The fifth Session of the Subcommittee on Agricultural Trade

Ljubljana, May 16, 2003

The Subcommittee focused on monitoring the development of trade in agricultural products among the CEFTA Parties and implementation of agricultural concessions provided under CEFTA, as well as implementation by the CEFTA Parties of agricultural policy measures. The Subcommittee also took note of the progress achieved in the field of further liberalization of trade in agricultural products. It will observe further steps towards further liberalization of trade in agricultural products. In this respect, the Subcommittee appreciated the progress achieved in this field. On the other hand, it expressed concern about the lack of progress in solving problems relating to safeguard measures applied by the CEFTA Parties.

In this respect, the Subcommittee recalled the following elements to be taken into account by the Parties when considering resorting to safeguard measures:

the introduction of the safeguard measure has to be justified (i.e. existence of serious disturbance on the market);
such measures have to be notified immediately to the other Parties concerned and to the Joint Committee;
the Parties concerned shall enter into consultations immediately to find an appropriate solution and
such measures have to be abolished immediately that the conditions causing market disturbances no longer justify their maintenance.

Background information

Market disturbances faced by certain CEFTA Parties arising from increased imports of agricultural products under the conditions established by CEFTA, and consequently, the introduction of safeguard measures, led to the setting up of the Subcommittee on Agricultural Trade by the Joint Committee's Decision in 1998, in accordance with Article 35, paragraph 5, of CEFTA with the aim of assisting it in the supervision and administration of the implementation of the relevant CEFTA provisions. The Subcommittee may prepare draft decisions, draft recommendations and proposals for the Joint Committee.

The Subcommittee shall deal with any issue of interest for the CEFTA Parties related to trade in agricultural products among them with regard to the implementation of CEFTA provisions, including inter alia:

Exchange of information and views on agricultural trade among the CEFTA countries, on agricultural policy measures related to trade, on the process of approximation to the EU Common Agricultural Policy;
Examination of the substance and functioning of the present concessions, barriers to agricultural trade and their impact on intra-CEFTA trade and ways of developing agricultural trade among the CEFTA countries;
Exploring and facilitating bilateral and multilateral consultations on safeguard measures, preparation of veterinary and phytosanitary agreements and certification in the field of agricultural products.

In the period from 1999 to 2000, the Subcommittee, on the basis of analysis, identified the reasons for market disturbances in trade among the CEFTA Parties, taking into account not only the rates of duties but also agricultural policy mechanisms such as direct payments, export subsidies and other support programmes. The results of the analysis confirmed a number of differences among the CEFTA countries. In particular, differences relate to the scope and scale of mutually granted concessions, measures and mechanisms of national policies in respect of agriculture (e.g. export subsidies, price support, direct payments). The Parties agreed that the existence of differences had given rise to serious imbalances in trade between the Parties, leading to tensions and to the necessity of temporary withdrawal of preferences. Furthermore, the analysis showed that further liberalization of agricultural products trade on a multilateral basis among the CEFTA Parties could not be achieved. In 2001, following the recommendation of the Subcommittee, the Joint Committee decided that interested Parties could start bilateral negotiations on modifications of existing bilateral protocols containing concessions in agricultural trade. It was confirmed that during such bilateral negotiations, all options to amend the respective protocols could be used (further liberalization as well as a reduction of concessions), provided that the Parties concerned were prepared to do so.

On that basis, further liberalization of trade in agricultural products was achieved between the Republic of Hungary on the one hand and the Czech Republic and the Slovak Republic on the other, on January 1, 2002 and July 15, 2003, as well as between the Republic of Slovenia on the one hand and the Czech Republic and the Slovak Republic on the other, on January 1, 2003.