Commission Report 2002 (Slovakia)

Recent developments under the Europe Agreement, including bilateral trade

The implementation of the Europe Agreement has continued to run smoothly, and no significant trade problems have been noted. Slovakia has continued to contribute to the smooth functioning of the various joint institutions. The eighth meeting of the Association Council took place in March 2002, and Association Committee meetings were held in December 2001 and in July 2002. The system of sub-committees has continued to operate well as a forum for technical discussions. The Joint Parliamentary Committee, comprising representatives of the Slovak National Council and the European Parliament, held its 13th meeting in Bratislava in June 2002. The Joint Consultative Committee, comprising representatives of the Economic and Social Committee and of NGOs in Slovakia, held its 2nd and 3rd meetings in November 2001 in Brussels and in May 2002 in Bratislava.

In general, trade relations between the European Community and Slovakia remain good. In 2001, EC imports from Slovakia amounted to EUR 8.1 billion and EC exports to Slovakia to EUR 7.9 billion. As in the previous two years, Slovakia continued to enjoy a small, albeit decreasing, trade surplus with the EC. Machinery and electrical and transport equipment continued to dominate both exports to and imports from the EC. Exports to the EC accounted for 60 % of Slovakia's total exports and the EC's share in Slovakia's total imports was 49.8 %. These figures reflect a high degree of trade integration with the EC; bilateral trade flows between the EC and Slovakia have more than quadrupled since 1993.

Under 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 72 % of EC agricultural imports from Slovakia and 77 % of EC agricultural exports to Slovakia are duty-free or benefit from preferential rates (average trade figures 1998-2000).

Negotiations on a further round of liberalisation, covering more sensitive sectors, began at the end of 2001 and were concluded in June 2002. The result of this further round, which will take effect in January 2003, enhances the existing agricultural trade preferences between the parties and promotes the full or partial lifting of import duties either within tariff quotas or for unlimited quantities in sectors such as cereals, dairy products, beef and sheep meat. It also includes a commitment by the parties to remove export refunds for certain sectors.

In March 1996 the Council mandated the Commission to open negotiations on agreements on the reciprocal recognition, protection and control of wine names and spirits designations, including trade arrangements, with Slovakia. The negotiations were interrupted in 1997 due to a limited offer from the Slovak side, which was unacceptable for the Community. Negotiations resumed in January 2001 and are ongoing.

Negotiations concerning processed agricultural products have been concluded at technical level. The decision of the Council on the adaptation of the Protocol 3 of the Europe Agreement for processed agricultural products is currently under preparation.

A safeguard measure on sugar imports was introduced in May 2001 to remain in force until December 2004 in principle, although it is scheduled for review in February 2003. The safeguard measures (in the form of export quotas) on exports of certain cereals, initially due to run until December 2001, have been extended.

An Additional Protocol to the Europe Agreement on preferential conditions for trade of certain fish and fishery products between the EC and Slovakia was signed in December 2001 but has yet to entered into force.

Formal negotiations on a Protocol to the Europe Agreement on Conformity Assessment and Acceptance of Industrial Products (PECA) continued over the reporting period as Slovakia further aligned its legislation with the acquis. These negotiations led to the initialling of an agreement between the Commission and the Slovak authorities in July 2002.

An Association Council Decision was adopted in November 2001 concerning rules for implementing the provisions on state aid. As regards the request from the Slovak authorities for transition to the second phase of the Europe Agreement, Slovakia has made good progress in removing the remaining obstacles, especially concerning requirements related to capital movements. The main remaining outstanding issues are rights of establishment, in particular for lawyers.

A new antidumping investigation was initiated on imports of hot rolled coils from Slovakia (among others) in December 2001. The investigation on imports of tube and pipe fittings (iron or steel) led to the imposition of definitive anti-dumping duties in August 2002.

In March 2002, in response to protectionist 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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