WORLD TRADE  
ORGANIZATION  WT/REG179/5 
5 September 2007 
 
 (07-3764) 
Committee on Regional Trade Agreements 
 Original:   English 
 
 
 
FREE TRADE AGREEMENT BETWEEN 
THE EFTA STATES AND CHILE 
  
Questions and Replies  
 
 
 The following communication, dated  5 September 2007, is being circulated at the request of 
the Delegations of the EFTA States and Chile.  
 This document reproduces the questions addressed to the Parties and the responses submitted. 
 
_______________ 
 
  Questions from Japan 
 
~ Goods ~ 
1. With respect to the provisions in Article 19, Paragraph 7, we noticed that the duration 
of a provisional emergency measure is within 120 days, which is shorter than 200 days set in the 
WTO safeguard agreement, as well as in the EFTA-Korea FTA.  Could the Parties tell us in 
general whether you think 120 days are sufficien t as the duration for a provisional emergency 
measure? 
 As stated in paragraph 7 of Article 19 provi sional measures shall only be taken in critical 
circumstances where delay would cause damage which would be difficult to repair. Therefore, the 
Parties believe that a period of 120 days is sufficient to analyze the circumstances. The period of 
application of any such provisional measure shall be  counted as part of the definitive measure and any 
extension thereof.  
2. With respect to Paragraph 18 and Chart II.2 of the Factual Presentations 
(WT/REG179/3), we noticed that it does not show the duty elimination of the EFTA States neither at the end of Mid-term (2008) nor the end of the implementation period (2010).  May we understand that the EFTA States will eliminate some of its duties against imports from Chile at the entry into force of the Agreement and that th ere is no transition/implementation period with 
regard to the duty elimination?  
 All concessions granted by the EFTA States in the Free Trade Agreement and the respective 
bilateral agricultural agreements are effective from the entry into force of the Agreement, with no 
dismantling. The EFTA States eliminated all customs du ties of products falling within HS chapters 25 
– 97 as of entry into force of the Agreement with  the exception of products listed in Annex III. The 
elimination/reduction of customs duties by the EFTA States for processed agricultural products is WT/REG179/5 
Page 2  
 
 listed in tables 1 – 4 to Annex IV. In addition, th e elimination of duties for fish and other marine 
products is listed in Annex V. 
3. With respect to the negotiations on dismantling of Chile’s duties of 366 products 
described in Paragraph 22 and Table II.1 of th e Factual Presentations (WT/REG179/3), could 
the Parties inform us about the outcome of the negotiations?  
With regard to the negotiations on dismantling of  Chile’s duties of 366 products described in 
paragraph 22 and table II.1 th ere is still no conclusions.  
 We noticed that there are no such descriptions  regarding the duties of the EFTA States.  
Could the Parties tell us why they agree on such asymmetrical arrangements? 
The EFTA States take into consideration the count erpart’s level of development with regard 
to flexibility and asymmetry in liberalization schedules.  
4. With respect to the safeguard mechanisms described in Paragraph 46 to 48 of the 
Factual Presentations (WT/REG179/3), was there any measure imposed after the entry into 
force of the Agreement? We are interested in both  global safeguards and bilateral safeguard 
measures.  
The EFTA States have not imposed any global saf eguard nor bilateral safeguard measures 
after the entry into force of th e EFTA-Chile Agreement. Chile has not applied bilateral safeguard 
measures to the EFTA countries. With regard to gl obal safeguards, Chile has applied the following 
measures: i) global safeguard measures to wheat flour (SACH 1101.0000) from October 10th, 2004 to 
October 10th 2006; ii) global safeguard measures to powder milk; liquid milk and gouda cheese from October 13th, 2006 to date.  
5. With respect to the non-application of anti-dumping measures described in 
Paragraph 49 of the Factual Presentations, could the Parties tell us whether a Party has 
imposed an anti-dumping measure on goods of an other Party before the entry into force of the 
Agreement?  
No anti-dumping measure on goods of another Pa rty to the EFTA-Chile Agreement has been 
imposed by any of the Parties before the entry into force of the Agreement.  
Could the Parties also tell us whether each of the Parties has effective anti-dumpling 
measures in their respective trade policies?    
 There are no anti-dumping measures in effect in the EFTA States.  Chile has not applied any 
competition measures (antitrust) to cases of dumping. 
~ Services ~ 
6. With respect to the provisions in Section 2: Establishment in Chapter III of the 
Agreement, it provides for investment protection as well as investment liberalization. We 
noticed that the liberalization commitments by EFTA States to Chile, shown in Annex 10, are 
higher than those to Korea in the EFTA-Korea FTA. Could the EFTA States inform us about 
the background of the difference of its commitments?  
 There is no difference in the investment liberalization commitments between the two 
Agreements. However, the level of liberalisation is  determined by the scope of the investment and 
services chapter of the respective agreements. Wh ereas under Article 32 of the EFTA-Chile FTA the  WT/REG179/5 
 Page 3 
 
 
 scope and coverage of the establishment section app lies to establishment "in all sectors, with the 
exception of establishment in services sectors", the scope of the Agreement on Investment between 
Korea and Iceland/Liechtenstein/Switzerland (Paragra ph 2 of Article 2) does not apply to measures 
affecting trade in services, provided that the sector concerned is covered by the chapters on trade in 
services and financial services.  
7. With respect to the scope of the Agreemen t described in Paragraph 27 of the Factual 
Presentations (WT/REG179/4), could the Parties te ll us about the progress of the negotiations 
on financial services?  
 Article 45 of the EFTA-Chile Agreement foresees that the Parties would consider including 
financial services in the Chapter on services two years after the entry into fo rce of the Agreement. 
Financial experts have exchange d information and ideas on the subject. However, the Parties still 
have not decided to initiate negotia tions on the inclusion of financial services pursuant to Article 45 of 
the Agreement. 
8. With respect to the description of Par agraph 45 of the Factual Presentations 
(WR/REG179/4), may we understand that the sect oral commitments of Iceland are less than 
what it commits under the GATS Agreement? If our understandings are correct, may we be 
informed of the background of this lower commitments? 
 In the negotiations with Chile some fields were  left for further discussion, as the parties aimed 
at a further opening and increased free trade in these areas in comparison with commitments globally. 
The agreement has of course a certain scope wh ich increases and deepens the free trade relations 
between the parties. However, the basic commitment s that are established in the GATS are of course 
fully valid between the parties and further fill into the scope of bilateral a nd multilateral relations.   
 The time it has taken to further discuss several  sectors and add those to the scope of the 
agreement, has unfortunately been longer than expect ed, and we hope to be able to finish this soon. 
Questions from the United States  
~ Goods ~ 
9. Paragraph 13 describes the relationship between the EFTA-Chile FTA and the FTAs 
each Party has with the EC.   
• Is our understanding correct that, in the even t that liberalization accelerates between 
 either Party and the EC, Chile may renegotiate the EFTA States’ preferential access to  Chile’s market whereas the EFTA States must  renegotiate with Chile to ensure that 
 Chile has treatment  no less favorable than that granted to the EC?  What is the 
 reasoning behind this asymmetrical obligation?  
 For processed agricultural products (products  covered by Annex IV), The EFTA States 
undertake, based on reviews, to grant Chile treatme nt no less favorable than that accorded to the 
European Community. The treatment granted by Chile  to the EFTA States has no direct link to the 
treatment Chile grants to the EU, however, Chile sh all reciprocally reduce its duties based on any duty 
reduction granted by the EFTA States to Chile. 
• Is there a plan to harmonize the liberaliz ation schedules under these agreements,  in 
 essence creating a free trade area among Chile, the EC and EFTA? 
 There is not any plan to harmonize the lib eralization schedules under these agreements. WT/REG179/5 
Page 4  
 
 10. According to paragraph 13 of the Factual Presentation and paragraph 2 of Annex VI, 
Chile may accelerate tariff elimination “upon deci sion by the Joint Committee”.  What is the 
reasoning behind conditioning Chile’s unilateral liberalization upon approval of a multi-national body of the agreement, rather than Chile itself?   
 It is stated in the Annex that if Chile’s ge neral economic situation a nd the situation of the 
economic sector concerned so permit, the Joint Comm ittee can decide to acceler ate tariff elimination. 
It is important for the other Parties to the Agreemen t to have the possibility to discuss this in the Joint 
Committee in order to have mutual understanding on the issue. Furthermore, according to article 85, 
paragraph 5, the Joint Committee subject to provi sions set out in annex XV may amend the Annexes 
and the Appendices to the Agreement. 
11. Could the Parties provide additional info rmation on the progress made in their 
negotiations to “explore the opportunities for ex changing further concessions in agricultural 
products among the Parties,” described in paragraph 14?  Have the Parties assessed the situation and reach any conclusion on opportuniti es to grant each other further concessions to 
improve liberalization?  What products a re under discussion?  Is there a framework for the 
discussions?   
Paragraph 14 deals with article 12.1, on basic du ties to be applied for successive reductions as 
set out in Annex VI. So, it does not refer w ith any progress made on further concessions in 
agricultural products among the Parties. Art. 5 of the bilateral agreements on trade in agricultural 
products deals with the further developments of tr ade in agricultural products among the Parties. In 
this regard, in their first Joint Committee meeting in January 2006, the Parties started a process to 
further liberalize their trade with processed agricu ltural products. This process is yet not finalized.  
12. Please confirm our understanding, based on the description in paragraph 18 of the 
Factual Presentation concerning the volume of imports from Chile into Switzerland that becomes duty free upon entry into force of the agreement, that 15 lines accounted for 
43.2 percent of Switzerland’s impo rts from Chile during 2002-2004. 
Yes, 15 tariff lines accounted for 43.2 percent of Swiss imports from Chile during 2002-2004.  
13. According to paragraph 18, “A number of Sw itzerland’s tariff lines are subject to MFN 
tariff quotas.” 
• How were these lines treated under the Agreemen t?  Did Chile gain anpreferential or 
 additional access to the products subject to WTO TRQs?   
 "Switzerland grants Chile reduced duties or tari ff elimination within several of Switzerland's 
WTO TRQs ".  
• In addition, as a methodological issue, how did the Secretariat treat the products 
 subject to TRQs in its analysis of liberalized tariff lines?  
 WTO Secretariat please provide the answer.  
14. We are very concerned about the consistency of this agreement with GATT Article 
XXIV, particularly as it pertains to Switzerla nd.  According to paragraph 18 of the Factual 
Presentation, only 56.8% of Switzerland’s imports (based on value) from Chile, and only 79.8% 
of tariff lines, become duty-free under the agreeme nt.  According to paragraph 30, “[a] large 
majority of agricultural products either have  been excluded from any liberalization by 
Switzerland, or are subject to reduced rates.”  Switzerland is a net importer of agricultural  WT/REG179/5 
 Page 5 
 
 
 products, and Chile is a net exporter of agricultura l products.  In light of the structure of these 
two economies, we wonder how this agreement meet s the “substantially all the trade” test of 
Article XXIV.  
 The "substantially all the trade" criterion refe rs to "trade", not to imports and exports 
separately. Taking the bilateral trade between Switzerland and Chile between 2004 and 2006, on 
average 88,68% of the trade was covered by the EFTA-Chile FTA. 
 Owing to the specific structure of bilateral tr ade between Switzerland and Chile, a single tariff 
heading (HS 2204) accounts for a very  substantial part of Chilean e xports to Switzerland (2003, at the 
time of conclusion of the FTA: 36.1%). Because its agricultural policy relies inter alia  on tariff 
protection for certain sensitive agricultural products, Switzerland has so far not been in a position to 
grant a concession on this tariff heading HS 2204 in any of its FTAs. 
 Article 5 of the Complementary Agreement between Chile and Switzerland provides that 
when re-examining the possibility of further liberalisa tions of agricultural trade, the Parties will take 
into account the pattern of trade in agricultural products between the Parties, the particular 
sensitivities of such products and the development of agricultural policy on both sides. Switzerland 
regularly considers its position with regard to possi ble additional concessions in the light of evolving 
agricultural markets and policies. So far, however , these assessments have not shown any change in 
the situation regarding HS 2204. 
 Other than the special issue of  HS heading 2204, more than 95% of total Chilean exports to 
Switzerland are currently covered by the FTA (incl uding more than 91% of all Chilean exports of 
agricultural products to Switzerland). 
 In this context, we would like to underline that there is no definition accepted by all Members 
of what "substantially all the trade" is. In par ticular Article XXIV creates no obligation to fully 
liberalise the whole agricultural sector. 
 For the reasons above, the EFTA States and Chile consider that the EFTA-Chile FTA does 
fulfill the "substantially all the trade" criterion set out in GATT Article XXIV. 
15. Article 16.6 of the Agreement provides that the Parties may “develop bilateral 
agreements” to implement the SPS provisions of the Agreement.  Have any such agreements 
been reached?  If so, please describe the agreement(s). 
 No such Agreements have been reached. 
~ Services ~ 
16. According to paragraph 28, “Chapter III… ex plicitly excludes establishment in service 
sectors from its scope of application (Article 32).”   The ability to establish an investment is a key 
component of mode 3.  Why was the right to estab lish an investment excluded from the scope of 
the agreement? 
 The service sectors are excluded from the Chap ter II “Establishment” because there is a 
service chapter that includes the four modes of suppli es. The right to establish in the services sector is 
given through national treatment and market acces s commitments in mode three under the services 
chapter. 
 WT/REG179/5 
Page 6  
 
 17. According to paragraph 45 of the Factual Presentation, Iceland’s sectoral commitments 
in this agreement are less than those of the GATS, including in such important sectors as value-added telecommunications.  Why has Iceland refra ined from making the same commitments in 
this agreement as it has already made in the GATS? 
 The substance of this question is the same is raised by Japan. In the negotiations with Chile 
some fields were left for further discussion, as the parties aimed at a further opening and increased 
free trade in these areas in comparison with co mmitments globally. The agreement has of course a 
certain scope which increases and deepens the free trad e relations between the parties.  However, the 
basic commitments that are established in the GATS are of course fully valid between the parties and 
further fill into the scope of b ilateral and multilateral relations. 
 The time it has taken to further discuss several  sectors and add those to the scope of the 
agreement, has unfortunately been longer than expect ed, and we hope to be able to finish this soon. 
18. Financial services is a fundamental sector missing from this agreement and is a sector in 
which the Parties have made GATS commitments.  Why did the Parties merely commit to 
“consider the inclusion of financial services” in  the future rather than include financial 
commitments now or commit to nego tiate commitments in the future? 
 Given the limited amount of time at the end of the negotiations, there has been no time to sort 
out all issues subject to negotiations and some areas  had to be left open to  future negotiations. The 
agreement reached is a balanced outcome. Financia l services involve a number of complex issues that 
could not be solved within the limited time for th ese negotiations.  The clause included by the Parties 
implies that they may consider this issue in the future. 
19. Is our understanding correct that none of the Parties took any no commitments in the 
audio visual sector?  If so, please explain why there are no commitments is this significant 
sector. 
 Audio-visual is part of the scope of the ser vice chapter (it is not excluded). However, both 
parties decided not to take specific commitments, but  this does not mean that the Parties may take 
further commitments in the future. 
Questions from the EC 
 
~ Goods ~ 
20. In paragraph 13 of the Factual Presentation, it  is stated that "the liberalization of 
customs duties on industrial products may be accelerated by Chile upon decision by the Joint Committee (Annex IV.2)". In addition, footnote 5 indicates that relevant discussions between the Parties are currently ongoing.  
• Could the Parties explain how the negotiation s on the acceleration of Chile's industrial 
 products liberalization are evolving? H ave the Parties reached an agreement?  
 No such agreement has been reached yet.  
• Could the Parties elaborate on the outcome of negotiations regarding the dismantling by 
 Chile of the 366 lines due to be negotiated by December 2006, as set out in  paragraph 22?  
 No such agreement has been reach yet.   WT/REG179/5 
 Page 7 
 
 
 • Could the Parties specify how mu ch trade these lines account for?  
 See Annex 1 and 2.  
21. According to paragraph 20 of the Factual P resentation, upon entry into force, and using 
a simple average approach, "calculations show th at overall liberalization by the EFTA States 
vis-à-vis Chilean products amounts to 98.8% of tariff lines and 80.3% of trade (based on 
average import values for 2002-2004)". In a disaggregated level, paragraph 18 indicates that Switzerland agreed, upon entry into force, to fully  liberalize 79.8% of its total tariff lines for 
products of Chilean origin, representing only 56.8% of imports from Chile.  
• Do the Parties, especially Switzerland, have  any plans to extend duty-free treatment to 
 additional tariff lines?  
 The Parties, in the framework of the Jo int EFTA-Chile Committee, regularly assess the 
possibilities to extend the scope of tariff disman tling under the agreement to additional products. 
Decision No 4 of 2006 of the Joint Committee, a dopted on 31 January 2 006, reduces the number of 
products listed in Annex III (Products  not covered by this Agreement). However, this decision has not 
entered into force yet. Moreover, pursuant to differe nt evolutionary clauses, the Parties are regularly 
assessing the situation regarding industrial produc ts, processed and basic agricultural products.  
• Do the Parties consider that these low percentages of duty-free trade meet the 
 “substantially all the trade” test of GATT Article XXIV?   
 The "substantially all the trade" criterion refe rs to "trade", not to imports and exports 
separately. Taking the bilateral trade between Switzerland and Chile between 2004 and 2006, on 
average 88,68% of the trade was covered by the EFTA-Chile FTA. 
 Owing to the specific structure of bilateral tr ade between Switzerland and Chile, a single tariff 
heading (HS 2204) accounts for a very  substantial part of Chilean e xports to Switzerland (2003, at the 
time of conclusion of the FTA: 36.1%). Because its  agricultural policy relies inter alia on tariff 
protection for certain sensitive agricultural products, Switzerland has so far not been in a position to 
grant a concession on this tariff heading HS 2204 in any of its FTAs. 
 Article 5 of the Complementary Agreement between Chile and Switzerland provides that 
when re-examining the possibility of further liberalisa tions of agricultural trade, the Parties will take 
into account the pattern of trade in agricultural products between the Parties, the particular 
sensitivities of such products and the development of agricultural policy on both sides. Switzerland 
regularly considers its position with regard to possi ble additional concessions in the light of evolving 
agricultural markets and policies. So far, however , these assessments have not shown any change in 
the situation regarding HS 2204. 
 Other than the special issue of  HS heading 2204, more than 95% of total Chilean exports to 
Switzerland are currently covered by the FTA (incl uding more than 91% of all Chilean exports of 
agricultural products to Switzerland). 
 In this context, we would like to underline that there is no definition accepted by all Members 
of what "substantially all the trade" is. In par ticular, Article XXIV creates no obligation to fully 
liberalise the whole agricultural sector. 
 For the reasons above, the EFTA States and Chile consider that the EFTA-Chile FTA does 
fulfill the "substantially all the trade"  criterion set out in GATT Article XXIV.  WT/REG179/5 
Page 8  
 
 22. According to paragraph 45 of the Factual Presentation, Article 16 "provides that the 
Parties may conclude relevant bilateral a rrangements and agreements to further the 
implementation of these provisions". 
• Could the Parties explain whether they inte nd to engage in bilateral negotiations to 
 further the implementation of SPS provisions?  
 No decisions have been taken with regard to  entering into bilateral negotiations on SPS.  
23. According to Article 46.6 of the Agreement, the Parties will review the provisions on the 
protection of intellectual property rights contained in the Agreement, upon request of any Party and subject to the consensus of the Joint Commi ttee. Paragraph 54 of the Factual Presentation 
states that the objective of this review would be two-fold: avoid or remedy trade distortions that 
could be caused by actual levels of protection of intellectual property and further improve those 
levels of protection. In addition, footnote 28 indicates that such a review has not been 
undertaken so far.  
• Could the Parties confirm whether the fact of  not having reviewed this Chapter implies 
 that they are fully satisfied with the current IPR provisions?  
 As stated above, the objective of this clause is  two-fold: On the one hand, a review can be 
done in order to avoid or remedy trade distortions caused by actual levels of protection of intellectual 
property; on the other hand the aim of a review can be to further improve th e levels of protection 
bilaterally agreed in this Chapter. As the Agreemen t entered into force only 2,5 years ago, there is not 
enough experience yet in order to decide on a revi ew of the provisions on IPR. Additionally, a 
consensus to initiate this process must be previous ly reached between the Parties within the Joint 
Committee. 
24. As set out in Article 71, a biennial review of the Government Procurement Chapter is 
foreseen to be carried out by the Joint Committee . In addition, a Working Party could be also 
convened upon request of a Party to tackle implementation issues of this Chapter. 
• Could the Parties indicate whether a bienni al review has been undertaken? If so, could 
 the Parties elaborate on the outcomes of th is review? If not, do they foresee to review 
 this Chapter in the coming months?  
 At the first Joint Committee meeting on 31 January 2006, the Parties noted that no difficulties 
or problems had been registered. The Parties have so  far not undertaken a review of the text, nor has 
such a review been foresee n in the immediate future. 
• Has a Working Party been convened, and if so, what issues were on the agenda? 
 The Parties have so far not convened a Wo rking Group, as according to Article 71 EFTA-
Chile.  
Questions from Thailand
 
~ Goods ~ 
25. The dispute settlement provisions under the FTA Agreement between the EFTA States 
and Chile mentions “retaliation”.  What are the methods for injury calculation for the purposes 
of retaliation?    WT/REG179/5 
 Page 9 
 
 
  In the FTA Agreement between Chile and the EFTA States there is no mention to 
“retaliation” neither methods for injury calcula tion. However, article 96 of the Agreement 
("Implementation of Arbitration Panel Rulings") states that if no implementing measure has been 
taken by the Party complained against, the comp laining Party shall be entitled to suspend only the 
application of benefits granted under this Agreement equivalent to  those affected by the measure 
found to be inconsistent with, or to  impair benefits under, this Ag reement. Notwithstanding the latter, 
if there is no agreement between parties about the be nefits to be suspended, the original arbitration 
panel may be requested to rule on whether the be nefits which the complaining Party intends to 
suspend are equivalent to those affected by the me asure found to be inconsistent with, and whether the 
proposed suspension is in accordance with  the provisions of the Agreement. 
~ Services ~ 
26. Article 29 (Recognition) provides that, “The Parties shall encourage the relevant bodies 
in their respective territories to provide recommendations on mutual recognition.”  What are 
the mutual recognition arrangements contemplated  by this provision and how are third parties 
restricted by these arrangements? 
 In this article, the meaning of “mutual recogn ition” is broad and can cover all the means of 
recognition mentioned in Article VII of the GATS. Pa rties shall encourage the relevant bodies in their 
respective territories to provide recommendation on mutual recognition. It could be the professional 
bodies which provide recommendation on mutual r ecognition or it could be government that 
negotiates mutual recognition agreements. No such recommendations have yet been made. 
27. In accordance with para. 45 of the WTO Se cretariat’s Factual Presentation, Iceland’s 
sectoral commitments under the Agreement provi de for less sectoral coverage than Iceland’s 
commitment under the GATS.  Moreover, the sect ors committed are subject to the same 
limitations contained in the GATS schedule.  Please explain how Iceland’s specific commitments 
meet the “substantial sectoral coverage” requirement of Article V of the GATS.  
 The substance of this question is the same as raised by Japan and United States. In the 
negotiations with Chile some fields were left for further discussion, as the parties aimed at a further 
opening and increased free trade in these areas in  comparison with commitments globally. The 
agreement has of course a certain scope which incr eases and deepens the free trade relations between 
the parties.  However, the basic commitments th at are established in the GATS are of course fully 
valid between the parties and further fill into the scope of bilateral and multilateral relations. 
The time it has taken to further discuss several  sectors and add those to the scope of the 
agreement, has unfortunately been longer than expect ed, and we hope to be able to finish this soon.  
28. The Agreement states that “a juridical person of a Party” who may benefit from the 
Agreement should be either constituted under the laws of Chile or an EFTA State..., if it is owned or controlled by a natural or juridical pers on of that party”.  Please provide details and 
the definition of a “natural person” under the Agreement. 
Article 23 (g) of the EFTA-Chile Agreement fo resees the following definition of a “natural 
person”: “natural person of a Party” is, in accordance  with its legislation, a national or a permanent 
resident of that Party if he or she is accorded s ubstantially the same treatment as nationals in respect 
of measures affecting trade in services”.  WT/REG179/5 
Page 10  
 
 Questions from Chinese Taipei
 
29. Article 29.6 of the EFTA-Chile FTA contains  the provision, “Where a Party recognises, 
by agreement or arrangement, the education or  experience obtained, requirements met or 
licenses or certifications granted in the territory of a non-Party, that Party shall accord another 
Party, upon request, adequate opportunity to ne gotiate its accession to such an agreement or 
arrangement or to negotiate comparable ones with it…” 
 Could the Parties please advise whether an y such agreements or arrangements exist 
whereby the education or experience obtained, requirements met or licences or certifications granted in the territory of a non-Party is recogn ized by either one of the Parties? If so, we 
should be grateful for a list of relevant ag reements and arrangements, and the non-Parties 
involved. 
 The idea of this article is similar to article V II paragraph 2 of GATS. No requests to negotiate 
for accessions to any agreement or arrangement of  this kind have been made by the Parties.  
30. According to paragraph 49 of the Factual Presentation (WT/REG179/4) prepared by the 
WTO Secretariat, Norway has improved its GATS commitment by eliminating the requirement 
for non-intra-corporate transferees to pass an economic needs test. 
(i) Could Norway please provide details of the above-mentioned liberalization measure?  
 The liberalisation is extended to all branches. 
(ii) Please also provide us with a description of  the policy objective of the existing economic 
 needs test requirement, its duration, th e criteria applied and how it operates?  
 It does not exist economic needs test for tem porary (three month) entries, but only for the 
situation when it is apparent that it will not be a permanent need of the service. 
(iii) What effects might this limited liberalization have on the original policy objective? 
 This liberalization will make it easier to handle applications, and as such contribute to quicker 
access of labour to employers in need of short term specialists. 
Questions from Canada
 
~ Goods ~ 
31. The EFTA Chile Factual Presentation (WT/REG179/3 - Page 9, para 22) notes that 
there are 366 lines where the duty dismantling by Chile was to be negotiated by December, 2006.  Were these negotiations ever concluded?  If so , by what date is the tariff phase out to be 
concluded?  If not, when do the parties an ticipate these negotiations will be concluded? 
 With regard to the negotiations on dismantling of Chile’s duties of 366 products described in 
paragraph 22, it’s still work in progress. 
~ Services ~ 
32. The factual presentation prepared by the S ecretariat includes general services trade and 
investment data for each of the Parties. Coul d the Chile and the EFTA States further elaborate  WT/REG179/5 
 Page 11 
 
 
 on how this agreement has stimulated services trad e and investments in service sectors between 
them? 
The whole concept within negotiating FTA’s, sp ecially with a services chapter, is seeking for 
an increase in services trade and investments in  the service sector, through the liberalization 
commitments to each mode of supply. The EFTA – Chile FTA tries to achieve a potential growth of 
the economic activity in those countries. However we  don’t have any kind of official report showing 
the link between the increases of trade in services an d investment with the entrance into force of the 
agreement.  
33. Could Chile and the EFTA States confirm that  their intention is to eventually include 
financial services into the services chapter   and not create a separate one? Could the Chile and 
the EFTA States report on any progress that has been made on this front? 
 Article 45 of the EFTA-Chile Agreement foresees that the Parties would consider including 
financial services two years after the entry into fo rce of the Agreement. Financial experts have 
exchanged information and ideas on the subject. Howeve r, the Parties still have not decided to initiate 
negotiations on the inclusion of  financial services pursuant to Article 45 of the Agreement. 
34. Paragraph 45 of the Secretariat Report indicates that Iceland has not included some 
telecommunication and maritime transport servic es which appear in its GATS schedule. Could 
Iceland provide the rational for not including these services in the EFTA States Chile FTA? 
The substance of this question is the same as ra ised by Japan, United States and Thailand. In 
the negotiations with Chile some fields were left  for further discussion, as the parties aimed at a 
further opening and increased free trade in these area s in comparison with commitments globally. The 
agreement has of course a certain scope which incr eases and deepens the free trade relations between 
the parties.  However, the basic commitments th at are established in the GATS are of course fully 
valid between the parties and further fill into the scope of bilateral and multilateral relations. 
The time it has taken to further discuss several sectors and add those to the scope of the 
agreement, has unfortunately been longer than expect ed, and we hope to be able to finish this soon.  
35. In the agreement, trade in services is defined as the supply of a service through the four 
modes of supply identified in the GATS and inv estment in service sectors is regulated by the 
provisions on trade in services, mode 3. Chapter III on establishment explicitly excludes 
establishment in service sectors from its scope of application. Could Chile and the EFTA States 
further elaborate on the differences between treatment of investment in service sectors and 
treatment of investment in other sectors? 
Investments in the services sectors are governed by the provisions on trade in services. These 
provisions build on the model of the GATS, where investments are covered under mode 3. Leaving aside the MFN-provision, market access for services in Article 25 and national treatment in Article 26 
is limited to sectors with scheduled commitments. In  this respect a "bottom-up" approach to coverage 
is followed, with extensive coverage provided for in  the relevant annexes. As regards investments and 
establishment in other sectors than services, the point of departure for Article 34 is automatic national 
treatment, except in sectors subject to reservations as  provided for in Article 35. Here, a "top-down" 
approach is followed.  
36. According to Article 24 of the EFTA-Chile FTA, rights and obligations of the Parties 
with respect to most favoured nation treatment are governed by the GATS.  Could Chile and 
the EFTA States explain why they were not ready  to provide MFN treatment under their FTA? WT/REG179/5 
Page 12  
 
 Under the Agreement, the Parties provide to  each other MFN treatment as governed by 
Article II of the GATS. The Agreement consequen tly incorporates by reference the lists of MFN 
exemptions agreed at the end of the Uruguay Round.  
37. According to Article 27 of the EFTA-Chile FTA, the Parties undertake to review their 
schedules at least every three years, with a view  to reducing or eliminating substantially all 
remaining discrimination. Footnote 9 of the Secret ariat Report indicates that, according to the 
Parties, there is no further liberalization to da te to report. Could Chile and the EFTA States 
report on any progress that has been ma de towards starting this review? 
We can’t report any progress to the date. 
  WT/REG179/5 
 Page 13 
 
 
 ANNEX 1 
CHILE AGREEMENT 
Appendix to Annex VI 
  
Export trade value and percentage of the i ndustrial products without concessions by Chile 
 
Norway  
 
• Export trade value in 2006:   7.962.000 US$ 
• Percentage of the total ex port trade value: 10.77% 
 
Iceland 
 
• No export 
 
Switzerland 
 
• Export trade value in 2006:   1.317.000 CHF (1.051.077 US$)  
• Percentage of the total export trade value: 0.67%  
 
Total export trade value from the EFTA States in 2006  
233.868.000 US$  
Percentage of the total export trade value from the EFTA States in 2006 
 
Norway: 3.40% 
Switzerland: 0.45%  
 WT/REG179/5 
Page 14  
 
 ANNEX 2 
Chilean Imports of industrial products from  EFTA countries in category Dismantling  
(thousands of US$) 
  Year 2006 
 
Norway: 
 
 
Chilean imports from Norway 61,518 Percentage over total imports of products in category "Dismantling" 13.84% 
 
Switzerland: 
 
 
Chilean imports from Switzerland 136,051 Percentage over total imports of products in category "Dismantling" 1.94% 
 
Iceland: 
 
 
Chilean imports from Iceland 3,334 Percentage over total imports of pr oducts in category "Dismantling" 0% 
 Liechtenstein:
 
 
Chilean imports from Liechtenstein 207 Percentage over total imports of products in category "Dismantling" 2.42%  Total Chilean imports from EFTA countries:
 
 
Total:  201,110  
Percentage over total imports from EFTA countries: 
 
 Norway  30.59% 
Switzerland 67.65% Iceland  1.66% Liechtenstein 102.93% 
 
__________