The International Practice of the European Communities - Current Survey International Trade Developments, Including Commercial Defence Actions XIV: 1 July 1997 - 30 June 1998 3 Accessions, Associations and Free-trade Agreements A General Developments Enlargement negotiations with the Czech Republic, Estonia, Poland, Hungary, Slovenia and Cyprus (the so-called first wave applicants) were initiated on 3 April 1998. Separately, on 27 April 1998, preparation for negotiations started with Bulgaria, Latvia, Lithuania, the Slovak Republic, and Romania. In both cases, negotiations have started with the so-called "screening", which entails the explanation by the Commission to the applicant countries of what the body of EU law (the acquis) means and the exploration of the problems which may arise in future negotiations. By the end of June 1998, the first wave applicants had already completed bilateral screening of the chapters on science and research, telecommunications, education and training, culture and audiovisual policy, industrial policy, small and medium-sized companies, common foreign and security policy, and company law. With regard to these chapters, the Commission stated that no problem had arisen because they did not contain delicate issues. However, some applicants requested transitional periods on telecommunications and audiovisual policy. Formal negotiations with the first wave applicants will start with the Member States on the above chapters in November 1998, while the Commission does not expect the screening process to finish before July 1999. In the meantime, multilateral screening of the countries in the second group had covered by the end of June 1998 chapters such as internal market, competition law, financial services, environment or taxation. At the end of the multilateral screening, the Commission will start bilateral screening meetings with these countries. Subsequently, the Commission will draft a report for the Council on the outcome of the screening process and then the Council will decide whether to invite Lithuania, Latvia, the Slovak Republic, Bulgaria or Romania to join the accession negotiations with the first wave countries. B EFTA The preferential origin rules in the Agreements with the Swiss Confederation, Iceland and Norway were modified (see section D below). 4 C Associations with Central European Countries: The Europe Agreements The Europe Agreements with Estonia, 5 Lithuania,6 and Latvia 7 were published and entered into force on 1 February 1998. These agreements contain provisions concerning, inter alia , free movement of goods, movement of workers, establishment, supply of services, and payments, capital and competition. Moreover, the Association Agreements with Poland, Bulgaria and the Slovak Republic were amended. Finally, several agreements on exports of iron and steel products covered by the ECSC were concluded (see Section 8A below). D Pan-European Harmonized Preferential Rules of Origin The protocols concerning preferential rules of origin in the free-trade agreements with the EEA countries (see section B above), Poland, 8 and the Slovak Republic 9 were amended. Article 4 of the above agreements provides that materials originating in Poland, Hungary, the Czech Republic, the Slovak Republic, Bulgaria, Romania, Latvia, Lithuania, Estonia, Slovenia, Andorra, San Marino, Switzerland, Norway and Iceland are considered as originating in the Community or in one of the above listed countries. Furthermore, requirements for some non-originating materials to obtain originating status were also modified. As a consequence, producers in any of the above countries will be able to source products originating in these countries and still maintain the preferential tariffs. E Agreements with CIS Republics The Interim Agreements on Trade and Trade-Related Matters signed with Armenia, 10 Georgia,11 Uzbekistan12 came into force and the Agreement signed with Kyrgyzstan was published and approved. 13 Partnership and Co-operation Agreements with Russia, 14 Ukraine,15 and Moldova16 were signed between 1 July 1997 and 30 June 1998. Finally, agreements on trade in steel products concluded with Russia, Ukraine, Georgia and Armenia were published and entered into force. 17 F New Transatlantic Market Place Initiative and Transatlantic Economic Partnership The New Transatlantic Market Place proposed by Commissioner Sir Leon Brittan was aimed, among others, at eliminating technical barriers to trade in goods through a process of mutual recognition and harmonization, liberalizing trade in services and in areas such as public procurement, intellectual property and investment. Other sectors, such as agriculture and the audiovisual sector, were excluded due to opposition of other EC Commissioners. Several EC Member States were reticent from the outset. France stated that, in the commercial field, priority should be given to the WTO. Furthermore, it linked any possible negotiations to a satisfactory settlement of the dispute on the Helms-Burton Act. The Netherlands feared that the New Transatlantic Market Place would undermine multilateralism. In view of the lack of consensus among the EC Member States, the Commission withdrew the proposal shortly before the EC/US Summit of May 1998. During the London Summit, the EC and the US found that it was necessary to strengthen economic cooperation across the Atlantic. To this end, they adopted the so-called Transatlantic Economic Partnership. The scope of this declaration does not contain any reference to a free-trade area in services, to a general abolition of customs duties or to the creation of a dispute settlement mechanism apart from the WTO regimes. The Transatlantic Economic Partnership concentrates on the reduction or elimination of existing trade barriers and on improvement of regulatory cooperation in areas such as customs duties on industrial products, global electronic trade, intellectual property rights, investment and competition so as to ensure gains in terms of market opening. The US and the EC are expected to start negotiations towards the end of 1998. G Mercosur EC Commissioner Marín proposed to initiate negotiations with Mercosur and Chile with a view to concluding a Free-trade Area Agreement. 18 The proposal came up against opposition from its inception, mainly from Agriculture Commissioner Fischler, and from France and Germany. Apparently, several countries and Commissioners were deeply concerned by the fact that trade liberalization would have to cover exports of several very sensitive agricultural products if the requirements of Article XXIV of GATT 1994 are to be fulfilled. After long discussions, however, the Commission requested from the Council a negotiation mandate for the initiation of negotiations, which will probably start in 1999. However, in the mandate no reference is made to certain agricultural products such as sugar, cereals or beef, which will thus not be covered by the negotiations. The Mercosur partners were not pleased with this position. The Brazilian Ambassador to the EU pointed out that if certain vital agricultural sectors are to be left out, it may no longer be in Mercosur's interest to start negotiations. H Others The Euro-Mediterranean Agreement with Tunisia was published and came into force in 1998. 19 The negotiations with a view to concluding an Association Agreement with Egypt were still ongoing and no agreement was expected to be reached before the end of 1998. With a significant symbolic value, the EU started negotiations with Syria in order to conclude an Association Agreement. The negotiations with South Africa on the conclusion of a free-trade area (FTA) agreement were expected to be wound up at the end of 1998. Finally, the EU will initiate negotiations with Mexico with a view to concluding an FTA in late 1998. This agreement is of special significance since the EU has lost its position of first trade partner with Mexico after this country joined NAFTA. Mexico and the EU signed a (non-preferential) Agreement on Trade and Trade-Related Matters in December 1997 which will come into force as from 1 July 1998. The EU further concluded inter alia the following agreements: Euro-Mediterranean Interim Association Agreement with the Palestine Liberation Organization; 20 Customs Cooperation Agreement with the United States; 21 Cooperation Agreement with the Lao People's Democratic Republic; 22 Customs Cooperation Agreement with Canada; 23 Customs Cooperation Agreement with Ukraine; 24 Cooperation Agreement with the Republic of Yemen; 25 Cooperation Agreement with the countries members of the Cartagena Agreement; 26 Customs Cooperation Agreement with Korea. 27 4 OJ (1997) L195/1, 101 and 201. 5 OJ (1998) L68/1. 6 OJ (1998) L51/1. 7 OJ (1998) L26/1. 8 OJ (1997) L221/1. 9OJ (1998) L212/1. 10 OJ (1997) L316/11. 11OJ (1997) L206/64. 12 OJ (1998) L43/1. 13 OJ (1997) L235/1 and L323/38. 14OJ (1997) L327/1. 15OJ (1998) L49/1. 16 OJ (1998) L181/1. 17 OJ (1997) L300/52 (publication), (1997) L300/51 (adoption); (1997) L210/32 (publication), (1997) L210/31 (adoption); (1997) L262/6 (adoption); (1997) L262/5 (adoption). 18 For more information, we refer to our surveys covering 1 January-31 December 1995, 1 January-30 June 1996 and 1 July-31 December 1996 (see note 1 above). 19 OJ (1998) L97/1 (publication); (1998) L132/14 (adoption). 20OJ (1997) L195/1. 21 OJ (1998) L222/17 (publication); (1997) L222/16 (adoption). 22 OJ (1997) L334/14. 23 OJ (1998) L7/37. 24 OJ (1998) L49/3. 25 OJ (1998) L72/17. 26 OJ (1998) L127/10. 27 OJ (1998) L121/13.
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