RESTRICTEDWORLD TRADE
ORGANIZATIONWT/TPR/G/98
15 April 2002
(02-1862)
Trade Policy Review Body Original:  English
TRADE POLICY REVIEW
SLOVENIA
Report by the Government
Pursuant to the Agreement Establishing the Trade Policy Review Mechanism
(Annex 3 of the Marrakesh Agreement Establishing the World Trade
Organization), the policy statement by the Government of Slovenia is attached.
Note: This report is subject to restricted circulation and press embargo until the end of the meeting
of the Trade Policy Review Body on Slovenia.Slovenia WT/TPR/G/98
Page 3
CONTENTS
I. INTRODUCTION 4
(1) I NTRODUCTORY REMARKS ON THE CONCEPT OF THE REPORT 4
(2) A DECADE OF SUCCESSFUL TRANSITION 4
(3) T HE SIGNIFICANCE OF THE WTO FOR SLOVENIA 4
II. ECONOMIC AND TRADE ENVIRONMENT 4
(1) S OUND ECONOMIC FUNDAMENTALS 4
(2) I NTERNATIONAL TRADE SUSTAINS ECONOMIC GROWTH 5
(3) I NWARD AND OUTWARD INVESTMENT IS INCREASING 5
III. TRADE POLICY DEVELOPMENTS 2000-2001 6
(1) WTO 6
(2) R EGIONAL AGREEMENTS 6
(i) Europe agreement 6(ii) Central European Free Trade Agreement (CEFTA) 7(iii) Agreement between the EFTA States and Slovenia 7
(3) B
ILATERAL AGREEMENTS AND INITIATIVES 7
IV. FUTURE POLICY DIRECTIONS AND OBJECTIVES 7
(1) S TRIVING FOR ECONOMIC GROWTH , QUALITY OF LIFE AND SOCIAL WELFARE 7
V. SLOVENIA'S PERSPECTIVE OF THE POST-DOHA AGENDA 8
(1) A GRICULTURE 9
(2) G EOGRAPHICAL INDICATIONS 9
(3) S USTAINABLE DEVELOPMENT AND THE ENVIRONMENT 9
(4) S ERVICES 9
(5) I MPLEMENTATION 9
(6) T RADE AND DEVELOPMENT 9
(7) C OMPETITION , INVESTMENT , TRADE FACILITATION 10
(8) G OVERNMENT PROCUREMENT 10
(9) M INISTERIAL DECLARATION ON TRIPS AND PUBLIC HEALTH 10
(10) WTO R ULES 10
(11) M ARKET ACCESS FOR NON -AGRICULTURAL PRODUCTS 10
(12) I NTERNAL AND EXTERNAL TRANSPARENCY OF THE WTO SYSTEM 11WT/TPR/G/98 Trade Policy Review
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I. INTRODUCTION
(1) INTRODUCTORY REMARKS ON THE CONCEPT OF THE REPORT
1. The first Trade Policy Review of Slovenia is an opportunity to assess the achievements of a
decade of transition and an opportunity to examine the trends in further development of Slovenian
current economic and trade policies.
2. Whereas the Report by the Secretariat is a thorough analysis of Slovenia's trade related policy
developments in the past in the broadest sense, the Report by the Government of Slovenia is intended
to provide an up-date on Slovenian economic and trade environment, recent trade policy
developments, future policy directions and Slovenia’s perspective of the Post-Doha Agenda.
(2) A DECADE OF SUCCESSFUL TRANSITION
3. Following its declaration of independence in 1991 and its subsequent international
recognition in early 1992, Slovenia moved quickly to establish macroeconomic stability, launching a
systematic transformation of the economy and normalising relationship with the international
financial community.
4. The transition process was, in fact, twofold; a transition from a developed regional economy
into a developed national economy and a transition from a system of a semi-market socialist economyto a full market economy through ownership transformation.
5. In the period of ten years Slovenia established a functioning market economy, a relatively
stable macroeconomic environment and achieved the highest living standard among the transition
countries. After having lost about 20 per cent of its output, the economy has been recovering since
1993 and the GDP has been increasing annually by 3 to 4 per cent. This was achieved despite the
disruption of trade flows and despite the regional instability associated with the break-up of the
former Yugoslavia.
(3) T
HE SIGNIFICANCE OF THE WTO FOR SLOVENIA
6. Slovenia, as a small central European economy, needs firm, clear, consistent and predictable
multilateral trade rules, with equal application and implementation by all Members of the WTO. The
rules and mechanisms of the WTO are an important support and assurance of Slovenia's foreign trade
policy and provide trade-related standards of condu ct, for both Slovenia and its trading partners.
7. As other Members with small shares of the global economy and global trade, Slovenia
attaches great importance to the rules-based system of the WTO as a guarantor for a fair treatment of
its trade interests and rights.
II. ECONOMIC AND TRADE ENVIRONMENT
(1) SOUND ECONOMIC FUNDAMENTALS
8. The relatively successful adaptation of Slovenian economy to the challenges that it was facing
in the past decade, can be explained by the favourable picture of Slovenia’s competitive potential.
9. Slovenia’s operating environment is characterised by the availability of well experienced and
educated labour force, information technology infrastructure and satisfactory research capabilities.
Slovenia is also characterised by a good network of  health care, low percentage of population belowSlovenia WT/TPR/G/98
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poverty line, a low level of corruption, a relatively low serious crime rate and low prison population
which combined indicated it as a safe place to live in. The real growth of GDP was 4.6 per cent in
2000. In the same year the GDP per capita in purchasing power standards stood at 72 per cent of the
EU average. The estimated economic growth rate for 2001 is 3.7 per cent.
10. Inflation has been reduced to one-digit figures and the budget deficit is quite moderate. In
2001 the average inflation rate was 8.4 per cent compared to 8.9 per cent in 2000 and is expected todrop to 6.4 per cent in 2002. The average unemployment rate (ILO) has declined from 7.6 per cent in
1999 to 6.3 per cent in 2001. Government revenues are estimated at 43.3 per cent and expenditures at
44.8 per cent of GDP in 2001 respectively, with fiscal deficit at 1.4 per cent of GDP.
(2) I
NTERNATIONAL TRADE SUSTAINS ECONOMIC GROWTH
11. International  trade plays an important role in the economic development of Slovenia.  The
60 per cent share of exports of goods and services in GDP in 2001 demonstrates that Slovenia has a
distinctive export oriented economy.
12. Recognising the importance of liberalised trade, enhanced access to global markets and
reduced barriers to trade for the economic growth, Slovenia has concluded preferential trade
agreements with 33 countries. The trade with preferential partners represents approximately 85 percent of total trade. Slovenia believes that preferential trade agreements, which considerably improve
trade conditions for economic operators can be a complementary instrument to the multilateral trading
system.
13. In 2001, Slovenian exports of goods and services amounted to 9.3 billion USD and imports to
10.1 billion USD. Total trade in goods and services rose by 4.9 per cent in real terms compared to
2000. The growth of exports was 7.2 per cent and the growth of imports was 2.6 per cent. As a result
the trade deficit in 2001 narrowed by 517 million USD against 2000.
14. The EU remains the most important trading partner, representing 62 per cent of Slovenian
exports and 68 per cent of its imports, although the overall trade patterns are registering a shift in the
direction to the Russian and the former Yugoslav markets, where Slovenia increased both its market
share and trade surplus.
15. The trade with the CEFTA countries is constantly increasing and reached 8 per cent of
Slovenian exports and 9.5 per cent of its imports in 2001, while the trade with EFTA countries has
dropped significantly, following the accession of Austria, Finland and Sweden to the EU.
(3) I
NWARD AND OUTWARD INVESTMENT IS INCREASING
16. Inward and outward investment is gaining in importance in Slovenian economic performance
and prospects. In the first phase of the transition Slovenia attracted relatively low inflows of FDI,rarely surpassing the levels of 1 per cent of GDP.
17. Acceleration of the privatisation process, however, has brought positive results in increasing
FDI. At the end of 2001, FDI inflows accounted for 2.3 per cent of GDP, while they were still less
than 1 per cent of GDP at the end of 2000. This trend is likely to continue due to the process of
integration into the EU and privatisation of the financial sector and public utilities.
18. The outward investment reached 0.59 per cent of GDP in 2001. This process of intensified
outward investment of Slovenian enterprises is expected to continue throughout 2002 and 2003, asWT/TPR/G/98 Trade Policy Review
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business is expanding and privatisation has been accelerated in the target markets of south-east
Europe.
19. With the objective of further strengthening the promotion of FDI Slovenia adhered to the
OECD Declaration on International Investments and Multinational Enterprises in December 2001.
III. TRADE POLICY DEVELOPMENTS 2000-2001
(1) WTO
20. Slovenia endeavours to ensure an effective implementation of all WTO agreements. In 2001
Slovenia prepared several regular and periodic notifications, which were reviewed by various WTO
committees.
21. Slovenia is a member of Working Parties on the accession to the WTO of the Russian
Federation, Ukraine, Belarus, Republic of Macedonia, Bosnia and Herzegovina. Presently, Slovenia isin bilateral negotiations on goods and services with the Russian Federation and Ukraine.
22. In May 2001 the European Commission (EC) and the Government of Slovenia organised a
Ministerial Conference of EC and Candidate Countries on WTO trade issues in Ljubljana. The joint
declaration in support of the launch of a new comprehensive round of multilateral trade negotiations
was adopted.
23. In September 2001, Slovenia concluded its accession process to the Ministerial Declaration
on Trade in Information Technology Products (ITA) and became the 56th Participant of this
Declaration.
24. At the accession to the GATT Slovenia accepted the obligation to accede to the Agreement on
Government Procurement (GPA 1994). In September 2001, Slovenia submitted an official application
for accession to the GPA and the information on the government procurement system in Slovenia.
25. In 2001 Slovenia was actively involved in mandated negotiations on further liberalisation of
trade in services and agricultural products and in the preparations for the Fourth WTO Ministerial
Conference held in Doha. Slovenia supported the conclusions of the Conference and the launching of
a new round of multilateral trade negotiations.
26. In co-operation with the International Trade Centre WTO/UNCTAD Slovenia organised the
second Regional Business Roundtable for economies in transition on information technology at theend of November 2001, following the successful first roundtable in November 2000. The participants
agreed that regional co-operation in the area of information technology should continue.
(2) R
EGIONAL AGREEMENTS
(i) Europe agreement
27. Slovenia completed the process of abolishing custom duties on imports of industrial products
on 1 January 2001. Further concessions for processed agricultural products  has been applied since 1
November 2001, for wine since 1 January 2002 and for fish and fishery products since 1 March this
year. A second round of negotiations for trade liberalisation in more sensitive agricultural products
started in December 2001.Slovenia WT/TPR/G/98
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(ii) Central European Free Trade Agreement (CEFTA)
28. In trade with industrial products the customs duties were abolished among all CEFTA Parties
on 1 January 2001. At the Joint Committee meeting held in October 2001 it was agreed that the
negotiations on amendments to bilateral protocols of agricultural concessions could start between the
interested Parties. It has been decided that the negotiations on the accession of Croatia to CEFTA
could be launched.
(iii) Agreement between the EFTA States and Slovenia
29. On 1 January 2001, Slovenia completed a process of abolishing custom duties on imports of
industrial products. Trade in agricultural goods is regulated through separate bilateral agreements,
whereas processed agricultural products originating in EFTA States have the same treatment as those
originating in the EU.
(3) BILATERAL AGREEMENTS AND INITIATIVES
30. Slovenia signed Free Trade Agreements (FTAs) with all Baltic States. In 2001 – 2002 Joint
Committees were held with all partners. The Parties to the FTAs assessed the results of FTAs and
gave an overall positive evaluation of their role and potential in the future development of bilateral
trade relations.
31. Slovenia concluded FTAs with a majority of successor countries of the former Yugoslavia.
The FTA with Macedonia has been applied since September 1996 and with Croatia since January
1998. The FTA between Slovenia and Bosnia and Herzegovina was signed in October 2001 and has
been applied since 1 January 2002. It is an agreement which provides for a complete liberalisation of
trade in industrial and agricultural products between the Parties. Exploratory talks on free trade
agreement with Federal Republic of Yugoslavia  started in February 2002.
32. Slovenia also signed FTAs with Israel and Turkey, which have been applied since September
1998 and June 2000 respectively.
33. In the period 2000-2002 Slovenia signed bilateral agreements on economic co-operation with
Greece and FYR.  Bilateral agreements on the protection of investment were signed with Austria,
Italy, Malta, Russian Federation, Thailand, Bosnia and Herzegovina and FYR.
IV. FUTURE POLICY DIRECTIONS AND OBJECTIVES
(1) STRIVING FOR ECONOMIC GROWTH , QUALITY OF LIFE AND SOCIAL WELFARE
34. Slovenia is aiming at becoming an active and successful competitor in the global economy,
whose competitive strengths will be based on high value-added manufacturing and services, quality,
innovation and entrepreneurship. Greater international competitiveness, however, is not a goal in
itself. It ensures high economic growth, which in re turn ensures a strong and prosperous country with
high quality of life and social welfare.
35. The Government is aiming at achieving the above goals with a systematic combination of
structural reforms and short-term macroeconomic policy measures, thus encouraging long-term
development factors. The long-term strategic directions are encompassed in the "Strategy of
Economic Development in Slovenia", "Na tional Programme for the Adoption of the  Acquis " and
"National Development Programme 2001-2006".WT/TPR/G/98 Trade Policy Review
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36. Completion of the main structural reforms  is based on: (i) wide-ranging stimulation of
domestic and foreign investment; (ii) increased labour market flexibility; (iii) state aid system in the
direction of incentives for enhancing competitivene ss, promoting small and medium size enterprises
and transfer of modern technology; (iv) streamlining and greater transparency of administrative
procedures; (v) more effective use of public resources; (vi) increasing the role of the private sector on
a concession basis through an adapted allocation structure.
37. The Government will continue its efforts to re duce inflation rates. The targeted inflation rate
for 2002 is 6.4 per cent. The aim of the public finance policy is to preserve the share of revenues at
about 42 per cent of the GDP. Through a variety of measures, government spending are to be lower
and more effective. By keeping the government deficit within sustainable limits, public finance policy
will supplement the efforts of other policies striving for stabilisation.
38. Slovenia is promoting a pro-active industrial policy, which is being implemented through two
interrelated programmes. The "Programme for Entrepreneurship and Competitiveness Promotion
2001 – 2006" consists of horizontal measures to enhance productivity growth, competitiveness at the
company level, internationalisation of Slovenian en terprises, investment promotion, inter-company
co-operation and cluster development. The "Programme Supporting Structural Adjustment andRestructuring" of traditional industries is aiming at supporting selected industries in meeting single
market criteria and requirements.
39. The positive reorientation towards FDIs is reflected in the renewed "Programme for the
Promotion of FDI for the period 2001 – 2004".  This Programme identifies three basic priorities: (i)
lifting of administrative barriers to investment, (ii)  improvement of the supply of industrial sites and
(iii) creation of an internationally comparable system of non-refundable incentives.
40. The affirmation of Slovenia as a springboard for doing business in the successor countries of
the former Yugoslavia does provide an opportunity of increasing future FDI inflows into Slovenia as
south-east Europe is gradually integrating into the European integration process and Slovenia is
already an important investor in the region.
41. The Government has primarily a role of a "catalyst" in enhancing development process. State
policies are to maintain competitive and open markets. Responsibility of the structural adjustmentremains with the enterprises. State interventions ar e organised in integral approaches and carried out
in a cost effective manner.
42. Accession to the EU is perceived not only as a process of regional integration but also an
important step forward in the globalisation of Sloven ian economy.  Slovenia expects to complete the
accession negotiations by the end of 2002 and to become a full member of the EU in the year 2004.
V. SLOVENIA'S PERSPECTIVE OF THE POST-DOHA AGENDA
43. In the process of the preparation of the 4
th Ministerial Conference at Doha, Slovenia
supported a comprehensive and substantial approach to a new Work Programme in the WTO leading
to multilateral negotiations on key issues of world trade. Slovenia maintains the view that the new
round of negotiations is critical in order to maintain the momentum of a rules-based system. The newround – Doha Development Agenda - should provide benefits to developing countries and assist their
better integration into the multilateral trading system. In the post-Doha process the positions of
Slovenia on specific issues are as follows:Slovenia WT/TPR/G/98
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(1) A GRICULTURE
44. Slovenia supports the general objectives of the negotiations on agriculture, which is to move
towards a fair and market oriented trading system, and at the same time to recognise the work already
undertaken in this regard under Article 20 of the Agreement on Agriculture. Slovenia supports
comprehensive negotiations, which implies the discussions on all issues, including geographical
indications. This also implies the recognition of non-trade concerns, specifically, the multifunctionalrole of agriculture with regard to the envir onment, rural development, food safety, consumer
concerns, labelling and animal welfare. These non-trade concerns should be properly taken into
account and reflected in the negotiating modalities. Slovenia is prepared to meet its obligations in the
agreed timetable and supports the development of negotiating modalities for further commitments as
well as the conclusion of the negotiations and the round as a whole by 1 January 2005.
(2) G
EOGRAPHICAL INDICATIONS
45. Slovenia supports the development of a multilateral system of notification and registration of
geographical indications for wines and spirits. At the same time, it supports the work programme for
the development of additional protection of geographical indications which is understand as
preparations for the negotiations.
(3) SUSTAINABLE DEVELOPMENT AND THE ENVIRONMENT
46. Slovenia supports increased action in the WTO in favour of sustainable development and for
the protection of the environment, i.e. to clarify the relationship between trade and environment and
ensure that it is mutually supportive.
(4) SERVICES
47. Slovenia welcomes the fact that clear dates have been agreed for the launching of market
access negotiations on services. Slovenia expects that negotiations will bring new marketopportunities for Slovenian businesses as well as benefits for consumers worldwide.
(5) I
MPLEMENTATION
48. The 4th Ministerial Conference in Doha made a good progress on resolving implementation
issues raised by developing countries. Slovenia supports a further review of specific issues including
the review and negotiation of proposals on rebalancing or amendment of WTO agreements, while thiscan not lead to the undermining of the basic principles and rules.
(6) T
RADE AND DEVELOPMENT
49. As a functioning market economy in a phase of conclusion of its transition, Slovenia is aware
that globalisation is a challenge and an opportunity to reduce the differences in economic
development. It is prepared to participate in coherent and effective assistance to developing and tolow income transition economies for their more effective integration into world trade. Slovenia
appreciates and supports the WTO's initiatives trade-related technical assistance and capacity
building.
50. Slovenia is currently preparing legislation establishing duty-free imports from least developed
countries.WT/TPR/G/98 Trade Policy Review
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(7) COMPETITION , INVESTMENT , TRADE FACILITATION
51. For these three key areas, Slovenia welcomed the objectives set out by the Doha Declaration,
namely to launch negotiations by a certain date within a single undertaking, for a multilateral
framework on competition policies, on investment and on the simplification of customs procedures,
including measures on transit and rapid release of goods at the border.
52. The decision on competition reflects a realistic and progressive approach towards the
development of disciplines at a multilateral level. The Doha Declaration provides a unique
opportunity for negotiations on a balanced framework of rules on investment, based on principles of
non-discrimination and transparency, aimed at impr oving conditions for foreign direct investment.
Negotiations on trade facilitation are an important issue for Slovenia. They can bring concrete and
significant benefits for traders and in particular small and medium sized enterprises, for whichprocedural barriers are a bigger problem, and at the same time lead to improvements in the efficiency
of trade administration.
(8) G
OVERNMENT PROCUREMENT
53. A common set of rules on transparency in government procurement would facilitate bilateral
and regional agreements on government procurement and access to the Government ProcurementAgreement.
(9) M
INISTERIAL DECLARATION ON TRIPS AND PUBLIC HEALTH
54. The adoption of the document showed that the WTO is supportive of public health matters
and that intellectual property is part of the solution for public health objectives in relation to the
private sector interests.  It is an important instrument of substantive clarification, which, by
safeguarding the TRIPs Agreement, contains a cons ensus on the flexibility inherent in several key
provisions of that agreement.
(10) WTO R ULES
55. As it has already been pointed out, the area of rule-making and further development and
improvements of rules in the WTO is of prime interest to Slovenia. Through this process the WTO
should endeavour to resolve open and long outstandin g issues of important systemic interest, without
calling into question the basic principles of the WTO agreements.
56. Any future rules on trade defence would reduce the scope for abuse of trade instruments and
trade-related measures and ensure that partners would adopt the same standards. As trade will be
further liberalised the more will it be necessary to  search and find improvements for trade-related
measures taken by governments.
(11) MARKET ACCESS FOR NON -AGRICULTURAL PRODUCTS
57. The mandate from Doha for market access negotiations on non-agricultural products holds the
prospect of significant trade and growth gains for all WTO Members. The setting of the deadline for
determining the modalities is important. The choice of modality is a key issue for Slovenia because it
will dictate much of the negotiations and future work.Slovenia WT/TPR/G/98
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(12) INTERNAL AND EXTERNAL TRANSPARENCY OF THE WTO SYSTEM
58. Slovenia supports and believes that the process of including the participation of civil society
in the matters of globalisation, coherence, and WTO rule-making, should lead to greater transparency
and effectiveness of the organisation, and, if necessary to institutional improvements. Slovenia
supports the WTO Secretariat greater autonomy to launch an improved dialogue with civil society.
Slovenia attaches also great importance to the internal transparency in the WTO. Applied structuresand procedures of the intergovernmental consultations and negotiations should be inclusive that
would enable equal participation of all member countries while preserving effectiveness of the
process. This could be only achieved through open-ended meetings and consultations in the informal
and formal modes.
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