,782 332,454 103,378 317,225 365,825 121,745
71 5,773 458 0 61,252 74,597 29,889
72 2,703,742 2,849,334 415,864 1,750,798 1,386,134 613,085
73 2,856,844 1,195,630 442,145 1,715,343 1,678,612 562,056
74 2,713,398 1,856,396 811,696 96,701 63,660 35,258
75 0 0 0 21,404 3,395 10,829
76 177,487 268,419 4,041 1,006,005 1,316,597 600,353
7 7 0000 0 0
78 2,806,970 2,713,541 1,145,168 0 0 0
79 1,576,688 1,881,766 389,174 54,590 51,026 13,230
80 0 37,397 0 508 9,862 0
81 0 32,632 0 7,628 10,000 8,964
82 85,403 72,938 44,940 864,248 905,922 545,203
83 41,120 85,862 120,630 2,321,130 2,492,017 813,780
84 314,254 332,209 130,395 12,529,173 14,439,053 5,539,516
85 9,692,573 8,710,189 2,980,558 12,275,929 16,261,395 1,923,660
86 52,933 65,775 37,705 2,360 1,492 0
87 2,393,416 2,723,123 519,660 1,875,707 2,828,671 9,28,346
88 167,534 414,834 5,033 395,083 585,648 60,195
89 0 0 0 6,752 0 0
90 8,364 30,341 3,851 1,560,356 1,840,620 613,631
91 0 0 0 111,763 183,118 29,816
9 2 0006 1 , 5 3 1 0
9 3 0000 0 0
94 756,688 1,341,756 357,099 4,921,062 6,526,066 3,679,973
95 7,213 6,418 2,748 171,818 180,304 67,697
96 169,847 189,154 31,910 336,617 427,266 144,970
97 636 14,460 2,663 0 0 0
TOTAL 56,112,776 46,932,840 13,621,204 149,518,888 160,641,102 52,171,893WT/REG36/2
Page 13
ANNEX III
Basic Data for 1998
Slovenia The FYROM
Population 1,987.344 2,015.000
Land area (sq. km) 20.273 25.713
GDP in million of US$ 18.206 3.196*
GDP per capita, in US$ 9.163 1.586*
Import in millions of US$ 10.111 1.913
Export in millions of US$ 9.051 1.322
Trade balance in millions of US$ -1.049 -591
* Data for 1997.
Source: Monthly Bulletin of Bank of Slovenia, June-July 199.
Government of the FYROM, Report on Economic Development.
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