. /.   WORLD TRADE  
ORGANIZATION  WT/REG232/3 
22 December 2008 
 (08-6287) 
Committee on Regional Trade Agreements  Original:   English 
  
 
FREE TRADE AGREEMENT BETWEEN  
THE EFTA STATES AND EGYPT 
 
Questions and Replies
 
 
 
 The following communication, dated 19 December 2008, is being circulated at the request of 
the delegations of the EFTA States and Egypt.   
 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  
 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, one generally accepted by the Members” of 
“substantially all trade” ignores the fact that ther e 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 fr om tariff elimination.   
  And, the fact that the term “substantially a ll 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.  Furthermore, we note that no further definition of the term 
‘substantially all the trade’ has b een agreed by the WTO Membership .  The Parties to the Agreement 
believe that the coverage of the Agreement is fully consistent with their WTO obligations.  
 
2. Please explain why products that may, at this  point, have no bilateral trade associated 
with them are not subject to full tariff elimination.  
 Products in which there is no bilateral trade ma y be particularly sensitive for either Party. WT/REG232/3 
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  3. Regarding the U.S. 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.  
 
 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 commit ment in the provisional Transparency Mechanism for 
Regional Trade Agreements for Members to provide this information.  
  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 comp arative 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 for lines that rema in 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.  
 
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