WORLD TRADE
ORGANIZATIONWT/REG138/3
17 April 2003
(03-2116)
Committee on Regional Trade Agreements Original:  English
EUROPEAN ECONOMIC AREA
Questions and Replies
This document reproduces the questions addressed to the Parties and the responses submitted.
The questions and replies set out below are organized in accordance with document WT/REG138/2.
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I. BACKGROUND INFORMATION ON THE AGREEMENT
1. Membership and Dates of Signature, Ratification and Entry into Force
1. We have not been able to view all of the annexes on the EFTA Internet site, and have not
been able to locate the EEA  on the EU Internet site.
The text of the European Economic Area ( EEA) Agreement can be found at the following
URL: http://secretariat.efta.int/Web/European EconomicArea/EEAAgr eement/EEAAgreement
3. Scope
2. Please clarify the scope of this agreement.
The Scope of the agreement, as explained in Article 1 of the EEA is to "promote a continuous
and balanced strengthening of trade and economic relations between the Contracting Parties with
equal conditions of competition, and the respect of the same rules, with a view to creating a
homogeneous European Economic Area" and this shall entail "(a) the free movement of goods; (b) the
free movement of persons; (c) the free movement of services; (d) the free movement of capital; (e) the
setting up of a system ensuring that competition is not distorted and that the rules thereon are equally
respected; as well as (f) closer cooperation in other fields, such as research and development, the
environment, education and social policy."
3. Please explain whether the agreement has substantial sectoral coverage.
The agreement covers all sectors, with the exception of the activities which in a Contracting
Party are connected, even occasionally, with the exercise of official authority. Transport services are
submitted to the provisions of Part III, Chapter 6.
4. Article 32 of the EEA states that provisions on right of establishment (found in Part III,
Chapter 2 of the Agreement), "... shall not apply, so far as any given Contracting party is
concerned, to activities which in that Contract ing Party are connected, even occasionally, with
the exercise of official authority.”
(a) Could the parties provide examples of activities that are covered by Article 32?WT/REG138/3
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The exception provided for by Article 32 of the EEA Agreement is similar to that included in
Article 45 of the EC Treaty, which stipulates that "the provisions of this Chapter [on right of
establishment] shall not apply, so far as any given Member State is concerned, to activities which in
that State are connected, even occasionally, with the exercise of official authority."
This provision is similar with those of Article 1.3.(b) of GATS which excludes from its scope
services "supplied in the exercise of governmental authority."
There has been a number of instances where the European Court of Justice has adopted
jurisprudence on the basis of Article 45. In these cases, the Court of Justice has taken a restrictive
interpretation of the scope of Article 45.
More specifically, the Court of Justice ruled on 21 June 1974 in Case 2/74 Reyners v Belgium
(European Court Reports, 1974, p. 631, paragraph 45) that the derogation provided for in Article 45
must be restricted to activities which in themselves are directly and specifically connected with the
exercise of official authority and accordingly, concluded that the profession of lawyer ("avocat") in
Belgium does not fall under the scope of Article 55.
The Court ruled, however, that the followin g activities are not covered by Article 45:
− private security undertakings and private security staff in Spain (Judgment of the
Court (Fifth Chamber) of 29 October 1998. Commission of the European
Communities v Kingdom of Spain , Case C-114/97, European Court Reports 1998);
− activity as an intermediary between supply and demand in employment relationship
in Italy (Judgment of the Court (Sixth Chamber) of 11 December 1997, Job Centre
coop. arl. , Case C-55/96, European Court Reports 1997, page I-7119);
− the concession for the computerisation system for the Italian lottery (Judgment of the
Court of 26 April 1994, Commission of the European Communities v Italian
Republic , Case C-272/91, European Court Reports 1994, page I-1409);
− the activities of approved commissioners with insurance undertakings and private
provident associations in Belgium (Judgment of the Court (Fifth Chamber) of 13 July1993, Adrianus Thijssen v Controledienst voor de verzekeringen , Case C-42/92,
European Court Reports 1993, page I-4047);
− the provision of business executives by personnel consultants in Germany (Judgment
of the Court (Sixth Chamber) of 23 April 1991, Klaus Höfner and Fritz Elser v
Macrotron GmbH , Case C-41/90, European Court Reports 1991 page I-1979);
− the activities of traffic accident experts in Greece (Judgment of the Court of 10
December 1991, Commission of the European Communities v Hellenic Republic ,
Case C-306/89, European Court Reports 1991, page I-5863);
− the activities concerning the design, programming and operation of data-processing
systems for the public authorities in Italy (Judgment of the Court of 5 December1989, Commission of the European Communities v Italian Republic , Case C-3/88,
European Court Reports 1989, page 4035);WT/REG138/3
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− the setting up of private schools in Greece (Judgment of the Court of 15 March 1988,
Commission of the European Communities v Hellenic Republic , Case 147/86,
European Court Reports 1988, page 1637).
In all these rulings the European Court of Justice has adopted a restrictive interpretation of
this exception. Any activity must be evaluated on a case by case, as it is with regard to Article 1.3GATS, with regard to the specific situation existing in the country.
(b) Do the parties to the EEA view the Article 32 provision as more or less inclusive
than the GATS’ exclusion of services provided in the exercise of governmental
authority?
These provisions seem to be referring to similar concepts, even if it does appears possible to
evaluate their exact interrelation, given the absence of specific GATS jurisprudence.
4. Economic and Trade Data
5. Can the parties please provide available information on the volume of trade affected by
the agreement?  The data provided free-of-charge on the Eurostat Internet site is insufficient to
answer this question.
The statistics provided by Eurostat are the only data available at present. Almost all trade in
services between the EU and Iceland, Liechten stein and Norway respectively would fall under the
provisions of the EEA Agreement. As a proportion of the EU's total foreign cross-border trade in
services (export + import) with Norway, Icel and and Liechtenstein represents 2.8 per cent.
II. PROVISIONS AFFECTING TRADE IN SERVICES
1. Provisions in the EEA which are relevant to the scope of the GATS
6. With regard to the MFN principle, we wo uld like to confirm whether the treatment
accorded under EEA to Switzerland, which is a third party to EEA, will be equally accorded toall other WTO Members.
Switzerland, not being Party to EEA, is not en titled to the preferential treatment that
Contracting Parties accord to each other.  For more information on the regime for trade in services
between the EFTA States, we refer to the notifi cation on the revised EFTA Convention (S/C/N/207).
7. In view of the close, special relationship between the Principality of Liechtenstein and
Switzerland (for example, we understand that there are no customs between Liechtenstein and
Switzerland) how is it ensured that the treatment accorded to Liechtenstein under EEA is not
accorded to Switzerland?
Switzerland is treated as a third Party to the EEA agreement. Normally, the provision of
services is not controlled at the border of a country. Therefore, despite the lack of customs control
between Liechtenstein and Switzerland, it was not necessary to introduce a control and surveillancemechanism for services following Liechtenstein's EEA membership. Such a control and surveillance
system has been introduced only for trade in goods  (see Trade Policy Review of Switzerland and
Liechtenstein 2000, WT/TPR/S/77, page 27).
8. Please identify all provisions in the Agreement that provide for the absence or
elimination of discrimination, in the sense of Article XVII, between or among the parties, inWT/REG138/3
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each of the sectors identified in  response to Question 2.  If any of these provisions are not
effective upon entry into force of the Agreement , identify the date on which each will become
effective, and explain whether this time-frame is reasonable.
The EEA Agreement is built upon the fundamental principle of non-discrimination for all
intra-EEA trade among the Contracting Parties. Ther e is a general prohibition of discrimination on the
grounds of nationality in Article 4, which establishes that "Within the scope of application of this
Agreement, and without prejudice to any special provisions contained therein, any discrimination on
grounds of nationality shall be prohibited." In addition, the EEA Agreement includes more specific
prohibitions of discrimination for particular areas, notably on the movement of persons, right of
establishment and supply of services. Article 28(2) establishes that freedom of movement of persons
"shall entail the abolition of any discrimination based on nationality between workers of EC Member
States and EFTA States as regards employment, remuneration, and other conditions of work andemployment", Article 31(1) establishes that "Within the framework of the provisions of this
Agreement, there shall be no restrictions on the freedom of establishment of nationals of an EC
Member State or an EFTA State in the territory of any other of these States" and Article 36(1)
provides that "Within the framework of the provisions  of this Agreement, there shall be no restrictions
on freedom to provide services within the territory of the Contracting Parties in respect of nationals ofEC Member States and EFTA States who are established in an EC Member State or an EFTA State
other than that of the person for whom the services are intended."
9. Please identify all provisions in the Agreemen t that allow for discrimination, in the sense
of Article XVII, between or among the Parties, in  each of the sectors id entified in response to
Question 2 and provide an estimate of the volume  of trade affected.  What plans do the Parties
have to eliminate this discrimination?
The EEA Agreement does not prejudice the applicability of provisions laid down by law,
regulation or administrative action providing for special treatment for foreign nationals on grounds of
public policy, public security or public health under Part III of agreement (Free circulation of persons,services and capitals).
10. Please identify all sectors or subsectors wi thin which the Agreement, in respect of any
Member outside the Agreement, raises the level of barriers to trade in services compared to the
level applicable prior to such an Agreement, and explain how the overall level of barriers within
the respective sectors or subsectors has not been raised.
The EEA Agreement has not raised the level of barriers to trade in services neither on an
overall level nor at sectoral level, but, on the opposite, has increased the possibilities for third
countries to provide services to the Contracting Parties to the EEA.
2. Rules of Origin
11. Article 34 of the EEA states that “Companies  or firms formed in accordance with the
law of an EC Member State or an EFTA State and having their registered office, central
administration or principal place of business within the territory of the Contracting Parties
shall, for the purposes of this Chapter, be treated in the same way as natural persons who are
nationals of EC Member states or EFTA States.”
(a) Does this provision apply to companies or firms that are formed in accordance
with the law of an EC Member State or an EFTA State and that engage in
substantive business in that state?
YesWT/REG138/3
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(b) What rights do companies or firms that are covered by Article 34 have under
EEA provisions that do not fall under Part III, Chapter 2?
The EEA Agreement makes reference to Article 34 also in Article 39, which makes
applicable Article 34 also to Part III, Chapter 3.
12. Please explain the requirements by which a service supplier of another Member that is a
juridical person constituted under the laws of a pa rty to the Agreement is entitled to treatment
granted under the Agreement, if that service supplier engages in substantive business
operations in the territory of the Parties to the Agreement.
The juridical person of another Member that is a juridical person constituted under the laws of
a Party to the Agreement is entitled to treatment granted under the Agreement on the basis of Article
34.
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