RESTRICTEDWORLD TRADE
ORGANIZATIONWT/REG69/M/1
26 July 1999
(99-3124)
Committee on Regional Trade Agreements
Twenty-Third Session
EXAMINATION OF THE EURO-MEDITERRANEAN AGREEMENT
BETWEEN THE EUROPEAN COMMUNITIES AND
THEIR MEMBERS, AND TUNISIA
Note on the Meeting of 2 July 1999
Chairman:  Mr. Andrew Stoler (United States)
1. This meeting was convened  in document WTO/AIR/1118.
2. Under Agenda Item C. XII, the Committee on Regional Trade Agreements (CRTA) took up
the examination of the Euro-Mediterranean Agreem ent between the European Communities and Their
Member States, and Tunisia.  The following topics were discussed:
A. General Remarks
B. Section I – Background Information on the Agreement
C. Section II - Trade Provisions
II.1 – Import Restrictions
II.3 - Rules of Origin and Co-operation in Customs Administration
II.4 - Standards
II.5 - Safeguards
D. Section III - General Provisions of the Agreement
A. General Remarks
3. The Chairman noted that the meeting was the first round of examination of this Agreement.
The Agreement had been signed on 17 July 1995, entered into force on 1 March 1998, and was
notified to the WTO on 15 January 1999.  The documents containing the Notification and the
Agreement were WT/REG69/N/1 and WT/REG69/1.  He said that he would organize the examination
by beginning with general comments and, thereafter , the examination would turn to the specifics of
the Agreement, using the Standard Format (WT/REG69/2).  The terms of reference for the
examination were contained in document WT/REG69/3:  "To examine, in light of the relevant
provisions of the GATT 1994, the Free Trade Agreement between the European Communities and
Tunisia and to submit a report to the Council for Trade in Goods."  These terms of reference applied
in conjunction with the following Understanding: "I t is understood that the statement read out by the
Chairman of the Council for Trade in Goods under item 7 of the Agenda of its meeting on 20
February 1995, as contained in document WT/REG3/1, applies mutatis mutandis  to this working
party.  It is also understood that, during the examination, due account will be taken of the intrinsic
differences between customs unions and free-trade areas."
4. The representative of the European Commun ities said that the Agreement between the
European Communities (EC) and Tunisia formed part of a wider initiative by the EC and the countriesWT/REG69/M/1
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of the Mediterranean basin to establish a comprehensive framework through relationships based on
partnership.  This process had been launched at the Euro-Mediterranean Conference, held in
Barcelona on 27-28 November 1995.  The Parties' common long-term objectives, set out in the
Barcelona Declaration, were to promote socio-economic development; improved living conditions
and increased employment for their populations; a reduction in the development gaps in the region;and further regional cooperation and integration.  A key element in this process was the negotiation of
a "new generation" of agreements between the EC and its partners in the Mediterranean: the Euro-
Mediterranean agreements.  The Euro-Mediterranean Agreement between the EC and Tunisia
replaced the Cooperation Agreement signed on 25 April 1976.  The Agreement established an
association between the Parties based on a range of objectives set out in Article 1 of the Agreement.
These objectives included: the provision of an appropriate framework for political dialogue; the
establishment of conditions for the gradual liberaliz ation of trade in goods, services and capital; and
the promotion of economic, social and cultural and financial cooperation between the Parties.  The
Agreement went beyond the simple establishment of a free-trade area.  The inclusion of a political
dimension in the Euro-Mediterranean Agreements was an important additional element in comparison
to the earlier generation of cooperation agreements and it was clear that the basis for relations
between the Parties was a respect for human rights and democratic principles.  The political dialogueestablished under this and other such agreements would contribute to the stability and security of the
whole Mediterranean region.
5. Under the Agreement, a free-trade area would be established between the EC and Tunisia for
trade in goods over a transition period lasting a maximum of 12 years beginning on 1 March 1998.However, the government of Tunisia had chosen to apply the provisions of the free-trade area relating
to tariff dismantling beginning on 1 January 1997.  Covering products in all Chapters of the
Harmonized System (HS), the Agreement provided for the abolition of quantitative restrictions on
imports and measures having equivalent effect on the date of entry into force; neither quantitative
restrictions, nor charges having equivalent effect, could be applied to exports.  Different treatmentwas foreseen for import tariffs on industrial products than for those on other products.  For industrial
products, imports into the EC were free of customs duties and charges having equivalent effect from
the entry into force of the Agreement.  Duties  on imports into Tunisia were to be eliminated
immediately for some products; for other products specified in appropriate Annexes, import duties
were to be progressively abolished in accordance wi th set timetables.  These provided that all duties
on industrial products would be eliminated by twelve years after entry into force at the latest, but there
were exceptions listed in Annex 6 of the Agreement for which Tunisia would also be able to retainquantitative restrictions.  Future arrangements concerning these products will be re-examined by the
Parties four years after entry into force of the Agreement.  For a number of products, steps would be
taken to liberalize trade immediately, while Protocols 1-3 of the Agreement detailed import duties to
be eliminated or reduced, in some cases within limits set by Tariff Rate Quotas (TRQs), on trade in a
positive list of products.  Regarding imports into the EC, more than 120 products (notably fruit andvegetables) were covered by liberalization commitments under Protocol 1 and some 30 fisheries
products were covered under Protocol 2.  For trade in the opposite direction, Protocol 3 covered some
30 products for imports into Tunisia.  Under the Agreement, the Parties had foreseen discussions on
further liberalization after 1 January 2000.  In addition, the Parties had agreed to keep the possibilities
for granting further concessions under regular review in the Association Council, which oversaw theoperation of the Agreement.
6. The representative of the European Communities said that the trade statistics included as an
Annex to the Standard Format showed that trad e falling outside HS Chapters 1-24 accounted for
93.3 per cent of all trade between the Parties in 1997.  In view of the provisions of the Agreementproviding for the liberalization of trade between the Parties, it was the firm view of the EC and
Tunisia, that this data justified the Agreement as a free-trade area in the sense of Article XXIV.  As
"duties and other restrictive regulations of commerce" were to be eliminated on "substantially all the
trade" between the Parties, the Agreement fulfilled the requirements of Article XXIV:8(b) of theWT/REG69/M/1
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GATT.  No provisions in the Agreement required the Parties to raise their "duties" or the level of
"other regulations of commerce" to the trade of non-Parties; consequently the Agreement was also
consistent with the requirements of Article XXIV:5(b) of the GATT.  Finally, economic and social
relations between the EC and Tunisia had developed in recent years with total two-way trade in goods
growing to 8,956 million ECU in 1998 from  8,161 million ECU in 19 97 and 7,043 million ECU
in 1996.  The Parties anticipated that the liberalization foreseen under the Euro-Mediterranean
Agreement would contribute to the continual expansion of this trade.  His delegation, and his
colleagues from Tunisia, were ready to answer questions; however, detailed questions would be
answered in writing.
7. The representative of Tunisia drew attention to the large Tunisian delegation at the meeting as
evidence of the interest that his government att ached to the examination of the Agreement and an
indication of the importance it attached to the WTO and the principles for which it stood.
Underscoring the full endorsement of his delegation to the common statement made by the
representative of the EC, he highlighted several characteristics of the Agreement.  The Association
Agreement was a new step forward in the strengthening of relations between Tunisia and the EC on
the basis of partnership, interdependence and co-development.  In this connection, he stressed theimportance of regional agreements towards integrating developing countries into the world economy;
it was from this perspective that Tunisia had become the first Mediterranean country to sign an
Association Agreement with the European Union on 17 July 1995.  The Agreement replaced the
respective Cooperation Agreements of 1969 and 1976 as well as the various adjustment protocols that
had been concluded between Tunisia and its partners.  While some had considered the previousagreements to be hardly consistent with the principles and the rules of the WTO, the present
Agreement was consistent with the rules of the WTO and the relevant provisions of GATT 1994.  The
Agreement was designed to establish a free-trade area, to promote the liberalization of services, to
favor the free movement of capital, to promote competition rules and to strengthen economic
cooperation between the Parties.  Finally, the completion of the free-trade area was foreseen at the endof a 12 year transition period; this gradual approach allowed a progressively closer economic
relationship while enabling Tunisia to complete the re-structuring, modernisation and
internationalization of its economy.  He welcomed questions and comments but said that, on certain
issues, replies would be submitted in writing.
B. Section I - Background Information on the Agreement
8. The representative of the United States said that while Tunisia had provisionally applied the
Agreement as of 1 January 1997, the Agreement was not notified until March 1998.  He asked why it
had not been notified at the time of provisional application by Tunisia.
9. The representative of the European Communities explained that the government of Tunisia
had applied the provisions on tariff dismantling from 1 January 1997, but not the rest of the
Agreement; this had the effect of accelerating Tunisia's dismantling of import duties.  Regarding the
notification and entry into force of the Agreement, the Agreement was signed in July 1995 and the
ratification process was not completed until January 1998.  Following ratification, the Agreemententered into force in March 1998; the Agreement did not enter into force any earlier.  The notification
by the Parties followed thereafter.
10. Appreciating that the Agreement was not notified earlier because ratification procedures were
incomplete, the representative of the  United States asked if there had been a mechanism in place to
collect interim duties that would have been owed if the treaty had not been ratified.  Was the
Agreement provisionally applied in this circumstance or was the Agreement essentially consummated
at the time that the tariffs were rolled back?WT/REG69/M/1
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11. The representative of the United States also asked how the Parties explained the situation
where one Party implemented the Agreement but not the other. Although tariff preferences were
granted unilaterally, why were they not granted on an MFN basis?  The representative of Tunisia
explained that Tunisia had decided unilaterally to early tariff dismantling for domestic reasons.  Thatdecision referred exclusively to fiscal provisions of the Agreement regarding tariff roll-back for goodswhich were necessary to stimulate dynamism within the Tunisian economy.
12. The representative of the United States said that Section I.2 of the Standard Format indicated
a transition period lasting a maximum of 12 years from the date of entry into force of the Agreement.
According to the Understanding on Article XXIV, the maximum implementation period allowed was
ten year with limited exceptions in extraordinary cases.  The representative of Australia shared the
concern over the longer transition period.
13. The representative of the European Communities said that the difference in the level of
development in the EC and Tunisia was the rationale behind a transitional period of 12 years.  On the
EC's side, the market opening under the Agreement was essentially immediate for industrial products.
For Tunisia, given different levels of development and economic situation of the country, the Partiesagreed to a slower market opening.  The representative of Tunisia agreed with that response.  The
difference in development between the two partners fully justified the time-lag between therecommended period found in the Understanding of Article XXIV and the period retained by both
Parties to the Agreement.  The authors of the Unders tanding were judicious in saying that the ten year
period could be exceeded, if justified, and he considered the difference in development fulljustification for the slightly longer transition period.
14. The representative of Australia remarked that, as Tunisia began implementing some aspects
of the Agreement more than a year before entry in to force of the Agreement, and as the entry into
force of the Agreement itself marked the beginning of a 12 year transition period, the transition periodwas, in effect, longer than 13 years. The representative of Tunisia said that, in his view, the spirit in
which the Agreement was concluded would be observed and the period for the dismantlement oftariffs would not exceed 12 years.
15. The representative of the United States requested a description of the products falling under
the 12 year transition period, and the volume of trade it covered.  The representative of the
European Communities explained that products covered by the transitional period were specified in
particular Annexes, with distinct timetables applied to different products.  The 12-year period
essentially applied to the products listed in Annexes 4 and 5, by tariff line number; duties on other
industrial products were either eliminated in a shorter period or upon entry into force.  The
representative of Australia asked whether the representative of the EC could describe the range of
HS Chapter numbers covered by Annexes 4 to 5. The representative of the European Communities
drew attention to the information available from the Secretariat which contained such a description.
16. Recalling the explanation that the long transition period was due to the differences in the
developed and developing status of the Parties, the representative of the United States asked whether
there were any products on which the EC had a transition period longer than ten years and wondered
if the EC, as a developed Member, was using the same justification for its delay.
17. The representative of the European Communities responded that Article 9 of the Agreement
was clear about the tariffs to be applied to industrial products on import into the Communities; the
removal of tariffs on these products was immediate on entry into force.  Arrangements fornon-industrial products including agricultural  products and fishery products, were found in
Protocols 1 and 2, which specified a list of products for concessions and liberalization.  Liberalization
for those products happened on entry into force on those products.  There was no limitation in
Protocol 1 or 2 regarding timetables for their implementation; some of the products concerned wereWT/REG69/M/1
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affected by TRQs and there were arrangements for the gradual increase in the level of those TRQs.
Otherwise, the general provision dealing with agricultural and fishery products was contained in
Chapter 2, where certain steps of liberalization were made immediately; the Parties kept the scope for
further steps under constant review and set a specific  rendezvous in the year 2001 to determine further
market opening measures.  Transition periods for tariff elimination on exports from the EC intoTunisia were detailed in Annexes 4 and 5 which covered many or most lines in HS Chapters 25 to 97.
There was a distinction between the two Annexes based on whether the starting-point for tariff
dismantlement by Tunisia was immediate or on the fourth year after entry into force; but in both cases
the transition was complete in the seventh year.  In response to the request by the representative of
Australia, he said that the items did not fall into any easily summarized set of products.
18. The representative of the United States asked when the TRQs would be completely liberalized
given that the TRQs entered into force immediately and the size of the quotas were increasing.  Was
there a schedule in the Annexes for periodic increases in the size of the tariff quota and changes in the
rates?  If so, did any of those periods run beyond ten years?
19. The representative of the European Communities said that details could be found in
Protocol 1 to the Agreement.  He said that he may have confused the Committee by mentioning TRQs
because the number of products covered by TRQs was limited and fixed from the start.  However, for
these products or some other products there were also reference quantities for import, and the Protocol
provided that these reference quantities would be increased in four equal steps over a four year period
between January 1997 and January 2000.
20. The representative of Tunisia said that the Pa rties were trying to move towards a free-trade
area in all products, industrial, agricultural and fisheries.  Tunisia was working on the basis of
four lists of imports from the EC: the first one contained equipment, semi-finished products and raw
materials not produced in Tunisia; the second list detailed the progressive reductions in tariffs, overfive years, of products not manufactured in Tunisi a; the third list comprised goods which Tunisia
considered as being in competition with locally produced goods;  and the fourth list included goods
manufactured in Tunisia which would become competitive vis-à-vis  EC products by the fifth year,
which was also the year specified for starting tariff reduction on these products.  As for agricultural
products, quotas were built on those negotiated in the previous agreement and further negotiations
would begin on January 2000 in order to achieve a format that the Parties hoped would fall within the
12 year period for agricultural products.  Roll-back occurred in stages with respect to industrial andagricultural products but there would always be some minor derogations.  The statistics included in
the Annex of the Standard Format showed that mo st of the trade between the Parties was covered by
the Agreement and that the Parties hoped for better integration in agriculture.
21. The Chairman asked if he had understood correctly that products covered by TRQs were not
scheduled for growth in their respective quota allotments.  Recalling that "reference quantities",
however, would be increased over a period, he asked for the definition of a reference quantity.
22. The representative from the European Communitie s said that there were, within the list of
product commitments by the EC, three lines on which reference quantities were applied: apricots,
oranges and almonds.  In each case, it was foreseen that imports into the EC would be free of duty
within a certain reference quantity or tonnage.  He was not certain about the distinction between a
tariff quota and a reference quantity, but the number of products on which reference quantities or
TRQs were applied was limited.  For most of the other lists, there was a commitment for access that
was not subject to either TRQs or reference quantities.
23. The representative of the United States requested a confirmation that for those three items,
imports over the quota amount would still be allowed to enter the EC at the MFN rate.  If such was
the case the reference quantity appeared to be a TRQ with a zero tariff rate.  He disagreed with theWT/REG69/M/1
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idea that the list was narrow and thus not material.  While it only incorporated apricots, oranges and
almonds, these products might be of significant importance.  The representative of Australia agreed
with this observation, particularly with regard to  oranges.  He also asked whether, since the
Agreement had a maximum transition period of 12 years, further liberalization of agriculture trade
would take place within the maximum transition period.
24. Indicating the complexity of the Protocols and Annexes to the Agreement, the representative
of the United States asked if the Parties might prepare a one page paper describing the items that were
included in the Protocols and the measures being applied within them, in order to facilitate the nextround of examination.  The representative of the European Communities replied that, as elements of
the paper just described were likely to addressed as part of the written question and reply exercise, hesuggested that the exercise itself might be sufficient to address the latest request.  Regarding the futureliberalization of trade in agricultural procucts, he said that he was not in a position to give the
commitment requested.  The timing of further libera lization would be in the forefront of discussions
between the Parties when they are conducted according to the relevant provisions of the Agreement.
25. Pointing to the data provided in paragraph 4 of the Standard Format, the representative of the
United States requested that the Parties provid e the information for the categories listed in
Section II.1.1 of the Standard Format.  How much trade was covered in each listed subdivision?  He
also asked if it would be possible for the Parties to provide information on: MFN trade; less-than-
MFN-trade; and zero-duty trade for agri cultural, industrial and total trade.
26. Supporting the request for further data, the representative of Australia said that actual trade
flows were interesting because the complementar ity between the economies of the EC and Tunisia
suggested that a greater proportion of the trade could have been in agricultural products.  He
wondered if the trade in agricultural products was not greater, because of EC market access barriers
and suggested that it was precisely in that area that the barriers would not be dismantled.
C. Section II - Trade Provisions
Section II.1. - Import restrictions
27. Noting that Tunisia maintained quantitative re strictions on the import of automobiles, which
were subject to a phase-out plan under the supervision of the Committee on Balance-of-Payments
Restrictions, the representative of the United States was interested in knowing how Tunisia had
applied these measures against the EC since the introduction of their FTA in 1997.  The representativeof Tunisia replied that the abolition of quantitative restrictions vis-à-vis  the EC was in line with WTO
provisions; quantitative restrictions imposed for problems of balance of payments also applied to
the EC.
28. The representative of Australia said that information in the Standard Format provided that
there were over 120 products, notably fruits and vegetables, for which customs duties had been
eliminated or reduced and the Protocols held in the Secretariat should list these products by HS lines.
However, he wanted to know the number of lines on which duties had been eliminated and on which
they had been reduced.  He also requested the same information for TRQs which, judging from the
text, were operating with reduced in-quota tariffs and included the three products already mentioned.
29. The representative of the European Communities offered to respond in writing but stressed
that examinations were conducted to assess the co mpatibility of agreements with Article XXIV and
whether the "substantially all the trade" requirement had been fulfilled.  Substantially all the trade
between the EC and Tunisia fell in the area of in dustrial products; though agricultural and fishery
products were approached in a different structure, they also had to be acknowledged as a smallerWT/REG69/M/1
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proportion of the trade between the Parties.  He added that the Committee should focus on the
fulfilment of the "substantially all the trade" criterion.
30. Responding to the last point, the representative of the United States said that the mechanisms
being applied to agricultural and fisheries products went beyond a narrow focus on the "substantially
all the trade" requirement of Article XXIV:8.  His delegation did not view the use of preferential tariff
rates as justified and wanted to know of them and the nature of their use within the Agreement.
31. Supporting the view just expressed, the representative of Australia stated that the issue of
"substantially all the trade" was indeed important.  He also noted that, as evidenced in the Standard
Format, 10 per cent of the trade between the Parties was covered by food and agriculture within the
framework of high and continuing barriers to trade in that area but even leaving that aside, 10 per centwas not a negligible amount.  The Members of the Committee had a legitimate interest in knowing the
exact extent to which barriers to that trade would be eliminated as required by Article XXIV.
32. The representative of Tunisia said that the Parties considered the clause for a rendezvous over
agricultural products very important for future progress.  As for the relationship between
Articles XXIV and XIX, he considered it an interesting systemic issue, though not strictly applicable
within the examination of individual agreements.
33. The representative of Canada supported the interventions just made by the representatives of
the Unites States and Australia regarding the request for additional documentation and statistics.
While it would be convenient only to deal with the Agreement and the Standard Format, the purpose
of the meetings was to seek clarification on questions arising from this documentation and this
exercise fell within the mandate of the Committee. She said that questions dealing with the
elimination of duties versus preferential rates versus retaining MFN rates were germane to
understanding the impact the Agreement would have on other Members and between the Parties; sheurged the Parties to provide such information.
Section II.3 - Rules of origin
34. The representative of the United States asked for a more complete description of how the
rules of origin regime was being applied.  Given that there were cumulation provisions for work
carried out in the EC, Algeria, Morocco and Tunisia, what was the rationale for cumulation withAlgeria, as no FTA was currently in force between the EC and Algeria?  Were there any countries
other than the EC, Algeria, Morocco and Tunisia for which products received originating status under
the Agreement?  If so, identify them?
35. The representative of the European Communities said that the provisions on cumulation in the
Agreement would only apply if the EC also had comparable agreements with the other countries, and
recalled that the EC had already signed an agreement with Morocco and was conducting negotiations
with Algeria.  He added that the question deserved a written reply.
36. The representative of Australia observed that the Members were increasingly having their
questions referred to Annexes and Protocols or were being offered responses in writing.  He remarked
that although the Standard Format had been designed to facilitate examinations, the way in which the
examinations were developing seemed to defeat the purpose of having the Standard Format in the first
place.  He hoped that the Committee would bear this comments in mind for its future work.WT/REG69/M/1
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Section II.4 - Standards
37. To a question be the  representative of the United States about the extent to which Tunisia had
already adopted European technical standards, the representative of Tunisia replied that there was
legislation in the pipeline designed to harmonize Tunisia's system to the international European
standard and that there was also inclusion of mutual recognition agreements of national certification
systems.
Section II.5 - Safeguards
38. The representative of Canada had a question regarding the interpretation of the phrasing in
Section 5.1 of the Standard Format which stated that Tunisia was allowed to increase or re-introduce
customs duties for infant industries.  What was meant by an increase or re-introduction of customs
duties?  Did this mean that relevant duties could be raised: above the rate at the time the Agreement
was signed; to the MFN rate at the time the Agreement was signed; or to some rate in between those?
39. The representative of the United States asked if the measures outlined in Sections 5.1 and 5.2
of the Standard Format had ever been used.  If so, when, how, and on what products?  How would the
Parties apply the global safeguard provisions set out in the WTO Agreement on Safeguards: was there
a possibility that Parties could exclude each other from the application of a safeguard measure or
maintain preferential rates vis-à-vis  another Party in the face of a global safeguard action by one of the
Parties?
40. In response to the question regarding infant industries, the representative of Tunisia said that:
first, such measures had never been applied by Tunisia; second, even if they were eventually applied,
such application would not go beyond the 12-year transition period; and third, in no case would the
MFN tariff be exceeded.  Regarding the application of global safeguards, as the Agreement had comeinto force quite recently and the first Consultation Committee had only convened during the previous
week, the Parties were at a preliminary stage of the implementation of the Agreement.  They hoped
that there would be very little recourse to the use of such exceptional measures but if such actions
were taken, the Parties would abide by WTO rules.
41. The representative of the European Commission agreed with the points made by the
representative of Tunisia and added that he understood that no safeguard measures had been taken
under the provisions of the Agreement to that date.  The Agreement did not affect the wider
consideration of WTO rights and obligations in the area of safeguards.  Thus, the matter raised by the
representative of the United States was not actually affected by the Agreement.
42. The representative of the United States requested a confirmation that if any Party to the
Agreement took a safeguard action under the WTO Agreement, such action would be applied equally
to the other Party as well as to all other Members of the WTO.  The representative of the
European Communities recalled the position that the EC had adopted on the legal relationship
between Article XXIV and Article XIX of the GATT, and the Agreement on Safeguards, and addedthat there was nothing in the Agreement which would prejudge the outcome in either direction.
43. The representative of Australia said that he did not understand what was meant by the reply
that there was nothing in the Agreement that would affect safeguard rights under the WTO.  He asked
whether the safeguard measures envisaged in Section II.5.2 of the Standard Format were consistent
with those of the WTO Agreement on Safeguards or whether the conditions for the demonstration ofserious injury and serious disturbance were different from those of the WTO Agreement on
Safeguards.WT/REG69/M/1
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44. The representative of the European Communities emphasized that the safeguards provisions
in the Agreement related to trade between the Parties; in that sense, they did not concern the
circumstances of global safeguard measures as understood in the context of Article XIX of the GATT.
Regarding criteria, in the absence of any experience of such measures, he could only be guided by the
text of the Agreement because there was no history of interpretation.
45. The representative of Australia said that it was a legitimate interest of the Members to know
whether the safeguards provisions within the Agreement made it easier to liberalize trade or were
more stringent than those of the WTO Agreement thereby impeding the liberalization of trade
between the Parties.  He understood the explanation that, as the safeguard measures had never been
applied, it would be hard to judge their consequences.  Still, when the Agreement was being
negotiated, the negotiators dealing with safeguards had recourse to the WTO Agreement and, if thesafeguards measures in the Agreement were different from those of the WTO Agreement, he
supposed that Members would be interested to know whether the safeguard measures in the
Agreement were more liberal or more stringent th an those in the WTO Agreement.  The answer to
this question would have a bearing on how the remova l of barriers to trade between the two Parties
would be carried out.
46. The representative of the European Communities said that the previous question strayed from
the operation of safeguards within the Agreement and into the issue of whether safeguards had a place
in any bilateral agreement.  The unclear relationship between Articles XXIV and XIX of the GATT
had been detaining the Committee for some time without, as yet, leading to a common view amongthe Members.
D. Section III - General Provisions of the Agreement
Section III.5 - Relation with other Trade Agreements
47. The representative of the United States expressed interest in knowing if there was any
provision in the Agreement which prevented Tunisia from making concessions on a MFN basis.  The
representative of Tunisia responded in the negative and said that the Parties respected WTO rules and
abided by GATT principles.
48. The representative of Australia noted that the Section III.5 of the Standard Format stated that
if Tunisia concluded FTAs with other Mediterranean countries, the EC was "ready to envisage"
cumulation of origin in its trade with these countries.  He requested an explanation of the phrase ready
to envisage cumulation.  The representative of the European Communities replied that in view of
uncertainties about which agreements and whic h countries would be involved within the
Mediterranean area, the use of the word "envisage" was simply a mark for the future.  The
representative of Australia said that a recent Trad e Policy Review for Egypt indicated that Egypt and
Tunisia had a FTA.  Mentioning that the EC was already advanced in the process of negotiating an
agreement with Egypt, he expressed his understa nding that cumulation between Egypt and Tunisia
with regard to the EC was ruled out at the moment.
49. The representative of the United States asked how the cumulation of origin for products
coming into the Mediterranean fit within the pan-European system of cumulation.  To what extent
was additional processing required for such products to become European-origin products?  He asked
for a clarification of the relationship between the cumulation provisions applied to the bilateralagreements between the EC and Mediterranean countries and how the agreements would fit into the
overall European system.  The representative of the European Communities said that he would be
happy to reply to this question in writing after consulting experts in this area.WT/REG69/M/1
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50. The representative of the United States wa s interested in knowing if the Parties were
intending to establish an Economic Integration Agreement on Services.  The representative of the
European Communities said that Articles 31 and 32 of the Agreement explained how the Parties were
to progress in the area of services.  This progress included a rendezvous, to assess the possibility oftaking work in this area forward, no later than five years after entry into force of the Agreement.Pending negotiations, there was no more than a reconfirmation of the Parties' GATS obligations.
51. The Chairman said that the Committee had had an interesting first round of examination for
this Free Trade Agreement.  There were a number of questions which the Parties had asked be
submitted in writing and he suggested that delegations with outstanding questions submit them to the
Secretariat no later the 15 July 1999.  That would enable the Committee to retain momentum in the
examination process and the Committee could resume the examination of the Agreement at a laterdate.
52. The Committee took note of the comments made.
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