WT/REG315/2  
 
3 September 2013  
(13-4653)  Page: 1/2  
Committee on Regional Trade Agreements  Original: English  
 
 FREE TRADE AGREEMENT BETWEEN UKRAINE AND THE EFTA STATES 
(GOODS AND SERVICES) 
QUESTIONS AND REPLIES 
 The following communication, dated 30 August 2013, is being circulated at the request of 
the delegations of Ukraine and the EFTA States.  
 This document reproduces the questions addressed to the Parties and the responses 
submitted. 
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Questions from the Delegation of Canada 
 
1.1.  Paragraph 3.54, (3 Provisions on Trade in Goods; 3.5 Safeguard mechanisms; 
3.5.1.2 Bilateral Safeguards): Article 2.16.10 requires that 5 years after entry into force 
of the Agreement the Parties shall review in the Joint Committee whether there is need 
to maintain the possibility to maintain bilate ral safeguard measures, and, if maintained, 
shall review the matter every two years thereafter.  
 It is Canada's belief that Parties should  only have access to bilateral safeguard 
measures within a defined transi tion period calibrated to allow industry time to adjust to 
the liberalization of tariffs. Could the Parties please explain why it is necessary to allow 
for access to bilateral safeguard measures in  perpetuity should the Parties so agree? 
 
 Bilateral safeguard measures have been includ ed in the Agreement to provide adequate time 
for industries to adjust to tariff liberalization. The Parties also depart from the assumption that bilateral safeguard measures can only be taken during the first few years after the entry into force 
of an agreement. The Parties, however, do not s ee the necessity to specify a specific transition 
period in that regard. It follows from the wording of the provision, that a bilateral safeguard measure can only be taken during the first few years after the entry into force of the Agreement ("Where, as a result of the reduction or elim ination of a customs duty under this Agreement" ). The 
Parties have agreed to periodically assess the need for maintaining this instrument – initially after 
five years and, thereafter, biennially. This re view process ensures that bilateral safeguard 
measures would be available to the Parties only if a particular need to maintain them continues to 
exist. 
 Questions from the Delegation of the Russian Federation  
 
Trade in goods 
 1.2.  Ukraine's tariff concessions on processe d agricultural products originating in EFTA 
countries are provided for in Table 2 to Annex II referred to in Paragraph 1 (b) of 
Article 2.1 Processed agricultural products. We  would be interested in an explanation of 
tariffs applied for tariff lines under category  "OT" in the column "Dismantling period" 
and how any change in tariffs and tariff lines "reviewed in the Joint Committee in 
accordance with Articles 3 and 5 of this Anne x" will be incorporated in the EFTA-Ukraine 
Free Trade Agreement? WT/REG315/2 
 
- 2 - 
 
   The tariffs under the category "OT" (Table 2 to Annex II referred to in paragraph 1b of 
Article 2.1) have the rate of duty applied as of 1 January 2009. Any changes in tariffs under the category "OT" agreed by the Parties after the review in the Joint Committee will become effective in accordance with the relevant decision of th e Joint Committee (Article 10.5 of the Agreement). 
 
1.3.  In accordance with Article 1.1 of Annex II referred to in Paragraph 1 (b) of Article 2.1 Processed agricultural products  the Agreement does not preclude EFTA 
countries "the application of measures adop ted upon export". We would like to express 
our concern that in the corresponding Agreem ent EFTA countries not only continue to 
levy import duties on processed agricultur al products but also continue to carry out 
export regulation system of granting ref unds based on price compensation scheme for 
the relevant agricultural raw materials in a processed agricultural product. The Russian 
Federation understanding is that the exis tence of such system distorts market 
competitiveness. If our understanding is in correct could the Parties provide us with 
proper argumentation and answers ther efore on the following questions: 
a. Is the export regulation system applied only by Switzerland? 
 Norway also applies a price compensation system. 
b. Does it mean that under mentioned Articl e 1.1 only EFTA countries at any point 
of time are granted the right to introd uce any changes within the FTA on trade 
in processed agricultural products with Ukraine? 
 According to the price compensation system ap plied by the EFTA States, changes in duties 
for processed agricultural products depend on the difference in prices between domestic and world 
market prices. 
1.4.  Regarding Paragraph 3.1 of the Factual Presentation, Article 2.1.1.(a) sets out the 
list of "Excluded products". How wa s this product coverage defined? 
 The product coverage was defined by mutual agreement of the Parties. 
 
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