WORLD TRADE  
ORGANIZATION  WT/REG256/M/1 
22 March 2010 
 (10-1546) 
Committee on Regional Trade Agreements 
Fifty-sixth Session  
 
 
 
CONSIDERATION OF THE FREE TRADE AGREEMENT  
BETWEEN THE EFTA STATES AND THE SACU STATES,  
GOODS  
 
Note on the Meeting of 15-16 March 2010  
 
Chairman: Mr. D. Brauns (Germany) 
  
1. The meeting was convened in document WTO/AIR/3502/Rev.1, dated 1 March 2010. 
2. Under Agenda Item C.V of its 56
th Session, the Committee on Regional Trade Agreements 
(hereinafter CRTA or the Committee) considered th e Free Trade Agreement between the EFTA States 
and the SACU States, goods, (hereinafter the Agreement).  
3. The Chairman  noted that the Agreement had entered into force on 1 May 2008 and had been 
notified by the Parties to the WTO on 29 October 2008 under Article XXIV:7(a) of the GATT 1994 
and the Understanding on the Interpretation of Article XXIV of GATT 1994 as an Agreement 
establishing a free trade area (document WT/REG256/N/1).  The text of the Agreement, together with its Annexes, was available on th e WTO Regional Trade Agreements Information System website.  
4. The Factual Presentation on the goods aspects (document WT/REG256/1 dated 22 December 
2009) had been prepared by the Secretariat on its  own responsibility in full consultation with the 
Parties, in accordance with paragraph 7(b) of th e Transparency Mechanism (TM) for Regional Trade 
Agreements (document WT/L/671).  In addition, wr itten questions and replies on the Agreement had 
been distributed in document WT/REG256/2, date d 3 March 2010.  He proposed to organize the 
consideration of the Agreement by first asking the Parties and then other Members for general 
comments.  The Committee would then turn to th e specifics of the Agreement using the Factual 
Presentation to guide the debate.  He proposed th at 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
, speaking on behalf of the EFTA States, thanked the 
WTO Secretariat for the excellent work in prepar ing the Factual Presentation and its support in the 
process.  The presentation provided a comprehensive and informative overview of the Agreement.  
She also thanked SACU partners for the excelle nt and close collaboration in preparing for the 
consideration.  For EFTA, the Agreement represented a first in many respects.  It was the first free 
trade agreement (FTA) concluded with another trad ing bloc;  the first FTA with partners from the 
sub-Saharan region;  and the first time that a least  developed country, Lesotho, became an EFTA free 
trade partner.  In addition to these milestones,  the Agreement was seen as an important economic 
instrument that provided favourable and stable frame work conditions for bilateral trade.  It would 
foster and further promote economic relations a nd co-operation between eco nomic operators of the 
SACU and EFTA States, strengthen export capacity, e nhance investments and c ontribute to further 
economic development in the Parties.  In 200 8, EFTA's exports to SACU and imports from 
SACU had amounted to over US$800 million and US$1. 6 billion, respectively.  Key exports from WT/REG256/M/1 
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  SACU into EFTA included:  fruits and nuts, nickel  and aluminium, ores, slag and ash, and precious 
stones and metals.  The main products exported from EFTA to SACU included:  machinery and 
mechanical appliances; pharmaceuticals and opti cal and medical instruments.  The Agreement 
provided for effective market access for non-agricu ltural goods, including fish and other marine 
products.  Non-agricultural goods  exported from SACU into the EFTA States had enjoyed duty-free 
status from the entry into force in 2008.  On the contrary, tariff dismantling for EFTA's exports into 
SACU's market would be progressive.  The use of al l kinds of export restrictions was also prohibited 
under the Agreement.  She pointed out that the Agre ement had reflected the Parties' diverse level of 
development at two levels:  firs tly, by foreseeing an asymmetric implementation of commitments and, 
secondly, by providing a framework for additiona l cooperation with a view to enhancing the 
SACU States' capacity to make full use of the opportunities created by the Agreement.  In 2009, 
EFTA had provided export promotion training in several SACU States and capacity building 
assistance to the SACU Secretariat.  Concessions on processed agricultural products were contained 
in the Agreement, while basic agricultural produc ts were covered in three bilateral agreements 
between SACU and the respective EFTA Member States.   A review process, aimed at increasing trade 
liberalization in basic and processed agricultural prod ucts, had started in 2009 and the next step would 
be a meeting with SACU States in the course of the week.  The Agreement estab lished liberal rules of 
origin and contained provisions for mutual assistan ce in customs matters.  On intellectual property 
rights, the Parties would grant adequate protection of such rights and seek the progressive harmonization of the legal framework;  rules on IPRs w ould be reviewed five years after the entry into 
force.  As for government procurement, the Partie s would exchange information and co-operate in 
order to enhance the understanding of their respective procurement markets;  to this end, they had 
agreed to discuss further liberalization within five years from the entry into force.  A revision of the 
Agreement was also foreseen for the further libera lization of trade in services and investment.  In 
closing, she thanked the Members, on behalf of th e EFTA States, for the interest and questions and 
looked forward to a fruitful discussion.  
6. The representative of Namibia
 took the floor on behalf of the Southern African Customs 
Union (SACU) States.  SACU was celebrating its centenary in April 2010, thereby making it the oldest customs union in the world.  SACU consisted of the following Member States:  the Republic of 
Botswana;  the Kingdom of Lesotho;  the Republic of  Namibia;  the Republic of South Africa;  and 
the Kingdom of Swaziland.  He thanked the Chairm an for having convened th e meeting and extended 
SACU Member States' sincere gratitude to the WTO Secretariat for having prepared the Factual 
Presentation, as well as for their coordination of i nputs into the process.  He believed that the 
presentation provided a good overview of the Agreement.   He further expressed appreciation to EFTA 
partners for the excellent cooperation in preparing fo r the review.  He observed that it was the third 
time within the last year that SACU had appeared  before the WTO membership in a transparency 
exercise.  Firstly, the 2002 SACU Agreement had been notified and successfully considered by the 
CRTA at its 53
rd Session in April 2009.  Secondly, the WTO Trade Policy Review of the SACU 
Member States had been successfully concluded in November 2009.  This showed SACU's belief in 
the transparency process, including the factual review, the WTO sought to promote and thus he reaffirmed SACU Member States unrelenting suppor t, commitment and belief towards the multilateral 
process.  As a customs union, SACU Member States  had decided to undertake trade negotiations with 
third parties collectively.  In this regard, Ar ticle 31 of the 2002 SACU Agreement provided for the 
establishment of a common negotiating mechanis m and the Agreement between EFTA and SACU 
marked the first agreement reached by the SACU Member States and a third party under this provision.  He was proud to indicate that the guiding principle in negotiating regional trade 
agreements had been adherence to the GATT 1994 provisi ons that applied in this regard.  One of the 
key objectives of SACU was to enhance trade amongst its Member States by facilitating the free 
movement of goods, whilst deepening integration th rough cooperation in the development of mutually 
beneficial economic and trade policies.  The Agre ement recognised the differe nt levels of economic 
development of the Member States and the need to  provide for their economic development.  The 
level of divergence in economic de velopment had created its own unique challenges, not only within  WT/REG256/M/1 
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  the region, but also in SACU's enga gement at the multilateral and bila teral levels without affecting the 
desire to develop common policies in pursuit of SACU's common interest.  In SACU Member States' 
view, the Agreement with EFTA was another step in the endeavour to integrate SACU into the global 
trading system.  In order to strengthen and support SA CU's efforts to further integrate into the global 
trading system, he reiterated calls made by other developing countries for the successful conclusion of 
the Doha Development Round of negotiations dur ing 2010. SACU Member States firmly believed 
that the conclusion of the Round should bring abou t meaningful market access for all developing 
countries.  As previously indicated by EFTA, the Agreement provided for an opportunity to review 
the scope and coverage of products with a view to fu rther liberalize trade among the Parties.  In this 
regard, the agricultural experts from EFTA and SACU w ould meet in the next days in Geneva to kick-
start the review process of the bilateral agreements .  In terms of the Agreement, the Parties did not 
apply export subsidies in their trade in products s ubject to tariff concessions.  The Parties enjoyed 
cordial trade relations based on mutually benefici al interests.  Bilateral trade between EFTA and 
SACU in 2009 had amounted to about US$2.8 billion,  out of which SACU's exports to and imports 
from EFTA had accounted for about US$2.1 billion and US$750 million, respec tively.  Between 2000 
and 2009, SACU had experienced a growing trade surplus with EFTA, reflecting the importance of 
the EFTA States to the SACU Member States.  He concluded by thanking Members for their interest and questions to which SACU had replied in writin g.  SACU would endeavour to clarify any other 
issues, if not immediately, in writing at a later st age and looked forward to a fruitful exchange during 
the session. 
7. The representative of the European Union (EU)
 thanked the EFTA and SACU States for their 
presentation and the WTO Secretariat for the Factua l Presentation, since it proved useful to better 
understand the key elements of the Agreement.  She questioned the focus on SACU's negotiating 
stand as a customs union, since there appeared to  be excessive focus on individual Members of the 
customs union.  She recalled that SACU had a functioning common external tariff (CET) in place, and had negotiated the Agreement as a group.  Since the EU was a customs union itself, she took the 
opportunity not only to underline the potential of regi onal economic integration, but also to appreciate 
the challenges involved, the commitments, and the laborious efforts required to advance it.  She 
encouraged SACU to continue stepping up efforts to  consolidate all different strands of its customs 
union.  
8. The representative of the United States
 joined the EU in thanking the Parties and the 
Secretariat.  She pointed out that in Tables III. 2A through III.2H, pages 8 to 11, and Tables AI.1 
through AI.4 of Annex I of the Factual Presentation,  it was stated that Norway had eliminated duties 
on 98% of all tariff lines, covering 96% of impor ts from SACU under the Agreement;  however, 
although 99.9% of non-agricultural goods were dut y free, only 52% of agricultural lines were duty 
free.  Switzerland had eliminated tariffs on 84.4% of  all tariff lines, covering 98.5% of imports from 
SACU under the Agreement;  however, although 99. 97% of non-agricultural goods were duty free, 
only 36.9% of agricultural lines were duty free.  Ic eland had eliminated duties on 76% of all tariff 
lines, covering 94.5% of imports from SACU unde r the Agreement;  however, although 100% of non-
agricultural goods were duty free, only 77.2% of ag ricultural lines were duty free.  In comparison, 
SACU as a whole had eliminated duties on only 77.1 % of all tariff lines, covering a range of trade 
volumes;  however, only 80.9% of SACU's non- agricultural goods tariffs, and 54.3% of its 
agricultural tariffs were duty-free under the Agreemen t.  In the case of the EFTA Member States, she 
was compelled to note the highly disproportiona te liberalization between non-agricultural and 
agricultural sectors, as well as the low level of  agricultural tariff lines elimination by the EFTA 
Member States.  To the United States delegation,  it was troubling that Switzerland had chosen to 
eliminate fewer agricultural tariffs than its SACU part ners.  As had been noted in previous sessions of 
the CRTA, the selective coverage by EFTA Members of agricultural goods hurt not only SACU in 
this case, but other Members operating in the multila teral system.  The sustained and systematic 
protection of these Members' agricultural sectors, ev en within their own free trade agreements, only 
made Members' efforts in Geneva towards multilatera l liberalization more difficult.  In the case of WT/REG256/M/1 
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  SACU States, she was forced to note the low level of  tariff liberalization in both the non-agricultural 
and agricultural sectors.  While recognizing the different views on the precise content of, and the methodological approach to, GATT Article XXIV  requirements among the Members, given the 
extensive protection afforded to the Parties' ag ricultural sectors, and SACU's protection of its 
industrial sector, the Unites States questioned how the Parties could possibly consider that the 
Agreement meet the "substantially all trade"  requirement.  The representative of Norway
 reaffirmed 
the response provided in writing ahead of the meeting to a similar question asked by the United States 
(i.e. question No.7 of the Questions and Repli es (Q&R) document).  The representative of Namibia  
supported the response provided by EFTA. 
9. The representative of the European Union  raised several points under different sections of the 
Factual Presentation.  On Section III.A.I (General provisions), she asked EFTA Member States to 
explain the criteria used to integrate developmen t aspects of the BLNS (i.e. Botswana, Lesotho, 
Namibia, and Swaziland) into the Agreement and, more specifically, how "specific BLNS sensitivities", as mentioned in the Factual Presentation, had been taken into account in the Agreement.  
In Article 7 of Annex VII of the Agreement, a revi ew of preferences granted to products categorized 
as Lists 5 and 6 was foreseen no later than five years after the date of entry into force of the 
Agreement.  The overall objective of the review wa s to improve market access conditions for these 
products, while also addressing cases of unsustainable liber alization.  In reply to question No.2 of the 
Q&R document, the Parties had confirmed that the review had already started in 2009.  She asked 
them to provide details of the objectives of the curre nt review and the scope of the envisaged greater 
liberalization.  Since the review allowed also for the roll back of commitmen ts, she asked the Parties 
to clarify whether the review of unsustainable lib eralization commitments a pplied only to the products 
categorized as List 5 and 6 or to a broader range  of products.  With respect to the SACU States' 
liberalization schedule, she noted that in paragr aph 35 and Chart III.4 of the Factual Presentation, 
most of the lines liberalized between 2008 and 2013 we re subject to rates of 10% or less, while the 
liberalization of lines subject to duties of up to 30% would only take place in 2015.  Since the latter 
represented the bulk of liberalization commitments by SACU, she asked SACU to give some details 
on the staging to implement liberalisation of those tariff lines with higher duties.  She further noted 
that Chart III.4 of the Factual Presentation did not provide the clarity needed to better understand the 
staging process of SACU's liberalization commitments  and suggested the Secretariat to use different 
types of charts in order to provide a clearer picture.  On Table III.6 of the Factual Presentation, showing SACU's trade liberalization commitments under the Agreement according to HS Sections, 
she asked SACU to enumerate, possibly by sector, the main products that were not covered by the 
Agreement in order to more clearly understand th e product exclusion list.  On trade in services 
(Section II.5(d) of the Factual Presentation), she noted that the Agreement did not include any 
commitments by the Parties with respect to the liberalization of trade in services but the Parties 
intended to extend the scope of the Agreement with a view to further liberalizing trade in services.  
Services liberalization, as well as investment a nd government procurement provisions, would be 
discussed in the Joint Committee with in five years after the entry into force of the Agreement, 
therefore by 2013.  She thus asked SACU to c onfirm whether by 2013 the Protocol on Services would 
be in place.  With respect to the relationship with  other agreements concluded by the Parties (Section 
IV.E  of the Factual Presentation), she observed that  some of the SACU agreements had not yet been 
notified to WTO.  This issue had been already raised during the consideration of SACU in the 
Committee in April 2009, and during SACU's Trade Policy Review in December 2009.  The EU had 
taken note of the reply to question No.10 of th e Q&R document in this regard and thus looked 
forward to the related notifications as soon as nationa l administrations gave their green light.  In the 
case of those agreements, such as Botswana-Malawi and South Africa-Mozambique, South-Africa-Zimbabwe, and South-Africa-Malawi, which SACU not ed that are old agreements which were in 
practice governed by the SADC Trade Protocol- she asked the SACU Members involved to indicate 
whether such agreements were no longer applicable  and formally superseded by the SADC Trade 
Protocol.    WT/REG256/M/1 
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  10. The representative of Norway  specified that BLNS sensitiviti es had been taken into account 
in the Agreement, more specifically under Article 25 on "Special treatment for Botswana, Lesotho, 
Namibia and Swaziland", and Chapter V on "Econo mic Cooperation and Technical Assistance", as 
well as through the asymmetric dismantlement of tari ffs.  Regarding the objective and scope of the 
review under Article 7 of Annex VII and the roll back of commitments, she indicated that, as had 
already been indicated in the written response to qu estion No.1 from the United States, Article 7 of 
Annex VII provided that only products categorized as List 5 and 6 would be reviewed no later than 
five years after entry into force of the Agreement.   For agricultural products, the Parties had already 
engaged in a review process to consider the possibility  of further trade liberalization.  In closing, she 
emphasized that, in EFTA's view, free trade agre ements could not replace multilateralism or the 
multilateral trading regime, and this was particularly true in the c ontext of today's economic downturn 
which reinforced the need to work together at th e multilateral level.  EFTA Member States considered 
free trade agreements as compleme ntary to the multilateral regime, enabling them to pursue deeper 
integration with a trading partner, in this case SA CU, at a time when the continued development of 
free trade relations hold a particular premium.  Sh e thanked all those involved in the consideration, 
including the WTO Secretariat and SACU.  The consideration process had allowed Members to 
clarify a number of issues.   
11. The representative of Namibia  said that SACU aligned itself with the response by EFTA on 
the issue of market treatment and market acce ss provisions.  On the staging to implement 
liberalization of products with higher duties, he i ndicated that more details could be found in the 
Agreement itself.  For instance, Annex VII outlined the different staging categories applied by SACU 
to liberalize tariffs on non-agricultural and processed agricultural products, while Annex IV dealt with 
fish and other marine products.  Basic agricultural products were covered by the bilateral agricultural 
agreements.  With respect to the list of products not covered by the Agreement, the Parties would 
provide a written answer within the timeframes as sti pulated by the review process.  With respect to 
liberalization in services, he believed that the ques tion actually fell beyond the scope of the review.  
Nevertheless, he pointed out th at the 2002 SACU Agreement only covered trade in goods with no 
reference or provision for liberalization of trade in services and at present there was no decision to extend the Agreement beyond trade in goods.  SACU took note of the question relating to the relationship with other agreements  concluded by the Parties and w ould answer in writing within the 
timeframe as required by the review process.  He emphasized that SACU was a fully-fledged customs 
union celebrating its centenary this year which wa s an important achievement that should not be 
underestimated, given the realities of the SACU region.  The SACU Council of Ministers had 
reaffirmed on various occasions its common objectiv es of strengthening SACU, ensuring the integrity 
of the union and maintaining the integrity of the SACU common external tariff.  SACU would continue to strengthen and deepen integration w ithin the customs union and to support other regional 
initiatives aimed at enhancing regional integratio n.  SACU remained committed to ensuring that 
common objectives were achieved and invited the WT O Membership to support their efforts in this 
process, in particular the strengthening of cust oms union institutions, capacities, mechanisms and 
policies.  In conclusion, he emphasized SACU Memb ers' commitment towards and, their belief in, the 
multilateral system.  In SACU's view, regional tr ade agreements should be  complimentary towards 
the multilateral processes.  It w as within this framework that SACU aimed to conclude trade 
agreements with third parties that strengthened and deepened integration within the customs union 
and assisted its Member States to integrate into  the global economy through enhanced trade and 
investment.  SACU would work towards ensuring that all trade agreements with third parties 
promoted this objective.  He believed that the Agreement with EFTA was existing proof of this 
commitment.  He thanked the Secretariat for the Factual Presentation, the WTO Membership for the 
interest shown by in the Agreement and EFTA part ners for the excellent cooperation and hospitality 
during the stay in Geneva.  He trusted that Member s would join SACU in celebrating the centenary in 
2010. WT/REG256/M/1 
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  12. The representative of the EU
 thanked SACU and EFTA States for their preliminary comments 
and hoped that the full compilation of ques tions would be answered in writing.  
13. The Chairman  noted that the consideration of the goods aspects of the Free Trade Agreement 
between the EFTA States and the SACU States ha d allowed the Committee to clarify a number of 
questions and oral discussion of the Agreement coul d be concluded in accordance with paragraph 11 
of the TM.  If any delegations wished to ask fo llow-up questions they were invited to forward 
submissions in writing  to the Secretariat by 22 March 2010 and the Parties were asked to submit 
replies  in writing by no later than 5 April 2010.  In accordance with paragraph 13 of the TM all 
written submissions, as well as the minutes of the meeting would be circulated promptly, in all WTO official languages, and would be made  available on the WTO website.   
14. The Committee took note
 of the comments made. 
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