The signing of the Europe Association Agreement with Slovenia was held back for a long time by Italy which, under Berlusconi's former Government, refused to approve the agreement with Slovenia. The reason was a non-resolved problem of the restitution of real estate property claimed by Italians who left the territory of Istria (in current Slovenia) after the Second World War. Slovenia's Parliament initially refused to recognize the right to the real estate property. The first breakthrough came in late 1995 and was chiefly due to a somewhat changed Italian Policy under the government headed by Mr. Dini. On the eve of the Madrid Summit in December 1995 the Spanish presidency of the EU formulated a compromise which established the possibility for foreigners to gain the access to real estate property in Slovenia later, after a transition period of several years.

As a result, Italy agreed to the initiation of the Europe Agreement with Slovenia, but continued to block the formal signing until legal clarification of assurances offered by Slovenia. The new Italian Government started a new round of discussions with Slovenia earlier this year, during which Slovenia clarified its assurances concerning the opening of its country's real estate market to foreigners four years following the ratification of the Europe Agreement. The Italian government headed by Premier Prodi accepted the formulation, which avoids the mention Italian nationals rights to property in Slovenia directly and instead only mentions that foreigners who resided in the territory of the what is now Slovenia for at least three years in the past will have preferential access to Slovenia's real estate market four years after the ratification of the Europe Agreement.

Italy declared, just before the signing of the Europe Agreement, that the problem between Italy and Slovenia relating to the restitution of compensation of former Italian property in Istria is not yet resolved, but that it is now only a bilateral matter no longer involving the EU.

Immediately following the signing of the Europe Agreement, Slovenia started to participate in all of the "structural dialogue meetings" between the EU and the accession candidate countries of central and eastern Europe. The EU Commission will also be formally requested in July by the EU Council to prepare its Opinion on Slovenia's accession to the European Union.

The commercial provisions of the Europe Agreement provide for the gradual establishment of a free-trade area between the Union and Slovenia over the transition period of a maximum of 6 years. The provisions abolish the EU's quantitative restrictions on imports of products from Slovenia. The EU is also immediately abolishing import duties on most products imported from Slovenia. Imports of remaining products from Slovenia are also subject to zero import duty, but only within the limits of tariff quotas. The EU agreed to increase the tariff quotas regularly and fully liberalize imports of these products on 1 January 2000.

Slovenia has also abolished import duties on number of EU products and agreed to reduce the remaining import duties on more sensitive products each year so that zero import duty is applied as of 1 January 2000 (or at the beginning of year 2001 for certain more sensitive products).

Special rules will be applied for agricultural products, where the two partners negotiated reciprocal concessions. The partners agreed also in the sphere of trade with agricultural products to abolish quantitative restrictions.

The Europe Agreement contains provisions on dumping as well as a safe-guard clause which allows to take, by either party, the trade defense measures in the case of a surge in imports. The use of this safe-guard clause is limited to cases of "serious injury" or to "serious perturbations of the market ".

As we go to press, it yet not clear when the commercial provisions of the Europe Agreement will enter into force. The Interim Agreement is yet to be concluded, but it is expected that it would enter into force as early as October, but certainly still this year.

As of the date of entry into force of the Europe Agreement, the Slovenian enterprises will have access to public procurement contracts in the EU and under the same conditions as other EU companies. Slovenia initially grants access to public procurement contracts only to EU companies effectively established on Slovenia's territory, and will grant access to the public procurement to the remaining EU companies only at the end of a transition period of 6 years.

Slovenia becomes associate partner of WEU :

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