Commission Report 2002 (Romania)

Recent developments under the Europe Agreement, including bilateral trade

Romania has continued to implement the Europe Agreement and the various joint institutions have continued to function smoothly. The Association Council met in March 2002 and the most recent meeting of the Association Committee was in October 2001. The Joint Parliamentary Committee, comprising of representatives from the Romanian and European Parliaments, met in Brussels in April 2002.

Relations between Romania and the Economic and Social Committee continued to be good and in June 2002 a report on Romania`s road to accession was adopted. No progress has been made with regard to establishing a Joint Consultative Committee with the Committee of the Regions.

Romania`s implementation of the Europe Agreement improved considerably and a number of outstanding issues were resolved during the course of the year (for example, the removal of export restrictions on sensitive raw materials and the phasing out of a discriminatory system of profit taxation). Measures were also taken to remove discriminatory restrictions on the right of lawyers from EU Member States to establish in Romania.

Recent indicators point to a steady improvement in Romania`s trade situation. During 2001, Romanian exports to the EC totalled EUR 9.3 billion (68% of total Romanian exports, an increase of 21% compared to 2000). Over the same period, imports from the EC rose to EUR 10.2 billion (57% of total Romanian imports, an increase of 17% over the previous year). This growth in trade both reflected and contributed to the revival of the Romanian economy that took place in 2001.

In 2001, Romania's main exports to the EC were: textiles and clothing (37%), machinery and equipment (15%), footwear (12%), and steel products (9%). The EC's main exports to Romania were machinery and equipment (27%), textiles and clothing (24%), transport equipment (10%), chemical products (7%) and steel products (5%).

As a consequence of the agreement resulting from the first round of trade negotiations in the agriculture sector (adopted on an autonomous basis, pending the conclusion of an Additional Protocol to the Europe Agreement), approximately 85% of EC agricultural imports from Romania and 43% of EC agricultural exports to Romania are duty free or benefit from preferential reduced duty rates (average trade figures for 1998-2000).

Negotiations on a further round of liberalisation, covering more sensitive sectors where trade is currently rather low, began at the end of 2001 and were concluded in June 2002. The result of this further round, scheduled to take effect in January 2003, enhances the existing agricultural trade preferences between the parties and promotes the abolition or reduction of import duties either within tariff quotas or for unlimited quantities in sectors such as cereals, dairy, beef and sheep meat. This further agreement also includes a commitment by the parties to remove export refunds for certain sectors.

The anti-dumping investigation on imports of urea from Romania (among others) led to the imposition of definitive duties in January 2002.

In March 2002, in response to protectionist measures taken by the US, which greatly restricted access to their market and created the risk of considerable trade diversion, the EU initiated provisional safeguard measures, with erga omnes effect, on imports of certain steel products. The measures were partly confirmed in September 2002.

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