WT/REG322/M/1  
 
4 October 2013  
(13-5364) Page: 1/3  
Committee on Regional Trade Agreements 
Seventieth Session    
 
CONSIDERATION OF THE FREE TRADE AGREEMENT BETWEEN  
HONG KONG, CHINA AND THE EFTA STATES, GOODS AND SERVICES 
NOTE ON THE MEETING OF 17-18 SEPTEMBER 2013 
Chairman: Ambassador Francisco Lima Mena (El Salvador) 
1.1.  The 70th Session of the Committee on Regional Trade Agreements (hereinafter 'CRTA' or the 
'Committee') was convened in Airgram WTO/AIR/4163/REV.1 dated 4 September 2013. 
1.2.  Under Agenda Item B.II of this session, the CRTA considered the Free Trade Agreement 
(FTA) between Hong Kong, China and the EFTA States (hereinafter "the Agreement"). 
1.3.  The Chairman said that the Agreement had entered into force on 1 October 2012 for 
Hong Kong, China; Iceland, Liechtenstein, and Switzerland; and on 1 November 2012 for 
Hong Kong, China and Norway. It had been notifi ed to the WTO by the Parties on 27 September 
2012 under Article XXIV:7(a) of the GATT 1994 and the Understanding on the Interpretation of 
Article XXIV of GATT 1994 as an Agreement establishing a free trade area (document WT/REG322/N/1) and under GATS Article V:7(a) as an Agreement providing for the 
liberalization of trade in services within the meaning of Article V of the GATS 
(document S/C/N/654). The text of the Agreement wa s available, together with its Annexes, on 
the Parties' official websites. The Factual Presentation on the goods and services aspects (document WT/REG322/1 dated 9 July 2013) had b een prepared by the Secretariat on its own 
responsibility in full consultation with the Parties, in accordance with paragraph 7(b) of the 
Transparency Mechanism for Regional Trade Ag reements (document WT/L/671). In addition, 
written questions and replies on this Agreemen t had been distributed in document WT/REG322/2 
dated 9 September 2013. He proposed to organize the consideration of the Agreement by first 
asking the Parties and then other Members to give any general comments and then use the Factual Presentation, document WT/REG322/1, to guide the debate.  
1.4.  The representative of Iceland, on behalf of the EFTA States, thanked the WTO Secretariat for 
the Factual Presentation and support during all st ages of the preparatory process. The finished 
document provided a comprehensive and informat ive overview of the EFTA-Hong Kong China Free 
Trade Agreement. He also thanked Hong Kong, Ch ina for the effective collaboration during all 
stages of the process.  
1.5.  The EFTA-Hong Kong China FTA had been nego tiated and signed in the context of a dynamic 
and expanding bilateral trade and economic relationship. Merchandise trade flows between the 
Parties had risen markedly over the past decade and had reached US$11 billion in 2012 – three 
times greater than in 2002 when bilateral merchandise trade was valued at US$3.6 billion. In 2012, exports from the EFTA States amounted to some US$9 billion, comprising mainly clocks and 
watches; precious stones and metals; machinery; and pharmaceuticals. EFTA's merchandise 
imports from Hong Kong China, had been growing at an annual rate of 12% over the last ten years and were currently valued at US$2 billion. Like th e composition of EFTA exports, imports primarily 
consisted of precious stones and metals; clocks and watches; and machinery. On the services side, 
trade in commercial services between the Parties was valued at about US$2 billion annually.  
1.6.  The Agreement with Hong Kong, China was co mprehensive. It covered trade in goods, trade 
in services, investment, protection of intellec tual property rights, government procurement, WT/REG322/M/1 
 
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  competition, trade and environment, and dispute settlement. As had been noted in their written 
answers to questions raised by Members, the Pa rties believed that the Agreement provided for 
substantive concessions by all sides, while taking into account the sensitivities of the respective 
Parties. Trade in basic agricultural products was covered under bilateral agreements between the 
individual EFTA States and Hong Kong, China an d formed an integral part of the instruments 
establishing the free trade area.  
1.7.  The EFTA States and Hong Kong, China were important trading partners and were pleased to 
see that the contractual links between their economies had been strengthened with the 
implementation of the Agreement. The Agreement provided a stable and predictable framework for 
deepening economic cooperation between their economies. It also provided the basis for the further development of bilateral trade and economic relations in the future. EFTA thanked 
Members for the interest shown in reviewing th e Agreement and looked forward to answering 
questions, if any.  
1.8.  The representative of Hong Kong, China thanked the Secretariat for preparing the Factual 
Presentation which concisely captured the key elements of the Agreement. She also thanked 
colleagues from the EFTA States for the joint preparatory work for the meeting.  
1.9.  The Agreement was Hong Kong, China’s first free trade agreement with European economies. 
It was an important milestone in its trade relationship with the EFTA States which were valuable 
trading partners of Hong Kong, China. All of the Parties were strong advocates of the free market, 
as well as free and open trade and investment. They shared the same commitment to trade and 
investment liberalization and facilitation. Hong Kong, China considered that the Agreement helped 
forge closer ties with the EFTA States.  
1.10.  When entering into the Agreement, the Pa rties had taken their rights and obligations under 
the WTO Agreements seriously, especially those pertaining to free trade areas and economic 
integration agreements in GATT Article XXIV and GATS Article V. The Agreement was fully 
consistent with the provisions of the WTO. It was comprehensive in scope and of high quality, encompassing a wide range of areas of mutual interest to Hong Kong, China and the EFTA States, 
including trade in goods and services as well as investment.  
1.11.  On trade in goods, the Agreement provided full certainty to exporters. Hong Kong, China 
had bound its existing zero import tariff regime for all goods originating in the EFTA States, which had gone beyond its WTO commitments. Reciprocally, all industrial goods as well as fish and 
certain marine products originating in Hong Kong, China could enjoy tariff-free entry into the 
EFTA States. Tariff-free entry or tariff concessions had also been accorded to certain agricultural products of Hong Kong, China origin when exported to the EFTA States. Apart from tariff 
eliminations and concessions, the Agreement included WTO-plus disciplines on the application of 
trade remedy measures to better safeguard the trade interest of both sides. There were also provisions for enhanced communication and cooperation in sanitary and phytosanitary measures, 
and technical barriers to trade. The Agreement also included trade facilitation measures to reduce 
and simplify documentation and formalities which would benefit traders by reducing costs to business and promoting efficiency. 
1.12.  On trade in services, the Agreement covere d a wide range of services sectors. The market 
access commitments made by Hong Kong, China and the EFTA States were broad and substantive. 
Some went beyond the existing commitments of respective Parties under the GATS, while others 
even exceeded the level of commitments offered under the Doha Round negotiations. Apart from 
market access commitments, the Parties had agreed on general disciplines on domestic regulation 
to ensure that measures affecting trade in services were transparent and administered in a reasonable, objective and impartial manner. The Agreement had also set out obligations specific to 
the liberalization and regulation of telecommunication services and financial services, which were 
important to the Parties.  
1.13.  On investment, the Agreement provided investors in non-services sectors with legal 
certainty on national treatment and safeguards on the movement of capital. These provisions, 
which were WTO-plus, complemented those on investment in services and helped foster mutual 
investment flows between Hong Kong, China and the EFTA States. WT/REG322/M/1 
 
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  1.14.  In addition, the Agreement contained provisions to promote competition, ensure effective 
protection of intellectual property rights, facilitate access to each other's government procurement market, and enhance protection of the environment through trade initiatives. Commitments and cooperation in these areas were in line with WTO Agreements. They would have the positive effect 
of facilitating bilateral trade and investment flows between the two sides. 
1.15.  She noted that the Agreement had entered into force in the last quarter of 2012. 
Hong Kong, China strongly believed that the Agreement would bring the economies and people of 
the two sides closer together. This would consolid ate their strengths, and enable them to jointly 
enhance their competitiveness in the global trade environment. Hong Kong, China also hoped that all FTAs, including the Agreement, which were based on WTO disciplines, would be conducive to further multilateral trade liberalization. Finally, Hong Kong, China thanked Members for their 
interest in the Agreement and especially the dele gations of Australia and the European Union for 
their written questions, to which joint written replie s by the Parties had been circulated prior to the 
meeting. Hong Kong, China looked forward to a fruitful discussion and would listen carefully to any 
comments made by Members.  
1.16.  The representative of the United States thanked the Secretariat and the Parties for the 
materials provided and the presentations. He noted under Section 3 of the Factual Presentation the 
substantial carve-out of tariffs by all EFTA Partie s. For example, Norway excluded 15.7% of tariff 
lines, corresponding to 15.4% of imports from Hong Kong, China. The United States also noted the low level of tariff elimination by all EFTA States in the agricultural sector with Iceland eliminating duties on only 71.1% of agricultural goods, Norw ay on 39.8% and Switzerland on only 29.9%. In 
comparison Hong Kong, China was 100% duty free on an MFN basis. 
1.17.  On the questions and replies document the representative of Australia thanked the Parties 
for their comprehensive responses to questions by Australia. These were being studied in capital 
and Australia would come back with any follow up questions in writing if needed. 
1.18.  The Chairman said that the considerat ion of the Goods and Services Aspects of the 
Free Trade Agreement between Hong Kong, China and the EFTA States had allowed the Committee 
to clarify a number of questions and the oral discussion of this RTA could be concluded in 
accordance with paragraph 11 of the Transparency  Mechanism. If any delegations wished to ask 
follow up questions they were invited to forwar d submissions in writing to the Secretariat by 
24 September 2013 and Parties were asked to submit replies in writing by no later than 8 October 
2013. In accordance with paragraph 13 of the Tran sparency Mechanism all written submissions, as 
well as minutes of this meeting would be circulated promptly, in all WTO official languages, and would be made available on the WTO website.  
1.19.  The Committee took note of the comments made. 
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