RESTRICTED
WORLD TRADE WT/REG1/3
19December 1995
ORGANIZATION(95-3997)
Original: English
INTERIM AGREEMENT BETWEEN THE EUROPEAN COMMUNITY
AND THE REPUBLIC OFBULGARIA
Questions andReplies
Contracting parties toGATT 1947andWTO Members wereinvited (WTO/AIR/59 andCorr.1)
tocommunicatetotheSecretariatanyquestionstheymightwishtoputconcerningtheInterimAgreement
between theEuropean Community andtheRepublic ofBulgaria. Inresponse tothisrequest, anumber
ofquestions werereceived andweretransmitted totheParties totheAgreement. Thequestions and
thereplies which havebeenreceived aresetoutbelow.
1. Scope
1.1 With regard totheplanthatafree-trade areawillbeestablished gradually inatransitional
periodlastingamaximumoftenyears,accordingtotheEC-BulgariaFreeTradeAgreement
andinconsistence withGATT provisions, onwhat tariff lines willthetariff reduction
bemade? What isthetrade volume subject tothetariff reduction eachyear?
Thetariff linesonwhich tariff reductions arebeing made intheprocess ofestablishing the
EC-Bulgaria FreeTrade Area, together withtheextent ofthetariffreductions andtransitional periods
(where applicable) arelisted inArticles 3-18oftheInterim Agreement (Articles 9to24oftheEurope
Agreement (EA)) andtherelated annexes I,IIa,IIb,III,IV,V,VI,XI,XIIIa, XIIIb, XIVa andXIVb
andinProtocols 1,2and3intheInterim Agreement/Europe Agreement andtheirannexes.
Itisnotatthisstage possible topredict theevolution oftrade andconsequently theshare of
trade thatwillbesubject totariff reductions attheendofthetransitional period inviewofthemyriad
ofuncertain factors involved.
EUexports toBulgaria Figures areforEC(12) onlyin000USD
1992 1993 1994
Total 1,443,026 1,576,251 2,019,560
Agricultural 159,807 254,270 264,340
Non-agricultural 1,245,894 1,279,433 1,718,612WT/REG1/3
Page2
Imports from Bulgaria Figures areforEC(12) onlyin000USD
intoEU
1992 1993 1994
Total 1,163,423 1,112,572 1,592,656
Agricultural 232,737 198,450 222,912
Non-agricultural 929,686 900,562 1,359,469
2. Industrial Products
2.1 What isspecifically meant bymeasures having anequivalent effect asquantitative
restrictions (QRs) onimports inArticles 4.4and5.4? What aretheQRsthathavebeen
eliminated sofaraccording tothese provisions? Isthisapplied tothird countries ona
non-discriminatory basis? Ifthemeasures areapplied tothird countries, onwhich
provisions oftheGATT aretheybased?
Theobligations toabolish "quantitative restrictions onimports [...]andmeasures having an
equivalent effect" isawide-ranging oneandimplies theabolition ofalllawsandregulations which
arecapable ofhindering, directly orindirectly, actually orpotentially, imports from theParties.
Articles4.4and5.4(10.4and11.4EA)furtherhave-withtheexceptionofthespecificmeasures
listed inAnnex VIIandreferred toinArticle 5.4-ageneric nature anddonotaimtorefertospecific
restrictions ormeasures. Rather theirobject istoensure thattheliberalization foreseen intheAgreement
isnotundermined bymeasures which defacto haveanequivalent effect toquantitative restrictions.
Asforeseen intheAgreement, allquantitative restrictions andmeasures having anequivalent
effect which wereapplied bytheCommunity toimports originating inBulgaria wereabolished onthe
dateofentry intoforce oftheInterim Agreement (31December 1993).
Withrespect toquantitative restrictions andmeasures having anequivalent effect which were
appliedbyBulgariatoimportsoriginatingintheEuropeanCommunity,allsuchmeasureswereabolished
on31December 1993 withtheexception ofthose listed inAnnex VIIoftheAgreement.
TheCommunity isnotaware thatBulgaria applies anyQRstothirdcountries.
2.2 What isspecifically meant by"any charges having anequivalent effect" astariffs in
Article 7?What hasactually beeneliminated according tothisprovision? Isthisapplied
tothird countries inanon-discriminatory manner?
Aswithquantitative restrictions andmeasures ofequivalent effect, theprovisions oncustoms
duties andcharges haveequivalent effect hasbeendrafted inthismanner tomake clearthattheyapply
notonlytocustoms duties buttoallcharges which haveanequivalent effect tocustoms duties. The
obligation toabolish "anycharges having anequivalent effect" aimstoencompass anycharge, whatever
itsname orstructure, thatisimposed onagoodinconnection withitsimportation. Charges imposed
inorder toprovide forcosts ofservices rendered are(asunder Article VIIIoftheGATT) exempted
from theabolition obligation inArticle 6oftheAgreement (Article 12EA).WT/REG1/3
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Asforeseen intheAgreement, allcharges having anequivalent effect totariffs which were
applied bytheCommunity toimports originating inBulgaria wereabolished onthedateofentry into
force oftheInterim Agreement (31December 1993).
With respect tocharges having anequivalent effect totariffs which wereapplied byBulgaria
toimports originating intheEuropean Community, allsuch measures were abolished on
31December 1993.
TheCommunity isnotaware thatBulgaria applies anycharges ormeasures having equivalent
effect toimports from thirdcountries.
2.3 What arethecustoms duties onexports andcharges thathavebeeneliminated according
toArticle 8.1? Isthisapplied tothird countries inanon-discriminatory manner?
TheEuropean Community doesnotapply customs duties onexports toanycountry.
TheCommunity isnotaware thatBulgaria applies customs duties onexports toanycountry,
including theCommunity.
2.4 What arethequantitative restrictions onexports thathave actually been eliminated
according toparagraphs 2and3ofArticle 8?Isthisapplied tothird countries ina
non-discriminatory manner? Iftheyareapplied tothird countries, onwhich provision
oftheGATT aretheybased?
Prior totheentry intoforce oftheInterim Agreement, Bulgaria prohibited theexport ofscrap.
Thisprohibition hasbeenreplaced byanexport taxforonesub-heading (CN7204.2100). Export
taxes alsoapply toexports ofhides andskins totheCommunity (Annex IX). Pursuant toArticle 8
oftheInterim Agreement (Article 14EA), these taxes have tobeabolished atthelatest on
1January 1998. Bulgaria hasbeenasked toconsider atimetable fortheabolition ofthese taxes.
TheCommunityisnotawarethatBulgariaappliesquantitativerestrictionsonexportstocountries
other thanthemember states oftheEuropean Community.
2.5 What is"agricultural component" inparagraphs 1and2ofArticle 12?What arethey
reasons forestablishing these provisions?
Under Articles 3and4.1(9and10.1EA),theindustrial dutyratepreviously applied toimports
intotheCommunity ofthese products from Bulgaria hasbeenabolished. Nonetheless, inArticle 12
(18EA)theCommunity reserves theright tomaintain, fortheproducts listed inAnnex Xtothe
Agreement, theagricultural component, which isatariffpublished intheEC'scustoms tariff, asregards
imports oftheseproducts fromBulgaria. Theproducts inAnnex Xarecovered bytheUruguay Round
definition ofagricultural products andarethussubject toECcommitments onagriculture.
Bulgaria hastheright, pursuant tothesecond paragraph ofArticle 12(18EA), tomirror the
application oftheagricultural component withrespect toimports oftheproducts covered bytheArticle
from theCommunity.WT/REG1/3
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3. Common Provisions
3.1 Hasthere beenacasewhere tariffs were increased according toArticle 23?Ifso,what
levelofincrease wasmade andonwhat items?
What isspecifically meant bytheelements ofpreference? What istheGATT basis for
thisprovision?
Theprovisions ofArticle 23(Article 29EA)havenotyetbeeninvoked byBulgaria.
Article 23(29EA)provides foraderogation fromtheprovision ofarticles 5(11EA)and20(1)
(26EA)byBulgaria foralimited duration (andatmostfornolonger thanuntiltheendofthetransitional
period) inexceptional cases forsectors undergoing restructuring orfacing serious difficulties, or
concerning infant industries.
Article 23(29EA)isinfullconformity withtheGATT. Itisrecalled that"anelement of
preference" referred toinArticle 23oftheInterim Agreement (29EA)would notbecreated bythe
application ofthesaidarticle, since thepreference itself would havealready beencreated pursuant
toArticle 5(11EA)asrequired byArticle XXIV:8. Indeed, theexceptional measures which canbe
taken byBulgaria must beeliminated bytheendofthetransitional period. After thisperiod any
measures based onArticle 23(29EA)shallcease toapply.
Moreover, during thetransitional period measures maynotexceed acertain threshold orsurpass
fiveyears (unless -inthelatter case-authorization todosohasbeereceived fromtheJointCommittee).
TheCommunity mayrequest consultations intheJointCommittee before anymeasure istaken. All
measures mustbeaccompanied byaschedule forphasing out.Measures cannot beapplied onproducts
benefiting fromfullliberalization formore thanthreeyears. Finally, itisforeseen thatmeasures may
onlytaketheform ofincreased customs duties.
Itshould benoted thatArticle 23(29EA)onlyconcerns imports intoBulgaria from the
Community andthatnomeasures against thirdcountries could bebased onArticle 23(29EA)ofthe
Agreement.
3.2 What arethereasons forproviding differential treatment forSpain andPortugal under
Article 31?What arethemain points ofthe"specific provisions" forthetwocountries?
Thespecific provisions referred toinArticle 31(Article 37EA)relate tothemeasures and
undertakings listed intheActsofAccession oftheKingdom ofSpain andthePortuguese Republic
totheEuropean Communities. These Actsprovide foratransitional period which expires attheend
of1995.
Thespecific provisions relate tothetransitional periods provided forintheActsofAccession
forharmonizing import duties andmeasures having anequivalent effect applied togoods entering the
territories ofSpain andPortugal withthose oftheCommunity ofTen. Thistransitional period expires
on31December 1995, when thesame regime willapply toSpain andPortugal asintherestofthe
Community.