WT/REG323/M/1  
 
4 October 2013  
(13-5360) Page: 1/3  
Committee on Regional Trade Agreements 
Seventieth Session    
 
CONSIDERATION OF THE FREE TRADE AGREEMENT BETWEEN  
MONTENEGRO AND THE EFTA STATES, GOODS 
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.III of this session, the CRTA considered the Free Trade Agreement 
(FTA) between Montenegro and the EFTA States (hereinafter "the Agreement"). 
1.3.  The Chairman said that the Agreement had entered into force on 1 September 2011 for 
Montenegro, Liechtenstein and Switzerland; 1 Oc tober 2012 for Montenegro and Iceland; and on 
1 November 2012 for Montenegro and Norway. It had been notified to the WTO by the Parties on 
24 October 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/REG323/N/1). The text of the Agreement was available, together with its Annexes, 
on the Parties' official websites. The Fa ctual Presentation on the goods aspects 
(document WT/REG323/1 dated 12 June 2013) had been 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/REG323/2 
dated 5 August 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/REG323/1, to guide the debate.  
1.4.  The representative of Montenegro said it was her pleasure, as one of the most recent 
members of the World Trade Organization, to pr esent the Free Trade Agreement with EFTA. She 
was grateful to the Secretariat, as well as to EFTA, for their cooperation in the course of preparing 
the Factual Presentation and to again express Montenegro's commitment to strengthening the 
multilateral trade system under the auspices of the WTO.  
1.5.   The Agreement between Montenegro and th e EFTA States had been signed on 14 November 
2011 in Geneva during the course of the EFTA Ministerial Conference, with the aim of further 
developing and enhancing trade and economic cooper ation, especially in the area of market access 
for goods. The Agreement had entered into force on 1 September 2012 for Montenegro, 
Switzerland and Liechtenstein, and on 1 Octobe r and 1 November 2012 for Iceland and Norway, 
respectively.  
1.6.   The objectives of the Agreement were th e liberalization of trade in goods in line with 
Article XXIV of GATT; a mutual increase in investment opportunities and the gradual development 
of an environment conducive to enhanced trade in services; providing for fair conditions of competition and ensuring intellectual property rights protection; gradual further liberalization of the government procurement market; and enhancing international trade in a way that contributed 
to sustainable development and to the harmonio us development and expansion of world trade. 
With these objectives in mind, the Agreement had the following chapters: Trade in Goods; Intellectual Property Protection; Investment, Services and Government Procurement; Payments WT/REG323/M/1 
 
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  and Capital Movements; and Trade and Sustainable Development, among others. The provisions of 
the Agreement were in compliance with the WTO rules.  
1.7.  With respect to market access for goods,  the Agreement covered both agricultural and 
industrial goods. For industrial products (Chapters 25-97 of the customs tariff), the Agreement 
foresaw almost full liberalization of the market s of both Parties. EFTA had granted significant 
concessions in favour of Montenegro for basic and processed agricultural products, whereas Montenegro had been granted virtually full access to the EFTA market for fish and other marine 
products, with negligible exceptions. Montenegro had also granted significant concessions to the 
EFTA states, liberalizing 84.9% of its tariff upon  the expiration of the implementation period. The 
rules of origin were governed by the Regional Co nvention on Pan-Euro-Mediterranean Preferential 
Rules of Origin. The Convention provided for modern  rules of origin, and had been signed by all EU 
Member States as well as 16 Mediterranean countries. 
1.8.  With the aim of ensuring full and effici ent implementation, the Agreement had envisaged the 
establishment of a Joint Committee between Monten egro and the EFTA States. The task of the 
Committee was to supervise and evaluate impl ementation of the Agreement and identify 
possibilities for its further development.  
1.9.  She thanked Members for taking an interest  in the Agreement. While regretting that the 
Ministry of Economy was not represented, she noted they remained committed to continued 
cooperation with the Secretariat and Members. She would be happy to answer questions, and if additional clarification was needed, the delegation would forward them to the Ministry of Economy for further consideration and responses. 
1.10.  The representative of Iceland, speaking on behalf of the EFTA States thanked the 
Secretariat for preparing the Factual Presentation. The EFTA States and Montenegro enjoyed good 
and effective bilateral economic and trade relations and it was not surprising, therefore, that the 
FTA negotiations had been concluded remarkably qu ickly. In fact, the formal negotiating process 
had been concluded after only two rounds at th e beginning of 2011. The Agreement had entered 
into force in 2012. 
1.11.  The Parties saw the Agreement as a useful  tool for strengthening economic links between 
them. It provided a stable and predictable fr amework for business operators and complemented 
the existing networks of free trade agreements  in Europe. Since 2006, growth in bilateral 
merchandise trade between EFTA and Montenegro had been a rather impressive average annual 
rate of 20%. Although the EFTA States had trad itionally run a trade surplus with Montenegro, 
imports from Montenegro had been growing rapi dly, amounting to US$2 million in 2012. On the 
export side, in the same year, the value had been US$11 million. EFTA's main exports were 
pharmaceutical products, clocks and watches, apparel, machinery; as well as optical and medical 
instruments. The principal imports into the EFTA States included monumental and building stones; watches; iron and steel items; as well as wine. 
1.12.  The Agreement focused on the liberalizati on of trade in goods and aimed at achieving 
substantive liberalization across all products, taking account the particular sensitivities of the Parties. As was traditionally the case in EFTA's free trade agreements, trade in basic agricultural products had been covered in bilateral agricultural  agreements between the individual EFTA States 
and Montenegro.  
1.13.  As with other EFTA agreements in the region, rules of origin were governed by the Regional 
Convention on Pan-Euro-Mediterranean Preferential  Rules of Origin. This permitted cumulation of 
materials originating in the EFTA States, Montenegro and the other “Pan-Euro-Med” member 
countries once the respective agreements were in place between the parties concerned. In addition to rules governing the protection of intellectual property rights, the agreement also contained 
basic provisions in trade in services, investment, government procurement, and sustainable 
development. In some of these areas, the Partie s had envisaged review clauses, which foresaw the 
possibility of developing the Agreement further. 
1.14.  The EFTA States considered the Agreement as an important economic instrument that 
promoted and deepened economic cooperation in the European context. Trade between the 
EFTA States and Montenegro held much potential, which could benefit industries on both sides of WT/REG323/M/1 
 
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  the Agreement. In this vein, the Parties had held a jointly organised export promotion seminar to 
promote the Agreement to Montenegrin producers an d exporters in Podgorica in September 2012.  
1.15.  In closing, he thanked both the WTO Secretariat and Montenegro for their excellent 
collaboration in preparing for the review. EFTA look ed forward to a constructive exchange of views 
on all aspects of the Agreement. 
1.16.  The representative of the United States thanked the Secretariat and the Parties for the 
materials provided and the Parties' statements. He noted under Section 3 of the Factual 
Presentation the low level of tariff elimination under  the Agreement by all Parties in the agricultural 
sector. Iceland eliminated duties on only 71. 6%, Norway on 40%, Switzerland on 36.8% and 
Montenegro on only 31.9% of agricultural tariff li nes. EFTA's protection of its agricultural sector 
from competition in yet another agreement was consistent with what Members had seen in its 
other agreements in the Committee and the United States regretted to see similar protection by 
Montenegro. 
1.17.  The Chairman said that the consideration of the Goods Aspects of the Free Trade Agreement 
between Montenegro 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 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 Transparency Mechanism all wr itten 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.  
1.18.  The Committee took note of the comments made. 
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