Concluding remarks by the Chairperson

This Trade Policy Review has allowed us all to understand and better appreciate the trade policies and practices of Bulgaria. Our dialogue has been thorough, positive and comprehensive, stimulated by the full and open engagement of the high-level Bulgarian delegation, led by Deputy Minister Radoslav Bozadzhiev.

Members praised Bulgaria for the significant macroeconomic and structural reforms implemented since its economic crisis in 1996. Membership of the WTO and the objective of accession to the EU had contributed to the process. Reforms implemented included trade and investment liberalization, privatization, and introduction of new legislation on bankruptcy and competition policy as well as in other trade-related fields. These had contributed to high rates of economic growth in the past five years. However, problems of widespread poverty and high levels of unemployment and the proportion of economic activity in the grey economy, remained to be tackled, although there were recent signs of improvement in social indicators. Members encouraged Bulgaria to continue consolidating its reforms.

Bulgaria's active participation in the multilateral trading system since its WTO accession in 1996 was acknowledged. All tariff lines were bound and average applied MFN rates had fallen from 17.6% in 1997 to 11.2% in 2003. Bulgaria had also undertaken GATS commitments with wide coverage of sectors and modes of supply. Furthermore, autonomous liberalization in goods and services had gone beyond Bulgaria's WTO commitments. However, some Members, observing that there remained a considerable margin between bound and applied tariff rates, stated that reduction of this margin would enhance the predictability of the tariff regime. Some Members also noted that there still remained high tariffs on particular products.

Regional trade liberalization, including the objective of EU membership, had contributed to Bulgaria's economic development. Some Members were of the view that, given Bulgaria's level of development and the significant levels of tariff liberalization already undertaken, it was inappropriate for Bulgaria to further reduce its applied MFN tariff rates. Others encouraged Bulgaria to reduce the gap between MFN and preferential rates in order to optimize net trade creation effects.

Bulgaria's legislative reforms in customs administration, contingency trade measures, government procurement, SPS and technical requirements, and intellectual property rights were commended. Issues were raised regarding the need for effective implementation and enforcement of these reforms.

On sectoral matters, the restoration of farm land to previous owners was commended, however the resulting structure of partitioned, small farms, and the lack of adequate complementary capital for investment, were seen as hindering the development of the sector and the reduction of poverty. Continuation of privatization reforms in energy and services areas was also encouraged.

Clarification was also sought by Members on the following issues:

• progress under the judiciary reform programme;

• tariff quota utilization;

• customs and trade facilitation provisions;

• internal taxation provisions;

• implementation of trade remedies;

• Government procurement procedures;

• foreign direct investment procedures and guidelines;

• regulatory measures for biotechnology products;

• energy price liberalization and State aids to the energy sector;

• a variety of intellectual property issues, including enforcement questions;

• trade in unbound services and the current round of negotiations;

• issues in the services sector, particularly financial and telecommunication services

Members expressed their appreciation for the oral and written responses provided by the Bulgarian delegation to these issues.

In conclusion, I believe that the Trade Policy Review Body is highly appreciative of the reform efforts undertaken by Bulgaria and their positive effects to date. I hope that Bulgaria has found the trade policy review process a positive exercise. Bulgaria participates actively in the Doha Development Agenda and Members encourage it to continue working constructively in the multilateral trading system.