RESTRICTEDWORLD TRADE
ORGANIZATIONWT/REG69/4
2 May 2000
(00-1760)
Committee on Regional Trade Agreements Original:  English
EURO-MEDITERRANEAN AGREEMENT BETWEEN THE
EUROPEAN COMMUNITIES AND TUNISIA
Questions and Replies
This document reproduces questions addressed to the Parties and the responses submitted.
The questions and replies set out below are organized in accordance with documents WT/REG69/2.
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I. BACKGROUND INFORMATION ON THE AGREEMENT
1. Membership and Dates of Signature, Ratification and Entry into Force
1. Tunisia provisionally applied the Agreement as of 1 January 1997, but the Agreement
was not notified until later.  Why did Tunisia not notify it at the time of provisional application?
The Agreement was notified to the WTO in January 1999, following the completion of the
ratification process in January 1998 and its entry into force in March 1998.  There was no provisional
application of the Agreement: only the provisions on tariffs, not the full Agreement, were applied (by
Tunisia) in advance of March 1998.
2. Was a mechanism put in place by Tunisia to collect interim duties that would have been
owed if the treaty had not been ratified?  Did the circumstances amount to provisional
application of the Agreement?  How do the Pa rties explain the situation where one Party
implemented the Agreement but not the other? Why were tariff preferences granted
unilaterally to the European Communities (EC) not applied on an MFN basis?
There was no decision by the Parties to implement the Agreement provisionally from
January 1997.  Tunisia decided, for internal reasons, to eliminate duties ahead of schedule, in order to
stimulate the dynamism of its domestic economy.  The EC/Tunisia Co-operation Agreement of 1976
remained in force until the entry into force of  the Euro-Mediterranean Agreement on 1 March 1998,
following completion of the ratification process.
3. Scope
3. According to the Understanding on Article XXIV, implementation periods for free trade
areas (FTAs) should not exceed 10 years except in  exceptional circumstances.  The transitional
period foreseen in this Agreem ent is a maximum of 12 years from the date of entry into force of
the Agreement.  How do the Parties justify this?WT/REG69/4
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The rationale for the transitional period of 12 years lies in the sharp difference between the
respective levels of development of the EC and Tunisia.  The Barcelona process1 provides the overall
framework for the development of the partnership ag reements between the EC and the countries of the
Mediterranean basin and recognizes the need to allow for progressive establishment of the FTAs,
which form an important element of this desired partnership.
On the EC side, all market opening under the Agreement takes place immediately (except for
some concessions on agricultural products which are implemented progressively by 1/1/2000).  In
view of the level of development already achieved in Tunisia, market opening towards imports from
the Community is slower, lasting in some cases up to 12 years.  A transitional period of this length is
necessary to allow Tunisia to deal progressively with the economic and social consequences linked to
the process of economic liberalisation and market opening under the FTA.
The Parties consider that these factors fully justify the length of this transitional period.
4. Can the Parties please describe and identify the Harmonized System (HS) Chapter
numbers of the products falling under the 12-yea r transition period, and the volume of trade
covered?
Products falling within the 12-year transition are listed in Annexes 4 and 5 of the Agreement.
Annex 4, under which tariff elimination takes place progressively over a period of 12 years from entry
into force of the Agreement, covers 1509 tariff positions at seven-digit level and concerns productswhich enjoy a certain level of competitiveness against like European products.  Over the period
1996-98 average imports of these products were about 502 million dinars.  Annex 5, under which
tariff elimination takes place progressively over a period of eight years beginning four years after
entry into force, covers 1188 tariff positions at seven-digit level and concerns products which need to
reach a higher level of competitiveness before exposure to competition from like European products.Over the period 1996-98 average imports of these products were about 476 million dinars.
5. Are there any products on which the EC ha s a transition period longer than 10 years?
If yes, with what justification?
No. Under Article 9 of the Agreement all tariffs on imports of industrial products into the EC
from Tunisia are eliminated at entry into force.   Specific concessions made on agricultural and
fisheries products are found in Protocols 1 and 2.  These concessions also apply from entry into force.
For some products covered by Protocol No 1, growth rates are built in to tariff quotas or reference
quantities, but these cover the period up to 2000 only (i.e. less than ten years).  Tariff quotas or
reference quantities are increased in four equal inst alments each corresponding to 3 per cent of these
amounts from 1 January 1997 to 1 January 2000.  These increases were applied retrospectively fromthe date of entry into force of the Agreement.
We note that some of the products will be subject to liberalization in a time-frame
longer than ten years.  We would be grateful for an explanation of the reasons for the extended
time-frames and the items involved.
The parties to the Agreement have provided replies to questions concerning the exceeding of
the ten-year period provided for by the Understanding on the Interpretation of Article XXIV of the
GATT on territorial application, frontier traffic, customs unions and free trade areas
(c.f. Section I/paragraph 13 of WTO Secretariat document WT/REG69/M/1, dated 26 July 1999).
                                                     
1 The Barcelona process was launched at the Euro-Mediterranean Conference held in Barcelona on
27/28 November 1995.WT/REG69/4
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The products falling within the 12-year period for tariff elimination are listed in Annexes 4
and 5 of the Agreement.
Annex 4, under which tariff elimination takes place progressively over a period of 12 years
from entry into force of the Agreement, covers 1,509 tariff positions at seven-digit level and concernsproducts which enjoy a certain level of competitiveness against like European products.  Over the
period 1996-1998 average imports of these products were about 502 million dinars.
Annex 5, under which tariff elimination takes place progressively over a period of eight years
beginning four years after entry into force, covers 1,188 tariff positions at seven-digit level and
concerns products which need to reach a higher level of competitiveness before exposure to
competition from like European products.  Over the period 1996-1998 average imports of theseproducts were about 476 million dinars.
4. Trade Data
6. Could the Parties provide further trade data on the different products covered by
liberalisation under the agreement, including the individual annexes and protocols?  How much
trade is covered by each subdivision?  Could th e Parties provide information on the proportions
of MFN trade;  less-than-MFN-trade;  and duty-free trade for agricultural, industrial and total
trade?
All trade between the Parties in industrial produc ts (HS Chapters 25-97) will be liberalised by
the end of the transitional period, with the possible exception of imports into Tunisia of products
falling under Annex 6.  The Parties have undertaken to examine future arrangements concerning
Annex 6 products four years after entry into force of the Agreement.  Imports into Tunisia in 1998 of
all products on the Annex 6 list were of a value of 31 million ECU, representing roughly 0.3 per centof total bilateral trade in that year.  Total bilateral trade in HS Chapters 25-97 represented 93.3 per
cent of total trade in 1997 and 94.1 per cent in 1998.  Taking into account the trade liberalisation also
undertaken in respect of trade in agricultural and fisheries products, the Parties are of the opinion that
the statistical data already presented demonstrates that the Agreement meets the “substantially all the
trade” coverage test of Article XXIV:8(b).
7. We welcome the data provided by the Parties.  We would also be grateful for advice of
what percentage of trade for each major sector (e.g. industrial, fisheries, agriculture) of trade
between the parties (for each party):
- has the duties eliminated and other regulations of commerce (such as quotas)
eliminated?
- is given concessions (rather than having duties and other regulations of
commerce removed) or is excluded?
For industrial products:
- Exports from Tunisia into the European Union are completely free since the
Cooperation Agreement entered into force;
- imports into Tunisia from the European Union are subject to progressive
liberalization over a period of 12 years.WT/REG69/4
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The following table provides information concerning exports of agricultural and fishery
products from Tunisia into the European Union (in millions of dinars):
Products 1997 1998 1999 Average
Products free of customs duties
or tariff quotas426.9 402.6 511.7 447
Other products 23.1 18.4 30.3 24
Total 450 421 542 471
Percentage share of products free
from customs duties or tariffquotas94.86% 95.63% 94.4% 94.9%
II. TRADE PROVISIONS
1. Import Restrictions
7. Tunisia maintains quantitative restrictions on the import of automobiles, which were
subject to a phase-out plan under the supervision of the Committee on Balance-of-Payments
Restrictions.  How are these measures applied against the EC since the introduction of their
FTA in 1997?
The abolition of quantitative restrictions vis-à-vis the EC was in line with WTO provisions;
quantitative restrictions imposed for balance-of-payments reasons also applied to the EC.
3. Rules of Origin
8. Please give a more complete description of the operation of the rules of origin regime.
Given that there were cumulation provisions for work carried out in the EC, Algeria, Morocco
and Tunisia, what was the rationale for cumula tion with Algeria, 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.
Since 1978, the agreements which have linked th e EC with the Maghreb countries (Algeria,
Morocco and Tunisia) have already allowed for identic al rules of origin which included provisions on
cumulation.  The negotiations for a new generation of agreement have led to the conclusion of
Euro-Mediterranean Agreements between the EC and Morocco and between the EC and Tunisia.  But
as yet only the EC/Tunisia Agreement has entered in to force.  Cumulation remains possible for any
products which have identical rules of origin subject to the provisions contained in all the agreements
presently in force.
9. Section III.5 of the Standard Format (WT/ REG69/2) 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.  Please ex plain the phrase “ready to envisage cumulation”.
Parallel to what has been done with the countries of Central and Eastern Europe the EC has
undertaken work to harmonize the rules of origin which govern trade with the countries of theMediterranean.  It is eventually envisaged to establish a “pan-European-Mediterranean” system of
cumulation, in which the Community and all its Mediterranean partners would participate.  For this
system of cumulation to be achieved, which would depend on the use of identical rules of origin, a
certain amount of work will be called for.  Hence the declaration of the EC in this Agreement on its
readiness to envisage future cumulation.WT/REG69/4
Page 5
10. We understand that Egypt and Tunisia have a FTA.  The EC is advanced in its
negotiations for an agreement with Egypt.  Is it correct, however, that cumulation between
Egypt and Tunisia with regard to the EC is ruled out at the moment?
The only possibility for cumulation between th e EC and Tunisia is that set out in the
Association Agreement.  Cumulation between Egypt, Tunisia and the EC would be subject to the rules
on “pan-European-Mediterranean” cumulation, in which the EC and all the Mediterranean countries
also signatories of the Barcelona declaration would participate.
11. How does 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?  Could the parties clarify the
relationship between the cumulation provisions applied to the bilateral agreements between the
EC and Mediterranean countries and how the agreements would fit into the overall European
system?
The system of pan-European cumulation applies between the EC, EFTA, the Central and
Eastern Europe countries and the Baltic countries.  The Mediterranean countries do not participate in
this system.  In order to be considered as Tunisian or EC products and thereby entitled to benefit from
preferences under the Agreement, products imported into Tunisia or the EC must undergo sufficient
working or processing in the sense of Article 7 of Protocol No. 4.  For any product imported into
Tunisia from one of the countries of EFTA, Central and Eastern Europe or the Baltic countries, its
origin will be determined by the legal framework under which the importation takes place.
4. Standards
12. To what extent has Tunisia already adopted European technical standards?
At present Tunisia adopts national standards on the basis of international standards or, where
these are lacking, on the basis of European standards.  In the absence of Tunisian standards,
international standards are applied and, where these are lacking, European standards are applied.
5. Safeguards
13. It is stated in the Standard Format (W T/REG69/2) that, in the case of safeguard
measures taken to protect infant industries, Tunisia is allowed to increase or re-introduce
customs duties.  What is meant by an increase or re-introduction of customs duties?  Would it
be possible to raise relevant duties above the rate  at the time the Agreement was signed;  to the
MFN rate at the time the Agreement was sign ed;  or to some rate in between them?
Pursuant to Article 14 of the Agreement, Tunisia is allowed during a transitional period, and
in exceptional circumstances and provided that certain conditions are met, to increase or reintroduce
customs duties which have been reduced or abolished pursuant to Article 11 of the Agreement.  Suchincreased or reintroduced duties may not exceed 25%  ad valorem and shall maintain an element of
preference for products originating in the EC.
14. Have safeguard measures ever been applied under the Agreement?  If so, when, how,
and on what products?  How would the Parties apply the global safeguard provisions set out inthe WTO Agreement on Safeguards: is there a poss ibility 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?WT/REG69/4
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No safeguard measures have yet been applied under the Agreement.  The Agreement does not
contain any provisions which affect or prejudice the Parties’ rights and obligations under the WTO
Agreement on Safeguards.
15. Can the Parties confirm that if any Part y 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 Agreement does not affect or prejudice the Parties’ rights and obligations under the WTO
Agreement on Safeguards.
16. Are the safeguard measures envisaged under the Agreement (Articles 25-27) consistent
with the provisions of the WTO Agreement on  Safeguards or are the conditions for the
demonstration of serious injury and serious disturbance different from those of the WTO
Agreement on Safeguards?
The safeguard provisions of the Agreement are consistent with the provisions of the WTO
Agreement on Safeguards.  As regards safeguard measures, it should be noted that no such measures
have been applied until now under the Agreement.
With regard to safeguards, including Article 25, what criteria are to be used to
determine whether a "serious disturbance" is  being caused and what are the "appropriate
measures" to be used?  Can the contracting Parties give assurances that such measures would
be WTO consistent, and would not prejudice the rights of non-parties to this agreement?
Tunisia has not applied any safeguard measures in trade relations with the European Union.
The criteria to be used to determine the existence of serious injury are those contained in
Article 4 of the WTO Agreement on Safeguards.  The "appropriate measures" referred to in Article 25
of the Cooperation Agreement are consistent with the provisions of Article 5 of the Agreement on
Safeguards and will be applied to imported products whatever their origin.
As regards safeguard measures, the Cooperation Agreement does not contain any provisions
for measures whose application might prejudice the safeguard-related rights of WTO Members thatare not party to this Agreement.
8. Sector-Specific Provisions
8.2 Agricultural and fisheries products
17. When would any tariff rate quotas (TRQs) for agricultural and fisheries products be
completely liberalized, given that the TRQs ente red into force immediately and the size of the
quotas were increasing?  Was there a schedule for pe riodic increases in the size of the tariff
quota and changes in the rates?  If so, did any of those periods run beyond 10 years?
The Agreement establishes a process aiming at a greater liberalisation of the Parties’
reciprocal trade in agricultural and fishery products.  The first stage of this process runs until
31 December 2000.  From 1 January 2000 the EC and Tunisia will assess the situation with a view to
determining the liberalisation measures to be applied from 1 January 2001.
18. For those items subject to reference quantities, would imports from Tunisia over the
reference amount still be allowed to enter the EC at the MFN rate?  If so, is it reasonable to
equate the reference quantity with a TRQ with a zero tariff rate?WT/REG69/4
Page 7
The answer to the first question is “yes”.  The reference quantity should not be equated
directly to a TRQ, as the management of reference quantities is more flexible than that of tariff
quotas.
19. Would further liberalisation of trade in agr iculture products take place within the
12 year maximum transition period of the Agreement?
Article 16 of the Agreement provides for a greater liberalisation of reciprocal trade in
agricultural products.  Examination of new liberalisation measures, pursuant to Article 18 of the
Agreement, will be undertaken from 1 January 2000.  New liberalisation measures should be applied
from 1 January 2001.
20. Could the Parties please describe the items included in the Protocols and the measures
being applied within them?
Protocol No 1 sets out the arrangements applying to imports of agricultural products into the
EC.  It concerns 125 tariff positions across 11 ch apters of the nomenclature.  The following table
provides a summary of the products and the type of concession concerned.
Chapter
NumberProducts Number of
Tariff PositionsDistribution of Tariff Positions
by Type of Concession
1 Live animals 2 zero customs duties
2 Meat 3 zero customs duties
6 Flowers 1 zero customs duties subject to tariff quota
7 Vegetables 25 21 positions with zero customs duties, 1 position with
zero customs duties subject to tariff quota and 3
positions with duties below MFN rates
8 Fruits 17 7 positions with zero customs duties, 3 with zero
customs duties subject to tariff quota and 7 with dutiesbelow MFN rates
9 Spices 5 zero customs duties
12 Oilseeds and
oleaginous fruits7 zero customs duties
15 Olive Oil 2 preferential rate below (-95%) MFN rates subject to
tariff quota
20 Preparations of
Vegetables,
Fruit…59 37 positions with zero customs duties, 3 positions with
zero customs duties subject to tariff quota and 19 with
duties below MFN rates
22 Wine 2 zero customs duties subject to tariff quota
23 Residues and
Wastes from thefood industries2 1 position with zero customs duties and 1 position with
duties below MFN rates
Summary: Number of positions by type of concession
-    83 positions with zero customs duties
-    10 positions with zero customs duties subject to tariff quota
-    30 with duties below MFN rates-    2 with duties below MFN rates subject to tariff quota
These preferences cover 94 per cent of EC imports of agricultural products (as defined in
Annex II of the EC Treaty) originating in  Tunisia (based on average imports 1996-98).WT/REG69/4
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Protocol No 2 sets out the arrangements applying to imports of fish and fisheries products into
the EC.  This provides that all imports are free of customs duties.  Imports of canned sardines are
subject to an annual duty free quota of 100 tonnes.
Protocol No 3 sets out the arrangements applying to imports into Tunisia for 39 items (at
six-digit level).  Imports of these products are subject to preferential customs duties within set tariff
quotas.
21. The Standard Format (WT/REG69/2) indicates that for over 120 products, notably
fruits and vegetables, customs duties have been eliminated or reduced and that these products
are listed by HS lines in the Protocols.  On how many lines have duties been eliminated and on
how many have they been reduced?  Ho w many lines are subject to TRQs, etc?
The answer to this question is given in that to the proceeding question.
III. GENERAL PROVISIONS OF THE AGREEMENT
5. Relation with Other Trade Agreements
22. Is there any provision in the Agreement which prevents Tunisia from making
concessions on a MFN basis?
The answer is no.
6. Provisions on Right of Establishment and Services
23. Do the Parties intend to establish an Economic Integration Agreement on Services?
Articles 31 and 32 of the Agreement indicate how the Parties intend to progress in the area of
services.  They agree to cover the area of servic es in the Agreement by simply reaffirming their
obligations under the General Agreement on Trade in Services (GATS) at the entry into force.  An
assessment of how the objective of liberalisation in this area is being attained, and possible
subsequent recommendations, are scheduled for no later than five years after entry into force of theAgreement.  Pending the relevant discussions between the Parties, it is too early to anticipate how this
will be taken forward.
IV. OTHER
We acknowledge that competition policy (Art icle 36) is not covered explicitly by the
WTO rules.  However, certain aspects of competition are captured by various WTO rules we
therefore would be grateful for comments on the following questions:
- What criteria are to be applied in asse ssing whether actions prevent, restrict or
distort competition, or whether actions by dominant undertakings constitute an
abuse of their position?  Are these considerations subject to specific legally based
processes?WT/REG69/4
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- Can the Parties give assurances that implementation of Article 36 does not
discriminate against the interests of non-parties to the Agreement (particularly
given that it exempts agricultural a nd fishery products from the provisions
stipulated in para. 1(c) of this Article?
Article 36, paragraph 3, states:  "The Association Council shall, within five years of the entry
into force of this Agreement, adopt the necessary  rules for the implementation of this Article."
Whatever provisions are adopted in this respect will take into account the relevant WTO
disciplines.
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