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Cablegate: Croatia Seeks "Breathing Space" In

This record is a partial extract of the original cable. The full text of the original cable is not available.

UNCLAS ZAGREB 000350

SIPDIS

STATE PASS USTR

E.O. 12958: N/A
TAGS: ETRD HR WTO
SUBJECT: CROATIA SEEKS "BREATHING SPACE" IN
NON-AGRICULTURAL MARKET ACCESS NEGOTIATIONS AS NEWLY
ACCEDING MEMBER OF WTO

REF: A. 2002 STATE 243208

B. 2003 STATE 19378

1. IN RESPONSE TO OUR DEMARCHE LAST FALL (REF A), THE
MINISTRY OF ECONOMY SHARED WITH US THE STATEMENT THAT IT
SUBMITTED TO THE NEGOTIATING GROUP ON MARKET ACCESS (NOVEMBER
UNCLASSIFIED

PAGE 02 ZAGREB 00350 141058Z
4-6, 2002), IN WHICH THE GOC ARGUED THAT CROATIA, ALONG WITH
OTHER COUNTRIES WHICH HAD NEWLY ACCEDED TO THE WTO, NEEDED
SOME "BREATHING ROOM" BEFORE IT COULD BE EXPECTED TO TAKE ON
ANY ADDITIONAL REDUCTIONS IN TARIFFS.

2. REF B FOLLOW-UP WAS FORWARDED TO OLGICA SPEVEC, ASSISTANT
MINISTER FOR TRADE AT THE MINISTRY OF ECONOMY ON JANUARY
27TH, BUT SHE WAS UNABLE TO MEET WITH US UNTIL FEBRUARY 11.
SPEVEC AND HER ASSISTANT FOR INTERNATIONAL TRADE, VESNA
FOCHT, REITERATED THE POSITION LAID OUT IN CROATIA'S NOVEMBER
STATEMENT. SPEVEC REPORTED THAT IN THE PREVIOUS WEEK'S
MEETINGS IN GENEVA, CROATIA HAD SPOKEN ON BEHALF OF A GROUP
OF "NEWLY-ACCEDED" COUNTRIES, INCLUDING OTHER CENTRAL AND
EASTERN EUROPEAN COUNTRIES AND JORDAN. THESE COUNTRIES
AGREED THAT THEY WERE BUSY ADJUSTING TO THE VERY AMBITIOUS
COMMITMENTS THEY HAD TAKEN ON AND WERE NOT READY TO MOVE
IMMEDIATELY TO THE VIRTUAL ELIMINATION OF TARIFFS.

3. SPEVEC ADDED THAT IN THE CASE OF CROATIA, IT WAS ALREADY
AMONG THE MOST OPEN COUNTRIES IN THE WORLD, IN TERMS OF ITS
COMPLETE BINDING OF TARIFF LEVELS. ITS AVERAGE BOUND RATE
TARIFFS LEVEL FOR NON-AGRICULTURAL PRODUCTS WAS 5 PERCENT,
WITH OVER 99 PERCENT OF ITS TARIFFS BOUND BELOW OR AT 14
PERCENT. IT WAS TIME FOR THE REST OF THE WORLD TO CATCH UP
WITH CROATIA. SHE ALSO NOTED THAT MOST OF CROATIA'S
NEIGHBORS, ASIDE FROM SLOVAKIA AND THE CZECH REPUBLIC, HAD
HIGHER TARIFFS. WHILE SHE RECOGNIZED THE MANY BENEFITS THAT
LOWER TARIFFS HAD BROUGHT CROATIA (WHICH IS EXPERIENCING A
CREDIT AND CONSUMER-LED BOOMLET), THERE WAS ALSO A CONCERN
ABOUT BALLOONING TRADE DEFICITS.
ROSSIN
UNCLASSIFIED

PAGE 03 ZAGREB 00350 141058Z

UNCLASSIFIED

>

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