Trade Policy Forum
Summary

Background

Trade liberalisation has been identified as key area of the trade initiative of the SP process from the very beginning. Long term benefits of liberalisation of trade are undisputed even though implementation takes time and requires political will as it may cause temporary losses in terms of revenue income and social cohesion.

The Working Group on Trade Liberalisation and Facilitation of the WT II (Trade WG) was set up in January 2000 under the chairmanship of FYR of Macedonia dedicating its efforts to promote and support actions regarding trade liberalisation and facilitation in a regional context.

The chair of WT II proposed at the Istanbul working table meeting in October 2000 to give an impulse to the process by calling a ministerial meeting by January this year in order to agree on early and concrete steps in this field.

As a result the Geneva Trade Policy Forum took place and included a ministerial meeting. The Forum was prepared and organised in the framework of the Trade WG.

The objective of the two day Forum was: (1) to review studies carried out within the framework of the Trade WG; (2) to invite the trade ministers of the countries of the region to agree on specific measures of regional character on trade liberalisation.

The Trade Policy Forum

The Stability Pact Working Group on Trade Liberalisation and Facilitation concluded its first year of activities with a two-day Trade Policy Forum in Geneva on 17 and 18 January. Participants at the event included ministers, vice-ministers, state secretaries and senior officials from Albania, Bosnia and Herzegovina, Bulgaria, Croatia, FR Yugoslavia, FRY/Montenegro, Macedonia Romania. Representatives from the European Commission, the World Bank, UNECE, and WTO, as well as officials from France, Hungary, the Netherlands, Slovenia, Switzerland, Turkey, the United Kingdom and the USA participated in the event.

The event highlighted the commitment of the SEE countries to trade liberalisation.

The ministers and high level officials of the SEE countries reaffirmed their governmentsí determination to take concrete actions to liberalise trade and open up their markets.

The event was organised by the Secretariat of the Working Group with the assistance of TDI Group, Ireland and was sponsored by the UK Department for International Development (DfID) as part of its programme of assistance to the Working Group.

The first day of the Forum, 17 January was devoted to a technical discussion on a number of trade issues in South-Eastern Europe. In particular, the Forum discussed the findings and recommendations of two studies commissioned by the Working Group in 2000. The first of these, a study on

Free Trade Agreements in South-Eastern Europe by Professor Patrick Messerlin and Jean-Christophe Maur of Groupe díEconomie Mondiale, Paris generated a lot of debate on the approach that countries should adopt when negotiating free trade agreements. The second study on

Non-Tariff Barriers to Trade in the western Balkan countries by Dr Hanspeter Tsch”ni and Dr Laurence Widermer of the Office of A. Dunkel, Switzerland was welcomed by the participants as providing new knowledge on this important area. Both of the studies were very well received and deeply discussed by the participants. These studies would serve also as a basis for future actions in the region and pave the way for the commitments to be taken in the next months.

The ministerial meeting of the Forum took place on 18 January and was co-chaired by the Chairman of the Stability Pact Working Table II, Mr Fabrizo Saccomanni and the Macedonian Minister of Economy, Mr Besnik Fetai.

Interventions of the ministerial meeting reflected a common will to move forward the trade initiative of the Stability Pact. The Special Co-ordinator of the Stability Pact Mr Bodo Hombach welcomed the countriesí commitment to trade reforms and underlined the importance of regional co-operation. Mr Mats Ringborg of the Swedish Ministry for Foreign Affairs on behalf of the EU Presidency emphasised the importance of trade for further economic integration into European structures and the EUís support for this including the launch of the Stabilisation and Association Process and the new assistance programme ñ CARDS.

The European Commission represented by Mr Roderick Abbot, Deputy Director General DG Trade echoed the importance of integrating into European structures and ensuring compliance with EU and WTO principles. Mr Abbot pointed out that trade liberalisation would bring pain as well as gain and advised the countries to carefully prioritise the actions they should take over the coming years. The message of the EC representative made it clear that regional co-operation will facilitate the integration process. He drew the attention to the EC guidance paper worked out for the countries of the region on how to manage trade policies toward third countries in the context of the SAA agreements.

The Forum Rapporteur, Mr Per Magnus Wijkman, provided a summary of the discussions from day one of the Forum before the various Stability Pact countries highlighted their individual positions on trade liberalisation and their support for this process. These presentations were followed by statements of support from representatives of multilateral and bilateral organisations. The World Bank representative Mr Costas Michalopoulos urged the countries to agree on a carefully selected but meaningful set of trade liberalisation measures. The WTO and the UNECE also highlighted the need for co-operation among the countries and compliance with international agreements.

The meeting closed with a unanimous endorsement of a Statement of Intent on Trade Liberalisation and Facilitation by the seven beneficiary countries of the Stability Pact. In the Statement, the Governments agree to ìexert their best efforts to prepare a Memorandum of Understanding, covering a series of specific actions to liberalise and facilitate trade.

The Working Group on Liberalisation and Facilitation of WT II was charged with preparing the Memorandum of Understanding. The countries also agreed to strengthen the capacity of the Trade Working Group by nominating senior trade policy officials to it.

Working Group Meeting

The fifth meeting of the Working Group on Trade Liberalisation and Facilitation was held on January 19.

The Trade WG discussed many implications of the Trade Policy Forum. It was agreed to create a dedicated core group of permanent members of the Trade WG consisting of senior trade policy officials from the Stability Pact counties and from relevant multilateral and bilateral organisations. The group will oversee the development and implementation of the work programme for 2001.

One of the key tasks for the Trade WG in 2001 will be the preparation of the Memorandum of Understanding and an intensive series of meetings has been agreed for the next six months. Proposal of Croatia to organise the first meeting in Zagreb was accepted and welcomed by the participants.

Other issues discussed at the meeting included the role of the Trade WG in relation to trade facilitation projects and identification of funding for trade-related projects put forward by Working Group members. The importance of the balance between the measures of trade liberalisation and trade facilitation was emphasised by several delegates.

Specific results

• A Statement of Intent endorsed by Ministers and other high level trade officials of all countries of the SEE region underlined the common political will of the region to liberalise trade.

• A Memorandum of Understanding is to be agreed on before the end of June this year on a series of specific actions. The future commitments are going to aim at reducing tariffs and eliminating non-tariff-barriers at a possible widest range within a specific timeframe.

• The ministers have agreed to delegate senior trade policy officials to reinforce the Working Group on Trade Liberalisation and Facilitation.

• The first session of Trade Working Group aiming at the elaboration of the MoU will be held in Zagreb on the 1st and 2nd of March this year with the participation of the designated senior trade policy officials as permanent members of the group. It will be followed by further sessions until the end of June in order to determine the scope and scale of the MoU to be agreed by the end of June.

• A dialogue with the donors has been initiated with the co-ordination of the SP office to ensure the necessary technical assistance and financial support for the Trade WG in the course of the elaboration of the MoU and the monitoring of its implementation.