RESTRICTEDWORLD TRADE
ORGANIZATIONWT/REG/GEN/M/3
4 February 1999
(99-0424)
Committee on Regional Trade Agreements
Twentieth Session
EXAMINATION OF THE FREE TRADE AGREEMENTS BETWEEN SLOVENIA AND
ESTONIA, LATVIA AND LITHUANIA; THE CZECH REPUBLIC AND ESTONIA,
LATVIA AND LITHUANIA; THE SLOVAK REPUBLIC AND ESTONIA, LATVIA
AND LITHUANIA; AND POLAND AND LITHUANIA1
Note of the Meeting of 30 November 1998
Chairman:  Mr. C. Pérez del Castillo (Uruguay)
1. The meeting was convened in document WTO/AIR/977 and Corr.1.
2. Under Agenda Items E.I-X of its Twentieth Session, the Committee on Regional Trade
Agreements (hereinafter CRTA or the Committee) took up the first round of examination of the
following Free-Trade Agreements (FTAs):
A. Examination of the FTAs between Slovenia and Estonia, Latvia and Lithuania.
B. Examination of the FTAs between the Czech Republic and Estonia, Latvia and
Lithuania; and the FTAs between the Slovak Republic and Estonia, Latvia and
Lithuania.
C. Examination of the FTA between Poland and Lithuania.
A. EXAMINATION OF THE FREE-TRADE AGREEMENTS BETWEEN SLOVENIA
AND ESTONIA, LATVIA AND LITHUANIA
General Statements
3. The Chairman proposed examining the FTAs between Slovenia and Estonia, Latvia and
Lithuania in one group using the Standard Formats submitted by the Parties
(documents WT/REG37/3, WT/REG34 /3 and WT/REG35/3, respectively) as a guideline.  He noted
that this would have no effect on the examination process per se , as each Agreement would be judged
on its own merit and would have its own report with  its own conclusions.  The three Agreements had
been notified to the WTO on 20 February 1997; notifications could be found in
documents WT/REG37/N/1, WT/REG 34/N/1 and WT/REG35/N/1, respectively.  The Agreement
between Slovenia and Estonia had been signed on 26 November 1996 and had entered into force on a
provisional basis on 1 January 1997; the text of the Agreement had been distributed as document
WT/REG37/1.  The Agreement between Slovenia and Latvia had been signed on 22 April 1996 and
                                                     
1This is of relevance for the examination of the following agreements;  the Free Trade Agreements
(FTAs) between Slovenia and Estonia, Latvia and Lithuania; The Czech Republic and Estonia, Latvia and
Lithuania; The Slovak Republic and Estonia, Latvia and Lithuania; and Poland and LithuaniaWT/REG/GEN/M/3
Page 2
had entered into force on a provisional basis on 1 August 1996; the text of the Agreement was
contained in document WT/REG34/1.  The Agreement between Slovenia and Lithuania had been
signed on 4 October 1996 and had entered into force on a provisional basis on 1 March 1997; the text
of the Agreement was contained in document WT/REG35/1.  The terms of reference for the
Agreements between Slovenia and Latvia and Lithuania had been adopted by the Council for Trade inGoods (CTG) on 4 February 1997 and for the Agreement between Slovenia and Estonia on
11 March 1997.  The Chairman recalled that these Agreements had been initially scheduled for
examination in the Nineteenth Session of the Committee, but the examination had been postponed due
to the late arrival of documentation.  Before giving the floor to the Parties, he noted that the
representative of Slovenia would answer questions as Estonia, Latvia and Lithuania were not yet
WTO Members.
4. The representative of Slovenia said that the Agreements between Slovenia and Estonia, Latvia
and Lithuania were basically very similar in substance and were building blocs in the overall
economic integration of Europe.  The primary objective of these Agreements was to establish a
free-trade area and to develop trade between the Parties, which at present was very low. The
Slovenia-Estonia FTA had not yet been formally ratified by the Parties, but had been provisionally
applied from 1 January 1997.  A timetable was not necessary because the dismantlement of duties hadtaken place immediately upon application of the Agreement and practically all products were traded
on a duty-free basis; 97.7 per cent of all imports into Slovenia from Estonia were duty-free.  On the
Estonian side, 82.8 per cent of imports of industrial products originating in Slovenia were duty-free.
One hundred per cent of Estonian imports of agricultural products were duty-free.  There was no trade
on an MFN basis between the two countries.  The share of agricultural imports of Slovenia was only2.2 per cent and the total trade of 99.1 per cent was duty-free.  Almost 100 per cent of agricultural and
industrial products were covered by the Agreement and all duties and charges had been abolished as
of 1 January 1997; trade at MFN rates represented only 0.1 per cent and 0.9 per cent, respectively.  No
tariff quotas were envisaged in the Agreement.  The situation was similar for the FTA between
Slovenia and Latvia.  The Agreement had been ratified by Latvia and there was no transitional period.All industrial products were duty-free from the date of application, 1 August 1996.  Of agricultural
imports into Slovenia, 2.8 per cent were on an MFN basis; the respective data for Latvia was not
available.  In the recent period, trade data had shown that 100 per cent of trade had been duty-free and
there had been no imports on a tariff-quota basis.  Finally, in the case of the Slovenia-Lithuania FTA,
Lithuania had ratified the Agreement, which had been provisionally applied as of 1 March 1997.
There was a transitional period for industrial products ending on 1 January 1999.  The share of
industrial trade amounted to 99.4 per cent on a duty-free basis.  The transitional period for agricultureconcerning Lithuania would end on 1 January 2001.  An increase in tariff quotas was envisioned on a
annual basis.  Thus far, there had been no agricultural trade between Slovenia and Lithuania.
Background Information on the Agreement
5. The representative of the United States expressed his support for the trade integration efforts
taking place within Europe and welcomed the opportunity to review these Agreements.  However, his
delegation wanted to ensure that they were in conformity with WTO rules.  He had noted that several
of the Agreements had been signed and provisionally applied from 1996, but had been notified only
recently.  In other cases, the Agreements had been ratified in early 1998, but had not been notified
until the fourth quarter.  He would appreciate if the Parties would provide an explanation for the delay
in the notification process.
6. The representative of the European Commun ities (EC) recognized that these Agreements
were part of the process of transition and liberalization within Europe and he welcomed them for their
contribution to this process.  It was evident that the Agreements should be considered complementary
to those signed between the EC and the same countries.  It was his delegation's view that that the
Agreements met the requirements of GATT Article XXIV as they led to the establishment of aWT/REG/GEN/M/3
Page 3
free-trade area in the sense of Article XXIV.  A positive aspect was that the transitional period
foreseen in the Agreements was either non-existent or short and all sectors of activity were covered.
7. The representative of Hungary welcomed these Agreements which were important both in the
European cooperation process and in the economic transition currently being faced by these countries.
He added that his delegation was convinced that they complied with Article XXIV in all aspects.
8. The representative of Japan expressed his concern about the gap between the dates of
signature and notification and asked the Parties to justify this delay.
9. The representative of Turkey expressed his support for these three Agreements; after having
examined them, his delegation considered that they fulfilled the criteria of Article XXIV.
10. In reference to the Slovenia-Estonia Agreement, the representative of Canada asked if all
goods in Chapters 25-97 of the Harmonised System (H S) were duty-free as a result of the Agreement
and for details of the products under HS Chapters 1-24 which were not covered.  With respect to theSlovenia-Latvia Agreement, she asked the same question in reference to Chapters 25-97.  In addition,
she asked for a further explanation of the MFN rate applied to goods in Chapters 1-24 flowing from
Latvia into Slovenia and whether this meant that there were no duty-free provisions with respect to
these goods.  Lastly, she enquired about Slovenian imports into Latvia with respect to Chapters 1-24.
11. The representative of the United States said that many of the questions he had about trade
coverage had already been posed by the representative of Canada.  He welcomed the trade data which
had been provided orally by the representative of Slovenia and he asked that it be submitted in
writing.  In addition, he asked for the number of tariff lines which were subject to the elimination of
duties, as opposed to duty preferences, and for a view of the overall trade profile for each country in
terms of its larger trading partners, including pref erential partners.  It appeared, in reviewing the
information provided in the Standard Format, that tariffs on some products would be eliminated, but
that others were subject to preferential treatment,  i.e. at less than MFN rates but greater than zero.
Given that Article XXIV provided for the elimination but not the reduction of tariffs, how did the
Parties justify the less-than-full elimination of tari ffs in intra-trade?  He added that this could
constitute the raising of barriers to third Parties.  Regarding the scope and product coverage, herecalled that Slovenia had recently acceded to the WTO, that Latvia was in the process of ratifying its
accession protocol and that Estonia and Lithuania were currently in the process of accession
negotiations; he wondered if any modification was foreseen to these Agreements as a result of the
accession process.
12. The representative of Japan expressed his concern regarding trade statistics and supported the
comments made by the representatives of Canada and the United States.  In addition, he asked
whether certain goods qualified for a special or longer transitional period.
13. The representative of Slovenia replied that the best approach would be to receive the
questions in writing and provide written answers to them.  The representative of the United States
asked that, where possible, answers to the questions raised orally be provided during the meeting.
This would eliminate the need for them to be provid ed in written form.  The Chairman said that all
outstanding questions should be provided to the Secretariat in writing.
14. The representative of Slovenia said that as he had not received any preliminary questions in
writing, he would prefer to receive new questions in writing in order to avoid any misrepresentation.
15. The representative of Australia appreciated that the representative of Slovenia wanted to offer
correct responses to the questions raised and preferred to receive them in written form, but some
scope remained for discussion as this was the purpose for the meeting.  General responses would beWT/REG/GEN/M/3
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appreciated, as well as an overall indication of the provisions of the Agreements.  He was happy to
put forward questions in writing to avoid any misconception, but some responses were expected.
16. The representative of Poland supported the representative of Slovenia's approach regarding
the manner in which the examination should be conducted.  He recalled that the methodology for
examination was to supply written questions in advance of meetings in order to facilitate theexamination process.  The representative of the Slovak Republic joined the previous speaker in
seconding the same approach.  He noted that, although the Standard Format had been circulated sometime ago, his delegation had not received any written questions and he would prefer to receive them in
writing in order to respond to them fully and completely.
17. The representative of the United States pointed out that some of the Agreements had been
circulated only recently, and if the Committee adopted a procedure where all questions had to be
submitted in writing two weeks in advance of the meeting, this would delay the process, given thesheer number of agreements before the Committee.  In his view, there was no reason to depart from
the usual practice of presenting questions orally in  meetings and expecting oral responses which could
be complemented with written replies.
18. The representative of the Czech Republic joined the representatives of Slovenia, Poland and
the Slovak Republic in their approach and added there was little efficiency in replying to oral
questions raised during the meetings.  For example, the representative of Slovenia had read out some
statistical figures, but these had been requested in writing.  Given that written replies were needed, he
considered it fair to receive the questions in writing.
19. The Chairman said that this was not the la st time that the Committee would examine these
Agreements.  In the light of the request made by the representatives of Slovenia and others, he asked
delegations that had put forward questions during the meeting to put them in writing and to submit
them to the Slovenian representative.  Nevertheless , in order to make the meeting more fruitful, it
would be appreciated if the representative of Slovenia could reply to some of the questions raised.
20. The representative of Slovenia gave some preliminary responses to the questions posed.  In
response to the Canadian representative's question, he said that all products in Chapters 25-97 were
covered.  As far as the Slovenia-Estonia FTA was concerned, all products under these Chapters were
duty-free and the same could be said for the Slov enia-Latvia and Slovenia-Lithuania Agreements.  He
would provide a written answer with regard to the products in Chapters 1-24 which were excluded
from the Agreements, but he noted that the number of excluded products was small and that trade in
these products was practically non-existent.  As far as the trade profile of the countries was
concerned, he would provide overall information on the trade between Slovenia and the Baltic
countries in terms of tariff lines and duty elimination, as requested by the representative of theUnited States.  He recalled that trade between Slovenia and these countries was very small, between
USD 1 and 2 million, or a little more.  This trade should be much better developed.  He asked the
representative of the United States to submit in writing his question about trade in agricultural
products at less than MFN rates.  As regards any possible modification of the Agreements as a result
of the accession process to the WTO, he said that he anticipated none.  Finally, he asked if therepresentative of Japan would submit his question in writing.
Trade Provisions
21. The representative of Australia said he had understood from the Agreement that Estonia had
eliminated import duties on all agricultural products from Slovenia, but that Article 15.3 permitted
Estonia to introduce customs tariffs on agricultural products.  There was no similar provision forindustrial products and he was concerned about the different treatment of agricultural products, whichWT/REG/GEN/M/3
Page 5
allowed for the re-introduction of tariffs.  In terms of the linkage to the accession process, he had also
noted the standstill commitment and wondered whether Estonia intended to apply that provision.
22. With reference to the Slovenia-Estonia FTA, the representative of the United States observed
that Estonia was allowed to raise tariffs on agricultural goods as long as a margin of preference for
preferential partners was maintained, beyond the fact that these provisions applied even if the newpreferential tariff was greater than zero.  He asked how this aspect regarding margin of preference
conformed with the requirements of Article XXIV:4.  In reference to rules of origin, he said that the
discussion on the European System of Cumulation of Origin (scheduled for the next day) should be
incorporated into these examinations as part of the factual record.  The representative of Japan
supported him.
23. The representative of the United States had some queries in relation to standards.  He asked if
any work had been completed on mutual recognition agreements or if there were any future plans to
do so; if negotiations were underway on sanitary and phytosanitary measures; if there were plans to
harmonize with EC rules; and whether such harm onization would include the adoption of the EC ban
on the importation of beef using growth hormones.
24. The representative of Australia asked whether any specific safeguard action on agricultural
products had been taken under these Agreements.  If so, he requested information on the kind of
products, the nature of the measures taken, the procedures, and an understanding of the criteria used to
determine whether a serious disturbance to the agricultural market had been caused and the
appropriate solutions given.  Finally, he asked whether the Parties could confirm that such measures
would not prejudice the rights of non-parties.
25. In response to the questions posed by the representative of Australia, the representative of
Slovenia replied that no specific safeguard actions had been taken on the basis of these three
Agreements and he reminded the Committee that agricultural trade between the countries was verysmall and did not play a role in their mutual economic relations.  There had been no reason to give
particular attention to this aspect of the Agreement.  He confirmed that there were certain plans for the
mutual recognition of standard and certification procedures, but was not sure whether such work hadbeen undertaken.  There were no specific rules relating to sanitary and phytosanitary measures.
26. The representative of the United States observed that, in the context of the safeguards section
on re-export and serious shortages, there was a direct reference to the requirements of Article XI of
the GATT.  As there was no similar reference in the balance-of-payments safeguards section, he asked
whether it was right to assume that GATT Articl e XII applied, and he asked how balance-of-payments
measures would be applied to the Parties.
27. The representative of Japan asked whether the safeguard provisions in these Agreements
applied only to the Parties or also to third Parties; whether safeguard measures would be taken on the
basis of Article XIX or the Agreement on Safeguards; and how MFN treatment would be dealt with in
implementing these measures.
28. The representative of Canada asked about the nature of the safeguard measures that could be
taken.   Could duties be raised to the level which ha d been in effect prior to the entry into force of
these Agreements or to some level above that, i.e. to the MFN rate or to the WTO bound rate?
29. The representative of the United States asked whether the Parties could explain the rationale
for exempting trade in agricultural products and fisheries from the provisions.  Did other rules apply
to these sectors?WT/REG/GEN/M/3
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30. The representative of Australia asked for a progress report on the Joint Committee to be
established on state aid.  What criteria would be used by this Committee and what were the rules on
implementation?
31. The representative of United States observed that the provisions on agriculture in these
Agreements were similar to those in some 47 other agreements in Europe.  His delegation had several
times expressed concern about the agricultural regime contained in other agreements of the European
network.  In summary, these views were that the exclusion of a major sector – agriculture - was not
only unfortunate, in view of the relative comparative advantage that countries like Slovenia could be
expected to have, but also rendered the Agreement in consistent with the requirement that substantially
all the trade be covered.  Article XXIV of the GATT provided for the elimination of duties, not for the
imposition of greater than zero but less than MFN preferential duties between countries.  Such duties
were not consistent with WTO obligations and would constitute a raising of barriers to third parties.
32. The representative of the European Communities said that his delegation did not share the
same understanding as that of the United States representative on the impact or the implications of the
rules.  He did not agree that the agricultural sector was excluded in this set of agreements, nor did he
share the position of the representative of the United States that the use of preferential concessions
between zero and the MFN rate constituted the raising of barriers to the trade of third parties.  Herecalled that this issue had been raised several times in past examinations and the views of his
delegation on this matter had not changed.
33. The representative of Hungary disagreed with the statement made by the representative of the
United States.  It was his delegation's view that the issue of substantially all the trade did not
necessarily mean that all duties should be reduced to  zero; rather, reductions of duties to less than the
MFN rate also constituted preferences.  He pointed out that in the present case, an entire sector was
not excluded, but only some items thereof.  The exclusion of some items did not result in increased
restrictions and was therefore not inconsistent with Article XXIV:4 of the GATT.
34. The representative of Turkey clarified his position that, according to Article XXIV, free trade
agreements should cover substantially all the trade, not trade in substantially all products or all
sectors.
35. In response to the question on safeguard provisions, the representative of Slovenia affirmed
that the provisions of the Agreements were intended  to apply to intra-trade only.  If measures were
introduced, they would not be above the MFN rate, th ey would be temporary in nature and they would
have no effect on third countries.
36. The representative of the United States asked if the Parties would apply safeguards pursuant
to the WTO Agreement on Safeguards.  Would they exclude other Parties to the Agreement or would
safeguards apply automatically to other Parties to the Agreement?
37. The representative of Slovenia replied that safeguards would apply to all Parties, if applied at
all.
38. The representative of Australia asked for an indication of the products which were currently
subject to state monopolies.  Could the Parties confirm that state monopolies operated in a manner
consistent with GATT Article XVII in their purchases from and sales to third countries?
39. The representative of the United States had observed that the Parties applied the WTO rules
on the Agreement on Government Procurement, although they were not yet members of this
Agreement.  Were these rules similar to those in other preferential agreements to which the countries
involved were party and did the Parties have plans to join the Agreement on Government ProcurementWT/REG/GEN/M/3
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and extend its benefits to other signatories?  In addition, he asked whether the Parties had negotiated
any intellectual property rules specific to these Ag reements or whether there were any plans to do so.
He also asked whether the Parties had negotiated a separate services agreement or if they intended to
do so.
40. In response to the United States representative's question on services, the representative of
Slovenia replied that there were no plans to nego tiate a separate services agreement.  He said he
would clarify the situation on public procurement at a later date.  In response to the question on state
monopolies, he said that there were no state monopolies in Slovenia.  Lastly, he asked that the
question on intellectual property be submitted in writing.
41. The Chairman said that this concluded the first round of examination of the Free-Trade
Agreements between Slovenia and Estonia, Latvia and Lithuania.  He asked that Members submit
written questions to the Secretariat by 14 December 1998 in order to allow enough time for the Partiesto return written replies, in advance of th e next Session.  The Committee would resume the
examination of these Agreements at a later date.
B. EXAMINATIONS OF THE FREE-TRADE AGREEMENTS BETWEEN THE
CZECH REPUBLIC AND ESTONIA, LATVIA, AND LITHUANIA, AND THESLOVAK REPUBLIC AND ESTONIA, LATVIA AND LITHUANIA
General Statements
42. The representative of the Slovak Republic, speaking also on behalf of the Czech Republic,
Estonia, Latvia and Lithuania, suggested a slight modification to the proposed order of the
examinations.  Given the similarities of these Agreements, he proposed that the FTAs between the
Czech and Slovak Republics and Estonia be considered together, followed by those with Latvia, and
concluding with those with Lithuania.  This would facilitate the Committee's work.  He explained that
the main reason for this approach was the fact that the Czech and Slovak Republics were Parties to a
customs union under the provisions of Article XX IV of the GATT.  The six Agreements under
examination had been negotiated individually, but with the spirit of the customs union in mind. The
representative of the United States went a step further and proposed that all six Agreements be dealt
with simultaneously.
43. The Chairman accepted the proposal made by the representative of the United States that the
six Agreements be examined in one group.  This would have no effect on the examination per se , as
each Agreement would be judged on its own merit and would have its own report with its own
conclusions. The terms of reference for these Agreements had been adopted by the CTG on4 February 1998 for the Agreements between the Slovak Republic and Latvia and Lithuania, on
19 November 1997 for the Agreements between the Czech Republic and Latvia and Lithuania and on
1 October 1998 for the Agreements between Estonia and the Czech and the Slovak Republics.  He
recalled that the Agreements between the Czech Republic and Latvia and Lithuania as well as the
Agreements between the Slovak Republic and Latvia and Lithuania had been initially scheduled forexamination in the Nineteenth Session of the Committee, but had been postponed due to the late
arrival of documentation.  The Agreement between the Czech Republic and  Estonia had been notified
to the WTO on 29 June 1998 (document WT/REG62/N/1).  It had been signed on 19 April 1996 and
had entered into force on 12 February 1998; the text of the Agreement had been distributed as
document WT/REG62/1.  The Agreement between the Slovak Republic and Estonia had been notified
to the WTO on 25 September 1998 (document WT/REG63/N/1).  It had been signed on 18 May 1996
and had entered into force on 13 March 1998; the text of the Agreement had been distributed as
document WT/REG63/1.  The Agreement between the Czech Republic and Latvia had been notified
to the WTO on 23 October 1998 (document WT/REG45/N/1).  It had been signed on 15 April 1996WT/REG/GEN/M/3
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and had entered into force on 1 September 1997; the text of the Agreement had been distributed as
document WT/REG45/1.  The Agreement between the Slovak Republic and Latvia had been notified
to the WTO on 18 December 1997 (document WT/REG47/N/1).  It had been signed on 19 April 1996
and had entered into force on 1 July 1997; the text of the Agreement had been distributed as document
WT/REG47/1.  The Agreement between the Czech Re public and Lithuania had been notified to the
WTO on 13 November 1997 (document WT/REG46/N/1).  It had been signed on 14 October 1996
and had entered into force on 1 July 1997; the text of the Agreement had been distributed as document
WT/REG46/1.  The Agreement between the Slovak Re public and Lithuania had been notified to the
WTO on 18 December 1997 (document WT/REG48/N/1).  It had been signed on 27 November 1996
and had entered into force on 1 July 1997; the text of the Agreement had been distributed as document
WT/REG48/1.  In line with past practice, the Chairman proposed that the Committee use the Standard
Formats submitted by the Parties to guide the debate.  Before giving the floor to the Parties, he notedthat the representatives of the Czech and the Sl ovak Republics would answer questions as Estonia,
Latvia and Lithuania were not yet WTO Members.
44. The representative of the Slovak Republic, speaking on behalf of the Czech and the Slovak
Republics, said that these six Agreements had been concluded with the aim of establishing
free-trade areas through the progressive elimination of obstacles to trade, in accordance with theprovisions of Article XXIV of the GATT.  A parallel objective was to develop further economic
co-operation and trade between the Parties and support the active participation of the countries
concerned into the world economy by contributing to the creation of a European-wide free trade
agreement.  He said that, given the comprehensiv eness of the information provided in the Standard
Format, he would limit his comments at this point  to a general overview.  The FTAs between the
Czech and Slovak Republics and Estonia had been signed in Tallinn on 19 April 1996 and 28 May
1996, and had been provisionally applied as of 1 July 1996.  The free-trade areas had been established
on the date of entry into force, when duties and other restrictive regulations of commerce had been
abolished on substantially all the trade between the signatories.  The Agreements applied to products
originating in the Parties fallin g within HS Chapters 1-97.  The FTAs between the Czech and Slovak
Republics and Latvia had been signed in Riga on 15 April 1996 and 19 April 1996, and had been
provisionally applied as of 1 July 1996.  The free-trade areas would be established over a transitional
period ending on 1 January 2001, when duties and other restrictive regulations of commerce would be
abolished on substantially all the trade between the signatories.  The Agreements applied to products
originating in the Parties fallin g within HS Chapters 1-97.  The FTA between the Czech Republic and
Lithuania had been signed on 14 October 1996 in Prague.  The FTA between the Slovak Republic and
Lithuania had been signed on 27 November 1996 in Bratislava.  Both Agreements had entered intoforce on 1 July 1997.  The free-trade areas would be established over a transitional period ending on
1 January 2001, when duties and other restrictive regulations of commerce would be abolished on
substantially all the trade between the signatories.  The Agreements applied to products originating in
the Parties falling within HS Chapters 1-97.  The Agreements contained provisions on state aid, state
monopolies, competition, dumping, general safeguards, intellectual property rights and publicprocurement.
Background Information
45. Recalling the points made by the representatives of the United States and Japan in relation to
the notification of the last set of agreements, the representative of the Czech Republic said that the
gap between the dates of entry into force and notification of each of these Agreements varied between
one and six months, which his delegation considered a reasonable period of time.
46. The representative of Hungary asked that the general statement he had made in reference to
the previous set of Agreements be applied to these Agreements.WT/REG/GEN/M/3
Page 9
47. The representative of the European Communities made the same request.  He had noted that
the transitional period envisaged was a maximum of three and a half years from the initiation of the
reduction of tariffs, which was commendably short, and that the Agreements' coverage was
comprehensive.
48. The representative of the United States said that the same issues he had raised in the
examination of Slovenia's Agreements were applicable here.  As a follow up to the response just given
by the representative of the Czech Republic regarding the dates of entry into force and notification, he
said that the Agreements had been applied provisionally from 1996, so more than two years had
lapsed before the notification had actually been made.
49. The representative of Turkey said that th e statement he had made in relation to the
Agreements between Slovenia and Estonia, Latvia and Lithuania applied here.
50. The representative of Japan asked for further clarification on the point made by the
representative of the Czech Republic regarding the dates of notification and entry into force.  For
example, the Slovak Republic-Estonia FTA had been signed in 1996, had been applied provisionally
from July of that year and had entered into force in March 1998.  The Agreement had been notified to
the WTO only in September 1998, which his delegation considered to be outside the context of GATT
Article XXIV:7(a).
51. The representative of Australia said that the issues he had raised earlier applied to these
Agreements.
52. The representative of the Slovak Republic asked Members to submit their questions in writing
so that the Parties could provide comprehensive responses, given the large number of Agreements
under examination.
Trade Provisions
53. The representative of Canada said that the questions she had raised in relation to the last set of
agreements applied also to these Agreements.  For example, she had asked for more precise
information on trade flows, on duty-free treatment, and on the goods for which reductions in the MFN
rates had taken place and for those where this was not the case.
54. The Chairman asked if all comments made by Members on the previous set of agreements
under the section on Trade Provisions applied to these six Agreements.
55. The representative of the United States said that this was the case for his delegation, but that
he had an additional question which applied only to these Agreements.  The documentation indicated
that both the Czech and the Slovak Republics would eliminate quantitative import restrictions by the
year 2001 on certain industrial products.  Would the Parties explain on what basis these restrictions
were currently maintained and whether the elimination would be on a MFN basis?
56. The representative of Japan asked whether safeguard provisions were only applied to the
Parties and if measures would be taken in line with GATT Article XIX and the Agreement on
Safeguards.
57. The representative of Turkey, noting that Article 28 of the Agreement dealt with the question
of anti-dumping, asked whether any anti-dumping measures were currently in force between the
Parties.WT/REG/GEN/M/3
Page 10
58. The representative of the Slovak Republic replied that his country did not apply any safeguard
or anti-dumping measures.  With regard to concessions below the MFN level and above zero, it was
his delegation's view that such concessions were also covered by GATT Article XXIV, although he
recognized that this was a systemic issue.  The standards regime applied between Parties was the same
as that applied towards third countries and involved no obstacle or trade distortion.
59. The representative of the United States reminded the Parties that he had asked whether the
Agreement allowed for the application of global safeguard measures between the Parties or if the
Parties were excluded from the application of sa feguard measures, pursuant to the WTO Agreement
on Safeguards.
60. The representative of the Slovak Republic replied that there were no safeguard provisions in
effect and that market disturbances would be de alt with on a case-by-case basis.  The Parties would
take the measures which caused the least disturbance.
61. The representative of the United States said that his question also applied to the previous set
of Agreements examined and he asked that this be reflected in the record. The documentation stated
that there were no provisions for accession to the Agreements; this topic was of interest to a number
of delegations and he asked the Parties to explain why there were no provisions for accession in these
Agreements.
62. The representative of Australia recalled that the Slovak Republic was a member of the Central
European Free Trade Agreement (CEFTA) and that Lithuania was advanced in its negotiations to
accede to the CEFTA.  He wondered how these negotiations would affect the FTA between the
Slovak Republic and Lithuania and whether there were any plans to make changes to the Agreement
to bring it into line with the CEFTA provisions.
63. The representative of the United States said that, as with his prior question, this question
should also have been raised in connection with th e previous set of Agreements concerning Slovenia.
Beyond the direct link to other preferential Agreements established by the rules of origin regime, how
did these agreement interact with other agreements to which the countries were party, for example,
CEFTA, the EC and EFTA?
64. In response to the question posed by the Australian representative regarding Lithuania's
accession to the CEFTA, the representative of the Slovak Republic said that if a country acceded to
the CEFTA, the original bilateral agreement between the Slovak Republic and the respective countrywould be void and would be replaced automatically by the CEFTA.
65. The Chairman said that this concluded the fi rst round of examination of the Free Trade
Agreements between the Czech Republic and Estoni a, Latvia and Lithuania, and the Slovak Republic
and Estonia, Latvia and Lithuania.  He indicated that Members had until 14 December 1998 to submitwritten questions to the Secretariat.  The Committee would resume the examination of these
Agreements at a date to be determined in the future.
C. EXAMINATION OF THE FREE-TRADE AGREEMENT BETWEEN POLAND AND
LITHUANIA
66. The Chairman said that the Agreement had been notified to the WTO on 15 January 1998
(document WT/REG49/N/1).  It had been signed  on 27 June 1996 and had entered into force on
1 January 1997; the text of the Agreement had b een distributed as document WT/REG49/1.  He
pointed out that an Additional Protocol to the Free Trade Agreement, replacing the original ProtocolsN°1 and 3 to the Free Trade Agreement and the Annexes to them, had been signed on 8 May 1998 andWT/REG/GEN/M/3
Page 11
had been notified to the WTO (document WT/REG49/ 3).  The terms of reference for the examination
had been adopted by the CTG on 4 February 1998.  He recalled that this agreement had been initially
scheduled for examination in the Nineteenth Session of the Committee, but had been postponed due to
the late arrival of documentation.  Finally, he proposed that in line with the past practice, the
Committee use the Standard Format submitted by the Parties (document WT/REG49/4) to guide thedebate.  Before giving the floor to the Parties, he noted that the representative of Poland would answer
questions as Lithuania was not yet a WTO Member.
67. The representative of Poland said that his country was developing trade relations with
Lithuania, a neighbouring country, which was currently undergoing deep structural and economic
change.  Lithuania had belonged to the Soviet Union, with which Poland had conducted trade on a
centralized basis.  Although a new pattern of trade was developing, it had not yet increased and both
countries expected to make use of their respective comparative advantages.  The structure of theAgreement resembled those signed by other countries in the Central European region and formed part
of the network of free trade agreements linking various partners in the region.  With respect to the
relation between this Agreement and WTO rules, his delegation was of the view that it was in full
compatibility with the requirements of GATT Arti cle XXIV.  He also noted that the Agreement
contained political declarations in which the Government of Poland had expressed its sympathy andsupport for Lithuania's wish to join the CEFTA and, once negotiations were complete,  the new
agreement would set the legal framework fo r trade relations between both countries.
68. The representative of the European Communitie s said that his same general comments made
earlier in relation to the previous sets of agreements also applied in the context of this Agreement.
The representative of the United States said that th e same questions he had raised in the context of the
previous sets of agreements applied here.  The representatives of Hungary, Canada , Australia , Turkey
and Japan reiterated these comments.
69. The representative of the United States said that the time-lag between the entry into force of
this Agreement in January 1997 and its notification in November 1998 was even more noticeable than
those registered in the previous sets of Agreements.  He asked the Parties to provide an explanationfor this.
70. The representative of Poland said that there was an unintended confusion of two aspects.
There had been approximately one year between th e Agreement's entry into force in January 1997 and
its notification in December 1997; this had been due to his delegation's assessment (which had not
proved realistic) that it would be able to notify agreements with the other Baltic States at the same
time.  Consequently there had been a time lag, but the lag was between 1 January 1997 and
30 December 1997, not November 1998.  On 8 May 1998, an Additional Protocol had been signed,which was now being implemented provisionally and which had changed certain aspects of the
original Agreement.  The Committee had both documents before it.
71. The representative of the European Communities observed that Section II of the Standard
Format stated that the end of the transitional period was 1 January 2001, but the section on Scope
specified that all duties would be eliminated by 1 January 2002.  He asked the representative ofPoland when the transitional period would end and when the free-trade area would be established.
72. The representative of Poland offered a preliminary response, saying that the notion of a
transitional period had various applications in the Agreement.  It was not exclusively related to the
elimination of duties; the date of 1 January 2002 referred exclusively to the final elimination of duties
on cars, so only one product would extend beyond 1 January 2001.  He reserved the right to amplify
or correct his statement at a later stage.WT/REG/GEN/M/3
Page 12
73. The representative of the United States said th at the rules of origin section stated that the
Poland-Lithuania FTA applied the same rules as the European Communities and other European
countries which had signed Association Agreements with the EC.  However, the notification of the
System of European Cumulation of Origin ( document WT/REG/GEN/N/1 ) did not include this
Agreement.  He asked whether the Poland-Lithuani a FTA was included into the European System of
Cumulation of Origin, and if so, whether an amendment would be made to its notification.
74. The representative of Poland replied that the Additional Protocol, which had entered into
force on 1 July 1998, contained the new Protocol on Rules of Origin which was based on the concept
of pan European Cumulation.  He thanked the representative of the United States for his observation
and said he would check the documents and make the necessary corrections.
75. The representative of Australia asked whether the Parties would explain the reasons for the
exceptions under Articles 8 and 9 on quantitative restrictions for Poland.
76. The representative of the European Communities asked about the extent and rationale for the
remaining quantitative restrictions on industrial products between the Parties to the Agreement.
77. In response to the questions raised, the representative of Poland said that there were
homogeneous reasons for applying such restrictions in the framework of the various Agreements that
Poland had with its partners.   He added that he would appreciate receiving the questions in writing.
78. The Chairman said that this concluded the fi rst round of examination of the FTA between
Poland and Lithuania. Members had until 14 December 1998 to submit written questions to the
Secretariat.  The Committee would resume the examination of this Agreement at a future date.
79. The Committee took note of the comments made.
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