WORLD TRADE  
ORGANIZATION   
WT/REG290/M/1 
10 October 2012 
 (12-5495) 
Committee on Regional Trade Agreements 
Sixty-sixth Session  
 
 
 
CONSIDERATION OF THE FREE TRADE AGREEMENT BETWEEN  
THE EFTA STATES AND SERBIA, GOODS  
 
Note on the Meeting of 18-19 September 2012 
 
Chairman:  Mr. F. Riegert (France) 
 
 1. The 66th Session of the Committee on Regional Trad e Agreements (hereinafter 'CRTA' or the 
'Committee') was convened in Airgra m WTO/AIR/3987 dated 7 August 2012. 
2. Under Agenda Item C.I of this session, th e CRTA considered the Free Trade Agreement 
(FTA) between the EFTA States and Serbia (hereinafter the 'Agreement'), goods.  
3. The Chairman said that the Agreement had ente red into force between Serbia, Lichtenstein 
and Switzerland on 1 October 2010, Serbia and Norw ay on 1 June 2011 and Serbia and Iceland on 
1 October 2011.  It had been notified to the WT O by the EFTA States in November 2010, June 2011 
and September 2011 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/REG290/N/1-3).  The text of the Agreem ent was available, together with its Annexes, 
on the Parties' official websites. The Factual Presentation on the goods aspects (document WT/REG290/1 dated 26 June 2012) had been prepared by the Secretariat on its own 
responsibility in full consultation with the Parti es, in accordance with paragraph 7(b) of the 
Transparency Mechanism for Re gional Trade Agreements (document WT/L/671).  In addition, 
written questions and replies on this Agreement had been distributed in document WT/REG290/2 
dated 3 September 2012.  He proposed to organize th e 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/REG290/ 1, to guide the debate.  
4. The representative of Norway, speaking on beha lf of the EFTA States noted that relations 
between Serbia and the EFTA countries were close and important.  Serbia wa s EFTA's second largest 
trading partner among the non-EU South Eastern Eu ropean countries, after Croatia.  Merchandise 
trade had risen significantly in recent years, peaking in 2008 at US$339 million.  Trade fell in the aftermath of the global financial crisis but had since picked up, reaching US$272 million in 2011.  
The EFTA States had traditionally run a trade surp lus with Serbia.  Exports in 2011 amounted to 
US$190 million and imports to US$82 million.  Imports from Serbia into the EFTA States had picked up in recent years, accounting for 30% of total trad e in 2011 as compared with 21% in 2008.  Exports 
from the EFTA States to Serbia consisted of  pharmaceutical products, machinery, electrical 
machinery, clocks and watches, optical/medical inst ruments and plastic articles.  Top imports into the 
EFTA States from Serbia included copper articles, m achinery, edible fruits and nuts, and aluminium 
articles. 
5. The basis for closer trade relations between EFTA  and Serbia was laid by a Joint Declaration 
on Cooperation signed in 2000.  Negotiations on  an FTA began in April 2009 and made quick WT/REG290/M/1 
Page 2  
 
  progress;  after two rounds, the negotiations were  concluded in July 20 09.  The focus of the 
Agreement was on the liberalization of trade in goods.  The EFTA States had abolished all customs 
duties on Serbian industrial goods, including fish and ma rine products, as of the entry into force of the 
Agreement.  Trade in basic agricultural produc ts was covered by three bilateral agricultural 
agreements between the indivi dual EFTA States and Serbia.  These provided for substantive 
concessions on all sides while taking into account the sensitivities of the respective Parties.  As with 
all EFTA agreements in the region, rules of origin  would be governed by the Regional Convention on 
Pan-Euro-Mediterranean Preferential Rules of Orig in once the respective agreements were in place 
between the concerned parties.  The Agreement also contained provisions on the protection of 
intellectual property rights, on services and inv estment, and on government procurement.  Trade 
between the EFTA States and Serbia held much pot ential and the EFTA States saw the Agreement as 
an important economic instrument that promoted  and deepened economic relations and cooperation 
within a European context.  The EFTA States and Se rbia expected to hold their first Joint Committee 
meeting in the next months.  She thanked bot h the WTO Secretariat and the representatives from 
Serbia for their excellent collaboration in prep aring for the review.  EFTA looked forward to a 
constructive exchange of views on all aspects of the Agreement.  
6. The representative of Serbia thanked the WTO S ecretariat for the preparation of the Factual 
Presentation on the Agreement.  She recalled that  the negotiations between Serbia and the EFTA 
States on the conclusion of the FTA commenced in Ap ril 2009 and were concluded in July 2009.  The 
Agreement was signed on 17 December 2009 in Geneva and was ratified in the National Assembly of 
Serbia on 26 May 2010.  Following specific ratifi cation procedures the Agreement entered into force 
between Serbia, Switzerland and Li chtenstein on 1 October 2010, Serbia and Norway on 1 June 2011 
and for Serbia and Iceland on 1 October 2011.  Th e Agreement with EFTA was another step towards 
better positioning Serbia in the world economy.  It was important to Serbia not only because it would 
increase trade with EFTA, but also because EFTA me mbers were among the leading investors in 
Serbia.  Investments from EFTA countries amounted to more than €2 billion and Serbia expected that 
they would grow in the future.  The Agreement opened new possibilities for further development of 
economic relations betwee n Parties and ensured a solid basis for wider mutual cooperation in all 
economic areas.  The Agreement with EFTA was also important due to the fact that Serbia was in the 
process of accession to the EU.  The EFTA States and EU members had signed, and were in the process of implementing, the Agreement on the Eu ropean Economic Area (EEA), which brought the 
EU and EFTA into a single market.  Since the Stabilization and Association Agreement (SAA) 
between Serbia and the EU as well as the FTA betwee n Serbia and EFTA were in force, Serbia had a 
free trade area with all EEA parties.   
7. The main objective of the Agreement was libera lization of trade in goods.  The liberalization 
of industrial products was based on the SAA between EU and Serbia.  The EFTA  States had abolished 
all customs duties on Serbian industrial products from the entry into force of the Agreement.  Serbia 
would eliminate import duties for all industrial pr oducts from EFTA States by the end of 2013.  
Serbia had concluded separate bila teral arrangements on agricultural products with each EFTA State.  
The Agriculture bilateral arrangements included mutu al concessions for trade in agricultural products 
as an integral part of the Agreement.  The Agre ement established a free-trade area over a transitional 
period of a maximum of five years at the end of which (2014) for Serbia 98.2% of imports from Switzerland, 100% of imports from Iceland and 99.4% of imports from Norway would be duty free.  
On the export side, from entry into force of the Ag reement, 100% of Serbia's exports to Iceland, 
95.5% of exports to Norway and 84.7% of exports  to Switzerland were duty free.  The Agreement 
also contained provisions on protection of intellect ual property rights, services, investment and public 
procurement.  It also provided for diagonal cu mulation of origin betw een CEFTA 2006 Parties - 
Serbia, Albania, Croatia and the Former Y ugoslav Republic of Macedonia (FYROM), and EFTA 
States from 1 January 2012.    WT/REG290/M/1 
 Page 3 
 
 
  8. Trade between the Parties was still on the low side .  The share of EFTA States in total Serbian 
exports was only 0.8%, while on the  import side EFTA's share was 1.2%.  In the first year of the 
implementation of the Agreement, total trade between Serbia and EFTA reached €245 million.  Serbian exports increased by 26% and amounted to  €66 million, while EFTA exports increased by 4% 
and amounted to €104 million.  This  positive trend continued in the first seven months of 2012 with 
an increase in Serbian exports to EFTA by 18% and imports by 11% compared to the same period in 
the previous year.  She stated that all these figures illustrated that the implementation of the Agreement had begun to fulfill its goa ls and purpose.  Within this context, there was, however, still 
space for improving economic relations between the Par ties.  The first meeting of the Joint Committee 
of the Agreement would be held in October 2012.  This would present an opportunity to discuss the 
implementation of the Agreement and possibiliti es for further economic cooperation.  Serbia 
continued its efforts to integrate into the intern ational trading system through its application for 
accession to the WTO, in parallel with liberalization of trade with its main partners including EFTA 
States and the EU.   
9. The representative of the United States thanke d the Secretariat and the Parties for the 
information provided to enable consideration of this  Agreement.  She noted that the provisions of 
Article XXIV applied only between two or more Me mbers of the WTO.  As Serbia was not a WTO 
Member absolute MFN obligations applied.  Neve rtheless, given Serbia's application for accession to 
the WTO, she felt it would be useful to indicate ways in which the Agreement would need to be 
changed to meet the requirements of Article XXI V.  Under the Agreement, paragraphs 25-40 and 
Annex I of the Factual Presentation, Tables A1-4 there were interesting discrepancies on tariff line 
coverage.  Although near 100% of EFTA's industrial tariffs were dut y free, only 71.8% of Iceland's 
agricultural tariff lines were duty free, only 44.79% of Norway's agricultural tariff lines were duty 
free, and only 37.13% of Switzerland's agricultural ta riff lines were duty free.  For Serbia 99.9% of its 
industrial tariffs were duty free but only 11% for Norway and 12.2% for Switzerland and Iceland of 
their agricultural tariffs were duty free under the Ag reement.  This was another Agreement in which 
EFTA Members had chosen to continue the protecti on of their agricultural sectors.  This Agreement 
was not a good example for Serbia as it continued to seek WTO Membership. 
10. The Chairman stated that the considerati on of the Goods Aspects of the Free Trade 
Agreement between the EFTA States and Serbia ha d allowed the Committee to clarify a number of 
questions and to conclude oral discussion of th is RTA 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 25 September 2012.  The Parties to the 
Agreement were requested to su bmit replies in writing by no later than 9 October 2012.  In 
accordance with paragraph 13 of the Transparen cy Mechanism all written submissions, as well as 
minutes of this meeting would be circulated prompt ly, in all WTO official languages, and would be 
made available on the WTO website.  
11. The Committee took note of the comments made. 
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