Title
INTERIM AGREEMENT BETWEEN THE EFTA STATES AND THE PLO FOR THE BENEFIT OF THE PALESTINIAN AUTHORITY
Preamble
The Republic of Iceland, the Principality of Liechtenstein, the Kingdom of Norway, the Swiss Confederation (hereinafter referred to as the EFTA States)
and
the PLO for the benefit of the Palestinian Authority (hereinafter referred to as the Palestinian Authority),
1. Considering the importance of the links existing between the EFTA States and the Palestinian Authority, in particular the Declaration signed in Geneva in December 1996, and recognising the common wish to strengthen these links, thus establishing close and lasting relations,
2. Recalling their intention to participate actively in the process of economic integration in the Euro-Mediterranean region, and expressing their preparedness to cooperate in seeking ways and means to strengthen this process,
3. Reaffirming their commitment to pluralistic democracy based on the rule of law, human rights, including rights of persons belonging to minorities, and fundamental freedoms, and recalling the principles of the United Nations Charter,
4. Considering the importance of the Middle East peace process leading to a permanent settlement based on Security Council Resolutions 242 and 338,
5. Considering the rights and obligations under the international agreements which they have signed and the importance of the Oslo agreements,
6. Desiring to create favourable conditions for the development and diversification of trade between them and for the promotion of commercial and economic co-operation in areas of common interest on the basis of equality, mutual benefit, non-discrimination and international law,
7. Recalling the membership of the EFTA States in the World Trade Organization (WTO) and their commitment to comply with the rights and obligations arising from the Agreement establishing the WTO, including the principles of most-favoured-nation and of national treatment, and also recalling the objective of the Palestinian Authority of becoming a Member of the WTO,
8. Resolved to contribute to the strengthening of the multilateral trading system and to develop their relations towards free trade in compliance with WTO rules,
9. Considering that no provision of this Agreement may be interpreted as exempting the Parties to this Agreement from their obligations under other international agreements,
10. Determined to implement this Agreement with the objective to preserve and protect the environment and to ensure an optimal use of natural resources in accordance with the principle of sustainable development,
11. Firmly convinced that this Agreement will contribute to the creation of an enlarged and harmonious free trade area between European and Mediterranean partners, thus constituting an important contribution to Euro-Mediterranean integration,
12. Considering the difference in economic and social development existing between the Parties and the need to intensify existing efforts to promote economic and social development in the West Bank and the Gaza Strip,
13. Declaring their readiness to examine the possibility of developing and deepening their economic relations in order to extend them to fields not covered by this Agreement, in accordance with their respective powers,
14. Convinced that this Agreement provides an appropriate framework for exchange of information and views on economic developments and trade as well as related matters,
15. Convinced that this Agreement will create favourable conditions to strengthen both bilateral and multilateral relations between the Parties in the economic field, in particular concerning trade and investment,
16. Recognising that this Agreement and its implementation should be reviewed in light of further developments in international economic relations and the Middle East peace process.
17. HAVE DECIDED, in pursuit of the above, to conclude the following interim Agreement (hereinafter called this Agreement):
Body
Article 1. Objectives
1. The EFTA States and the Palestinian Authority shall establish a free trade area, in accordance with the provisions of this Agreement.
2. The objectives of this Agreement, which is based on trade relations between market economies and on the respect of democratic principles and human rights, are:
(a) to promote, through the expansion of reciprocal trade, the harmonious development of the economic relations between the EFTA States and the Palestinian Authority and thus to foster in the EFTA States and in the West Bank and the Gaza Strip the advance of economic activity, the improvement of living and employment conditions, and increased productivity and financial stability;
(b) to provide fair conditions of competition for trade between the Parties to this Agreement and to facilitate trade between the constituent territories and not to raise barriers to the trade of other trading partners with them;
(c) to contribute in this way, by the removal of barriers to trade, to Euro-Mediterranean economic integration and to the harmonious development and expansion of world trade.
Article 2. Scope
This Agreement shall apply:
(a) to products falling within Chapters 25 to 97 of the Harmonized Commodity Description and Coding System (HS), excluding the products listed in Annex I;
(b) to products specified in Protocol A, with due regard to the arrangements provided for in that Protocol;
(c) to fish and other marine products as provided for in Annex II; originating in an EFTA State or in the West Bank and the Gaza Strip.
Article 3. Rules of Origin and Co-operation In Customs Administration
1. Protocol B lays down the rules of origin and methods of administrative cooperation.
2. The Parties to this Agreement shall take appropriate measures, including reviews by the Joint Committee and arrangements for administrative co-operation, to ensure that the provisions of Articles 4 (Customs duties on imports and charges having equivalent effect), 5 (Customs duties of a fiscal nature), 6 (Customs duties on exports and charges having equivalent effect), 7 (Quantitative restrictions on imports or exports and measures having equivalent effect), 12 (Internal taxation and regulations) and 21 (Reexport and serious shortage) of this Agreement and Protocol B are effectively and harmoniously applied, and to reduce, as far as possible, the formalities imposed on trade, and to achieve mutually satisfactory solutions to any difficulties arising from the operation of those provisions.
3. On the basis of the reviews referred to in paragraph 2, the Parties to this Agreement shall decide on the appropriate measures to be taken.
Article 3. Customs Duties on Imports and Charges Having Equivalent Effect
1. No new customs duty on imports or charge having equivalent effect shall be introduced in trade between the EFTA States and the West Bank and the Gaza Strip.
2. The EFTA States and the Palestinian Authority shall abolish on the date of entry into force of this Agreement all customs duties on imports and any charges having equivalent effect on products originating in an EFTA State or the West Bank and the Gaza Strip.
Article 5. Customs Duties of a Fiscal Nature
The provisions of Article 4 (Customs duties on imports and charges having equivalent effect) shall also apply to customs duties of a fiscal nature.
Article 6. Customs Duties on Exports and Charges Having Equivalent Effect
1. No new customs duty on exports or charge having equivalent effect shall be introduced in trade between the EFTA States and the West Bank and the Gaza Strip.
2. The EFTA States and the Palestinian Authority shall abolish on the date of entry into force of this Agreement all customs duties on exports and any charges having equivalent effect on products originating in an EFTA State or the West Bank and the Gaza Strip.
Article 7. Quantitative Restrictions on Imports or Exports and Measures Having Equivalent Effect
1. No new quantitative restriction on imports or exports and measures having equivalent effect shall be introduced in trade between the EFTA States and the West Bank and the Gaza Strip.
2. The EFTA States and the Palestinian Authority shall abolish on the date of entry into force of this Agreement quantitative restrictions on imports or exports and measures having equivalent effect.
Article 8. General Exceptions
This Agreement shall not preclude prohibitions or restrictions on imports, exports or goods in transit justified on grounds of public morality, public policy or public security; the protection of health and life of humans, animals or plants and the environment; the protection of national treasures possessing artistic, historic or archaeological value; the protection of intellectual property; rules relating to gold or silver; or the conservation of exhaustible natural resources, if such measures are made effective in conjunction with restrictions on domestic production or consumption. Such prohibitions or restrictions shall not, however, constitute a means of arbitrary discrimination or a disguised restriction on trade between the Parties to this Agreement.
Article 9. State Monopolies
1. The EFTA States shall ensure that any state monopoly of a commercial character be adjusted, with the exceptions laid down in Protocol C, so that no discrimination regarding the conditions under which goods are procured and marketed will exist between nationals of the EFTA States and the Palestinian people of the West Bank and the Gaza Strip. These goods shall be procured and marketed in accordance with commercial considerations.
2. The Palestinian Authority will progressively adjust any state monopoly of a commercial character so that at the latest by the end of 31 December 2001, no discrimination regarding the conditions under which goods are procured and marketed will exist between the Palestinian people of the West Bank and the Gaza Strip and the nationals of the EFTA States. The Joint Committee will be informed of the measures adopted to implement these objectives.
3. The provisions of this Article shall apply to any body through which the competent authorities of the Parties to this Agreement, in law or in fact, either directly or indirectly supervise, determine or appreciably influence imports or exports between the Parties to this Agreement. These provisions shall likewise apply to monopolies delegated to other bodies.
Article 10. Technical Regulations
The Parties to this Agreement shall, within the framework of the Joint Committee, discuss closer co-operation on matters related to removing technical barriers to trade. This co-operation shall take place in fields related to technical regulations, standardisation as well as conformity assessment.
Article 11. Trade In Agricultural Products
1. The Parties to this Agreement declare their readiness to foster, in so far as their agricultural policies allow, harmonious development of trade in agricultural products.
2. In pursuance of this objective each individual EFTA State and the Palestinian Authority concluded a bilateral arrangement providing for measures to facilitate trade in agricultural products.
3. The Parties to this Agreement shall apply their regulations in sanitary and phytosanitary matters in a non-discriminatory fashion and shall not introduce any new measures that have the effect of unduly obstructing trade.
Article 12. Internal Taxation and Regulations
1. The Parties to this Agreement shall apply any internal taxes and other charges and regulations in accordance with Article III of the General Agreement on Tariffs and Trade 1994 and other relevant WTO Agreements.
2. Exporters may not benefit from repayment of internal taxation in excess of the amount of direct or indirect taxation imposed on products exported to the territory of one of the Parties to this Agreement.
Article 13. Payments and Transfers
1. Payments relating to trade between an EFTA State and the West Bank and the Gaza Strip and the transfer of such payments to the territory of the Party to this Agreement where the creditor resides, shall be free from any restrictions.
2. The Parties to this Agreement shall refrain from any currency exchange or administrative restrictions on the grant, repayment or acceptance of short and medium-term credits covering commercial transactions in which a resident participates.
3. No restrictive measures shall apply to transfers related to investments and in particular to the repatriation of amounts invested or reinvested and of any kind of revenues stemming therefrom.
Article 14. Public Procurement
1. The Parties to this Agreement consider the effective liberalization of their respective public procurement markets, on the basis of non-discrimination and reciprocity, as an integral objective of this Agreement.
2. To this effect, the Parties shall co-operate within the framework of the Joint Committee.
Article 15. Protection of Intellectual Property
1. The Parties shall grant and ensure adequate and effective protection of intellectual property rights in accordance with the highest international standards. They shall adopt and take adequate and effective measures for the enforcement of such rights against infringement thereof, in particular against counterfeiting and piracy.
2. The Parties shall co-operate in matters of intellectual property in accordance with Article 26 (Technical assistance) of this Agreement.
3. The implementation of this Article shall be regularly reviewed by the Parties. If problems which affect trade arise in connection with intellectual property rights, urgent consultations shall be undertaken within the framework of the Joint Committee, at the request of any Party, with a view to reaching mutually satisfactory solutions.
Article 16. Rules of Competition Concerning Undertakings
1. The following are incompatible with the proper functioning of this Agreement in so far as they may affect trade between an EFTA State and the West Bank and the Gaza Strip:
(a) all agreements between undertakings, decisions by associations of undertakings and concerted practices between undertakings which have as their object or effect the prevention, restriction or distortion of competition;
(b) abuse by one or more undertakings of a dominant position in the territories of the Parties to this Agreement as a whole or in a substantial part thereof.
2. The provisions of paragraph 1 shall also apply to the activities of public undertakings, and undertakings for which the Parties to this Agreement grant special or exclusive rights, in so far as the application of these provisions does not obstruct the performance, in law or in fact, of the particular public tasks assigned to them.
3. If a Party to this Agreement considers that a given practice is incompatible with the provisions of paragraphs 1 and 2, it may take appropriate measures under the conditions and in accordance with the procedures laid down in Article 23 (Procedure for the application of safeguard measures).
Article 17. State Aid
1. Any aid granted by a Party to this Agreement or through public resources in any form whatsoever which distorts or threatens to distort competition by favouring certain undertakings or the production of certain goods shall, in so far as it may affect trade between an EFTA State and the West Bank and the Gaza Strip, be incompatible with the proper functioning of this Agreement.
2. Any practices contrary to paragraph 1 should be assessed on the basis of the criteria set out in Annex III. The Parties recognise that the Palestinian Authority may, until 31 December 2001, grant state aid to undertakings as an instrument to tackle its specific development problems.
3. The Parties to this Agreement shall ensure transparency of state aid measures by exchanging information as provided in Annex IV.
4. If a Party to this Agreement considers that a given practice is incompatible with the provisions of paragraph 1, it may take appropriate measures under the conditions and in accordance with the procedures laid down in Article 23 (Procedure for the application of safeguard measures).
Article 18. Dumping
If an EFTA State finds that dumping within the meaning of Article VI of the General Agreement on Tariffs and Trade 1994 is taking place in trade with the West Bank and the Gaza Strip, or if the Palestinian Authority finds that dumping within this meaning is taking place in trade with an EFTA State, the Party concerned may take appropriate measures against this practice in accordance with the Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994 and with the procedure laid down in Article 23 (Procedure for the application of safeguard measures).
Article 19. Emergency Action on Imports of Particular Products
Where any product is being imported in such increased quantities and under such conditions as to cause, or threaten to cause: (a) serious injury to domestic producers of like or directly competitive products in the territory of the importing Party to this Agreement, or (b) serious disturbances in any related sector of the economy or difficulties which could bring about serious deterioration in the economic situation of a region, the Party concerned may take appropriate measures under the conditions and in accordance with the procedure laid down in Article 23 (Procedure for the application of safeguard measures).
Article 20. Structural Adjustment
1. Exceptional measures of limited duration which derogate from the provisions of Article 4 (Customs duties on imports and charges having equivalent effect) may be taken by the Palestinian Authority in the form of increased customs duties or when not applicable or effective, in the form of structural adjustment charges on products listed in Annex V.
2. Without prejudice to measures related to products covered by Annex V, measures mentioned in paragraph 1 may only be applied to infant industries, or certain sectors undergoing restructuring or facing serious difficulties, particularly where these difficulties produce important social problems.
3. After the introduction of these measures, the total ad valorem customs duties and structural adjustment charges applicable in the West Bank and the Gaza Strip to products originating in an EFTA State may not exceed 25% and shall maintain an element of preference for products originating in an EFTA State. They may not exceed customs duties levied on imports to the West Bank and the Gaza Strip of similar goods from any other country. The total value of imports of the products which are subject to these measures may not exceed 15% of total imports of industrial products from the EFTA States as defined in Article 2(a) during the last year for which statistics are available.
4. These measures shall be applied for a period not exceeding 5 years unless a longer duration is authorized by the Joint Committee.
5. The Palestinian Authority shall inform the Joint Committee of any exceptional measures it intends to take and, at the request of the EFTA States, consultations shall be held in the Joint Committee on such measures and the sectors to which they apply before they are applied. When taking such measures the Palestinian Authority shall provide the Joint Committee with a schedule for the elimination of the customs duties or structural adjustment charges introduced under this Article. This schedule shall provide for a phasing out of these duties or structural adjustment charges at equal annual rates starting at the latest two years after their introduction. The Joint Committee may decide on a different schedule.
Article 21. Re-export and Serious Shortage
Where compliance with the provisions of Articles 6 (Customs duties on exports and charges having equivalent effect) and 7 (Quantitative restrictions on imports or exports and measures having equivalent effect) leads to:
(a) re-export to a third country against which the exporting Party to this Agreement maintains, for the product concerned, quantitative export restrictions, export duties or measures or charges having equivalent effect; or
(b) a serious shortage, or threat thereof, of a product essential to the exporting Party to this Agreement; and where the situations referred to above give rise or are likely to give rise to major difficulties for the exporting Party, that Party may take appropriate measures under the conditions and in accordance with the procedures laid down in Article 23 (Procedure for the application of safeguard measures). The measures shall be non-discriminatory and be eliminated when conditions no longer justify their maintenance.
Article 22. Balance of Payments Difficulties
1. The Parties to this Agreement shall endeavour to avoid the imposition of restrictive measures for balance of payments purposes.
2. A Party in serious balance of payments difficulties, or under imminent threat thereof, may, in accordance with the conditions established under the General Agreement on Tariffs and Trade 1994 and the Understanding on the Balance-of-Payments Provisions of the General Agreement on Tariffs and Trade 1994, adopt trade restrictive measures, which shall be of limited duration and non-discriminatory, and may not go beyond what is necessary to remedy the balance of payments situation. Preference shall be given to price-based measures which shall be progressively relaxed as balance of payments conditions improve and eliminated when conditions no longer justify their maintenance. The Party introducing such restrictive measures, shall inform the other Parties to this Agreement and the Joint Committee forthwith, if possible, prior to their introduction and shall provide a time schedule for their removal. The Joint Committee shall, upon the request of any other Party, examine the need for maintaining the measures taken.
Article 23. Procedure for the Application of Safeguard Measures
1. Before initiating the procedure for the application of safeguard measures set out in the following paragraphs of the present Article, the Parties to this Agreement shall endeavour to solve any differences between them through direct consultations, and inform the other Parties to this Agreement thereof.
2. Without prejudice to paragraph 6 of the present Article, a Party which considers resorting to safeguard measures shall promptly notify the other Parties and the Joint Committee thereof and supply all relevant information. Consultations between the Parties to this Agreement shall take place without delay in the Joint Committee with a view to finding a commonly acceptable solution.
3. (a) As regards Articles 16 (Rules of competition concerning undertakings) and 17 (State aid), the Parties concerned shall give to the Joint Committee all the assistance required in order to examine the case and, where appropriate, eliminate the practice objected to. If the Party in question fails to put an end to the practice objected to within the period fixed by the Joint Committee or if the Joint Committee fails to reach an agreement after consultations, or after thirty days following referral for such consultations, the Party concerned may adopt the appropriate measures to deal with the difficulties resulting from the practice in question.
(b) As regards Articles 18 (Dumping), 19 (Emergency action on imports of particular products) and 21 (Re-export and serious shortage), the Joint Committee shall examine the case or the situation and may take any decision needed to put an end to the difficulties notified by the Party concerned. In the absence of such a decision within thirty days of the matter being referred to the Joint Committee, the Party concerned may adopt the measures necessary in order to remedy the situation.
(c) As regards Article 30 (Fulfilment of obligations), the Party concerned shall supply the Joint Committee with all relevant information required for a thorough examination of the situation with a view to seeking a commonly acceptable solution. If the Joint Committee fails to reach such a solution or if a period of three months has elapsed from the date of notification, the Party concerned may take appropriate measures.
4. The safeguard measures taken shall be notified immediately to the Parties to this Agreement and to the Joint Committee. They shall be restricted with regard to their extent and to their duration to what is strictly necessary in order to rectify the situation giving rise to their application and shall not be in excess of the injury caused by the practice or the difficulty in question. Priority shall be given to such measures that will least disturb the functioning of this Agreement. The measures taken by the Palestinian Authority against an action or an omission of an EFTA State may only affect the trade with that State. The measures taken against an action or omission of the Palestinian Authority may be taken only by that or those EFTA States the trade of which is affected by the said action or omission other than those taken under Article 19 (Emergency action on imports of particular products) and Article 21 (Re-export and serious shortage).
5. The safeguard measures taken shall be the object of regular consultations within the Joint Committee with a view to their relaxation, substitution or abolition, when conditions no longer justify their maintenance.
6. Where exceptional circumstances requiring immediate action make prior examination impossible, the Party concerned may, in the cases of Articles 18 (Dumping), 19 (Emergency action on imports of particular products) and 21 (Re-export and serious shortage) and in cases of state aid having a direct and immediate incidence on trade between the Parties, apply forthwith the precautionary and provisional measures strictly necessary to remedy the situation. The measures shall be notified without delay and consultations between the Parties to this Agreement shall take place as soon as possible within the Joint Committee.
Article 24. Security Exceptions
Nothing in this Agreement shall prevent a Party to this Agreement from taking any measures which it considers necessary:
(a) to prevent the disclosure of information contrary to its essential security interests;
(b) for the protection of its essential security interests or for the implementation of international obligations or national policies
(i) relating to the traffic in arms, ammunition and implements of war, provided that such measures do not impair the conditions of competition in respect of products not intended for specifically military purposes, and to such traffic in other goods, materials and services as is carried on directly or indirectly for the purpose of supplying a military establishment; or
(ii) relating to the non-proliferation of biological and chemical weapons, nuclear weapons or other nuclear explosive devices; or
(iii) taken in time of war or other serious international tension.
Article 25. Services and Investments
1. The Parties recognize the growing importance of services and investments. In their efforts to gradually develop and broaden their co-operation, the Parties will cooperate with the aim of further promoting investments and achieving a gradual liberalization and mutual opening of markets for trade in services.
2. The Parties will discuss this co-operation in the Joint Committee with the aim of developing and deepening their relations under this Agreement.
Article 26. Technical Assistance
In order to facilitate the implementation of this Agreement the Parties shall agree upon appropriate modalities for technical assistance and co-operation of their respective authorities in trade-related matters. To this end, they shall co-ordinate efforts with relevant international organizations.
Article 27. The Joint Committee
1. The implementation of this Agreement shall be supervised and administered by a Joint Committee.
2. For the purpose of the proper implementation of this Agreement, the Parties to this Agreement shall exchange information and, at the request of any Party to this Agreement, shall hold consultations within the Joint Committee. The Joint Committee shall keep under review the possibility of further removal of the obstacles to trade between the EFTA States and the West Bank and the Gaza Strip.
3. The Joint Committee may take decisions in the cases provided for in this Agreement. On other matters the Joint Committee may make recommendations.
Article 28. Procedures of the Joint Committee
1. For the proper implementation of this Agreement the Joint Committee shall meet on a regular basis and whenever agreed to be necessary. Each Party to this Agreement may request that a meeting be held.
2. The Joint Committee shall act by common agreement.
3. If a representative in the Joint Committee of a Party to this Agreement has accepted a decision subject to the fulfilment of constitutional requirements, the decision shall enter into force, if no later date is contained therein, on the date the lifting of the reservation is notified.
4. For the purpose of this Agreement the Joint Committee shall adopt its rules of procedure. (1)
5. The Joint Committee may decide to set up such sub-committees and working parties as it considers necessary to assist it in accomplishing its tasks. (2)
Article 29. Arbitration Procedure
1. Disputes between Parties to this Agreement, relating to the interpretation of rights and obligations of the Parties to this Agreement, which have not been settled through consultation or in the Joint Committee within six months, may be referred to arbitration by any party to the dispute by means of a written notification addressed to the other party to the dispute. A copy of this notification shall be communicated to all Parties to this Agreement.
2. The constitution and functioning of the arbitral tribunal is governed by Annex VI.
3. The arbitral tribunal shall settle the dispute in accordance with the provisions of this Agreement and applicable rules and principles of international law.
4. The award of the arbitral tribunal shall be final and binding upon the parties to the dispute.
Article 30. Fulfilment of Obligations
1. The Parties to this Agreement shall take all necessary measures to ensure the achievement of the objectives of this Agreement and the fulfilment of their obligations under this Agreement.
2. If an EFTA State considers that the Palestinian Authority has, or if the Palestinian Authority considers that an EFTA State has failed to fulfil an obligation under this Agreement, the Party concerned may take the appropriate measures under the conditions and in accordance with the procedures laid down in Article 23 (Procedure for the application of safeguard measures).
Article 31. Annexes and Protocols
The Annexes and the Protocols to this Agreement are an integral part of it. The Joint Committee may decide to amend the Annexes and Protocols.
Article 32. Trade Relations Governed by this Agreement
This Agreement applies to trade relations between, on the one side, the EFTA States and, on the other side, the West Bank and the Gaza Strip, but not to the trade relations between individual EFTA States, except if otherwise provided for in this Agreement. For the purpose of this Agreement the term "Parties" shall mean the EFTA States and the PLO for the benefit of the Palestinian Authority, which shall act with their respective powers.