WT/REG315/M/1  
 
4 October 2013  
(13-5361) Page: 1/3  
Committee on Regional Trade Agreements 
Seventieth Session    
 
 CONSIDERATION OF THE FREE TRADE AGREEMENT BETWEEN  
UKRAINE 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.IV of this session, the CRTA considered the Free Trade Agreement 
(FTA) between Ukraine and the EFTA States (hereinafter "the Agreement"). 
1.3.  The Chairman said that the Agreement had entered into force on 1 June 2012. It had been 
notified to the WTO by the Parties on 18 June 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/REG315/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/644). The text of the Agreement was available, together with its Annexes, 
on the Parties' official websites. The Factual Presentation on the goods and services aspects 
(document WT/REG315/1 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) ("TM"). Written 
questions and replies on this Agreement had been distributed in document WT/REG315/2 dated 
3 September 2013. He proposed to organize the cons ideration 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/REG315/1, to guide the discussion. 
1.4.  The representative of Iceland, speaking on behalf of the EFTA States thanked the Secretariat 
for preparing the Factual Presentation and support in the preparatory process. The document 
prepared provided a comprehensive and informat ive overview of the EFTA-Ukraine free trade 
agreement. He also thanked Ukraine for their effect ive collaboration in preparing for the meeting.  
1.5.  The Agreement had been concluded in 2010, following five rounds of negotiations, which took 
place over a period of 12 months. It had been negotiated and signed in the context of an 
expanding and deepening trading relationship between the Parties.  
1.6.  Merchandise trade flows between the EFTA St ates and Ukraine had been rising rapidly over 
the last decade, averaging an annual growth of 15%. In 2012, total merchandise trade stood at 
US$1.1 billion, four times higher than the figure recorded ten years earlier. In 2012, merchandise 
exports from the EFTA States had amounted to about US$850 million, comprising mainly fish and seafood; pharmaceuticals; clocks and watches; and machinery. While EFTA maintained a trade 
surplus with Ukraine, merchandise imports had been  growing faster than exports, registering an 
almost 20% average annual growth since 2002. EFTA imports consisted mainly of inorganic chemicals; precious metals and stones; ships and floating structures; and apparel. Bilateral trade 
in commercial services had been growing rapidly in recent years and was currently valued at over 
US$1 billion. WT/REG315/M/1 
 
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  1.7.  The Agreement was comprehensive. It covered trade in goods, trade in services, investment, 
trade facilitation, competition, protection of intellectual property rights and government procurement. In the area of goods, the bilateral agreements on basic agricultural products signed 
between the individual EFTA States and Ukraine formed an integral part of the instruments 
establishing the free trade area. Overall, the Ag reement provided for substantive concessions by 
all sides, while taking into account the interests and sensitivities of the respective Parties.  
1.8.  The rules of origin of the Agreement were  based on the Pan-Euro-Mediterranean model text 
which allowed for cumulation of materials originating in the EFTA States, Ukraine and other 
Pan-Euro-Med member countries once the respective agreements were in place between the parties concerned.  
1.9.  He concluded by noting that all the Parties considered the Agreement to be an important 
economic instrument that provided a solid foundation for bilateral trade between them. To 
capitalize on the potential benefits of the Agreem ent, a public seminar had been organized earlier 
in the year in Ukraine to promote the Agreement and provide information about business 
opportunities. It was also worth noting that at the first Joint Committee meeting under the 
Agreement in May 2013, the Parties noted that the Agreement was functioning well. He thanked WTO Members, on behalf of the EFTA States, for their interest in the Agreement and looked 
forward to responding to  Members' questions.  
1.10.  The representative of Ukraine stated that the Agreement had entered into force on 1 June 
2012. It covered trade in industrial and agricultural goods as well as trade in services. Its 
objectives were: to liberalize trade in goods; to substantially increase investment opportunities in 
the free trade area; to liberalize mutual access to the government procurement markets of the 
Parties; to promote competition in their econ omies; and to ensure adequate and effective 
protection of intellectual property rights.  
1.11.  Even though the Agreement had been in force only for one year, and it was too early to 
assess its results, Ukraine regarded it as a real market opportunity for Ukrainian businesses, since 
it had significant growth and development po tential and Ukraine would be working towards 
implementation of its provisions in full. The Agreement envisaged good administration, 
consultation and transparency mechanisms, and its Joint Committee was a venue for all Parties to regularly discuss in a practical way the Agreement's current status and any issue which could arise in the course of its implementation.  
1.12.  Upon entry into force of the Agreement, th e Parties had agreed to abolish customs duties on 
imports of products originating in the EFTA States or Ukraine except as otherwise provided for in Annex IV and no new customs duties on import s were to be introduced. For certain goods 
imported to Ukraine there had been negotiated sc hedules of liberalization from the MFN rate to 
zero by 2022. Upon entry into force of the Agreement, the Parties eliminated customs duties on exports of products to other Parties except as provided for in Article 2.4 and no new customs 
duties on export would be introduced.  
1.13.  For processed agricultural products, the Agreement provided that the EFTA States would 
accord to Ukrainian products treatment no less favorable than that accorded to EU originating products. Ukraine would accord to EFTA products treatment no less favorable than that accorded 
to EU originating products.  
1.14.  There was also established a regular consultation mechanism to review the development of 
trade in the products covered by the Annex. Furt hermore the Agreement provided the basis for the 
Parties to further improve their bilateral trade conditions.  
1.15.  The Agreement was comprehensive and also covered the issues of competition policy, 
intellectual property rights, investment, government procurement and dispute settlement. 
1.16.  In addition to the Agreement, the Parties had also negotiated and signed bilateral 
Agreements on Agriculture (AA) between the indi vidual EFTA Member States and Ukraine which 
formed an integral part of the Agreement. WT/REG315/M/1 
 
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  1.17.  The package also included the Memorandum on Agricultural Cooperation Programme and a 
Joint Statement on Cooperation in the field of fish eries, that had been signed by the Parties with 
the aim of facilitating the implementation  of the objectives of the Agreement. 
1.18.  He thanked the EFTA States and the EFTA Secretariat for their technical assistance in the 
area of customs cooperation, fisheries, and ge nerally raising awareness for Ukrainian businesses 
on the terms of market access to the EFTA States, rules of origin and customs procedures. Ukraine was grateful to the WTO Secretariat for the preparation of the Factual Presentation, and noted its 
professionalism. Ukraine also appreciated questions from Members and their interest in the 
Agreement. Responses had been provided to all the questions received and he would be ready to provide further clarifications. 
1.19.  The representative of the United States thanked the Parties and the Secretariat for the 
materials provided and the statements by the Parties. He noted under section 3 of the Factual 
Presentation the substantial carve-out of tariffs by  the Parties under the Agreement.  For example, 
Iceland excluded 6.1% of tariff lines, representing 61.2% of its imports from Ukraine while Ukraine 
excluded 16.3% of tariff lines covering 19.4% of imports from Iceland.  Moreover it appeared that 
a significant segment of Ukraine's top 25 export s to EFTA would remain dutiable under the 
Agreement. There was also a lack of tariff elimin ation in the agricultural sector with Iceland, 
Norway and Switzerland eliminating duties on on ly 72.8%, 46.7% and 33% respectively of their 
agricultural tariff lines while Ukraine eliminated duties on only 25% of its agricultural lines for imports from EFTA States. The United States' concerns about EFTA's protection of its agricultural sector in its FTAs had been stated before and it was regrettable that Ukraine had sought out 
similar protection in the Agreement.  
1.20.  On the questions and replies document the representative of Canada thanked the Parties for 
their responses to questions and would be in touch with the Parties as soon as possible should 
there be any follow up questions.  
1.21.  The Chairman said that the considerat ion of the Goods and Services Aspects of the 
Free Trade Agreement between Ukraine 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 forward submission s 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 Transparency Mechanism all written submissions, as well as 
minutes of the meeting would be circulated promptly, in all WTO official languages, and would be made available on the WTO website.  
1.22.  The Committee took note of the comments made. 
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