WORLD TRADE
ORGANIZATIONS/C/N/190
11 February 2002
(02-0903)
Council for Trade in Services Original:  English
JOINT COMMUNICATION FROM THE EUROPEAN COMMUNITIES
AND THEIR MEMBER STATES AND THE REPUBLIC OF SLOVENIA
Notification pursuant to Article V:7(a) of the General Agreement for Trade in Services
Pursuant to Article V, paragraph 7(a) of the GATS, the European Communities and their
Member States, on the one part, and the Republic of Slovenia, on the other part, hereby notify the
"economic integration agreement" as instituted by the Europe Agreement concluded between
themselves.  The formal notification is made in a ccordance with the "standard format for information
on economic integration agreements on services" as taken note of by the Committee on RegionalTrade Agreements at its meeting on 2 May 1997.
To facilitate the examination by the Members, th e relevant provisions on trade in services in
this agreement have been identified in the notification.  The full text of the Europe Agreement where
these provisions can be found, in their original version, is available at the WTO Secretariat.  TheEurope Agreement is published in the Official Journal of the European Communities (L 51 of
26 February 1999, p. 1) and in the Official Journal of the Republic of Slovenia (Official Gazette
No. 44/97-13/97 of 24 July 1997).
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I. BACKGROUND INFORMATION ON THE AGREEMENT
1. Membership and dates of signature, ratification and entry into force
The Europe Agreement establishes an association between the European Communities and
their Member States (15), acting within the framewor k of the European Union, of the one part, and the
Republic of Slovenia, of the other part.  The agreement entered into force on 1 February 1999 afterthe ratification process had been concluded by the 15 EU Member States and Slovenia, The Europe
Agreement was signed on 10 June 1996.
2. Type of agreement
The Europe Agreement is the basic legal instrument of the relationship between the EU and
Slovenia.  It establishes gradually a free-trade area between the EU and Slovenia, provides for apolitical dialogue, legal approximation and various other areas of co-operation.  No new customs
duties or quantitative restrictions can be introduced in trade between the European Union and
Slovenia from the date of entry into force of the Europe Agreement.  The Europe Agreement provides
for progressive alignment with Community rules as well as a number of specific provisions in such
areas as capital movement, rules of competition, intellectual and industrial property rights and publicprocurement.  The Europe Agreement constitutes a key element of the EU's pre-accession strategy
which aims at preparing Slovenia for EU membership.S/C/N/190
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3. Scope
As regards the services sectors, the Europe Agreement covers in principle all services sectors
and all modes of delivery (see II(b) below).
II. PROVISIONS AFFECTING TRADE IN SERVICES
1. (a) Provisions in the Europe Agreement which are relevant to the scope of the GATS:
- Article 1 – Objective;
- Title I – "General principles":  Articles 2 and 3;
- Title IV – Chapter 1 "Movement of workers";  Chapter 2 "Establishment ";
Chapter 3 "Supply of services between the Community and Slovenia" and
Chapter 4 "General provisions;
- Title V – Chapter 1 "Current payments and movement of capital";
Chapter 2 "Competition and other economic provisions" andChapter 3 "Approximation of laws";
- Title VI – "Economic cooperation", in particular Articles 75 on Investment promotion
and protection;  Article 80 on Energy;  Article 82 on Environment;  Article 83 on
Transport;  Article 84 on Post and Telecommunications;  Article 85 on Banking,
insurance and other financial services;  Article 90 on Tourism and Article 91 onSmall and medium-sized Enterprises;
- Title X – "Institutional, general and final provisions".
(b) These provisions on the Europe Agreement constitute an agreement liberalising trade
in services between the European Communities and their Member States, on the one
part, and the Republic of Slovenia, on the other part, in the sense of Article V,paragraph 1, given that:
- it provides for universal sectoral coverage of all service activities, subject to a gradual
coverage of some services' (see Article 45, paragraph 1(i), paragraphs 4, 5 and 6) and
the temporary exemption under Article 46 (i.e. establishment in air transport services,inland-waterway transport services and maritime transport services);
- it provides for the liberalisation of trade through all modes of supply:  "cross border"
trade, "consumption abroad", "commercial presence" (with or without movement of
natural persons) as well as "presence of natural persons" (see in particular Articles 38,
42, 43, 45, 50, 53, 57 and 60);
- it provides for the absence or elimination of substantially all discrimination through
elimination of existing discriminatory measures and prohibition of new or morediscriminatory measures (see in particular Articles 38, 45, 50, 51, 53 and 54);
- the time-table for the progressive elimination of existing discriminatory measures is
reasonable:  a transition period of a maximum of 6 years (see Articles 3 and 45);
- the degree of liberalisation of trade in services between the Community and its
Member States, on the one part, and the Republic of Slovenia, on the other part, goesbeyond the requirements and disciplines of the GATS in many respects.  To achieve
full national treatment, additional disciplines and means of liberalisation are foreseen
such as:  mutual recognition of qualifications;  approximation of laws;  behaviour of
monopolies and exclusive service providers;  restrictive business practices and
payments, transfers and free movement of capital.S/C/N/190
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(c) Consideration should also be given, pursuant to Article V, paragraph 2 of GATS to
the relationship of this agreement to the wider process of economic integration
between the European Communities and their Member States, on the one part, and the
Republic of Slovenia, on the other part, provided for under the Europe Agreement.
Economic integration is not only taking place in the field of services, but also inrespect of trade in goods and in economic relations in general.  In addition, this
Agreement will help the Republic of Slovenia to achieve its objective to become a
member of the European Union.
(d) The European Communities and their Member States, on the one part, and the
Republic of Slovenia, on the other part, have negotiated their Schedule of Specific
Commitments and list of MFN exemptions during the Uruguay Round.  The entry
into force of the Europe Agreement did not imply any modification or amendment inthese lists.  The Europe Agreement aims at facilitating trade between the Parties.  No
provisions of the Europe Agreement aim at raising the level of restrictions of trade in
services in respect of any other WTO Member.
2. Rules of Origin
A "Community company" or a "Slovenian comp any" respectively shall mean a company set
up in accordance with the laws of a Member States or of Slovenia respectively and having its
registered office or central administration or principal place of business in the territory of the
Community or Slovenia respectively.  However, s hould the company, set up in accordance with the
laws of a Member State or Slovenia respectively, have only its registered office in the territory of the
Community or Slovenia respectively, the company shall be considered a Community or a Sloveniancompany respectively if its operations possess a real and continuous link with the economy of one of
the Member States or Slovenia respectively (Article 47).
3. Standards/Recognition
The Europe Agreement foresees measures necessary for mutual recognition of qualifications
(Article 51) and to achieve Slovenia's full conf ormity with Community technical regulations and
European standardisation and conformity assessment procedures (Article 76).
4. Safeguards
The Europe Agreement has provisions for balance-payments difficulties in the Community or
in Slovenia (Article 66:2) and for limited de rogations for Slovenia from the provisions on
establishment in special cases including:  Slovenian industries undergoing restructuring, facing
serious difficulties or elimination/drastic reduction of the total market share, or for newly emerging
industries in Slovenia (Article 52).  These provisions have not been applied so far.
5. Subsidies and State-Aid
Article 65 contains a number of provisions as regards subsidies and state aids.  It contains
inter alia  a general prohibition of any public aid which distorts or threatens to distort competition by
favouring certain undertakings or certain products.  Any practices contrary to this rule shall be
assessed on the basis of criteria arising from the application of the rules of Article 87 (ex-Article 92)of the Treaty establishing the European Community.  In applying this provision, the parties recognise
that during the first four years after the entry into force of the Europe Agreement, any public aid
granted by Slovenia shall be assessed taking into account the fact that Slovenia shall be regarded as an
area identical to those areas of the Community described in Article 87(3)(a) of the Treaty establishing
the European Community.  In addition, special implementing rules on state aids shall be developed toS/C/N/190
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implement the above-mentioned provisions.  These rules are currently in the process of being adopted.
Each party shall ensure transparency in the area of public aid.
6. Government Procurement
Article 69 contains provisions on non-disc rimination as regards public procurement.
III. GENERAL PROVISIONS OF THE AGREEMENT
1. Exceptions and reservations
Exceptions are provided for under Articles 56 (public policy, security and health) and 120
(security).
2. Accession
The Europe Agreement does not contain any provisions allowing other countries to accede to
the Agreement.  However, with necessary modi fications, the Agreement shall apply to any new
Member State of the European Communities.
3. Dispute settlement procedures
Each of the two parties may refer to the Association Council any dispute relating to the
application or interpretation of this Agreement.  The Association Council may settle the dispute by
means of a decision, which will be binding for each party (Article 113).
4. Relations with other trade agreements
Article 28 states that the Europe Agreement shall not preclude the maintenance or
establishment of customs unions, free trade areas or arrangements for frontier trade except in so far as
they alter the trade arrangements provided for in th e Agreement.  Consultations shall take place within
the Association Council concerning agreements establishing such customs unions or free trade areas
and, where requested, on the other major-related issues.
5. Institutional framework
The Europe Agreement provides for a cycle of annual meetings of the Association Council
(ministerial level) and the Association Committee (high level officials) as well as frequent multi-disciplinary sub-committee meeting (technical level).  These institutions of the Europe Agreement
have assumed an enlarged role in the pre-accession proc ess, in particular in regard to monitoring the
progress made by Slovenia in the adoption and implementation of the acquis communautaire .
Exchanges between the European and Slovenian Parliaments are taking place within a Joint
Parliamentary Committee which meets 1-2 times a year.
IV. TEXT AVAILABLE FROM:
The full text of the agreement is available from:
- the WTO Secretariat;
- European Commission;
- the Republic of Slovenia.
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