Title
EUROPE AGREEMENT establishing an association between the European Communities and their Member States, of the one part, and the Republic of Hungary, of the other part
Preamble
THE KINGDOM OF BELGIUM,
THE KINGDOM OF DENMARK,
THE FEDERAL REPUBLIC OF GERMANY,
THE HELLENIC REPUBLIC,
THE KINGDOM OF SPAIN,
THE FRENCH REPUBLIC,
IRELAND,
THE ITALIAN REPUBLIC,
THE GRAND DUCHY OF LUXEMBOURG,
THE KINGDOM OF THE NETHERLANDS,
THE PORTUGUESE REPUBLIC,
THE UNITED KINGDOM OF GREAT BRITAIN AND NORTHERN IRELAND,
Contracting Parties to the Treaty establishing the European Economic Community, the Treaty establishing the European Coal and Steel Community and the Treaty establishing the European Atomic Energy Community, hereinafter referred to as 'Member States`, and
The EUROPEAN ECONOMIC COMMUNITY, the EUROPEAN COAL AND STEEL COMMUNITY, the EUROPEAN ATOMIC ENERGY COMMUNITY, hereinafter referred to as 'the Community`,
of the one part, and
THE REPUBLIC OF HUNGARY, hereinafter referred to as 'Hungary`,
of the other part,
CONSIDERING the importance of the existing traditional links between the Community, its Member States and Hungary and the common values that they share;
RECOGNIZING that the Community and Hungary wish to strengthen these links and to establish close and lasting relations, based on mutual interests, which would facilitate the participation of Hungary in the process of European integration, thus strengthening and widening the relations established in the past notably by the Agreement on Trade and Commercial and Economic Cooperation, signed on 26 September 1988;
CONSIDERING the opportunities for a relationship of a new quality offered by the emergence of a new democracy in Hungary;
REAFFIRMING their commitment to pluralist democracy based on the rule of law, human rights and fundamental freedoms, a multiparty system involving free and democratic elections, to the principles of a market economy and to social justice, which constitute the basis for the association;
RECALLING the firm commitment of the Community and its Member States and of Hungary to the process of the Conference on Security and Cooperation in Europe (CSCE), including the full implementation of all provisions and principles therein, in particular the Helsinki Final Act, the concluding documents of the Madrid and Vienna follow-up meetings and the Charter of Paris for a new Europe;
CONSCIOUS of the importance of the association agreement in building the structures of a peaceful, prosperous and stable Europe, with the Community as one of its cornerstones;
BELIEVING that full implementation of the association will be facilitated by further actual progress in Hungary towards a market economy, inter alia in the light of the conclusions of the CSCE Bonn Conference, and genuine rapprochement of the Contracting Parties' economic systems;
DESIROUS of establishing regular political dialogue on bilateral and international issues of mutual interest, to enhance and complete associations;
TAKING ACCOUNT of the Community's wilingness to provide decisive support for the completion of the process towards a market economy in Hungary and to help it cope with the economic and social consequences of structural readjustment;
TAKING ACCOUNT furthermore of the Community's willingness to set up instruments of cooperation and economic, technical and financial assistance on a global and multiannual basis;
BEARING IN MIND the economic and social disparities between the Community and Hungary and thus recognizing that the objectives of this association should be reached through appropriate provisions of this Agreement;
CONVINCED that the Association Agreement will create a new climate for their economic relations and in particular for the development of trade and investment, instruments which are indispensable for economic restructuring and the technological modernization;
DESIROUS of establishing cultural cooperation and developing exchanges of information;
CONSIDERING Hungary's firm intention to seek full integration in the political, economic and security order of a new Europe;
HAVING IN MIND that the final objective of Hungary is to become a member of the Community and that this association, in the view of the Parties, will help to achieve this objective,
HAVE AGREED AS FOLLOWS:
Body
Article 1.
An association is hereby established between the Community and its Member States on the one part and Hungary on the other part. The objectives of this Association are:
- to provide an appropriate framework for the political dialogue between the Parties, allowing the development of close political relations,
- to establish gradually a free trade area between the Community and Hungary, covering substantially all trade between them,
- to make progress towards realizing between them the other economic freedoms on which the Community is based,
- to establish new rules, policies and practices as a basis for Hungary's integration into the Community,
- to promote economic, financial and cultural cooperation on the widest possible foundation,
- to support Hungary's efforts to develop its economy and to complete the conversion into a market economy,
- to set up institutions suitable to make the association effective.
Title I. POLITICAL DIALOGUE
Article 2.
A regular political dialogue shall be established between the Parties. It shall accompany and consolidate the rapprochement between the Parties, support the new political order in Hungary and contribute to the establishment of lasting links of solidarity and new forms of cooperation. The political dialogue and cooperation, based on shared values and aspirations:
- will facilitate Hungary's full integration into the community of democratic nations and progressive rapprochement with the Community. Political convergence and economic rapprochement provided for in this Agreement are closely related and mutually complementary parts of the association,
- will bring about better mutual understanding and an increasing convergence of positions on international issues, and in particular on those matters likely to have substantial effects on one or the other Party,
- will enable each Party to consider the position and interests of the other Party in their respective decision-making process,
- will contribute to the rapprochement of the Parties position on security issues and will enhance security and stability in the whole of Europe.
Article 3.
1. Consultations as appropriate shall be held between the Parties at the highest political level.
2. At ministerial level, political dialogue shall take place within the Association Council, which shall have the general responsibility for any matter the Parties might wish to put to it.
Article 4.
Other procedures and mechanisms for political dialogue shall be set up by the Parties by establishing appropriate contacts, exchanges and consultation, in particular in the following forms:
- meetings at the level of political directors between Hungarian officials, on the one hand, and the Presidency of the Council of the European Communities and the Commission of the European Communities, on the other,
- taking full advantage of all diplomatic channels between the parties, including appropriate contacts in the bilateral as well as the multilateral field, such as the United Nations, CSCE meetings and elsewhere,
- providing regular information to Hungary on European political cooperation which shall be reciprocated as appropriate,
- any other means which would contribute to consolidating, developing and stepping up political dialogue.
Article 5.
Political dialogue at parliamentary level shall take place within the Parliamentary Association Committee.
Title II. GENERAL PRINCIPLES
Article 6.
1. The Association includes a transition period of a maximum duration of 10 years divided into two successive stages, each in principle lasting five years. The first stage shall begin when this Agreement enters into force.
2. The Association Council shall proceed regularly to examine the application of this Agreement and of Hungary's accomplishments in the process leading to a market economy system.
3. During the course of the 12 months preceding the expiration of the first stage, the Association Council shall meet to decide the transition to the second stage as well as on any possible changes to be brought about as regards measures concerning the implementation of the provisions governing the second stage. In doing this, it will take into account the results of the examination mentioned in paragraph 2.
4. The two stages envisaged in paragraphs 1, 2 and 3 do not apply to Title III.
Title III. FREE MOVEMENT OF GOODS
Article 7.
1. The Community and Hungary shall gradually establish a free trade area in a transitional period lasting a maximum of 10 years starting from the entry into force of this Agreement in accordance with the provisions of this Agreement and in conformity with those of the General Agreement on Tariffs and Trade (GATT).
2. The combined nomenclature of goods shall be applied to the classification of goods for imports into the Community. The Hungarian customs tariff shall be applied to the classification of goods for imports into Hungary.
3. Subject to specific provisions in Chapters II and III, for each product the basic duty to which the successive reductions set out in this Agreement are to be applied shall be that actually applied erga omnes on the day preceding the date of entry into force of the Agreement.
4. If, after entry into force of this Agreement, any tariff reduction is applied on an erga omnes basis, in particular reductions resulting from the tariff agreement concluded as a result of the GATT Uruguay Round, such reduced duties shall replace the basic duties referred to in paragraph 3 as from the date when such reductions are applied.
5. The Community and Hungary shall communicate to each other their respective basic duties.
Chapter I. Industrial Products
Article 8.
1. The provisions of this Chapter shall apply to products originating in the Community and in Hungary listed in Chapters 25 to 97 of the combined nomenclature and of the Hungarian customs tariff with the exception of the products listed in Annex I.
2. The provisions of Articles 9 to 13 included do not apply to products mentioned in Articles 15 and 16.
Article 9.
1. Customs duties on imports applicable in the Community to products originating in Hungary other than those listed in Annexes IIa, IIb and III shall be abolished on the entry into force of this Agreement.
2. Customs duties on imports applicable in the Community to products originating in Hungary which are listed in Annex IIa shall be progressively abolished in accordance with the following timetable:
- on the date of entry into force of this Agreement each duty shall be reduced to 50 % of the basic duty,
- one year after the date of entry into force of this Agreement the remaining duties shall be eliminated.
Customs duties on imports applicable in the Community to products originating in Hungary listed in Annex IIb shall be progressively reduced, from the date of entry into force of this Agreement, by annual reductions of 20 % of the basic duty, so as to arrive at a total abolition by the end of the fourth year after the date of entry into force of this Agreement.
3. The products of Hungarian origin listed in Annex III shall benefit from a suspension of customs duties on imports within the limits of annual Community tariff quotas or ceilings increasing progressively in accordance with the conditions defined in the Annex. At the same time, customs duties on imports applicable to import quantities in excess of the quotas or ceilings provided for above shall be progressively reduced in accordance with the conditions set out in Annex III so as to arrive at a complete abolition of customs duties on imports of the products concerned at the end of the fifth year at the latest.
4. Quantitative restrictions on imports to the Community and measures having equivalent effect shall be abolished on the date of entry into force of this Agreement with regard to the products originating in Hungary.
Article 10.
1. Customs duties on imports applicable in Hungary to products originating in the Community which are listed in Annex IV shall be reduced progressively:
- upon entry into force of this Agreement: to two-thirds of the basic duty,
- on January 1, 1993: to one-third of the basic duty,
- on January 1, 1994: to zero.
2. Customs duties on imports applicable in Hungary to products originating in the Community not listed in Annexes IV and V shall be reduced progressively:
- on January 1, 1995: to two-thirds of the basic duty,
- on January 1, 1996: to one-third of the basic duty,
- on January 1, 1997: to zero.
3. Customs duties on imports applicable in Hungary to products originating in the Community which are listed in Annex V shall be reduced progressively:
- on January 1, 1995: to 90 % of the basic duty,
- on January 1, 1996: to 75 % of the basic duty,
- on January 1, 1997: to 60 % of the basic duty,
- on January 1, 1998: to 45 % of the basic duty,
- on January 1, 1999: to 30 % of the basic duty,
- on January 1, 2000: to 15 % of the basic duty,
- on January 1, 2001: to 0 % of the basic duty.
4. Quantitative restrictions on imports into Hungary and measures having an equivalent effect thereto of products originating in the Community as listed in Annex VIa shall be progressively abolished between January 1, 1995 and December 31, 2000 according to the timetable provided in that Annex. All other quantitative restrictions and measures having an equivalent effect thereto shall be abolished upon entry into force of this Agreement.
The Association Council shall periodically review the progress achieved in dismantling quantitative restrictions.
From the date of entry into force of this Agreement, Hungary shall open import ceilings for products originating in the Community listed in Annex VIb and on the conditions contained therein.
Article 11.
The provisions concerning the abolition of customs duties on imports shall also apply to customs duties of a fiscal nature.
Article 12.
The Community shall abolish in its imports from Hungary charges having an effect equivalent to customs duties on imports upon the entry into force of this Agreement.
Hungary shall abolish on its imports from the Community charges having an effect equivalent to customs duties on imports in accordance with the following timetable:
[TABLE]
Article 13.
The Community and Hungary shall progressively abolish between them at the latest by the end of the fifth year after entry into force of this Agreement any customs duties on exports and charges having equivalent effect as well as quantitative restrictions on exports and any measures having equivalent effect except those that might be required for the administration of international obligations.
Article 14.
Each Party declares its readiness to reduce its customs duties in trade with the other Party more rapidly than is provided for in Articles 9 and 10 if its general economic situation and the situation of the economic sector concerned so permit.
The Association Council may make recommendations to this effect.
Article 15.
Protocol No 1 lays down the arrangements applicable to the textile products referred to therein.
Article 16.
Protocol No 2 lays down the arrangements applicable to products covered by the Treaty establishing the European Coal and Steel Community.
Article 17.
1. The provisions of this Chapter do not preclude the retention by the Community of an agricultural component in the duties applicable to products listed in Annex VII in respect of products originating in Hungary.
2. The provisions of this Chapter do not preclude the introduction of an agricultural component by Hungary in the duties applicable to the products listed in Annex VII in respect of products originating in the Community.
Chapter II. Agriculture
Article 18.
1. The provisions of this Chapter shall apply to agricultural products originating in the Community and in Hungary.
2. The term 'agricultural products` means the products listed in Chapters 1 to 24 of the combined nomenclature and of the Hungarian customs tariff and the products listed in Annex I, but excluding fishery products as defined by Regulation (EEC) No 3687/91.
Article 19.
Protocol No 3 lays down the trade arrangements for processed agricultural products which are listed therein.
Article 20.
1. The Community shall abolish at the date of entry into force of this Agreement the quantitative restrictions on imports of agricultural products originating in Hungary maintained by virtue of Council Regulation (EEC) No 3420/83 in the form existing on the date of signature hereof.
2. The agricultural products originating in Hungary listed in Annex VIIIa or Annex VIIIb shall benefit, upon the date of entry into force of this Agreement, from the reduction of levies within the limit of Community quotas or from the reduction of customs duties upon the conditions provided in the same Annex.
3. Agricultural products listed in Annex IXa originating in the Community shall be imported into Hungary free of quantitative restrictions. Agricultural products originating in the Community listed in Annex IXb shall be free from quantitative restrictions up to the quantities set out in that Annex.
4. The Community and Hungary shall grant each other the concessions referred to in Annexes Xa, Xb, Xc, XIa, XIb, XIc and XId, on a harmonious and reciprocal basis, in accordance with the conditions laid down therein.
5. Taking account of the volume of trade in agricultural products between them, of their particular sensitivity, of the rules of the common agricultural policy of the Community and of the rules of agricultural policy of Hungary and of the consequences of the multilateral trade negotiations under the General Agreement on Tariffs and Trade, the Community and Hungary shall examine in the Association Council, product by product and on an orderly and reciprocal basis, the possibilities of granting each other further concessions.
Article 21.
Notwithstanding other provisions of this Agreement and in particular Article 30, if, given the particular sensitivity of the agricultural markets, imports of products originating in one Party, which are the subject of concessions granted in Article 20, cause serious disturbance to the markets in the other Party, both Parties shall enter into consultations immediately to find an appropriate solution. Pending such solution, the Party concerned may take the measures it deems necessary.
Chapter III. Fisheries
Article 22.
The provisions of this Chapter shall apply to fishery products originating in the Community and in Hungary, which are covered by Regulation (EEC) No 3687/91 on the common organization of the market in the sector of fishery products.
Article 23.
The provisions of Article 20 (5) shall apply mutatis mutandis to fishery products.
Chapter IV. Common Provisions
Article 24.
The provisions of this Chapter shall apply to trade in all products except where otherwise provided herein or in Protocols Nos 1, 2 and 3.