WORLD TRADE
ORGANIZATIONWT/REG154/2
29 October 2003
(03-5740)
Committee on Regional Trade Agreements Original:  English
EUROPEAN FREE TRADE ASSOCIATION
Communication from the EFTA States
AGREEMENT AMENDING THE CONVENTION ESTABLISHING
THE EUROPEAN FREE TRADE ASSOCIATION
Submission of Information according to “the Standard Format for Information on Economic
Integration Agreements on Services”.
This information is submitted in accordance with the “standard format for information on
economic integration agreements on services” as taken note of by the Committee on Regional Trade
Agreements at its meeting on 2 May 1997.
To facilitate the examination by the Members, the relevant provisions on trade in services
have been identified in this information.  Th e full text of the amended Convention (consolidated
version), where these provisions can be found, in their original version, is available at the WTO
Secretariat, on the EFTA web-site www.efta.int, in the EFTA.
I. BACKGROUND INFORMATION ON THE AGREEMENT
1. Membership And Dates Of Signature, Ratification And Entry Into Force
The Convention establishing the European Free Trade Association (EFTA) was signed on
4 January 1960 and entered into force on 3 May 1960.  As of today there are four Member States of
EFTA: Iceland, Liechtenstein, Norway and Switzerland.  Several countries like the UK and Denmark
in 1973, Portugal in 1986 and Austria, Finland and Sweden in 1994 have withdrawn from the
Convention and have become EU Member States .  Over time there have been made many
amendments to the Convention.  A major revision started in 1999 and resulted in an Agreement
amending the EFTA Convention that was signed by the four EFTA members on 21 June 2001 in
Vaduz in Liechtenstein and entered into force on 1 June 2002.
The Agreement amending the EFTA Convention was notified on 3 December 2002 in
accordance with Article V:7(a) of the GATS.
2. Type Of Agreement
The Agreement amending the EFTA Convention has developed the EFTA Convention
(consolidated version) into a comprehensive econom ic integration agreement, now including services
and several other trade related issues in addition to the traditional goods-related and institutional
provisions.WT/REG154/2
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The objectives of the Association shall be:
• to promote a continued and balanced strengthening of trade and economic relations
between the Member States with fair conditions of competition, and the respect ofequivalent rules, within the area of the Association;
• the free trade in goods;
• to progressively liberalise the free movement of persons;
• the progressive liberalisation of trade in services and investment;
• to provide fair conditions of competition affecting trade between the Member States;
• to open the public procurement markets of the Member States;
• to provide appropriate protection of intellectual property rights, in accordance with
the highest international standards.
Article 2 of the EFTA Convention provides for a progressive liberalisation of trade in services
in accordance with Article V of the General Agreement on Trade in Services (hereinafter “GATS”).
3. Scope
Chapter IX and X of the EFTA Convention read together cover all modes of delivery (supply)
as defined in GATS.  Further, the EFTA Convention covers in principle all services sectors with
certain conditions relating to land and air transport listed in Annexes P and Q and subject to
reservations for individual Member States in Annexes L, M, N, O.
4. Trade Data
See available data from OECD and Eurostat.
II. PROVISIONS AFFECTING TRADE IN SERVICES
1. (a) Provisions In The EFTA Convention Which Are Relevant To The Scope Of The
GATS:
Chapter I - “Objectives”
Chapter IV - State aid
Chapter VI - “Rules of competition”
Chapter VIII - “Free movement of persons”Chapter IX - “Investment”
Chapter X - “Trade in Services”
Chapter XIII - “Current payments”
Chapter XIV - “Exceptions and safeguards
Chapter XVI - “Institutional provisions”Chapter XVII - “Consultations and dispute settlement”
Chapter XVIII - “General provisions”WT/REG154/2
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(b) These provisions of the EFTA Convention constitute a liberalisation of trade in
services between the EFTA States, in the sense of Article V, paragraph 1, given that:
− it provides for universal sectoral coverage of all services activities, subject to
the exceptions under Articles 33, 39 and Annexes L to Q. These exclusionscorrespond to the exceptions provided for under the GATS.
− it provides for the liberalisation of trade through all modes of supply (Articles
23 and 29): “cross border” trade and “commercial presence”, as well as“consumption abroad”, and “presence of natural persons” (subject to
conditions set out in Article 29 (7)). 
− Article 29 (3) stipulates that the Member States shall endeavour to eliminate
gradually remaining discriminations, which they may maintain in accordance
with Annexes L to O.  The Member States agree to review the present
provision, including its Annexes, before 31 May 2004, with a view to
reducing, and ultimately eliminating, the remaining restrictions.
(c) The EFTA States have negotiated their Schedule of Specific Commitments and list of
MFN exemptions during the Uruguay Round.  The entry into force of the EFTA
Convention did not imply any modification or amendment in these lists.  The EFTAConvention aims at facilitating trade betwee n the Parties.  No provisions of the EFTA
Convention aim at raising the level of restri ctions of trade in services in respect of
any other WTO Member.
2. Rules Of Origin
Article 23 (1) states that within the framework of, and subject to, the provisions of this
Convention, there shall be no restrictions on the righ t of establishment of companies or firms, formed
in accordance with the law of a Member State and having their registered office, central
administration or principle place of business in the territory of the Member States.  This shall also
apply to the setting up of agencies, branches or subsidiaries by companies or firms of any Member
State established in the territory of any other Member State.
Article 29(1) provides that within the framework of, and subject to, the provisions of this
Convention, there shall be no restrictions on the righ t to supply services within the territory of the
Member States in respect of natural persons, companies or firms of Member States who are
established in a Member State other than that of the natural person, company or firm for whom theservices are intended.
3. Standards/Recognition
Article 32 stipulates that that the mutual recognition between the Member States of diplomas,
certificates and other evidence of formal qualifications, and the coordination of the provisions laid
down by law, regulation or administrative action in the Member States concerning the taking up and
pursuit of activities by natural persons, shall be governed by the relevant provisions of Article 22, ofAnnex K (including Appendix 3 thereto) and of the Protocol to Annex K on movement of persons
between Liechtenstein and Switzerland.
Moreover, a Member State may enter into an agreement or arrangement with a particular
State providing for the recognition of standards, criteria for authorization, licensing or certification ofservices suppliers, in which case it shall offer adequate opportunity for any other Member State to
negotiate its accession to such an agreement or arrang ement or to negotiate comparable ones with it.  WT/REG154/2
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Where a Member State accords recognition autonomously, it shall afford any other Member
State adequate opportunity to demonstrate that they also fulfil these criteria, and thereby should be
given the same recognition. Recognition shall not be accorded in a discriminatory manner, or as a
disguised restriction to the establishment in the services sector.
4. Safeguards
According to Article 40, a Member State may unilaterally take appropriate measures under
the conditions and procedures set out in Article 41 if serious economic, societal or environmental
difficulties of a sectoral or regional nature liable to persist are arising.
5. State Aid
According to Article 16 (3), the Member States shall review the scope of application of this
chapter with a view to extending the disciplines wi th respect to State aid to the field of services,
taking into account international developments in the sector.  The reviews shall take place at yearly
intervals.
6. Government Procurement
Nothing provided in respect of the progressive liberalisation of the trade in services will be
construed to impose any obligation with respect to government procurement  (Article 34).
7. Sector-specific provisions
Annexes P and Q contain specific rules applicable to land and air transport.
III. GENERAL PROVISIONS OF THE AGREEMENT
1. Exceptions And Reservations
Exceptions are provided for under Article 33 (general) and Article 39 (security).
2. Accessions
According to Article 56, any State may accede to  the Convention, provided that the Council
decides to approve its accession, on such terms and conditions as may be set out in that decision.
3. Dispute Settlement Procedures
The EFTA Convention provides for various ways to resolve disputes between the Member
States.
Article 47 stipulates that Member States shall at all time endeavour to agree on the
interpretation and application of the convention. Cooperation and consultations would lead to a
mutually satisfactory resolution of matters that might affect its operation.
The EFTA Convention also provides for an arbitration procedure for disputes between the
Member States. If a matter has not been resolved within 45 days after consultations pursuant to
Article 47 have taken place, according to Article 48 such matter may be referred to arbitration. The
procedure of the arbitration is regulated in Article 48 and Annex T to the EFTA Convention.WT/REG154/2
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4. Relation With Other Trade Agreements
According to Article 49, the EFTA Convention do es not create any specific relations with
other bilateral, plurilateral or multilateral agreements.  In particular, the EFTA Convention shall be
without prejudice to the rules applicable to Member States governed by the Agreement on the
European Economic Area, the Nordic cooperation and the regional union between Switzerland andLiechtenstein.
5. Institutional Framework
A Council for the administering of the EFTA Convention is set up in Article 43.  Each
Member State is represented with one vote. The Council may decide to set up such organs,
committees and other bodies, as it considers necessary to assist it in accomplishing its tasks.  Annex S
lists the current bodies, including an expert group on services, establishment and capital movement.
IV. OTHER
The full text of the EFTA Convention is available from
- the WTO Secretariat
- the EFTA Secretariat
- the EFTA States
- www.efta.int
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