. /. RESTRICTED  WORLD TRADE  
ORGANIZATION  WT/REG132/M/3 
15 September 2005 
 (05-4060) 
Committee on Regional Trade Agreements 
Fortieth Session  
 
 
EXAMINATION OF THE FREE TRADE AGREEMENT 
BETWEEN THE EFTA STATES AND CROATIA 
 
Note on the Meeting of 26 July 2005  
 
Chairman:  Mr. R. Saborío (Costa Rica) 
  
1. The meeting was convened in document WTO/AIR/2624. 
2. Under Agenda Item C.III of its Fortieth Session, the Committee on Regional Trade 
Agreements (hereinafter CRTA or the Committee)  took up the examination of the Free Trade 
Agreement (FTA) between the EFTA States and Croatia. 
3. The Chairman
 said that this was the third round of examination of the FTA between the 
EFTA States and Croatia.  The proceedings of th e first and second rounds, which had taken place in 
the 35th and 37th Sessions of the Committee in December 2003 and October 2004, could be found in 
documents WT/REG132/M/1-2.  Since then the Par ties had provided responses to written questions 
circulated as document WT/REG132/4.  
4. In light of the recent discussions in the Ne gotiating Group on Rules (NGR) on "substantially 
all trade", the representative of the United States  requested the Parties to provide data on the number 
of tariff lines covered by the Agreement, includi ng the Agreements on agriculture.  Specifically, she 
asked if the Parties would provide the following:  the number of tariff lines fully liberalized;  the 
number of agricultural tariff lines fully liberalized  in each agricultural Agreement;  the number of 
tariff lines with reduced, but not fully liberalized, tariff lines;  the number of tariff lines subject to TRQs;  the number of tariff lines not covered in th e Agreement or the agricu ltural Agreements;  the 
total number of tariff lines liberalized at each ph ase;  and the total number of tariff lines in each 
Party's tariff schedule.  Second, she said that at th e last meeting the Parties had justified the limited 
coverage of agricultural products by  explaining that tariff concessions had been granted in those areas 
in which the trade between the Parties was concen trated.  She asked the Parties to explain the 
rationale for not liberalizing tariff lines in which th ere was limited or no trade, given that the purpose 
of an RTA was to expand trade including new tradi ng opportunities.  Limiting trade concessions to 
those areas where trade existed and not granting concessions in areas where it did not exist seemed to her to limit the opportunities to be generated by an RTA.  Finally, she noted that the evolutionary 
clause in Article 30 provided the Parties the opportunity to review the Agreement "to extend it to 
areas not covered therein" and she wondered if the Parties had utilized or considered utilizing this 
clause to extend tariff liberali zation to additional products. 
5. In response to the question on the evolutiona ry clause, the representative of Switzerland
 said 
that given that industrial produc ts generally benefited after th e transition period from full 
liberalization of tariffs while agricultural produc ts did not, it was customary to discuss ways to 
improve reciprocal trade in agriculture and market  access for processed agricultural products within 
the Joint Committee.  Regarding new trading oppor tunities, he said that whenever a new regional 
trade agreement was concluded, concessions were gran ted on the basis of actual trade rather than on WT/REG132/M/3 
Page 2  
 
 any future trade which might take place.  He agreed  that future trade should be taken into account and 
the evolutionary clause was there for that purpose.  He agreed also that trade liberalization in the 
agricultural sector was limited.  As regards the re quest by the representative of the United States for 
information on all tariff lines liberalized, he said th at no consensus had yet been reached in the NGR 
on the provision of tariff information, so the Parti es would have difficulty in satisfying the request, 
both formally and administratively.  Article XXIV made reference to "substantially all trade", which 
meant not all trade, but less than total trade.  Thus there was no obligation to liberalize the entire 
agricultural sector.   
6. The Chairman
 said that the third round of examina tion of the FTA between the EFTA States 
and Croatia had allowed the Committee to clarify a number of questions, but some outstanding issues 
remained.  He invited delegations wishing to ask further questions to submit them in writing to the 
Secretariat by 23 September and for the Parties to pr ovide written replies by not later than 31 October 
2005.  Once the replies had been circulated, any request  for additional information could be dealt with 
without holding another round of formal examination.  At that point, the Secretariat could begin drafting the report of the examination. 
7. The Committee took note
 of the comments made. 
_________