Aims, Objectives and Extent

The establishment of a free trade area as the key objective of the Agreement, during the transition period, which ended on January 1, 2001, was accomplished, in accordance with the provisions of CEFTA and Article XXIV of GATT.

In addition, the objectives of the Agreement are:

• to promote through the expansion of trade the harmonious development of economic relations among the Parties and thus to foster in the Parties the advance of economic activity, the improvement of living and employment conditions, and increased productivity and financial stability,
• to provide fair conditions of competition for trade among the Parties,
• to contribute by removing barriers to trade, to the harmonious development and expansion of world trade.

The Agreement stipulates provisions on liberalization of trade in industrial and agricultural products.

Customs duties on imports of non-sensitive industrial products were abolished on the date of application of the Agreement. Customs duties on imports of sensitive industrial products were gradually reduced and were abolished on January 1, 2001 (except for used motor cars imported into Poland and Romania, for which customs duties were abolished on January 1, 2002). However, in some cases, customs duties had already been abolished within bilateral Free Trade Agreement(s) between some Parties prior to accession to CEFTA.

The system of concessions in trade in agricultural products comprises lists A, B, C and D. For products on List A, duties have been abolished. For products on List B, reduced customs duties have been applied. For products on Lists C and D, duties have been either reduced or abolished, within or without tariff quotas. Until the accession of Croatia to CEFTA, the same Lists A and B applied among all CEFTA Parties, whereas Lists C and D were agreed on a bilateral basis between two Parties.

The general provisions encompass rules of origin and co-operation in customs matters, internal taxation, general exceptions, security exceptions, state monopolies, payments, the rules of competition concerning undertakings, state aid, public procurement, protection of intellectual property, dumping, general safeguards, structural adjustments, balance of payments difficulties, re-export and serious shortage, evolutionary clause, trade relations governed by this and other Agreements, provisions on the Joint Committee and provisions on the validity of and withdrawal from the Agreement.

Accession of new Parties to CEFTA

In order to facilitate the accession of new Parties to CEFTA, the original Agreement was amended in 1995, by the introduction of Article 39a. This Article formally introduces two conditions for gaining the status of a new Party:

• the applicant must be a country situated in Europe
• the application must be accepted by all CEFTA Parties.

There are also two further criteria for accession to CEFTA, which were determined during meetings of the Prime Ministers of the CEFTA Parties. These are:

• membership of the World Trade Organization,
• having an Association Agreement with the EU.