WORLD TRADE  
ORGANIZATION  WT/REG201/5 
2 February 2009 
 (09-0454) 
Committee on Regional Trade Agreements Original:   English/French 
  
 
 
FREE TRADE AGREEMENT BETWEEN THE EFTA STATES AND TUNISIA 
 
Questions and Replies
 
 
 
 The following communications, dated 24 Dece mber 2008 and 13 January 2009, are being 
circulated at the request of the delegations of the EFTA States and Tunisia.   This document reproduces the follow-up
 questions addressed to the Parties following the 
51st Session of the CRTA and the responses submitted. 
 
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  Questions from the Delegation of the United States
 
 
Response from the EFTA States  
 1. Regarding the Parties’ assertions about the "absence of a definition of" substantially all 
trade, the United States would like to emphasize the following: 
 To argue that there is "no definition, on e generally accepted by the Members" of 
"substantially all trade" ignores the fact that th ere is no need for a so-called "definition" of 
"substantially all trade" because the term genera lly speaks for itself, leaving little room for 
products to be exempt from tariff elimination. 
  And, the fact that the term "substantially al l trade" has not been further clarified does 
not change the fact that Members are under an ob ligation to cover "substantially all trade" if 
they want the cover of GATT Article XXIV.  Th e United States assumes that the Parties have 
their own understanding of what "substantially al l trade" is because they are required to make 
sure they meet this standard of coverage.  
 In this light, we ask that the Parties pl ease explain their understanding of the term 
"substantially all trade".    
 It seems clear that "substantially all the trade"  is not the same as all the trade but certainly 
significantly more than some of the trade. Furtherm ore, we note that no further definition of the term 
"substantially all the trade" has been agreed by the WTO Membership. The Parties to the Agreement 
therefore believe that the coverage of the Agreemen t is fully consistent with their WTO obligations. 
 
   
 
 WT/REG201/5 
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  Response from Tunisia
 
 
 The Agreement between Tunisia and the Europ ean Free Trade Association contains a firm 
commitment to establish a free trade area in  accordance with Article XXIV of the GATT 1994. 
 
 It expressly provides for the elimination of barri ers with respect to substantially all the trade 
between the two parties, pursuant to the provisi ons of Article XXIV.8, and complies with those 
provisions by establishing the requirement of reciproc ity and a vast and varied field of application 
encompassing trade in both goods and services.  
 The Agreement provides for the elimination of  customs duties on non-agricultural products 
and for the liberalization of trade in agricultural products on the basis of a bilateral exchange of 
concessions (e.g. tariff quotas, exemption from custom s duties).  Moreover, as indicated in the latest 
response to a question from the United States ( document WT/REG204/1 of 26 November 2008), it 
should be emphasized that Tunisia and the EFTA States have agreed to periodically review the 
development of their trade in agricultural produ cts within the framework of their respective 
agricultural policies and international obligations  (Factual Presentation by the WTO Secretariat, 
document WT/REG201/3 of 10 September 2008, paragr aph 19).  The statistics on trade volume for 
the base period 2002-2004 (the period preceding the signing of the Agreement) reflect both parties' commitment to comply with the relevant provi sions of Article XXIV of the GATT 1994 concerning 
the obligation to eliminate "duties and other restri ctive regulations of commerce … with respect to 
substantially all the trade".  The Secretariat's F actual Presentation, mentioned above, clearly reflects 
this commitment.  
2. Please explain why products that may, at this  point, have no bilateral trade associated 
with them are not subject to full tariff elimination.  
Response from the EFTA States
 
 
Products in which there is no bilateral trade ma y be particularly sensitive for either Party. 
Response from Tunisia  
 
 Please provide further details and be more specific. 
 3. Regarding the United States request to provide the average duty rate by HS chapter and 
HS section for lines that remain dutiable:  
 We do not agree that this calculation is no t possible.  AVEs for specific duties could be 
calculated.  Also, average duties could be calculated for products with quotas.  As such, we 
respectfully repeat our request for this informatio n, and note that we would welcome assistance 
from the Secretariat if that would be helpful to the Parties.  
 
Response from the EFTA States
 
 
 It is difficult to provide the average duty rate  by HS chapter and HS section for the lines 
remaining dutiable due to specific duties and in-quota rates; the information requested is not readily 
available. We also note that there is no commitme nt in the provisional Transparency Mechanism for 
Regional Trade Agreements for Members to provide this information.    
  WT/REG201/5 
 Page 3 
 
 
   On the subject of ad valorem  equivalents, there is no agreed methodology for calculating 
AVEs of specific tariffs, other than for placing tariffs  in various tariff bands in the Doha negotiations 
of agricultural market access. Th e outcome of any such calculation will vary substantially depending 
on, inter alia , the reference period choice for prices (world market prices or domestic import prices or 
a weighting of the two) and treatment of lines with  little or no trade. In the absence of an agreed 
methodology, calculating AVEs would neither result in meaningful information about actual tariff 
protection, nor provide adequate material for co mparative analysis. The WTO itself does not include 
specific duties in its calculations.    We note, moreover, that product lines may be le ft out of the Agreement because they are not 
of interest in the framework of our trade relati ons and/or because these are sensitive for the parties 
involved. Providing an average fo r lines that remain dutiable would present a distorted picture of the 
actual trade liberalisation undertaken in the context of the FTA and would not enable Members to draw meaningful conclusions.   Response from Tunisia
 
 
 It is difficult to provide th e average duty rate by HS chapter and HS section for the tariff lines 
that remain dutiable, because this information is not available. 
 
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