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Cablegate: Meeting with Montenegro Deputy Prime Minister Djurovic To

R 050904Z DEC 08
FM USMISSION GENEVA
TO SECSTATE WASHDC 7656
INFO AMEMBASSY PODGORICA
AMEMBASSY BELGRADE
USEU BRUSSELS
USDOC WASHDC

UNCLAS GENEVA 001055


STATE FOR EUR/SCE, EUR/ACE, EB/TPP/MTA
STATE PASS FOR USAID
USTR FOR MORROW, KLEIN
USDOC FOR 4232/ITA/MAC/EUR
USDOC FOR CLDP/SKERR

E.O. 12958: N/A
TAGS: ETRD ECON EINV WTRO USTR MW
SUBJECT: MEETING WITH MONTENEGRO DEPUTY PRIME MINISTER DJUROVIC TO
DISCUSS FINAL STEPS REQUIRED FOR WTO ACCESSION

Summary

Bilateral Meeting with Montenegro, November 24, 2008.

1. Summary: USTR Senior Director for WTO Accessions, Cecilia
Klein, and USTR/Geneva representatives Bob Kasper and Nancy Omelko
met Montenegro Deputy Prime Minister Gordana Djurovic and
Montenegrin delegation on 24 November 2008. The bilateral talks
focused on resolving remaining issues in the WTO accession
negotiations, notably in the areas of intellectual property rights,
customs, technical barriers to trade, SPS and state-owned
enterprises. The discussions were constructive and largely
successful. Both sides have homework assignments, but the agreed
objective is to provide all necessary inputs to the WTO Secretariat
in time to allow for the circulation of a revised draft Working
Party report in mid-December. End summary.

2. Montenegro is in the final stage of its accession process. We
believe that all bilateral market access agreements have been
concluded, and that the WTO Secretariat is currently attempting to
consolidate them. The bilateral market access agreement with
Montenegro was concluded "in principle" in October, and Montenegro
is producing the bilateral offers that will be signed and submitted
to the WTO Secretariat to complete the consolidation. We also
expect that Montenegro's offer on agricultural supports and
subsidies will be acceptable to Working Party members. The
legislative implementation of WTO rules is mostly complete. The
remaining outstanding implementation issues include the WTO
compatibility of the existing laws on Trademarks and Copyrights,
which date from the State Union with Serbia. While Montenegro plans
to enact all remaining legislative drafts soon, these two IPR laws
will only be revised during 2009. U.S. IPR experts are reviewing
the existing laws to ensure that they adequately implement the TRIPS
Agreement until Montenegro's own legislation is enacted. Most of
the remaining questions and unresolved issues are in the revised
draft WP report and involve either clarifications on key issues
(Trading Rights, State-owned Enterprises and Insurance Services);
the need for additional information (on customs valuation, TBT, and
SPS); or the need to verify outstanding legislation in the area of
customs valuation, trading rights, and intellectual property rights
(IPR) protection to ensure WTO conformity.

3. Working through the issues identified in the U.S. comments,
Montenegro agreed to the following improvements in the WP report:

(A) Additional descriptive material on State-owned or -controlled
enterprises identified during WP deliberations; and clarification
that all State enterprises are subject to the obligations of GATT
Article XVII on use of "commercial considerations," without
prejudice as to whether these will be notified to the WTO as
enterprises with special or exclusive privileges;

(B) Clarification that a registered foreign firm may import and
export whether or not it is established in Montenegro;

(C) Confirmation that fees for import licenses vary from Ministry
to Ministry and are consistent with GATT Article VIII;

(D) Confirmation of the extent and WTO compatibility of
Montenegro's new customs fees;

(E) Confirmation in the WP report text that Montenegro is joining
both the Information Technology Agreement and the Agreement on Trade
in Civil Aircraft;

(F) Changes in excise tax rates to ensure that the rates on all
types of still fruit wines are the same for all fruit;

(G) Acceptance of revised commitment paragraphs on Quantitative
Restrictions and Licensing, Customs Valuation, Trade Remedies,
export restrictions, TBT, and SPS;

(H) Confirmation that all export duties and the licensing
requirements on ferrous and nonferrous scrap had been eliminated;

(I) Confirmation that two identified subsidy programs had been
eliminated or would be by the date of accession;

(J) Confirmation that export promotion language would be removed
from the criteria for establishment in the Free Zones, and that no
rule of origin would exempt sales from the zone into the rest of
Montenegro from reapplication of tariffs and taxes exempted on
inputs of goods produced in the Zones;

(K) Clarification that Montenegro's duty drawback scheme does not


permit rebates of tariff duties in excess of the original charges on
the imported goods;

(L) Confirmation on various TBT issues and new text on the enquiry
points;

(M) Additional descriptive material on the acceptance of Codex
Alimentarious and IPPC.

(N) Edits to the text in the SPS and Services sections; and,

(O) Confirmation that the Amended Law on Geographical Indications
has fixed identified deficiencies.

4. Next Steps: The improvements listed above will be communicated
directly to the WTO Secretariat, which will incorporate them into a
revised draft report on the Working Party. Montenegro will provide
bilaterally to the United States (1) additional information on its
Customs Valuation legislation related to its WTO consistency and (2)
remaining pieces of legislation for WTO implementation (Customs Laws
and regulations, Law on Trade, and the remaining IPR legislation),
so that remaining issues can be resolved. The United States will
review and verify (a) the remaining legislative texts and (b) the
consolidated draft Schedules when they have been produced, as well
as (c) confirm the acceptability of Montenegro's improvements and
additional information. We expect to be able to verify and sign the
bilateral market access deal in both goods and services with
Montenegro by mid-December, to allow circulation of schedules for
verification before winter break. U.S. review and acceptance of the
revised draft Working Party text and draft Protocol of accession
will be crucial to meeting the timetable Montenegro has set to
complete the accession process.

5. WTO Plans: It is likely that the new draft WP report will be
circulated to WTO members prior to the December-January holiday
break, along with the consolidated schedules. The Secretariat will
ask for final comments and verification of the schedules and
schedule an informal review meeting for mid January to address any
outstanding issues in the draft report or schedules. If all goes
well, the plan is for the accession package to be adopted formally
at a Working Party meeting in late January, in time for the package
to be transmitted to the February 5 General Council for final WTO
approval and Montenegro's signature. After ratification, Montenegro
will become a WTO Member 30 days after the instrument of
ratification is transmitted to the WTO Director General. Deputy
Prime Minister Djurovic believes Montenegro will be a WTO member in
late April or early May.

Allgeier

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