WT/REG357/2  
 
11 February 2016  
(16-0892)  Page: 1/4  
Committee on Regional Trade Agreements  Original: English  
 
FREE TRADE AGREEMENT BETWEEN THE EFTA STATES AND CENTRAL AMERICA – 
COSTA RICA AND PANAMA (GOODS AND SERVICES) 
QUESTIONS AND REPLIES 
 The following communication, dated 9 February 2016, is being circulated at the request of 
the delegations of the EFTA States and Central America (Costa Rica and Panama).  
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   This document reproduces the questions addressed to the Parties and the responses 
submitted. 
 
Questions from the delegation of Thailand 
 Trade in services and investment 
 
1.1.  Which sectors and sub-sectors of C osta Rica and Panama have increased their 
exports to EFTA from the date of the entry into force of the Agreement? Please provide 
specifics. 
 The Free Trade Agreement between Costa Rica and EFTA entered into force with different 
dates for each EFTA country. Therefore, the information yearly term showed below is calculated 
from September to August. Under those circumstances, comparing data from September 2013 to August 2014 and from September 2014 to August 2015, the exports show an increase of 40.8% 
(US$9.4 million). Disaggregating the information by  sector, it shows that the industrial sector 
decreased 9.6% (-US$0.2 million), while the agricultural sector in creased 45% (+ US$9.6 million). 
 
 The increase in the agricultural sector was generated in particular by fruits, coffee and fruit 
juice.   
Sector  Accumulated 
September 13 - 
August 14 
(US$ million)  Accumulated 
September 14 - 
August 15 
(US$ million)  Absolut 
Increase 
(US$ 
million)  Inter-
annual 
increase  
Agriculture WTO 21,37 30,99 9,62 45,0% 
Agriculture 20,92 30,31 9,39 44,9% 
Food 0,46 0,69 0,23 50,1% 
Industry WTO 1,79 1,62 -0,17 -9,6% 
Precision Medical devices 0,42 0,68 0,26 61,5% 
Rubber 0,85 0,33 -0,52 -61,3% 
Electrical and electronic  devices 0,12 0,22 0,10 84,5% 
Transport material 0,01 0,19 0,18 2358,8% 
Pharmaceutic chemicals 0,01 0,08 0,08 1539,3% 
Wood 0,02 0,06 0,04 162,4% 
Metalworking 0,21 0,03 -0,18 -85,9% 
Textiles leather and footwear 0,09 0,02 -0,07 -81,6% WT/REG357/2 
 
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  Sector  Accumulated 
September 13 - 
August 14 
(US$ million)  Accumulated 
September 14 - 
August 15 
(US$ million)  Absolut 
Increase 
(US$ 
million)  Inter-
annual 
increase  
Jewels 0,00 0,00 0,00 99,3% 
Others 0,07 0,01 -0,06 -85,5% 
Total  23,16 32,61 9,45 40,8% 
 
 The information requested from Panama is not available in this particular moment. The 
information could be shared whenever is feasible.  
 Rules of origin 
 
1.2.  Paragraph 3.43: Insufficient working or processing not conferring origin is defined 
in Article 5 of Annex I, while accumulation rules are set in Article 6. Accumulation is 
permitted in cases where the EFTA States and Costa Rica or Panama have a preferential 
trade agreement with the same non-party or group of non-parties, as long as they 
comply with the specific rules of origin  for that product or material under the 
Agreement. For this rule to apply an equivale nt provision shall be in force between each 
Party and the non-party or group of non-partie s, as well as any other conditions that the 
Parties consider necessary for its application.  Other disciplines contained in Section II of 
Annex I cover, in Articles 7 through 12 of the Annex: unit of qualif ication; accessories, 
spare parts and tools; packaging materials and containers; sets; neutral elements; and 
fungible materials. 
 Under the Agreement, "the origin crit eria in cases where the accumulation 
between the parties (the EFTA States, Cost a Rica and Panama) and non-party/group of 
non-parties that have the preferential trade arrangement with the parties is permitted." 
Do the origin criteria under the FTA with the non-party(ies) have to be identical with the origin criteria under the agreement before th e accumulation under this provision can be 
applied? 
  The accumulation regime is set out in Article 6 of Annex I to the Agreement. While the origin criteria under an FTA with a non-party need not be identical, accumulation can only take place in 
cases where the specific rules of origin under the Agreement are complied with, as stipulated in 
paragraph 5 of Article 6.   
Denial of benefits 
 
1.3.  According to paragraph 4.4 of the docu ment which states that "the agreement does 
not contain any specific provision on Denial of Benefits," Can the Parties explain their 
rationale for excluding Denial of Benefits fr om the Trade in Services Chapter? Is there 
any part of the Chapter that refers to  Denial of Benefits for non-Party? 
 Clear and precise rules of origin for trade in services are included in the Agreement through 
the definitions of "Natural Person of another Party" and "Juridical Person of another Party". As a 
consequence, it is clear who is entitled to benefit from the Agreement and not. We do not see the need for an article on  Denial of Benefits. 
 
Other services not included elsewhere 
Panama 
 
1.4.  Paragraph 4 .73: Under the GATS, Panama has horizontal limitations on the 
acquisition of land by non-Panamanians in  certain areas. It also has horizontal 
limitations, mainly on market access, for mo des 3 and 4, requiring a certain number of 
local workers be employed in companies registered in Panama. Panama's GATS 
commitments are made part of Panama's obligations under the Agreement and shall 
apply to the other Parties. Moreover, though no mention is made in its GATS Schedule, 
under the Agreement, Panama reserves the right to adopt or maintain any measure for 
the management, administration , operation, maintenance, pr eservation, modernization, 
development or ownership of the Panama Canal and any juridical person that may WT/REG357/2 
 
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  succeed the Panama Canal Authority (PCA) and the reverted areas, that restrict the 
rights of investors and foreign service providers. 
 Would the representatives of the Panama nian Government clarify which certain 
areas of their land non-Panamanians can acquire? 
 
 The limitations under GATS regarding the acquisition of land by non-Panamanians in the Republic of Panama is applicable to areas deno minated "reverted areas", which are areas located 
in the former Panama Canal Zone previously managed by United States of America until the 
signing of the Torrijos Carter Agreement. These area s were returned to the Republic of Panama on 
31 December 1999.  
 Currently, these real estate properties are managed by the Department of Reverted Property 
Management of the Ministry of Economics and Fi nance (UABR) and could be acquired by either 
Panamanians or non-Panamanians. Those acquisitions of real estate properties are executed by auctions.  
Intellectual property rights 
 
1.5.  Apart from what is mentioned under to pic 5.9 "Intellectual property rights", does 
this Agreement cover other rights such as Co pyright, Design and so on? If yes, could the 
Parties please clarify? 
Article 6.1.1 of the Agreement states that "Parties shall grant and ensure adequate, effective 
and non-discriminatory protection of intellectual pr operty rights", in accordance to Chapter 6 and 
Annex XIX to the Agreement and the international agreements referred therein. The definition of 
intellectual property is set out in Article 1 of Annex XIX. Specifically, intellectual property comprises "copyrights, including the protection of computer programmes and compilations of data, 
as well as related rights, trademarks for goods and services, geographical indications (including 
appellations of origin), industrial designs, patents, plant varieties, topographies of integrated circuits, as well as undisclosed information".  
 
1.6.  Paragraph 5.24: On trademarks (Art icle 3 of Annex XIX), the principles of 
protection are reaffirmed, including the Partie s' rights to make registrability depend on 
distinctiveness acquired through use in cert ain circumstances and the possibility for the 
Parties to consider that shapes of goods can constitute a trademark. The provisions also 
cover the grant of exclusive rights to prev ent the likelihood of confusion under certain 
conditions. The rights described under Arti cle 3 of Annex XIX shall not prejudice any 
existing prior rights, nor shall they affect the possibilities of the Parties making rights 
available on the basis of use. The Parties al so reaffirm the importance of and shall be 
guided by the principles of the WIPO Join t Recommendation Concerning Provisions on 
the Protection of Well-Known Marks, adopted in 1999. They reaffirm the importance of 
the WIPO Joint Recommendation Concerning Pr ovision on the Protection of Marks and 
other Industrial Property Rights in Signs, on the Internet, adopted in 2001. 
 There is a difference between European Nations and Central America Countries in 
Geographic indication (GI) and Trademark pr otection. Could the Pa rties please provide 
us with the measures for the GI and Trad emark protection under this agreement? 
 
 The Agreement sets out the principles of pr otection for both trademarks (Article 3 of 
Annex XIX) and geographical indications (Article 7 of Annex XIX). Specific protection "measures" are not regulated under the Agreement. 
 
Competition 
 1.7.  Paragraph 5.35: Chapter 8 addresses competition. Anti-competitive practices 
identified under Article 8.1 are incompatib le with the proper functioning of the 
Agreement insofar as they may affect trade between the Parties. If at the moment of 
entry into force of the Agreement a Party has not yet adopted competition legislation or 
designated a competent authority, it shall do so within a period of three years. The 
Parties shall cooperate in their dealings on  anticompetitive practices with the aim of 
ending such practices. Consultations, within  the Joint Committee, may be requested by a WT/REG357/2 
 
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  Party in order to foster understanding or to  address any matter aris ing under Chapter 8. 
The Agreement's dispute settlement mechanis m may not be used for provisions on 
competition. 
 Under the Agreement, "The Parties shall cooperate in their dealings on 
anticompetitive practices with the aim of endi ng such practices." Thailand is interested 
in learning about how "cooperation" can be implemented among the Parties. Are there examples of such cooperation listed under the provision? If so, what are they? Do 
"dealings" cover both administrative and judi cial procedures? Plea se explain the scope 
of the Parties' "dealings"?   Could the Parties please elaborate on th e procedure for consultations, which may 
be requested by a Party within the Joint Committee? After a Party makes a request to 
the Joint Committee, will the Committee deci de on the time and venue of such 
consultations and will also hear the consultation or will the consultations be 
confidentially held between the Parties involved? 
  According to paragraph 2 of Article 8.2 of the Agreement: "Cooperation may include the 
exchange of pertinent information that is available to the Parties. No Party shall be required to 
disclose information that is confidential according to its laws." There are no other specific examples listed in the Agreement. In practice, cooperation may take place between the Parties' competent authorities. For example, if undertakings from different Parties are jointly involved in 
anti-competitive practices, it might be appropri ate to address such issues through cooperation. 
  Article 8.2, including the terms "shall cooperate in their dealings with anticompetitive 
practices" must be read in light of Article 8.1, which sets out anti-competitive practices. For the 
purpose of the Agreement, potentially anticompetitive practices are only relevant if they affect trade between the Parties. The aim of Article 8.2 is  to provide the Parties with the possibility to 
cooperate where there may be anticompetitive behavi ours that affect trade between them with the 
aim of putting an end to such practices. The Pa rties are free to choose the means of cooperation, 
subject to their domestic legislation.  
 The procedure for consultations under the Joint Committee is spelled out in Article 8.3, 
which reads as follows:  
"To foster understanding between the Parties or to address any matter arising under this 
Chapter, a Party may request consultations within the Joint Committee. This request shall indicate the reasons for the consultations. Consultations shall be held promptly with a view 
to reaching a conclusion consistent with this Chapter. The Parties concerned shall give to the 
Joint Committee all the support and information needed. No Party shall be required to disclose information that is confidential according to its laws." 
 
 The Joint Committee consists of representatives of the Parties (c.f. Article 11.1 of the 
Agreement). It is a forum for the Parties to discuss any issue arising under the FTA, including competition matters. More generally speaking, the rules of procedures of the Joint Committee will 
be established pursuant to Article 11.1 of the Agreement when the Joint Committee meets for the 
first time. These rules will also be applicable to consultations regarding competition matters. Discussions in the Joint Committee are not open to the public.  
 
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