THE EUROPEAN FREE TRADE ASSOCIATION : THE EUROPEAN FREE TRADE ASSOCIATION Santiago, 9 April 2008 Geir Ulle, gul@efta.int Eivind Skjulestad, esk@efta.int


Outline: Outline What is EFTA EFTA’s Free Trade Relations EFTA – Chile Free Trade Agreement


Slide3: Member States Iceland Liechtenstein Norway Switzerland EFTA


Slide4: Main economic sectors Iceland: Fisheries, aluminium, pharmaceuticals, services Norway: Oil, natural gas, fisheries (incl. fish farming), machinery, shipbuilding, services (including maritime transport) Liechtenstein and Switzerland: Machinery, pharmaceuticals, chemicals, watchmaking, services (incl. financial services and tourism) EFTA on the world stage


Slide5: EFTA - a top rank trader World’s 12th biggest economy (2005) World’s 15th biggest trader (total trade value) Combined foreign direct investment outflow 64 billion US$ (2005) Among the world’s highest GPD per capita


Economic indicators 2006: Economic indicators 2006


Top EFTA companies: Top EFTA companies


Highly competitive economies with well educated work force: Highly competitive economies with well educated work force


EFTA-EU trade: >70% of EFTA total trade: EFTA-EU trade: >70% of EFTA total trade


Slide10: EFTA’s trade strategy has progressively evolved. Since the late 1990s the EFTA States have ‘gone global’ to maintain their competitive position in the world. EFTA has one of the world's largest networks of free trade partners, which secure EFTA economic operators free access to markets of around 440 million consumers. The main reason EFTA is a common vehicle for free trade negotiations is that, as a trade grouping, the EFTA countries carry more weight as economic players and are thus more interesting for potential trade partners.


Slide11: EFTA Free Trade Agreements 1992: Turkey, Israel 1999: Morocco, Palestinian Authority 2001: Mexico 2002: Macedonia, Croatia, Jordan 2003: Singapore 2004: Chile, Lebanon 2005: Tunisia, Republic of Korea 2006: SACU 2007: Egypt 2008: Canada Negotiations with: Colombia, GCC, Peru, Russia, Indonesia, India, Thailand


EFTA activities: EFTA activities Three Pillars EFTA Convention: legal basis of the organisation. Relationship between the EFTA States From «Stockholm» (1960) to «Vaduz» (2001) EEA Agreement: 3 EFTA States + European Union Relations with non-EU countries: ‘third countries’ Free trade agreements (FTA) Joint Declarations of cooperation (JDC)


Slide13: Motivators Secure market access for economic operators from EFTA countries and avoid discrimination on major markets Economic considerations: increase efficiency, promote competition, strengthen liberalisation Access to emerging markets (growth potential) EFTA trade policy


Slide14: Technical assistance Assist new partners in the implementation of the FTA with EFTA; Provide the necessary capacity to benefit from preferential access to the EFTA markets; Capacity-building, training, and transfer of know-how in trade-related matters; Focus on where EFTA can provide optimal expertise. EFTA technical assistance centres on: technical standards, intellectual property, fisheries, origin rules and general customs procedures, services, promotion of exports towards the EFTA States and organisational training vis-à-vis new multilateral trade bodies.


Slide15: Russia: Record of Understanding signed to examine closer trade and investment relations (Joint Russia-EFTA Study Group) India: Negotiations to enter into a Free Trade Agreement were launched in Davos, Switzerland on 26 January 2008 Indonesia: A Joint Study Group was established in November 2005 to examine the feasibility of a trade agreement between the EFTA States and Indonesia. Thailand: Free Trade Agreement between the EFTA States and Thailand is currently under negotiation. Gulf Co-operation Council (Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates): Negotiations ongoing Ongoing negotiations and talks


Slide16: EFTA – Chile Trade


Bacground for the EFTA – Chile FTA: Bacground for the EFTA – Chile FTA EFTA: Open economies depend on international trade Carry more weight when negotiate as a trade group Chile is an important trading partner for EFTA, e.g. for Norway and Iceland in the fish sector Avoid discrimination to other countries (EU) Chile: Open and competitive economy oriented towards free-trade Seeks to attain wide scope agreements Improved market access in potential markets All texts in agreement with the WTO


EFTA – Chile Trade: EFTA – Chile Trade


EFTA – Chile Trade : EFTA – Chile Trade EFTA’s imports and exports to Chile FTA


Swiss – Chile Trade: Swiss – Chile Trade


Norway – Chile Trade: Norway – Chile Trade


EFTA – Chile Trade: EFTA – Chile Trade Main EFTA imports from Chile (2007): Animal feed (for fish) Fruits and nuts Beverages, Wine Woodpulp Fish


EFTA – Chile Trade: EFTA – Chile Trade


EFTA – Chile Trade: EFTA – Chile Trade Main EFTA exports to Chile (2007): Machinery, mechanical appliances Pharmaceutical products Electrical Machinery Optical, medical instruments Clocks and watches


Slide25: EFTA – Chile Free Trade Agreement


EFTA Chile FTA: EFTA – Chile Free Trade Agreement Negotiated in 15 months, 6 rounds Signed on 26 June, 2003 Entered into force 1 December 2004 EFTA Chile FTA


EFTA Chile FTA: EFTA Chile FTA The Main objectives of the FTA Liberalization of trade in goods Liberalization of trade in services Increase investment opportunities Open the government procurement markets Protection of intellectual property rights Fair competition Framework for further cooperation


EFTA Chile FTA: EFTA Chile FTA Structure


EFTA Chile FTA: EFTA Chile FTA Trade in Goods Industrial goods EFTA grants free trade (zero duty) for all industrial products from the entry into force of the agreement. Chile has dismantling for certain products and has excluded a number of tariff lines to be reviewed. Fish and other marine products EFTA and Chile grants each other free trade from e.i.f. Agricultural goods Positive lists of tariff concessions (reductions or elimination)


EFTA Chile FTA: EFTA Chile FTA Trade in Goods – continue Trade disciplines Origin rules and Customs procedures Sanitary and Phytosanitary (SPS) measures Technical regulations Anti-dumping and countervailing measures Safeguards


EFTA Chile FTA: EFTA Chile FTA Trade in Services Based on GATS - WTO Positive lists of specific commitments of each Party Review the lists after three years for further liberalization Separate Annex on telecommunication services Inclusion of Financial Services to be reconsidered after two years


EFTA Chile FTA: EFTA Chile FTA Investment/ Establishment Improve the environment for investments and the establishment of companies between the Parties National treatment (a few exceptions)


EFTA Chile FTA: EFTA Chile FTA Competition Co-operation Notification and consultations Exchange of information Avoid distortion in trade with goods and services


EFTA Chile FTA: EFTA Chile FTA Government Procurement Non-discriminatory access to their procurement markets for: Goods Services, and Public works Applicable to: Central government level Sub-central government level, and Entities operating in the utility fields listed in the respective Annexes.


EFTA Chile FTA: EFTA Chile FTA Intellectual Property Rights (IPR) Sets a high standard Covering protection of areas such as: Patents Trademarks Copyrights In certain areas the commitments go beyond the WTO TRIPS Agreement and other international conventions and treaties


EFTA Chile FTA: EFTA Chile FTA Institutional Provisions Dynamic trade agreement Joint Committee Meets at least biannually Can discuss everything related to the Agreement Regular contact, formal and informal The second Joint Committee meeting was conducted yesterday Adopts Decisions updating the Agreement Avoid discrimination to other trading partners


EFTA Chile FTA: EFTA Chile FTA Dynamic Trade Agreement Several review clauses build in the Agreement Joint Committees every two years, Decisions Inclusion of Financial services Review commitments on services Potential elimination of Chilean reservation list on industrial goods Review of agricultural concessions Avoid discrimination to other trading partners


EFTA Chile FTA: EFTA Chile FTA Dispute settlement Avoidance or settlement of disputes Practical approach Direct expert contacts Joint Committee Dispute Settlement No cases !!


EFTA Chile FTA: EFTA Chile FTA WTO – CRTA (Committee on Regional Trade Agreements) The WTO Agreement sets out a set of rules for bilateral trade agreements Once an agreement has entered into force, it is examined by the CRTA. Full transparency and ensure compliance with the WTO rules EFTA – Chile Agreement was examined on 13 Sept. 07


EFTA Chile FTA: EFTA Chile FTA More information All texts of the Agreement, information, updates: EFTA’s web page, www.efta.int WTO’s examination of the Agreement, including questions and answers and report from the CRTA: WTO’s web page, www.wto.org


Slide41: Thank you for your attention. gul@efta.int esk@efta.int