RESTRICTEDWORLD TRADE
ORGANIZATIONWT/REG52/2/Add.4
19 February 2001
(01-0804)
Committee on Regional Trade Agreements Original:  English
EUROPEAN COMMUNITES-SLOVAK REPUBLIC EUROPE AGREEMENT, SERVICES
Joint Communication from the Parties
Addendum
This document reproduces additional questions addressed to the Parties and the joint
responses provided by them.
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Note by the Parties: In answering the questions, we have focussed on the liberalisation provisions
of the Europe Agreement.  WTO Members should, however, be aware of the relationship of this
Agreement to the wider process of economic integration and law approximation between theEuropean Communities (EC) and its Member States and the Slovak Republic in view of preparing the
Slovak Republic for EU membership.  This process is in itself liberalising.
1. Please provide more information on how movement of workers is addressed under the
Agreement.  Chapter I (Movement of Workers) of Title IV indicates that during the second
stage of the agreement or earlier, the Associ ation [Council] shall examine further ways of
improving the movement of workers.  Has this work begun?  How does this commitment relate
to Article 56 of Chapter III in Title IV, which addresses liberalization of temporary entry of key
personnel? What time period is envisaged for liberalization?
Chapter I of the Title IV of the Europe Agreemen t provides for, in particular, an application
of the national treatment principle in respect to the workers who are legally employed on the territory
of the other Party, as well it addresses the issues related to access to the labour market.
Chapter III deals with movement of persons connected with cross-border supply of services
and refers to the right of the temporary movement of natural persons providing services and keypersonnel of the service supplier, including persons responsible for negotiating the sale of services or
for entering into agreements to sell services for that service supplier.  Article 55(1) stipulates that
“The parties undertake in accordance with the provisions of this Chapter to take the necessary steps to
allow progressively the supply of services by Community or Polish companies or nationals who are
established in a Party other than that of the person for the services are intended taking into account thedevelopment of the services sectors in the Parties.”  Article 6 which lays down a transition period of a
maximum duration of ten years is a horizontal provision applicable to Article 55.  It is therefore the
objective of both Parties to achieve the undertaking under Article 55 within the transition period.  As
far as the liberalisation of temporary entry of key personnel is concerned, Article 55(2) stipulates that
the liberalisation should take place “in step with the liberalisation process mentioned in paragraph 1.”WT/REG52/2/Add.4
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2. Article 45:5 of Chapter II (Establishment) in Title IV seems to provide flexibility to
introduce transition periods on top of the existing  very long 10-year transition periods.  How do
the EU and the Slovak Republic see this as meeting the requirements under GATS Article V to
eliminate discrimination between the Parties?
The scope of this Article is limited as this provision only applies to the Slovak Republic and
can only be granted with the EC’s agreement within the Association Council.  This could only be
done in exceptional circumstances and for a limited period of time.
Such a very limited flexibility to extend the duration of a transition period for one of the two
Parties is justified given the asymmetric nature of the EC and the Slovak Republic economies and in
relation with the overall framework of integration of the Slovak Republic within the EC.
3. Earlier documentation states that mode 1 (cross-border) and mode 2 (consumption
abroad) are "covered" by the Agreement in Chapte rs 55-58.  Unfortunately, in reviewing these
provisions, it is not entirely clear how these modes are covered.  For example, Article 56 in
Chapter III seems to address cross-border services but the commitment is limited to progressiveliberalisation taking into account the development of the particular services sector.  Please
clarify.
Article 56(1) covers the “supply of services by Community or Slovak Republic companies or
nationals who are established in a Party other than  that of the person for whom the services are
intended.”  Despite the difference of wording which is due to the fact that the Europe Agreements
were negotiated before GATS was concluded, this must be understood as covering consumption
abroad and cross-border supply of services.
As indicated above, Article 7 which lays down a transition period of a maximum duration of
ten years is a horizontal provision applicable to Article 56.  It is therefore the objective of both Parties
to achieve the undertaking under Article 56 within the transition period.
For the purpose of implementing Article 56 of the Europe Agreement, the EC and other
countries (including Slovak Republic) are conducting negotiations on European Common Aviation
area.
4. The EC representative made reference at the July 1998 meeting to further liberalization
in "contractual services."  Could the EC please clarify which services are considered to be
contractual services?
The Europe Agreement between the EC and its Member States and the Slovak Republic
functions on the basis of negative listing.  The agreement covers all services sectors.  Only those
services which are excluded or for which specific transition periods are given, or special rules apply,
are mentioned, either in the text of the Agreement itself or in Annexes XVI:a to XVI:c.  As
contractual services are not specifically excluded and as no specific transition periods are given in the
Europe Agreement, these services are covered by the general provisions of the Europe Agreement.WT/REG52/2/Add.4
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5. The general information provided in WT/REG52/2/Add.3, including the charts,
indicates that several sectors are "covered" by the EU-the Slovak Republic Agreement.  Could
the Parties provide a deeper analysis of whether the financial services and telecommunication
services will be fully liberalized at the end of the transitional period?
Telecommunication Services
Telecommunication services are covered by the liberalisation process which principles are
determined in the Europe Agreement.
As regards establishment (equivalent to mode 3 and part of mode 4), the EC grants full
national treatment for the establishment and operation of Slovak Republic firms and nationals fromthe date of entry into force of the Agreement.  The Slovak Republic grants full national treatment for
the establishment and operation of EC firms from the entry into force of the Agreement.
The Europe Agreement provides that the Slovak Republic should grant full national treatment
for the establishment of EC nationals from the start of the sixth year following the enter into force ofthe Agreement.
The right of establishment includes the right to employ key personnel.As regards supply of services (equivalent to modes 1, 2 and 4), telecommunication services
are not excluded from the scope of Article 56(1) and 56(2).  It is therefore the objective of both
Parties to achieve the undertaking under Article 56 within the transition period.
As regards movement of workers, telecommunication services are not excluded from the
provisions of Article 38, 42 and 43 (application of national treatment in respect of legally employedworkers).
Financial Services
Financial services are covered by the liberalisation process which principles are determined in
the Europe Agreement.
Financial services are defined in Annex XVI:a of the Agreement (see Article 50).
As regards establishment (equivalent to mode 3 and part of mode 4), the EC grants full
national treatment for the establishment and operation of Slovak Republic firms and nationals from
the date of entry into force of the Agreement. Fr om the entry into force of the Agreement the Slovak
Republic has granted full national treatment for the operation of Community companies established in
the Slovak Republic.  The Slovak Republic must grant right of establishment and full national
treatment to EC firms and nationals at the latest at the end of the ten-year transitional period
(Article 45(1)).  The right of establishment includes the right to employ key personnel.
As regards supply of services (equivalent to modes 1, 2 and 4), Financial services are not
excluded from the scope of Article 56(1) and 56(2).  It is therefore the objective of both Parties to
achieve the undertaking under Article 56 within the transition period.
As regards movement of workers, telecommunication services are not excluded from the
provisions of Article 38, 42 and 43 (application of national treatment in respect of legally employed
workers).
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