European Union- Bulgaria Free Trade Agreement

 
 

European Union (EU):

The process of European integration was launched as early as May 1950, by the proposal of France to establish “the first concrete foundation of a European federation”. On April 8, 1965, the Treaty establishing a single Council of Ministers and a single Commission of the European Communities was signed in Brussels between the 6 original member countries of the three Communities: the European Coal and Steel Community, the European Economic Community, and the European Atomic Energy Community. After four waves of accessions after that (1973: Denmark, Ireland and the United Kingdom; 1981: Greece; 1986: Spain and Portugal; 1995: Austria, Finland and Sweden), the EU now has 15 Member States. It is also preparing for the accession of 13 eastern and southern European countries.

  

 

  

European Association Agreement between the EU and Bulgaria:

  The relations of Bulgaria and the European Union, European Community, now being built through the European Agreement establishing an association between the Republic of Bulgaria.

European Association Agreement with Bulgaria provides for the parties’ cooperation on a wide range of issues, mainly in the field of economy, the central component of the association is to achieve free movement of goods, persons, services and capital. There is no doubt that the priority in cooperation between Bulgaria and the European Union in the long term given to build closer economic relations until the entry of Bulgaria into the EU, as explicitly stated in the preamble of the European Association Agreement.

 European Free Trade Association (EFTA)- Bulgaria Free Trade Agreement:

The EFTA-Bulgaria free trade agreement was signed in Geneva, Switzerland on 29 March 1993. It entered into force on 1 Jul 1993.

Bulgaria underwent a political change in 1991 as the pro-Western Union of Democratic Forces defeated Bulgarian Socialist Party in the election. Since then, Bulgaria began the difficult transformation from a command economy to a market-oriented society. Soviet Union has greatly reduced economic cooperation with Bulgaria. The Bulgarian economy was therefore seriously damaged. The country then started to extend economic relations with other countries, especially European countries

 Bulgaria is an important trading partner for the EFTA states in Eastern Europe and an important market for its exports, with significant growth potential. Substantial benefits can be obtained by enhancing economic cooperation with Bulgaria.

Main objectives of the agreement:

(a) To develop economic relations between two parties via the expansion of reciprocal trade

(b) To provide fair conditions of competition for trade between the contracting parties

(c) To contribute to the development and enlargement of world trade through removing trade barriers

 The agreement consists of a total of 39 Articles, 14 Annexes, 6 Protocols, and 1 Declaration. The agreement contains the establishment of a free trade area between EFTA states and Bulgaria during a transitional period ending on 31 December 2002.

The agreement covers industrial products as well as fish and marine products. Trade in agricultural products is covered in three bilateral agricultural agreements negotiated between the respective EFTA states and Bulgaria.

According to the agreement, all customs duties charged on trade between EFTA states and Bulgaria in industrial goods and fish and other marine products should be progressively eliminated. Custom duties actually have been fully abolished as of 1 January 2002. Quantitative restrictions charged on trade between the two parties should also be eliminated on the date of entry into force of the agreement.

Besides the removal of trade barriers, the agreement includes provisions regarding trade-related disciplines such as rules of competition, protection of intellectual property, public procurement, state monopolies, state aid, and payments and transfers.

Bulgaria plays an important role on the EFTA’s trade in Eastern Europe. In particular, Bulgaria is the major export market for EFTA countries. Trade agreements are one way to encourage trade and international relations between countries. Free trade agreement promotes the innovation, competition and generates economic growth.