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