Title
FREE TRADE AGREEMENT BETWEEN THE EFTA STATES AND THE MEMBER STATES OF THE CO-OPERATION COUNCIL FOR THE ARAB STATES OF THE GULF
Preamble
PREAMBLE
The Republic of Iceland, the Principality of Liechtenstein, the Kingdom of Norway and the Swiss Confederation (hereinafter referred to as "the EFTA States");
and
the Governments of the United Arab Emirates, the Kingdom of Bahrain, the Kingdom of Saudi Arabia, the Sultanate of Oman, the State of Qatar and the State of Kuwait (hereinafter referred to jointly as "GCC" or severally as the "GCC Member States");
hereinafter each EFTA State and each GCC Member State being referred to as a "Party" and collectively as "the Parties".
RECOGNIZING the longstanding friendship and strong economic and political ties between the GCC Member States and the EFTA States, in particular the Declaration on Co-operation signed in Brussels on 23 May 2000, and wishing to strengthen these links through the creation of a free trade area, thus establishing close and lasting relations;
REAFFIRMING their commitment to the principles and objectives set out in the United Nations Charter and the Universal Declaration of Human Rights;
DETERMINED to promote and strengthen the multilateral trading system, as set up through the World Trade Organization (WTO), in a manner conducive to the development of regional and international cooperation, thereby contributing to the harmonious development and expansion of world trade;
CONSCIOUS of the dynamic and rapidly changing global environment brought about by globalization and technological progress presenting various economic and strategic challenges and opportunities to the Parties;
DETERMINED to develop and strengthen their economic and trade relations through the liberalization and expansion of trade in goods and services in their common interest and for their mutual benefit;
RESOLVED to ensure a stable and predictable investment environment;
RESOLVED to foster creativity and innovation by protecting intellectual property rights;
AIMING to create new employment opportunities, improve health and living standards, promote opportunities for transfer of technology, and ensure a large and steadily growing volume of real income in their respective territories through the expansion of trade and investment flows;
REAFFIRMING their commitment to economic and social development based on the principles set out in the relevant International Labour Organisation (ILO) Conventions;
ACKNOWLEDGING the differences in the development levels and capacities between the Parties;
RECOGNIZING the need to enhance the competitive environment in their markets;
SEEKING to preserve and protect the environment in accordance with the principle of sustainable development;
CONVINCED that the establishment of a free trade area will provide a more favourable climate for the promotion and development of economic and trade relations between the Parties;
HAVE AGREED, in pursuit of the above, to conclude the following free trade agreement (hereinafter referred to as "this Agreement"):
Body
Chapter 1. GENERAL PROVISIONS
Article 1.1. Objectives
1. The EFTA States and the GCC Member States hereby establish a free trade area in accordance with the provisions of this Agreement.
2. The objectives of this Agreement 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"), pursuant to Chapter 2;
(b) to achieve the liberalisation of trade in services, in conformity with Article V of the General Agreement on Trade in Services (hereinafter referred to as "the GATS"), pursuant to Chapter 3;
(c) to promote competition in their economies pursuant to Chapter 4;
(d) to ensure adequate and effective protection of intellectual property rights, pursuant to Chapter 5;
(e) to achieve further liberalisation on a mutual basis of the government procurement markets of the Parties, pursuant to Chapter 6; and
(f) mutually enhance investment opportunities.
Article 1.2. Geographical Scope
1. Without prejudice to Annex IV, this Agreement shall apply:
(a) to the land territory, internal waters, and the territorial sea of a Party and the air-space above the territory of a Party in accordance with international law; as well as
(b) beyond the territorial sea, with respect to measures taken by a Party in the exercise of its sovereign rights or jurisdiction in accordance with international law.
2. Annex I applies with respect to Norway.
Article 1.3. Trade and Economic Relations Governed by this Agreement
The provisions of this Agreement apply to the trade and economic relations between, on the one side, the individual EFTA States and, on the other side, the individual GCC Member States or, where specifically provided for, the GCC Member States acting jointly as GCC. This Agreement applies neither to the trade relations amongst the EFTA States nor to the trade relations amongst the GCC Member States.
Article 1.4. Relationship to other Agreements
The Parties reaffirm their rights and obligations under the WTO Agreement and the other agreements negotiated thereunder to which they are a party and any other international agreement to which they are a party.
Article 1.5. Regional and Local Government
1. Each Party shall take such reasonable measures as may be available to it to ensure observance of the provisions of this Agreement by the regional and local governments and authorities within its territory.
2. This provision is to be interpreted and applied in accordance with the principles set out in paragraph 3 (a) of Article I of the GATS and the Understanding on the Interpretation of Article XXIV of the GATT 1994, as applicable. Paragraph 3 (a) of Article I of the GATS and the Understanding on the Interpretation of Article XXIV of the GATT 1994 are hereby incorporated and made part of this Agreement.
Article 1.6.
Transparency 1. The Parties shall publish or otherwise make publicly available their laws, regulations, judicial decisions and administrative rulings of general application as well as their respective international agreements which may affect the operation of this Agreement.
2. The Parties shall promptly respond to specific questions and provide, upon request, information to each other on matters referred to in paragraph 1.
Article 1.7. Confidential Information
1. Each Party shall maintain the confidentiality of information which the Party submitting the information has designated as confidential.
2. Nothing in this Agreement shall require any Party to disclose confidential information, which would impede law enforcement, or otherwise be contrary to the public interest or would prejudice the legitimate commercial interests of any economic operator.
Chapter 2. TRADE IN GOODS (1)
Article 2.1. Scope
1. This Chapter applies to:
(a) products falling within Chapters 25 to 97 of the Harmonized Commodity Description and Coding System (hereinafter referred to as “HS”), excluding the products listed in Annex II;
(b) processed agricultural products specified in Annex III, with due regard to the arrangements provided for in that Annex; and
(c) fish and other marine products as provided for in Annex V.
2. GCC and each EFTA State have concluded agreements on trade in agricultural products on a bilateral basis. These agreements form part of the instruments establishing a free trade area between the EFTA States and GCC.
Article 2. Customs Duties
1. No new customs duties shall be introduced in trade between the EFTA States and GCC, except as provided for in this Agreement.
2. The EFTA States shall, on entry into force of this Agreement, abolish all customs duties on imports of originating products from GCC.
3. GCC shall, on entry into force of this Agreement, abolish all customs duties on imports of originating products from the EFTA States, except as provided for in Annex VI.
4. A Party may introduce or maintain duties on exports in conjunction with domestic measures, in so far as it considers that such duties are necessary. Such duties shall be applied irrespective of the destination of the product. The Parties shall inform the Joint Committee of all export duties applied.
5. A customs duty includes any duty or charge of any kind imposed in connection with the importation of a product, including any form of surtax or surcharge, but does not include any charge imposed in conformity with Articles II and VII of the GATT 1994.
Article 2.3. Quantitative Restrictions on Import and Export
Article XI of the GATT 1994 is incorporated into and made a part of this Agreement mutatis mutandis.
Article 2.4. National Treatment
The Parties shall apply national treatment in accordance with Article II of the GATT 1994, including its interpretative notes, which is hereby incorporated into and made part of this Agreement.
Article 2.5. Rules of Origin and Methods of Administrative Co-operation
The provisions on rules of origin and methods of administrative co-operation are set out in Annex IV.
Article 2.6. Customs Valuation
The Parties shall determine the customs value of goods traded between them in accordance with the provisions of Article VII of the GATT 1994 and the WTO Agreement on Implementation of Article VII of the GATT 1994.
Article 2.7. 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 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.
3. Without prejudice to paragraph 1, the Parties agree to hold consultations in the framework of the Joint Committee where a Party considers that an EFTA State or GCC has 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 TBT Agreement.
Article 2.8. Sanitary and Phytosanitary Measures
1. The rights and obligations of the Parties in respect of sanitary and phytosanitary measures shall be governed by the WTO Agreement on the Application of Sanitary and Phytosanitary Measures (hereinafter referred to as "the SPS Agreement").
2. The Parties shall exchange names and addresses of contact points with sanitary and phytosanitary expertise in order to facilitate technical consultations and the exchange of information.
3. Without prejudice to paragraph 1, the Parties agree to hold consultations in the framework of the Joint Committee where a Party considers that an EFTA State or GCC has 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 SPS Agreement.
Article 2.9. Anti-dumping
1. The EFTA States and GCC shall endeavour to refrain from initiating anti- dumping procedures and measures against each other.
2. 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 except as provided for in this Article.
3. Before an EFTA State or GCC initiates an investigation to determine the existence, degree and effect of any alleged action in an EFTA State or GCC, as provided for in Article VI of the GATT 1994 and the Agreement on Implementation of Article VI of the GATT 1994, the Party considering initiating an investigation shall notify in writing the EFTA State or GCC whose goods are subject to investigation and allow for a 30 days period with a view to finding a mutually acceptable solution. The consultations shall take place in the Joint Committee if an EFTA State or GCC so requests within ten days from the receipt of the notification.
4. If any anti-dumping measure were to be applied by an EFTA State or GCC, the measure shall without exception be terminated on a date not later than three years from its imposition. Nothing in this paragraph shall prevent an EFTA State or the GCC from introducing new anti-dumping measures in accordance with paragraph 2 and 3 of this Article on products subject to measures that have been terminated.
5. Five years after the date of entry into force of this Agreement, the Parties shall in the Joint Committee review whether there is need to maintain the possibility to take anti-dumping measures between them. If the Parties decide, after the first review, that there is a need to maintain the possibility, they shall thereafter conduct biennial reviews of this matter in the Joint Committee.
Article 2.10. 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, including its interpretive notes which are hereby incorporated into and made part of this Agreement.
Article 2.11. Subsidies and Countervailing Measures
1. The rights and obligations of the Parties relating to subsidies and countervailing measures shall be governed by Articles VI and XVI of the GATT 1994 and the WTO Agreement on Subsidies and Countervailing Measures, except as provided for in paragraph 2.
2. Before an EFTA State or GCC initiates an investigation to determine the existence, degree and effect of any alleged subsidy in an EFTA State or in a GCC Member State, as provided for in Article 11 of the WTO Agreement on Subsidies and Countervailing Measures, the Party considering initiating an investigation shall notify in writing the Party whose goods may be subject to investigation and allow for a 30 days period with a view to finding a mutually acceptable solution. The consultations shall take place in the Joint Committee if any Party so requests within ten days from the receipt of the notification.
Article 2.12. Global Safeguard Measures
The Parties confirm their rights and obligations under Article XIX of GATT 1994 and the WTO Agreement on Safeguards. In taking measures under these WTO provisions, a Party shall exclude imports of an originating good from an EFTA State or GCC if such imports do not in and of themselves cause or threaten to cause serious injury. The Party taking the measure shall demonstrate that such exclusion is in accordance with its WTO obligations, as interpreted through the WTO jurisprudence.
Article 2.13. General Exceptions
The rights and obligations of the Parties in respect of general exceptions shall be governed by Article XX of the GATT 1994, which is hereby incorporated into and made part of this Agreement.
Article 2.14. Security Exceptions
The rights and obligations of the Parties in respect of security exceptions shall be governed by Article XXI of the GATT 1994, which is hereby incorporated into and made part of this Agreement.
Chapter 3. TRADE IN SERVICES
Article 3.1. Scope and Coverage
1. This Chapter applies to measures by Parties affecting trade in services. It applies to all services sectors.
2. In respect of air transport services, this Chapter shall not apply to measures affecting air traffic rights or measures affecting services directly related to the exercise of air traffic rights, except as provided for in paragraph 3 of the GATS Annex on Air Transport Services. The definitions of paragraph 6 of the GATS Annex on Air Transport Services are hereby incorporated into and made part of this Agreement, mutatis mutandis.
3. Articles 3.4, 3.5 and 3.6 shall not apply to laws, regulations or requirements governing the procurement by governmental agencies of services purchased for governmental purposes and not with a view to commercial resale or with a view to use in the supply of services for commercial sale.
Article 3.2. Incorporation of Provisions from the GATS
Wherever a provision of this Chapter provides that a provision of the GATS is incorporated into and made part of this Agreement, the meaning of the terms used in the GATS provision shall be understood as follows:
(a) "Member" means Party;
(b) "Schedule" means a Schedule referred to in Article 3.16 and contained in Annex VII; and
(c) "specific commitment" means a specific commitment in a Schedule referred to in Article 3.16.
Article 3.3. Definitions
For the purpose of this Chapter, and with reference to Article 3.2:
(a) the following definitions of Article I of the GATS are incorporated into and made part of this Agreement:
(i) “trade in services”;
(ii) “services”; and
(iii) “a service supplied in the exercise of governmental authority”;
(b) “measures by Parties” (2)
means measures taken by:
(i) central, regional or local governments and authorities; and
(ii) non-governmental bodies in the exercise of powers delegated by central, regional or local governments or authorities;
(c) “service supplier” means any person that supplies, or seeks to supply, a service; (3)
(d) “natural person of another Party” means a natural person who is a national or a permanent resident of an EFTA State or of a GCC Member State, under their respective legislation;
(e) “juridical person of another Party” means a juridical person that is either:
(i) constituted or otherwise organised under the law of that other Party, and is engaged in substantive business operations in the territory of:
(A) any Party; or
(B) any Member of the WTO and is owned or controlled by natural persons of that other Party or by juridical persons that meet all the conditions of subparagraph (i)(A); or
(ii) in the case of the supply of a service through commercial presence, owned or controlled by natural persons of that other Party, juridical persons that meet the conditions of subparagraph (e)(i) or State entities of that other Party;
(f) the following definitions of Article XXVIII of the GATS are hereby incorporated into and made part of this Agreement:
(i) “measure”;
(ii) “supply of a service”;
(iii) “measures by Members affecting trade in services”;
(iv) “commercial presence”;
(v) “sector” of a service;
(vi) “service of another Member”;
(vii) “monopoly supplier of a service”;
(viii) “service consumer”;
(ix) “person”;
(x) “juridical person”;
(xi) “owned”, “controlled” and “affiliated”; and
(xii) “direct taxes”;
(g) “GATS” means the General Agreement on Trade in Services of 1994.
Article 3.4. Most-Favoured-Nation Treatment
1. Without prejudice to measures taken in accordance with Article VII of the GATS, and except as provided for in its List of MFN Exemptions contained in Annex VII, a Party shall accord immediately and unconditionally, in respect of all measures affecting the supply of services, to services and service suppliers of another Party treatment no less favourable than the treatment it accords to like services and service suppliers of any non-party.
2. Treatment granted under other existing or future agreements concluded by one of the Parties and notified under Article V or Article V bis of the GATS shall not be subject to paragraph 1.(4)
3. The rights and obligations of the Parties in respect of advantages accorded to adjacent countries shall be governed by paragraph 3 of Article II of the GATS, which is hereby incorporated into and made part of this Agreement.
Article 3.5. Market Access
Commitments on market access shall be governed by Article XVI of the GATS, which is hereby incorporated into and made part of this Agreement.
Article 3.6. National Treatment
Commitments on national treatment shall be governed by Article XVII of the GATS, which is hereby incorporated into and made part of this Agreement.