Commission Report 2002 (Hungary)

Recent developments under the Europe Agreement, including bilateral trade

Hungary continued to implement the Europe Agreement and has contributed to the smooth functioning of the various joint institutions.

The Association Committee held its tenth meeting in May 2002, when it reviewed progress in Hungary`s preparations for accession, notably in the light of the Accession Partnership priorities, and in bilateral relations under the Europe Agreement. The system of sub-committees continued to function well as a forum for technical discussions. The Joint Parliamentary Committee, comprising representatives of the Hungarian and European Parliaments, held its 17th meeting in February 2002 in Budapest.

In general, trade relations between the European Community and Hungary remain good and trade continues to expand. In 2001, EC imports from Hungary amounted to EUR 24.1 billion, and EC exports to Hungary to EUR 23.6 billion. The EC accounts for about 74% of Hungary`s total exports and 58% of its imports. In 2001, the main product groups imported from the EC were machinery, followed by transport equipment and chemical products. Hungary`s main exports to the EC for the same period were machinery, followed by transport equipment and textiles.

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 87% of EC agricultural imports from Hungary and 98% of EC agricultural exports to Hungary 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 April 2002. The result of this further round, applicable as of July 2002, 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. This new agreement also includes a commitment by the parties to remove export refunds for certain sectors.

In April 2002 the Association Council decided to further liberalise trade in processed agricultural products between the EC and Hungary, essentially through the mutual reduction of custom duties. The decisions came into force retroactively from January 2002.

An Additional Protocol to the Europe Agreement entered into force in January 2002. It provides for preferential conditions for trade between the EC and Hungary of certain fish and fishery products.

An anti-dumping proceeding concerning imports of hot-rolled coils originating, inter alia, in Hungary was initiated in December 2001.

In March 2002, in response to protectionist measures 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.

In September 2002 Hungary gave its approval to the Annex to the Protocol to the Europe Agreement on conformity Assessment and Acceptance of Industrial Products (PECA) on Good Laboratory Practice. Implementation will help remove barriers to the functioning of the internal market, as there will now be mutual recognition of good laboratory practice between Hungary and the Member States. Amended antitrust implementing rules under the Europe Agreement were adopted by the Association Council and entered into force in Hungary in April 2002.

Hungary has adopted legislation in July 2002 to bring motorway construction under standard public procurement rules. The alignment of Hungarian legislation with EC rules on public procurement in general is expected to be completed in the course of this year.

---

Next: Accession Partnership
Up: b) Relations between the European
Previous: b) Relations between the European