CROATIA AND EU TO BEGIN FIRST ROUND OF TALKS ON SAA ON MONDAY

BRUSSELS, Dec 16 (Hina) - The first round of negotiations between Croatia and the European Union on a Stabilisation and Association Agreement (SAA) is to commence in Brussels on Monday, 18 December. The first round of the talks will probably last one day and the parties are expected to consider primarily issues which are likely to be quickly agreed on. Croatia's delegation is led by the chief negotiator with the EU, Neven Mimica, whereas the EU negotiators will be led by Catherine Day, the deputy director-general of the foreign affairs department within the European Commission. According to Croatian sources, Monday's talks should be focused on a political and security chapter of the SAA which stipulates conditions and manners of the regional cooperation and the political dialogue between Zagreb and the EU as well as between Croatia and other countries covered by the SAA process. Negotiators are to consider the institutionalised mechanisms for the implementation of all what is agreed upon. As regards the scope of economic issues, the negotiations will commence with easier topics such as the free flow of capital and subsequently more difficult issues such as the process of trade liberalisation and a period on transitional liberalisation (which will Croatia ask for) will be discussed. The latter issue as well as the adjustment of the national legislation, which is also a chapter of the document, are likely to be considered in the coming two rounds of negotiations. The SAA contains a chapter on programmes of the technical and financial assistance which the EU is going to offer to Croatia. Ahead of the start of the talks, the Croatian delegation is very optimistic asserting that it is very well prepared for this task and is expecting over 50 percent of the topics of the first round to be concluded. The European Commission is ready to proceed with the talks by the tempo and rhythm which suits best Zagreb. Croatians expect that three rounds of the negotiations to be held before the conclusion of the agreement. The next two rounds are to be held in February and in March or April, so that the SAA could be initialled during the Swedish chairmanship over the EU, which expires on 30 June 2001. According to journalists' speculations, after it is initialled, the SAA could relatively quickly be ratified by 15 EU member- countries and thus take effect in the end of 2001 when the two-year- long preferential treatment of Croatian goods imported to the EU ends. With the SAA becoming effective at that time, it will be needless to extend the preferential regime. At the moment, a level of the liberalisation for Croatian commodities' entry to the EU market is such that it makes possible for Croatia to export all of its goods, except wine, fish and beef, practically duty-free and without quantitative restrictions. The point of the negotiations on the economic topics is in establishing how fast Croatian market can open itself for EU products. The negotiations on the SAA officially began at the Zagreb Summit on 24 November with solemn statements given by Croatian Premier Ivica Racan and European Commission President Romano Prodi. This document is the first step in attempts to formalise EU- Croatian relations. According to its form, it is a kind of association contract similar to contracts on the associate membership of the current applicants for the EU membership and is intended to countries covered by the SAA process - Croatia, Bosnia- Herzegovina, Macedonia, Albania and the Federal Republic of Yugoslavia. To date only Macedonia initialled the SAA with the EU, while another three countries (Albania, Bosnia and the FRY) have not yet met conditions for launching negotiations on it. (hina) ms