WORLD TRADE  
ORGANIZATION  WT/REG232/M/1 
19 December 2008 
 
 (08-6251) 
Committee on Regional Trade Agreements 
Fifty-first Session  
 
 
 
CONSIDERATION OF THE FREE TRADE AGREEMENT  
BETWEEN THE EFTA STATES AND EGYPT, GOODS  
 
Note on the Meeting of 27-28 November 2008  
 
Chairman:  Mr. D. Brauns (Germany) 
 
 
1. The meeting was convened in document WTO/AIR/3261, dated 16 October 2008. 
2. Under Agenda Item B.VI of its 51st Session, the Committee on Regional Trade Agreements 
(CRTA or the Committee) took up consideration of  the Free Trade Agreement between the EFTA 
States and Egypt (hereinafter referred to as 'the Agreement'), goods. 
3. The Chairman  said that the Agreement had entered into  force on 1 August 2007 and had been 
notified by the Parties to the WTO on 17 July 2007 under Article XXIV:7(a) of the GATT 1994 and 
the Understanding on the Interpretation of Artic le XXIV of GATT 1994 as an Agreement establishing 
a free-trade area (document WT/REG232/N/1).  The te xt of the Agreement was available, together 
with its Annexes, on the Parties' official websites. 
4. The Factual Presentation on the goods aspects (document WT/REG232/1 dated 19 September 
2008) 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 
Agreements (document WT/L/671).  Due to the late  receipt of replies from the Parties, the written 
questions and replies on this Agreement had been  recently distributed in document WT/REG232/2 
dated 24 November 2008.  He had been informed by the Secretariat that the figures presented in the 
Factual Presentation for Switzerland’s relations with Egypt were incorrect due to the incorporation of 
in-quota tariff lines.  The tariff analysis had been  rerun and copies of the revised tables and chart, 
showing the old figures in brackets, had been made  available in the room.  The revised Factual 
Presentation would be issued following the meeting.   He proposed to organize the consideration of 
Agreement by first asking the Parties and then othe r Members to give any general comments.  The 
Committee would then turn to the specifics of the Agreement using the Factual Presentation, 
document WT/REG232/1, to guide the debate and the Committee would go through the Factual Presentation section by section, and then look at the questions and replies document. 
5. The representative of Norway
, on behalf of the EFTA States, expressed her gratitude to the 
WTO Secretariat for having prepared the Factual Presentation, to Japan, the United States, Chinese 
Taipei, the European Communities (EC) and Turkey for their advance questions, and to the Egyptian 
delegation for what had been close and fruitful cooper ation in the preparation of this consideration.  
The Agreement had been signed on 27 January 20 07 and had entered into force on 1 August 2007.  
The first Joint Committee meeting under the Agreem ent had taken place earlier this month.  Trade 
between the Parties had increased  steadily since 2002, reaching US$533 million in 2007, an increase 
of 24% from the previous year.  EFTA’s exports  to Egypt had grown 20% from 2006 while imports WT/REG232/M/1 
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  from Egypt into the EFTA States had grown by a robust 57%.  Egypt was the fourth most important 
trading partner of the EFTA States on the African c ontinent, after South Africa, Libya and Nigeria.  
Indeed, Egypt ranked as EFTA’s second largest expor t destination in the region and was EFTA’s 
ninth largest import source from the continent.  Among the EFTA countries, Switzerland was Egypt’s 
largest bilateral trading partner, accounting for 78% of EFTA-Egypt bilateral trade in 2007.  
Norway’s trade with Egypt had developed partic ularly strongly since 2005, reaching a high of 
US$117 million in 2007 and reflecting a 79% incr ease over bilateral trade in 2006.  The main 
products exported by EFTA included pharmaceutical  products, machinery, and organic chemicals, 
and its main imports were electrical machinery, fruit s and nuts, and apparel.  There was considerable 
potential for further expansion of trade between the Parties more generally but also in line with the 
growing integration and development of the Euro-Mediterranean region. 
6. The Agreement covered trade in industrial produc ts, including fish and other marine products 
and processed agricultural products.  With regards to  the former, as was standard EFTA practice, all 
industrial goods originating in Egypt entered the EFTA States on a duty-free basis upon the entry into 
force of the Agreement.  EFTA's exports to Egypt would, for the most part, enjoy duty-free access by 
2020.  Duties on fish and other marine products w ould be fully eliminated by 2021.  Bilateral 
Agreements had been negotiated between the individual EFTA States and Egypt on basic agricultural 
goods;  these formed an integral part of the inst ruments creating the free-trade area.  Under these 
bilateral Agreements, preferential access was grante d to products of particular importance to Egypt, 
for example, potatoes, grapes, and olive oil.  Libe ralization of goods covered all major sectors in two-
way trade.  The Parties did not maintain any other restrictions on the movement of goods and  
therefore, believed that the Agreement was comp atible with GATT Article XXIV.  The Agreement 
also included provisions relating to the eliminati on of other trade barriers as well as trade-related 
disciplines including competition, state monopolies and subsidies.  Moreover, there were provisions 
on the protection of intellectual property rights, investment, services, current payments and capital 
movements, government procurement, economic co-operation and institu tional and procedural 
matters.  The Agreement integrated the provisions of  the Pan-Euro-Med Protocol on rules of origin, 
maintaining the general structure and substance of sta ndard European rules.  As part of the Euro-Med 
cumulation system, exporters and importers could ta ke advantage of diagonal cumulation, and further 
enhance their competitiveness in th e European-wide market.  Cumulation was an important element 
for investment too.  In this respect, production facilities could benefit from the sourcing and delivery of inputs and outputs throughout the Euro-Med region.  It was her delegation’s opinion that this would 
be a significant element in the growth of foreign dir ect investment between the Parties.  According to 
the most recent figures available in 2006, EFTA’s ag gregate stock of FDI in Egypt had amounted to 
approximately US$430 million, representing a signi ficant number of companies active in sectors as 
diverse as agribusiness, pharmaceuticals, machin ery, and services, including notably financial 
services.  Indeed, Egypt was Switzerland’s second larg est FDI destination on the African continent.  
In several areas, such as services and government procurement, the Parties aimed at achieving gradual 
liberalization and opening of their markets, such as in the case of services where a review was set to 
occur at the latest five years after the en try into force of the Agreement, by 2012. 
7. The representative of Egypt
 thanked the WTO Secretariat for having preparing the Factual 
Presentation and the Members for having asked useful questions concerning the main concepts of the 
Agreement.  He hoped that the replies given would enable them to have a better understanding of the 
Agreement.  Improving trade relations with the EFTA  States had been on Egypt's agenda since 1995 
which had been the year of the first round of nego tiations;  the tenth round had been held in 2006.  
The Agreement was considered as one of the important economic instruments that Egypt had 
concluded.  One of the fundamental objectives of a ny bilateral agreement was to improve and expand 
intra-trade, but under this Agreement, its target was not only to increase intra-trade, but also to 
increase investments utilizing the rules of diag onal cumulation which was pre-stated in the 
Pan-Euro-Med Protocol on rules of origin Egypt  had agreed with EFTA, the European Communities, 
Turkey, and the Agadir countries.  It also hoped to increase the number of investments, especially  WT/REG232/M/1 
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  since the Government was undertaking a series of amendments towards reforming and improving the 
business and investment climate which was considered  a gateway to the Middle East, Africa and the 
European markets.  Total trade between the Par ties amounted to US$533 million in 2007 increasing 
by 24.4% from 2006.  The Agreement provided a structure that furnished a good inception and it was 
his delegation’s opinion that it would make a signi ficant contribution to the development of its 
economy and most importantly promote tr ade and investment among the Parties. 
8. The representative of the United States  thanked the Secretariat for having prepared the 
Factual Presentation and the Parties for having resp onded to Members' questions.  His delegation was 
forced to note that the highly disproportionate lib eralization between the industrial and agricultural 
sectors including the low level of agricultural tariff elimination by the EFTA States, and the tariff 
elimination by Egypt on only 13.7% of agricultural goods was abysmal.  Given the extensive protection afforded to each Party's agricultural goods, the United States questioned how the Parties 
could possibly consider that the Agreement met th e "substantially all the trade" test.  The United 
States wished to have further explanation from th e Parties as to how they determined a specific 
agricultural product was too sensitive to be liberali zed and why products for which there was no trade 
between the Parties were not subject to full tariff elim ination.  He requested the Parties to provide the 
average duty rate by HS Chapter and Section for th e lines remaining dutiable.  He acknowledged that 
his delegation was being repetitive;  however, the Ag reements reviewed in the current meeting which 
were based on a disturbing "à la carte" approach that  freely allowed the Parties to discriminate against 
other Members in a manner inconsistent with MFN obligations under the guise of 
GATT Article XXIV coverage did not bode well for comprehensive multilateral trade liberalization. 
9. The representative of the European Communities
 thanked the Parties for having provided 
written replies to its questions, but highlighted the lack of ambitious liberalization under the 
Agreement as regards trade in agri culture.  Her delegation noted that only approximately 13% of 
Egyptian agricultural tariffs were duty-free under th e Agreement, while Switzerland had liberalized 
less than 30% of its agricultural tariff lines.  These figures clearly ill ustrated that the bulk of the 
agricultural sector remained out of the scope of the Agreement.  Her delegation wished to register its 
disappointment with such unambitious liberalization. 
10. The representative of Norway  replied that there was no agreed definition of "substantially all 
the trade".  The Agreement covered all the broad sectors of the Parties’ two-way trade and was the 
result of negotiations between the Parties.  The Pa rties considered that th e Agreement fulfilled the 
criteria of “substantially all the trade”.  Regarding the question of how to determine which agricultural 
products were sensitive, that was a decision which w as up to each of the Parties to the Agreement, and 
it depended on each of the Parties' national agricultu ral policies.  With respect to the question on 
average duties on each HS Chapter, that had not been possible to cal culate, partly because of specific 
and in-quota duties on these lines.  Also just as a ge neral remark, her delegation did not consider that 
averages across HS Chapters n ecessarily illustrated that much. 
11. The representative of the United States  said his delegation was not convinced by the comment 
that it had not been possible to calculate average dut ies.  There was a method to calculate ad valorum 
equivalents (AVEs) of specific duties and hi s delegation wondered why using AVEs for the 
calculations would be not possible.  The representative of Norway  clarified that it had been not 
possible to calculate them within the timeframe that the Parties had.  As regards whether it actually 
was possible, – she was not sure, but according to her instructions, it was not something the Parties 
necessarily could do.  The representative of the United States  asked whether the Parties could submit 
those average duties using AVEs in order to provi de a comprehensive picture on those tariff lines 
remaining dutiable.  The representative of Norway  said her delegation would look further into this and 
would get back with the information that the Parties could retrieve within the deadline. WT/REG232/M/1 
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  12. The Chairman  noted that the consideration of the goods aspects of the Free Trade Agreement 
between the EFTA States and Egypt had allowed the Committee to clarify a number of questions and 
the Committee concluded oral discussion of the Ag reement 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 11 December 2008 and Parties were asked to 
submit replies in writing by no later than 24 Decemb er 2008.  In accordance with paragraph 13 of the 
Transparency Mechanism all written submissions , as well as minutes of this meeting would be 
circulated promptly, in all WTO official la nguages, and would be made available on the 
WTO website. 
13. The Committee took note  of the comments made. 
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