Title
FREE TRADE AGREEMENT BETWEEN THE ARAB REPUBLIC OF EGYPT AND THE EFTA STATES
Preamble
The Arab Republic of Egypt (hereinafter referred to as Egypt), on the one part, and the Republic of Iceland, the Principality of Liechtenstein, the Kingdom of Norway, the Swiss Confederation (hereinafter referred to collectively as the EFTA States), on the other part, hereinafter referred to as "the Parties":
CONSIDERING the importance of the links existing between Egypt and the EFTA States, in particular the Declaration on Co-operation signed in Zermatt in December 1995, and recognizing the common wish to strengthen these links, thus establishing close and lasting relations,
RECALLING the membership of Egypt and the EFTA States in the World Trade Organization (hereinafter referred to as "the WTO") and their commitment to comply with the rights and obligations arising from the Marrakech Agreement establishing the WTO, including the principles of most-favoured-nation and of national treatment,
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,
REAFFIRMING their commitment to the principles and objectives set out in the United Nations Charter and the Universal Declaration of Human Rights,
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,
RESOLVED to contribute to the strengthening of the multilateral trading system and to develop their relations towards free trade in compliance with the WTO rules,
CONSIDERING that no provision of this Agreement may be interpreted as exempting the Parties from their obligations under other international agreements, especially the WTO,
DESIRING to create new employment opportunities while promoting sustainable development,
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,
CONVINCED that this Agreement provides an appropriate framework for exchange of information and views on economic developments and trade,
CONVINCED that this Agreement will create conditions encouraging economic, trade and investment relations between them,
HAVE DECIDED, in pursuit of the above, to conclude the following Free Trade Agreement (hereinafter referred to as "this Agreement"):
Body
Chapter I. General Provisions
Article 1. Objectives
1. Egypt and the EFTA States shall establish a free trade area in accordance with the provisions of this Agreement with a view to spurring prosperity and economic development in their territories.
2. The objectives of this Agreement, which is based on trade relations between market economies, are:
(a) to achieve the liberalisation of trade in goods, in conformity with Article XXIV of the General Agreement on Tariffs and Trade (hereinafter referred to as "the GATT 1994");
(b) to gradually develop an environment conducive to increased investment flows and enhanced trade in services;
(c) to ensure adequate and effective protection of intellectual property rights; and
(d) to support the harmonious development of economic relations between the Parties through technical and financial assistance.
Article 2. Trade Relations Governed by this Agreement
This Agreement applies to trade relations between, on the one side, Egypt, and, on the other side, the individual EFTA States.
Article 3. Territorial Application
This Agreement shall apply to the territories of the Parties except as provided for in Protocol C.
Chapter II. Trade In Goods
Article 4. Scope
This Chapter shall apply to the following products originating in Egypt or an EFTA State:
(a) all products falling within Chapters 25 to 97 of the Harmonized Commodity Description and Coding System (hereinafter referred to as "HS"), with the exception of the products listed in Annex I;
(b) processed agricultural products specified in Protocol A, with due regard to the arrangements provided for in that Protocol;
(c) fish and other marine products as provided for in Annex II; and
(d) agricultural products falling within HS Chapters 1 to 24 as specified in Annex III.
Article 5. Rules of Origin and Co-operation In Customs Administration
Protocol B lays down the rules of origin and methods of administrative cooperation.
Article 6. Customs Duties on Imports and Charges Having Equivalent Effect
1. No new customs duties on imports or charges having equivalent effect shall be introduced in trade between Egypt and the EFTA States as of the entry into force of this Agreement.
2. Egypt shall gradually eliminate its customs duties on imports and any charges having equivalent effect on products originating in an EFTA State in accordance with Annex IV.
3. The EFTA States 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 Egypt.
Article 7. Basic Duties
1. The applicable rates for imports between the Parties, to which the successive reductions set out in this Agreement are to be applied, shall be the WTO bound rate or the applied rate enforced as of the entry into force of this Agreement if it is lower. If, after the entry into force of this Agreement, a tariff reduction is applied on an erga omnes basis, the reduced rate shall apply.
2. The Parties shall communicate to each other their respective rates applied on the date of the entry into force of this Agreement.
Article 8. Customs Duties of a Fiscal Nature
Article 6 shall also apply to customs duties of a fiscal nature.
Article 9. Quantitative Restrictions on Imports and Measures Having Equivalent Effect
1. Quantitative restrictions on imports and any other measures having equivalent effect in trade between Egypt and the EFTA States shall be abolished from the entry into force of this Agreement.
2. No new quantitative restriction on imports or any other measures having equivalent effect shall be introduced in trade between Egypt and the EFTA States.
Article 10. Customs Duties and Quantitative Restrictions on Exports
Egypt and the EFTA States shall neither apply customs duties or charges having equivalent effect, nor quantitative restrictions or measures having equivalent effect to exports between themselves.
Article 11. Internal Taxation
1. The Parties shall refrain from any measure or practice of an internal fiscal nature establishing, whether directly or indirectly, discrimination between the products of a Party and like products originating in the territory of another Party.
2. Products exported to the territory of a Party may not benefit from repayment of indirect internal taxation in excess of the amount of indirect taxation imposed on them either directly or indirectly.
Article 12. Payments and Transfers
1. Payments relating to trade between Egypt and an EFTA State and the transfer of such payments to the territory of the Party where the creditor resides, shall be free from any restrictions.
2. The Parties 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.
Article 13. Technical Regulations
1. The rights and obligations of the Parties in respect of technical regulations, standards and conformity assessment shall be governed by the WTO Agreement on Technical Barriers to Trade (hereinafter referred to as "the WTO TBT Agreement").
2. The Parties shall strengthen their co-operation in the field of technical regulations, standards and conformity assessment, with a view to increasing the mutual understanding of their respective systems and facilitating access to their respective markets, thereby preparing the ground for possible mutual recognition agreements.
3. Without prejudice to paragraph 1, the Parties agree to hold consultations in the framework of the Joint Committee where Egypt or an EFTA State considers that one or more EFTA States or Egypt respectively have taken measures which are likely to create, or have created, an obstacle to trade, in order to find an appropriate solution in conformity with the WTO TBT Agreement.
Article 14. Sanitary and Phytosanitary Measures
1. The Parties shall apply their regulations for sanitary and phytosanitary matters in a non-discriminatory fashion and shall not introduce any new measures that have the effect of unduly obstructing trade.
2. The principles set out in paragraph 1 shall be applied in accordance with the WTO Agreement on the Application of Sanitary and Phytosanitary Measures, which is hereby incorporated into and made part of this Agreement.
Article 15. State Trading Enterprises
The rights and obligations of the Parties in respect of state trading enterprises shall be governed by Article XVII of the GATT 1994 and the Understanding on the Interpretation of Article XVII of the GATT 1994, which are hereby incorporated into and made part of this Agreement.
Article 16. Subsidies and Countervailing Measures
1. The rights and obligations of the Parties in respect of subsidies and countervailing measures shall be governed by Articles VI and XVI of the GATT 1994, the WTO Agreement on Subsidies and Countervailing Measures and the WTO Agreement on Agriculture.
2. If a Party finds that subsidies are granted which affect trade with another Party, the Party concerned may take appropriate measures in accordance with the above mentioned Agreements and relevant internal legislation and executive regulations.
Article 17. Anti-dumping
1. The rights and obligations of the Parties in respect of the application of anti-dumping measures shall be governed by Article VI of the GATT 1994 and the Agreement on Implementation of Article VI of the GATT 1994.
2. If a Party finds that dumping is taking place in trade with another Party, the Party concerned may take appropriate measures in accordance with the above mentioned Agreements and relevant internal implementation legislation.
Article 18. Safeguard Measures
1. The provisions of Article XIX of the GATT 1994 and the WTO Agreement on Safeguards shall apply between the Parties.
2. Before applying safeguard measures pursuant to the provisions of Article XIX of the GATT 1994 and the WTO Agreement on Safeguards, the Party intending to apply such measure shall supply the Joint Committee with all relevant information required for a thorough examination of the situation with a view to seeking a solution acceptable to the Parties. In order to find such a solution, the Parties shall immediately hold consultations within the Joint Committee. If, as a result of the consultations, the Parties do not reach an agreement within thirty days of the initiation of the consultations on a solution to avoid the safeguard measures, the Party intending to apply safeguard measures may apply the provisions of Article XIX of the GATT 1994 and the WTO Agreement on Safeguards.
3. In the selection of safeguard measures pursuant to this Article, the Parties shall give priority to those that cause least disturbance to the achievement of the objectives of this Agreement.
4. Safeguard measures shall be notified immediately to the Joint Committee and shall be subject to periodic consultations within the Committee, particularly with a view to their abolition as soon as circumstances permit.
Article 19. Structural Adjustment
1. By way of derogation from the provisions of paragraph 2 of Article 6, Egypt may take exceptional measures of limited duration to increase or re-introduce customs duties.
2. Such measures may only apply to new and infant industries or to sectors undergoing restructuring or experiencing serious difficulties, particularly where those difficulties entail severe social problems.
3. Customs duties on import into Egypt of products originating in an EFTA State that are introduced by such exceptional measures may not exceed 25 per cent ad valorem, and must retain a preferential margin for products originating in the EFTA States. The total value of imports of the products subjected to such measures may not exceed 20 per cent of total imports of industrial products from the EFTA States during the last year for which statistics are available.
4. Such measures shall be applied for no longer than five years, except where a longer duration is authorized by the Joint Committee. They shall cease to apply at the latest on expiry of the maximum transitional period.
5. Such measures may not be introduced for a given product if more than three years have elapsed since the abolition of all duties, quantitative restrictions and charges and measures having equivalent effect for the product concerned.
6. Egypt shall inform the Joint Committee of any exceptional measures it intends to adopt and, at the request of an EFTA State, consultations shall be held on the measures and sectors concerned before they are implemented. When adopting such measures, Egypt shall provide the Joint Committee with a schedule for the abolition of the customs duties introduced or increased pursuant to this Article. Such schedule shall provide for the phasing out of the duties concerned by equal annual instalments, starting no later than the end of the second year following their introduction. The Joint Committee may decide on a different schedule.
7. By way of derogation from the provisions of paragraph 4, the Joint Committee may exceptionally, in order to take into account the difficulties involved in setting up new industries, endorse the measures already taken by Egypt pursuant to paragraph 1 for a maximum period of four years beyond the twelve years transitional period
Article 20. Re-export and Serious Shortage
1. Where compliance with the provisions of Article10 leads to:
(a) re-export to a third country against which the exporting Party 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; 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 laid down in paragraph 2.
2. The difficulties arising from the situations referred to in paragraph 1 shall be submitted for examination to the Joint Committee. The Committee may take any decision needed to put an end to the difficulties. If it has not taken such a decision within thirty days of the matter being referred to it, the exporting Party may apply appropriate measures on the exportation of the product concerned. The measures shall be non-discriminatory and be eliminated when conditions no longer justify their maintenance.
3. In the selection of measures, priority must be given to the action which least disturbs the functioning of this Agreement.
4. The measures taken shall be subject to periodic consultations within the Joint Committee with a view to their elimination as soon as circumstances permit.
Article 21. General Exceptions
Nothing in this Agreement shall preclude prohibitions or restrictions on imports, exports or goods in transit justified on grounds of public morality, public policy or public security, of the protections of health and life of humans, animals or plants, of the protection of national treasures possessing artistic, historic or archaeological value, of the protection of intellectual property or of regulations concerning gold and silver or conservation of exhaustible natural resources. Such prohibitions or restrictions shall not, however, constitute a means of arbitrary discrimination or disguised restriction on trade between the Parties.
Article 22. Security Exceptions
Nothing in this Agreement shall prevent a Party from taking any measures which:
(a) it considers necessary to prevent the disclosure of information contrary to its essential security interests;
(b) relate to the production of, or trade in, arms, munitions or war materials or to research, developments or productions indispensable for defence purposes, provided that such measures do not impair the conditions of competition in respect of products not intended for specifically military purposes; or
(c) it considers essential to its own security in the event of serious internal disturbances affecting the maintenance of law and order, in time of war or serious international tension constituting threat of war or in order to carry out obligations it has accepted for the purpose on maintaining peace and international security.
Chapter III. Protection of Intellectual Property
Article 23. Protection of Intellectual Property
1. The Parties shall grant and ensure adequate, effective and non–discriminatory protection of intellectual property rights, and provide for measures for the enforcement of such rights against infringement thereof, counterfeiting and piracy, in accordance with the provisions of this Article, Annex V to this Agreement and the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (hereinafter referred to as "the TRIPS Agreement").
2. The Parties shall accord to each others' nationals, treatment no less favourable than they accord to their own nationals. Exemptions from this obligation must be in accordance with the substantive provisions of Article 3 of the TRIPS Agreement.
3. The Parties shall accord to each others' nationals, treatment no less favourable than accorded to nationals of any other state. Exemptions from this obligation must be in accordance with the substantive provisions of the TRIPS Agreement, in particular Articles 4 and 5 thereof.
4. The Parties shall regularly review this Article and Annex V to this Agreement with a view to their effective implementation and their future development. In the event that problems in the area of intellectual property rights affecting trading conditions arise, urgent consultations shall take place, with a view to reaching mutually satisfactory solutions.
5. With a view to facilitating the implementation of this Article and Annex V to this Agreement, the EFTA States shall grant technical and financial assistance to Egypt in accordance with Chapter VII.
Chapter IV. Investment and Services
Article 24. Investment Conditions
1. The Parties shall create stable, favourable and transparent conditions for investors of the other Parties that are making or seeking to make investments in their territories.
2. Investments of investors of a Party shall, in the territories of the other Parties, at all times be accorded fair and equitable treatment as well as protection and security, in accordance with international law.
3. The Parties shall consider extending the scope of this Agreement to include the right of establishment of companies of one Party in the territory of another Party. The Joint Committee shall make recommendations for achieving this objective.
Article 25. Investment Promotion
1. The Parties recognize the importance of promoting cross-border investment and technology flows as a means for achieving economic growth and development. Cooperation in this respect may include:
(a) appropriate means of identifying investment opportunities and information channels on investment regulations;
(b) the provision of information on the Parties' measures to promote investment abroad (technical assistance, financial support, investment insurance, etc.);
(c) the furthering of a legal environment conducive to increased investment flows, including through the conclusion of bilateral agreements; and
(d) the development of mechanisms for joint investments, in particular with small and medium enterprises.
2. The Parties recognize that it is inappropriate to encourage investment by relaxing health, safety or environmental standards.
Article 26. Trade In Services
1. The Parties reaffirm their respective commitments under the terms of the General Agreement on Trade in Services (hereinafter referred to as "the GATS") and in particular the commitment to accord each other most-favoured nation treatment (hereinafter referred to as "MFN") in trade in service sectors covered by these commitments.
2. In accordance with the GATS, this treatment shall not apply to:
(a) advantages accorded by any Party under the provisions of an agreement as defined in Article V of the GATS or under measures adopted on the basis of such an agreement; or
(b) other advantages accorded pursuant to the list of MFN exemptions annexed by any Party to the GATS.
Article 27. Right of Establishment and Liberalisation of Services
1. The Parties shall consider extending the scope of this Agreement to include the right of establishment of companies of one Party in the territory of another Party and the liberalization of the supply of services by companies of one Party to service consumers in another Party.
2. The Joint Committee shall make the necessary recommendations for the implementation of the objectives set out in paragraph 1. When formulating these recommendations, the Joint Committee shall take into account the experience gained by the implementation of the MFN treatment granted to each other by the Parties in accordance with their respective obligations under the GATS, and in particular Article V thereof.
3. The objective set out in paragraph 1 of this Article shall be the subject of a first examination by the Joint Committee at the latest five years after the entry into force of this Agreement.
Chapter V. Payment and Capital Movement
Article 28. Payments for Current Transactions
Subject to the provisions of Article 30, the Parties undertake to allow all payments for current transactions to be made in a freely convertible currency.
Article 29. Capital Movements
1. The Parties shall ensure that capital for investments made in companies formed in accordance with their laws, any returns stemming therefrom, and the amounts resulting from liquidations of investments shall be freely transferable.
2. The Parties shall hold consultations with a view to facilitating the movement of capital between Egypt and the EFTA States and achieve its complete liberalization as soon as conditions are met.
Article 30. Balance of Payments Difficulties
Where an EFTA State or Egypt is in serious balance of payments difficulties, or under threat thereof, the EFTA State concerned or Egypt respectively may, in conformity with the conditions laid down within the framework of the GATT 1994 and Articles VIII and XIV of the Statutes of the International Monetary Fund, take restrictive measures with regard to current payments if such measures are strictly necessary. The EFTA State concerned or Egypt, as appropriate, shall inform the other Parties immediately thereof and shall provide as soon as possible a timetable for the removal of such measures.
Chapter VI. Competition and other Economic Matters
Article 31. 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 Egypt and an EFTA State:
(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; and
(b) abuse by one or more undertakings of a dominant position in the territories of the Parties as a whole or in a substantial part thereof.
2. The Joint Committee shall, within five years of the entry into force of this Agreement, adopt by decision the necessary rules for the implementation of paragraph 1.
3. If, in the absence of the rules referred to in paragraph 2, a Party considers that a particular practice by an undertaking or undertakings of another Party is incompatible with the terms of paragraph 1, and if such practice causes or threatens to cause serious prejudice to its interest or material injury to its domestic industry, including its service industry, it may take appropriate measures after consultation within the Joint Committee or after thirty working days following referral for such consultation.
4. Notwithstanding any provisions to the contrary adopted in conformity with paragraph 2, the Parties shall exchange information taking into account the limitations imposed by the requirements of their national secrecy laws, such as in particular rules concerning professional and business secrecy.
Article 32. Public Enterprises
With regard to public enterprises and enterprises to which special or exclusive rights have been granted, the Joint Committee shall ensure that as from the fifth year following the date of entry into force of this Agreement there is neither enacted nor maintained any measure distorting trade between the Parties contrary to their interests. This provision should not obstruct the performance in law or in fact of the particular tasks assigned to theses enterprises.
Article 33. Public Procurement
The Parties agree on the objective of a progressive liberalisation of public procurement. The Joint Committee will hold consultations on the implementation of this objective.