WT/REG357/M/1  
 
25 May 2016  
(16-2834)  Page: 1/4  
Committee on Regional Trade Agreements 
Eightieth Session   
 
 FREE TRADE AGREEMENT BETWEEN THE EFTA STATES AND CENTRAL AMERICA  
(COSTA RICA AND PANAMA),  
GOODS AND SERVICES 
NOTE ON THE MEETING OF 5 APRIL 2016 
Chairman: Ambassador Daniel Blockert (Sweden) 
1.1.  The 80th Session of the Committee on Regional Trade Agreements (hereinafter 'CRTA' or the 
'Committee') was convened in Airgram WTO/AIR/RTA/5/Rev.1 dated 24 March 2016. 
1.2.  Under Agenda Item D.IV of the session , the CRTA considered the Free Trade Agreement 
(FTA) between the EFTA States and Central America – Costa Rica and Panama, goods and 
services, (hereinafter "the Agreement"). 
1.3.  The Chairman said that the Agreement ha d entered into force on 19 August 2014 for Costa 
Rica, Panama and Norway, 29 August 2014 for Costa Rica, Panama, Liechtenstein and Switzerland, 
and 5 September 2014 for Costa Rica, Panama and Iceland. It had been notified to the WTO by the Parties on 19 November 2014 under Article XXIV:7(a) of the GATT 1994 and the 
Understanding on the Interpretation of Article XXI V of GATT 1994 as an Agreement establishing a 
free trade area (document WT/REG357/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/774). The text of the Agreement was available, together with its Annexes, on 
the Parties' official websites. 
1.4.  The Factual Presentation on the goods an d services aspect (document WT/REG357/1 dated 1 
December 2015) had been prepared by the Secretaria t on its own responsibility in full consultation 
with the Parties, in accordance with paragraph 7(b) of the Transparency Mechanism for Regional 
Trade Agreements (document WT/L/671). In addition, written questions and replies on this Agreement had been distributed in document WT/REG357/2 dated 11 February 2016. He proposed 
to organize the consideration of the Agreement by first asking the Parties and then other Members 
to give any general comments. He would then turn to the specifics of the Agreement. 
1.5.  The representative of Switzerland, speaking on behalf of the EFTA States thanked the WTO 
Secretariat for preparing the Factual Presentati on and its support during all stages of the 
preparatory process. The document provided a comprehensive and informative overview of the 
EFTA-Central America Free Trade Agreement. He also thanked Costa Rica and Panama for their 
effective collaboration during all stages of the process. 
1.6.  He recalled the initiative taken by Panama in 2009 to intensify trade relations with EFTA. This 
had led to the signing of a Joint Declaration on Cooperation in 2010, and to the launch of free trade negotiations soon thereafter. An FTA was then concluded between Costa Rica, Panama and 
the EFTA States in 2013, following six rounds of negotiations. The Agreement had been negotiated 
and signed in the context of an expanding and d eepening trading relationship between the Parties. 
Merchandise trade had increased considerably in recent years, almost doubling from 2006 to 2014, when it peaked at over US$800 million. Costa Rica and Panama were EFTA’s leading trading 
partners in Central America. 
 WT/REG357/M/1 
 
- 2 - 
 
  1.7.  In 2015, exports from the EFTA States to Costa Rica and Panama amounted to around 
US$350 million, comprising mainly pharmaceuticals, watches, optical and medical instruments, machinery, and precious stones and metals. EFTA’s imports from the Central American States amounted to US$300 million. These imports primarily consisted of fruits, coffee, precious stones 
and metals, optical and medical instruments, and ships and boats. 
1.8.  The Parties' shared high ambitions had resulted in a comprehensive FTA. The Agreement 
covered trade in goods, trade in services, investment, competition, protection of intellectual 
property rights, government procurement, trad e and sustainable development and cooperation. 
The EFTA States believed that the Agreement prov ided for substantive concessions by all sides, 
while taking into account the sensitivities of the respective Parties.  
1.9.  Trade between the EFTA States and the Central American States held much potential and the 
EFTA States viewed the FTA as an important instrument for promoting and deepening economic 
ties between all Parties. The Agreement would create new opportunities for economic operators and provide a strong stimulus for the further growth of trade and investment. At the same time, a 
solid platform had been established for developing further contractual links and cooperation with 
the region. He thanked Members who had sent written questions ahead of the meeting and for the interest shown in reviewing the Agreement. The Parties had provided responses and he looked 
forward to answering further questions, if any.  
1.10.  The representative of Costa Rica welcomed  the opportunity to present the Agreement. Over 
the past 20 years, Costa Rica had built a strong foreign trade platform. This strategy in turn had 
become a key engine of his country's growth and had enabled it to boost and diversify its exports. 
Hence Costa Rica, together with Panama and the EFTA States, decided to negotiate an FTA. The 
negotiating process had begun in February 2012 and culminated with the entry into force of the Agreement in 2014, that was, for Costa Rica, Panama and Norway on 19 August, followed by 
Liechtenstein and Switzerland on 29 August and Ic eland on 5 September of that same year. Other 
Central American countries had expressed an interest in acceding to the Agreement, for example Guatemala, which had completed its own process of accession, and Honduras, whose terms of 
accession were currently being negotiated. 
1.11.  The FTA between Central America and the EFTA States was a modern trade instrument 
which established a legal framework with clear, stable and transparent rules that generated confidence and security in trade relations betw een the Parties. The FTA opened up significant 
opportunities to increase and diversify Costa Rica's export supply to countries that figured 
prominently among its strategic partners. Under this Agreement, Costa Rican exports had access 
to the European market as a whole, thus consolidating its presence across the entire continent. 
From the consumer's standpoint, the FTA provided  free entry for raw materials and intermediate 
goods which directly enhanced the competitiveness of domestic production. 
1.12.  In Costa Rica's view, another valuable feature of the Agreement was that the EFTA States 
were world leaders in vital global economic sectors of great interest to Costa Rica, such as 
services, energy, manufacturing and telecommunications. They were, moreover, a major source of foreign investment in Costa Rica. 
1.13.  Considering the statistics on Costa Rica's trade with the EFTA States in recent years, Costa 
Rica had high expectations for the results that the Agreement would bring. Costa Rica's trade with 
the EFTA States had tripled in the last decade, gr owing at an average annual rate of 7.7% from 
US$81.4 million in 2005 to US$171.6 million over the past year. The leading imports from the 
EFTA countries were medicines, antisera and fert ilizers, of which 82.7% was from Switzerland and 
17.1% from Norway. Imports from Iceland and Liec htenstein respectively accounted for 0.1% and 
0.06% of the total. Costa Rica's exports to these partners chiefly consisted of bananas, coffee and 
pineapple, recording an average annual increa se of 17% from US$6.8 million in 2005 to 
US$32.7 million in 2015. In 2015, 80.7% of these exports went to Norway and the remaining 
19.3% to Switzerland. During the period 2004-2014, investment inflows from Switzerland and Norway averaged US$26.6 million per year and went mainly to the real estate, tourism, 
manufacturing and financial sectors. 
 WT/REG357/M/1 
 
- 3 - 
 
  1.14.  Now that almost two years had gone by since the Agreement had entered into force, his 
country was pleased to take part in this transparency exercise, which bore witness to the genuine strengthening and expansion of trade links and bi lateral investment flows between Costa Rica and 
the EFTA States. Costa Rica was committed to the multilateral trading system. Trade agreements, 
as part of the system, were a valuable tool for integrating the various economic actors, boosting 
trade, promoting development, and contributing to  poverty reduction. An agreement such as the 
one under consideration today, based as it was on WTO disciplines, promoted economic growth 
and efficiency in the Parties concerned, thus complementing multilateral trade liberalization. He 
thanked the Secretariat for the work it had done, Panama and the EFTA States, as well as the delegations that had submitted questions. He remained at the Committee's disposal to answer any further questions relating to the Agreement. 
1.15.  The representative of Panama was pleased to participate in the CRTA, which would consider 
the Agreement. Panama's firm commitment to the notification and examination of its trade 
agreements within the framework of the Transpar ency Mechanism for Regional Trade Agreements 
was a reflection of its commitment as a full WTO Member to the work undertaken by the 
Committee to enhance understanding of those agreements. Panama shared the goal of strengthening the multilateral trading system whil e at the same time tightening the important 
economic and trade links with the EFTA States whose trade was globally competitive, and it was 
gratifying to have them as trading partners. 
1.16.  Over the past few years, Panama had under taken to open up its trade with new partners 
strategically linked to some of the important countries in this economic bloc whose economies 
were particularly vibrant at the moment. Panama was focussing its efforts on foreign investment 
and trade as the driving forces in its efforts to open up its economy. 
1.17.  The FTA's preamble referred to building on the Parties' rights and obligations under the WTO 
Agreement, while the objectives of the Agr eement were to encourage the expansion and 
diversification of trade between the Parties, to eliminate unnecessary barriers to trade and to facilitate the cross-border movement of goods and services between the Parties. He highlighted 
some important facts about the Agreement. The te xt of the Agreement was covered by Law No. 4 
of 17 April 2014. It had entered into force on 29 August 2014 for Norway, Switzerland and Liechtenstein, and 5 September 2014 for Iceland. Most of the products that Panama exported to 
the EFTA States were granted immediate duty-free access upon entry into force of the Agreement. 
These products included tropical fruit such as melons, watermelons, pineapple, pumpkins, bananas 
and papaya. 
1.18.  In the case of goods, with the entry in to force of the Agreement Panama had granted the 
EFTA States duty-free treatment on 34.5% of tari ff lines, representing 16% of the value of imports 
from EFTA in 2011-2013. By the end of the implementation period for Panama, this figure would rise to 93.6% of all tariff lines. The EFTA States had granted Panama duty-free treatment on 
almost 60% of tariff lines upon the Agreement's entry into force. 
1.19.  The liberalization process for trade in goods aimed to fulfil two main objectives: first, to 
open reciprocal markets through the elimination of customs duties and non-trade barriers; and 
second, to obtain for similar goods originating from other countries the same treatment that 
Panama and the EFTA States granted to each other through bilateral trade agreements. 
1.20.  Following the entry into force of the Agreem ent, bilateral relations between the EFTA States 
and Panama had shown dynamism which was reflected in important aspects such as increased 
trade and investment flows, contributing to a greater goal, namely the well-being of citizens. 
In terms of the percentage of the total, the breakdown of Panama's trade with the EFTA States was as follows: Switzerland 88.7%, Norway 11.1%, and Iceland 0.2%. 
1.21.  In 2015, Panama's trade with the EFTA countries reached US$45.3 million. EFTA's main 
exports to Panama included medicines, electric ally operated wristwatches, antisera and other 
blood fractions,  blood-grouping reagents, articles of jewellery,  medicaments containing hormones,  
and wristwatches, whether or not incorporating a stopwatch facility. Panama's main exports to the 
EFTA States included roasted and decaffeinated coffee, gold  (including gold plated with platinum),  
and other unwrought forms for non-monetary use. WT/REG357/M/1 
 
- 4 - 
 
  1.22.  As regards services, the Agreement which was based on a negative list approach opened up 
opportunities for Panama's service suppliers, enabling the promotion of value-added supply of software, contact centres, architecture, engineering, business consulting, publishing houses and franchises inter alia. The Agreement ensured that there would be no discrimination against 
persons and companies seeking to provide services in Panama. 
1.23.  In 2014, EFTA's foreign direct investment (FDI) in Panama exceeded US$183.6 million, 
representing approximately 4.4% of total FDI. Among the Swiss-owned companies established in 
Panama were Syngenta AG, Belcorp Group, Novartis Pharma, Roche, Panalpina SA, and 
Sika Group, while the Norwegian-owned companies included Wilhelmsen Ship Services and Blom. 
1.24.  It was important to note that the Agreement contained 21 annexes covering, inter alia , 
rules of origin and methods of administrative  cooperation, electronic commerce, a tariff 
dismantling list for the Parties, trade facilitation, schedules of commitments in services, a list of 
MFN exemptions, intellectual property rights, sanitary and phytosanitary measures, technical barriers to trade, and government procurement. 
1.25.  He thanked the Secretariat for the preparation of the Factual Presentation of the 
Agreement, his partners from the EFTA States and Costa Rica, the delegations that had raised questions, and all Committee participants. 
1.26.  The representative of Thailand thanked the Parties' for their comprehensive presentation of 
the Agreement and for their responses to Thailand's written questions. His delegation was still 
reviewing the responses and reserved the right to come back with written questions if necessary. 
1.27.  The representative of the United States said that the low level of tariff elimination in 
agricultural goods had become an unfortunate hall mark of EFTA's agreements and something that 
his delegation had raised in previous meetings. On trade in services, the factual presentation 
noted in paragraph 4.17 that the Parties' schedules of specific commitments and MFN exemptions 
were subject to periodic review. He asked if the Parties could describe the structure and time-
frame for these periodic reviews, if they could indicate how many reviews had been undertaken to date and what the outcomes were. With regard to the nature of the commitments, the Factual 
Presentation suggested that for a majority of the Parties services liberalization commitments were 
not very different from those undertaken by those Parties in the GATS. This was unfortunate. Regarding investment in non-services sectors, the Factual Presentation suggested that the Agreement allowed the Parties to unilaterally add new reservations against national treatment 
obligations after entry into force of the Agreement. He asked the Parties to confirm whether this 
description of the operation of the Agreement with  respect to investment was correct and, if so, 
what was the trade policy rationale for allowing individual Parties to unilaterally alter commitments 
to lessen the scope of non-discrimination. With respect to the section on agreements with other 
Members, he asked when the EFTA Parties expected to notify their agreement with the Gulf Cooperation Council which was in force since July 2014 and why this agreement had not been 
notified sooner. On the list of non-notified RTAs  were some ALADI agreements of which Panama 
was a party and he requested that Panama notify such RTAs as soon as possible. 
1.28.  The representative of Switzerland said the Parties would provide a written response to the 
questions raised. The representative of Costa Rica echoed this response. 
1.29.  The Chairman said that the consideration of the Goods and Services Aspects of the Free 
Trade Agreement between the EFTA States and Central America (Costa Rica and Panama), had 
allowed Members to clarify a number of questions and the Committee had now concluded oral 
discussion of the RTA in accordance with paragr aph 11 of the Transparency Mechanism. If any 
delegations wish to ask follow-up questions they we re invited to forward submissions in writing to 
the Secretariat by 13 April 2016 and Parties were as ked to submit replies in writing by no later 
than 27 April 2016. In accordance with paragrap h 13 of the Transparency 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. 
1.30.  The Committee took note of the comments made. 
__________