WORLD TRADE
ORGANIZATIONWT/REG126/3
11 March 2003
(03-1375)
Committee on Regional Trade Agreements Original:  English
FREE TRADE AGREEMENT BETWEEN THE EFTA STATES AND MEXICO
GOODS ASPECTS
Communication from the Parties
I. BACKGROUND INFORMATION TO THE AGREEMENT
1. Membership and Dates of Signature, Ratification and Entry into Force
The Parties to the Agreement (hereinafter “the Agreement”) are the States of the European
Free Trade Association (Iceland, Liechtenstein, Norway and Switzerland) on the one hand, and the
United Mexican States (hereinafter “Mexico”), on the other hand.  The Agreement applies to the
customs territories of the Parties.
The Agreement and the bilateral agricultural arrangements were signed on  
27  November 2000 in Mexico City and entered into force on 1 July 2001.
The Agreement and the bilateral agricultural arrangements, as the instruments creating the
Free Trade Area between the EFTA States and Mexico, were notified on 25 July 2001 to the Council
for Trade in Goods and to the Council for Trade in Services in accordance with Article XXIV:7(a) of
GATT 1994 and Article V:7(a) of the GATS.
2. Type of Agreement
The Agreement creates a free-trade area in conf ormity with the criteria set out in Article
XXIV:8(b) of GATT 1994.  While the Agreement does not contain a transitional period for the EFTAStates for the abolition of duties and other restrictions on trade, Mexico has a transitional period
lasting a maximum of 10 years for certain products.  The bilateral agricultural arrangements introduce
substantial liberalisation of trade in agricultural goods.
The objectives of the Agreement are to establish the necessary conditions for the gradual and
reciprocal liberalisation of trade in goods, the liberalisation of trade in services, the progressive
liberalisation of investment, the opening of go vernment procurement markets, a co-operation
mechanism for competition, and an adequate and effective protection of intellectual property rights.
3. Scope
The free-trade area established by the Agreement and the bilateral agricultural arrangements
provide the framework for future trade relations between the EFTA States and Mexico.
The Agreement covers trade in industrial products falling within HS Chapters 25 to 98, except
for products listed in Annex I of the WTO Agreement on Agriculture, and fish and other marineproducts (Annex III: H.S. Chapters 3, 15 and 16).  Agricultural products (H.S. Chapters 1 to 24) are
covered in three bilateral agricultural agreements.  The products covered are products originating in
the EFTA States or in Mexico according to the ru les of origin set out in Annex I of the Agreement.WT/REG126/3
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4. Trade Data
In 2000, total trade between the EFTA States and Mexico amounted to 816 million US
dollars.  The EFTA States imported goods from Mexico for 169 million US dollars and exported
goods worth 647 million US dollars.  Industria l products and agricultural products accounted
respectively for 95.7 and 4.3 per cent of total trade.  Fifty-five per cent of traded industrial products
enjoy duty-free treatment under the Agreement.  Duties on the remaining industrial products are
scheduled to be progressively dismantled by 2007.  With regard to agricultural products, 68 per cent
of traded goods enjoy duty-free treatment under the Agreement, while 17 per cent are subject to
reduced duties under the bilateral agricultural arrangements.  The share of agricultural trade without
any concessions is 15 per cent.
Trade data, including trade flows and trade coverage, can be found at Annex. This data will
be updated to include 2002 figures as soon as they are available.
II. TRADE PROVISIONS
1. Import Restrictions
1.1 Duties and Charges
Upon entry into force of the Agreement, the EFTA States have abolished all customs duties
on imports originating in Mexico in accordance with  Article 6.1 of the Agreement with the exception
of some minor exceptions listed in Annexes III and IV to the Agreement.  Under Article 6.2 of the
Agreement, Mexico is to progressively abolish customs duties on imports and charges having
equivalent effect on products originating in an EFTA State in accordance with Annexes III and V to
the Agreement containing different timetables (categories), as indicated below:
Category Time schedule
              A Entry into Force
              B 1 January 2003
              B+ 1 January 2005
              C 1 January 2007
              1/ 1 January 2007
             C 2/ 1 January 2007
1.2 Quantitative restrictions
Article 7 of the Agreement stipulates that all import prohibitions or restrictions in trade
between the EFTA States and Mexico, other than customs duties and taxes, whether made effectivethrough quotas, import or export licenses or other measures, are to be eliminated upon the entry into
force of the Agreement.  Mexico may maintain certain measures, under the conditions set out in
Annex VI of the Agreement.  These relate to (temporary) measures or restrictions for certain
petrochemical products, certain vehicles, used clothes, and used vehicles.  No new such measures
shall be introduced.
2. Export Restrictions
Article 7 of the Agreement stipulates that all export prohibitions or restrictions in trade
between the EFTA States and Mexico, other than customs duties and taxes, are to be eliminated upon
the entry into force of the Agreement.  Mexico may apply certain restrictions to the granting of exportWT/REG126/3
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licences for certain petrochemical products under the conditions laid down in Annex VI of the
Agreement.
3. Rules of Origin
The definition of the concept of “originating products” and methods of administrative co-
operation between the Parties is set out in Annex I and its Appendices and is in compliance with
Annex II of the Agreement on Rules of Origin of the WTO, in particular, are based on a positive
standard and clearly defined.
Annex I establishes the general requirements to determine the originating status of a product,
as well as the necessary administrative procedures to claim preferential treatment, for example,
evidence of the originating status of products is furnished on the basis of a movement certificateEUR.1 or an “invoice declaration” as prov ided for in Appendices 3 and 4 to Annex I.
Products are considered of Mexican or EFTA origin either if they are: wholly obtained;
manufactured exclusively from originating materials; or if they have been sufficiently worked or
processed.  Appendix 2 and 2(a) to Annex I lists th e different rules that apply for determining whether
a product has been sufficiently worked or processed.  While they differ from product to product, the
rules fall into several broad categories:
• The materials used must undergo a change of tariff classification under the Harmonised System;
• Products are considered to be originating if sufficient value is added in the EFTA States or
Mexico.  Percentages involved may vary from product to product; or
• For some products, the rule defines the production process to be followed.
4. Standards
4.1 Technical Barriers to Trade
Under Article 10 of the Agreement, both Parties confirm their rights and obligations relating
to standards, technical regulations and conformity assessment procedures under the WTO Agreement
on Technical Barriers to trade.  The Agreement fu rther provides for the Parties to co-operate and
exchange information and assistance in the field of technical regulations, standards and conformity
assessment.  Consultations in the Joint Committee are to be held in case one Party considers anotherto have created an unjustified technical obstacles to trade.
4.2 Sanitary and Phytosanitary Measures
Under Article 9 of the Agreement, the Parties confirm their rights and obligations under the
WTO Agreement on the Application of Sanitary and Phytosanitary Measures.
5. Safeguards
Article 14 of the Agreement provides procedures and conditions for the application of
safeguards between the Parties.  In accordance with these provisions, each Party may take appropriate
measures when the increase in imports of a product of one Party leads to serious injury to the
domestic industry of like or directly competitive products or serious disturbances in any sector of theeconomy or serious difficulties which could bring about serious deterioration in the economic
situation of a region of the importing Party.
5.1 Balance of payment difficultiesWT/REG126/3
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Article 16 of the Agreement states that where an EFTA State or Mexico is in serious balance
of payment difficulties, the EFTA State or Mexico, may adopt restrictions on imports in accordance
with the conditions established under the GATT 1994.
6. Anti-dumping and Countervailing Measures
Article 13 of the Agreement provides for the Parties rights and obligations in respect of the
application of anti-dumping measures in accordance with Article VI of the GATT 1994 and the
Agreement on Implementation of Article VI of the GATT 1994.  The Article furthermore provides for
a two-day period for consultations under the Agreement before the initiation of an investigation.
7. Subsidies and State-Aid
Under Article 11 of the Agreement, the Parties confirm their rights and obligations in respect
of subsidies and countervailing measures arising from Articles VI and XVI of the GATT 1994 and the
WTO Agreement on Subsidies and Countervailing Measures.  The Article foresees the exchange of
the notifications to the WTO pursuant to Article XV:1 of the GATT 1994 and Article 25 of the
Agreement on Subsidies and Countervailing Measures .  The Article furthermore provides for a two-
day period of consultations before initiation of an investigation.
8. Sector-specific Provisions
8.1 Agriculture
Due to the different agricultural policies of the EFTA States, trade in agricultural products is
covered in three bilateral agricultural agreements negotiated between the respective EFTA State
(Iceland, Norway and Switzerland/Liechtenstein) and Mexico.  These agreements also form part of
the instruments establishing the free trade area and are subject to the relevant disciplines for trade in
goods in the main Agreement, including a dispute settlement mechanism, and a review clause.  Theseagreements provide for duty-free or preferential treatment on agricultural products, for certain
products, within the limits of the tariff quota.  The EFTA States provide duty-free or preferential
treatment as of entry into force of the Agreements.  Mexico will eliminate duties on agricultural
products at the latest ten years after entry into force of the Agreement in accordance with different
tariff dismantling schedules (categories 1 to 6).  The bilateral agricultural arrangements contain
specific rules of origin, generally based on the “wholly-obtained” criteria.
8.2 Fish
Trade in fish and other marine products is covered in Annex III to the Agreement.  The EFTA
States have committed themselves to free trade in fish products as of the entry into force of the
Agreement with one minor exception.  Mexico has been granted transitional periods between four to
ten years.  A review clause three years after entry into force of the Agreement allows for a review of
the customs duties on products listed in Articles 3 and 4 of Annex III and for the Joint Committee to
agree on accelerated tariff elimination schedules.WT/REG126/3
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Category Time schedule
          1 0 years
          2 3 years
          3 8 years          4a 9 years
          4 10 years
          5 Reduction of customs duties provided that
conditions in Articles 5 and 6 are fulfilled
III. GENERAL PROVISIONS OF THE AGREEMENT
1. Exceptions and Reservations
Article 17 of the Agreement is based on the language of GATT Art. XX (General
Exceptions), with some minor exceptions.  However, such prohibitions or restrictions shall not
constitute a means of arbitrary or unjustifiable discrimination where the same conditions prevail or a
disguised restriction on trade between the Parties.  Furthermore, Article 18 of the Agreement relates to
security exceptions.
2. Accession
According to Article 82 of the Agreement, any State may, upon invitation by the Joint
Committee, become a Party to the Agreement.  The terms and conditions are subject to an agreement
between the Parties and the invited State.
3. Dispute Settlement Procedure
The Agreement includes an arbitration procedure for disputes between the Parties relating to
the understanding and interpretation of the Agreement.  In a first step, the Agreement provides for
consultations between the Parties.  Disputes, which have not been settled within 45 days afterconsultations, may be subject to arbitration by means of written notification from one Party to the
other.  Provisions on the constitution and functioning of the arbitration panel are provided for in the
Agreement.  The panel is to settle the dispute in  accordance with international law and the decisions
of the arbitration panel are binding upon the Parties to the dispute.
5. Institutional Framework
The Agreement establishes a Joint Committee which is to supervise and administer the
Agreement.  Information shall be exchanged an d consultations can be held within the Joint
Committee.  The Joint Committee can take decisions in cases provided for by the Agreement or make
recommendations.  The Joint Committee is to keep under review the removal of further barriers to
trade between the EFTA States.WT/REG126/3
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IV. OTHER
1. Provisions in Services
Sections I to IV of Chapter III of the Agreement establishes an economic integration
agreement between the EFTA States and Mexico in the sense of Article V of GATS.1
2. Investment
Sections V of Chapter III also establishes the commitment of the Parties to guarantee the right
of free transfer with respect to direct investment.  The Chapter also includes provisions on investment
promotion, international commitments on investment and balance-of-payments difficulties. Consistent
with their commitments in international investment  agreements, the Parties confirm the objective of
progressive liberalisation, committing to review the investment legal framework and climate not later
than three years after the entry into force of the Agreement.
3. Intellectual Property Rights
In accordance with Article 69 of the Agreement,  the Parties shall grant and ensure adequate,
effective and non-discriminatory protection of intellectual property rights, in conformity with
international law and the provisions of the Ag reement and its Annex XXI.  Article 69 contains
provisions regarding the principles of the protection of intellectual property rights, national treatment
and MFN treatment.  Article 69 further provides for the possibility of holding consultations on issues
concerning the protection of intellectual property rights.  Annex XXI provides for the definition and
scope of protection and lists relevant international conventions to which the Parties shall undertake to
adhere.
4. Competition
Chapter V on competition includes the Parties’ commitment to avoid that the benefits of the
Agreement are undermined by anticompetitive business conduct.  The Chapter establishes a co-
operation mechanism between the Parties on competition law enforcement policy, such asnotification, consultation and exchange of information.  Furthermore, a clause on consultations is
included.
5. Customs Co-operation
The basis for co-operation in the customs field is provided for in Titles V and VI of Annex I
referred to in Article 5 of the Agreement.  The areas of co-operation include communication of stamps
and addresses, verification of movement certificates EUR.1 and invoice declarations, disputesettlement, penalties and free zones.
                                                     
1 See document WT/REG126/4 containing Standard Format on services.WT/REG126/3
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ANNEX
EFTA STATES' TRADE WITH MEXICO
1997 1998 1999 2000 1998/97 1999/98 2000/99
                  In thousand US dollars  Percentage change
IMPORTS
Iceland 1,483 1,657 1,927 2,427 11.7 16.3 25.9
Norway 52,498 41,758 54,984 53,582 -20.5 31.7 -2.5
Switzerland 46,080 97,560 117,545 113,371 111.7 20.5 -3.6
EFTA 100,061 140,975 174,456 169,380 40.9 23.7 -2.9
Share in EFTA's tot. imports 0.09% 0.12% 0.15% 0.15%
EXPORTS
Iceland 379 284 312 579 -25.1 9.9 85.6
Norway 31,628 39,839 33,578 61,123 26.0 -15.7 82.0
Switzerland 419,842 484,847 559,563 585,298 15.5 15.4 4.6
EFTA 451,849 524,970 593,453 647,000 16.2 13.0 9.0
Share in EFTA's tot. exports 0.36% 0.43% 0.47% 0.46%
IMPORTS + EXPORTS
Iceland 1,862 1,941 2,239 3,006 4.2 15.4 34.3
Norway 84,126 81,597 88,562 114,705 -3.0 8.5 29.5
Switzerland 465,922 582,407 677,108 698,669 25.0 16.3 3.2
EFTA 551,910 665,945 767,909 816,380 20.7 15.3 6.3
Share in EFTA's total trade 0.23% 0.28% 0.32% 0.32%
-- no percentage calculated
Source: World Trade Atlas2.43 0.5854 61113585
0100200300400500600
Iceland Norwa y SwitzerlandEFTA States' trade with Mexico
(2000 - million US dollars )
  Imports
  ExportsWT/REG126/3
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EFTA STATES' TRADE WITH MEXICO BY SELECTED COMMODITIES (HS)
Source: World Trade Atlas 1998 1999 2000 1998 1999 2000 
IMPORTS In thousand US dollars In per cent
Iceland
Total imports from Mexico 1,657 1,927 2,427 100.0 100.0 100.0 
In per cent of imports from world 0.07% 0.08% 0.10%
HS 85 Electrical machinery 172 493 907 10.4 25.6 37.4 
HS 84 Machinery, mechanical appliances 161 258 328 9.7 13.4 13.5 HS 22 Beverages 139 287 305 8.4 14.9 12.6 
Norway
Total imports from Mexico 41,758 54,984 53,582 100.0 100.0 100.0 
In per cent of imports from world 0.11% 0.16% 0.17%
HS 84 Machinery, mechanical appliances 3,969 6,367 12,261 9.5 11.6 22.9 HS 89 Ships, boats and floating structures 1 0 10,967 0.0 0.0 20.5 
HS 85 Electrical machinery 4,828 6,055 9,530 11.6 11.0 17.8 HS 87 Vehicles (not railway) 6,588 28,544 9,501 15.8 51.9 17.7 HS 09 Coffee, tea, maté and spices 11,103 5,320 4,269 26.6 9.7 8.0 
HS 90 Optical, medical, surgical instruments 322 1,016 856 0.8 1.8 1.6 
HS 22 Beverages 666 618 714 1.6 1.1 1.3 HS 29 Organic chemicals 935 802 618 2.2 1.5 1.2 
Switzerland
Total imports from Mexico 97,560 117,545 113,371 100.0 100.0 100.0 In per cent of imports from world 0.12% 0.15% 0.14%
HS 29 Organic chemicals 53,623 47,605 56,532 55.0 40.5 49.9 
HS 84 Machinery, mechanical appliances 1,791 2,063 13,505 1.8 1.8 11.9 HS 87 Vehicles (not railway) 10,337 39,735 12,732 10.6 33.8 11.2 
HS 09 Coffee, tea, maté and spices 7,438 6,692 10,654 7.6 5.7 9.4 
HS 32 Tanning, dye, paints, putty, inks 6,490 6,139 4,256 6.7 5.2 3.8 HS 04 Dairy produce, eggs, honey 4,257 4,012 3,462 4.4 3.4 3.1 HS 85 Electrical machinery 2,772 1,011 2,149 2.8 0.9 1.9 
HS 22 Beverages 1,459 1,483 1,971 1.5 1.3 1.7 
HS 17 Sugars 362 249 1,131 0.4 0.2 1.0 HS 08 Fruit and nuts 721 641 718 0.7 0.5 0.6 
EXPORTS In thousand US dollars In per cent
Iceland
Total exports to Mexico 284 312 579 100.0 100.0 100.0 
In per cent of exports to world: 0.01% 0.02% 0.03%  
HS 99 Salvage and reparations 0 0 399 0.0 0.0 68.9 
HS 15 Fats and oils 72 188 130 25.4 60.3 22.5 
HS 90 Optical, medical, surgical instruments 9 37 50 3.2 11.9 8.6 
Norway
Total exports to Mexico 39,839 33,578 61,123 100.0 100.0 100.0 In per cent of exports to world: 0.10% 0.07% 0.11%
HS 27 Mineral fuels, oil 0 5,067 23,019 0.0 15.1 37.7 
HS 85 Electrical machinery 7,200 6,982 12,860 18.1 20.8 21.0 HS 38 Misc. chemical products 309 1,442 8,209 0.8 4.3 13.4 HS 99 Salvage and reparations 15,709 2,686 7,076 39.4 8.0 11.6 
HS 03 Fish, crustaceans 4,046 5,147 2,895 10.2 15.3 4.7 
HS 84 Machinery, mechanical appliances 2,384 3,107 2,872 6.0 9.3 4.7 HS 83 Misc. articles of base metal 1,452 1,907 2,026 3.6 5.7 3.3 HS 90 Optical, medical, surgical instruments 2,113 1,588 659 5.3 4.7 1.1 
Switzerland
Total exports to Mexico 484,847 559,563 585,298 100.0 100.0 100.0 
In per cent of exports to world: 0.61% 0.70% 0.73%
HS 85 Electrical machinery 41,412 51,459 119,826 8.5 9.2 20.5 HS 84 Machinery, mechanical appliances 129,886 150,015 118,686 26.8 26.8 20.3 
HS 29 Organic chemicals 113,127 95,396 88,089 23.3 17.0 15.1 HS 30 Pharmaceutical products 53,982 78,868 71,089 11.1 14.1 12.1 HS 91 Misc. articles of base metal 33,155 34,555 37,040 6.8 6.2 6.3 HS 90 Optical, medical, surgical instruments 19,273 23,595 29,274 4.0 4.2 5.0 
HS 87 Vehicles (not railway) 1,493 6,847 19,503 0.3 1.2 3.3 
HS 33 Pefumery, cosmetics 11,579 13,987 15,218 2.4 2.5 2.6 HS 82 Tools, implements, cutlery 6,291 6,954 9,588 1.3 1.2 1.6 HS 38 Misc. chemical products 14,207 9,559 8,244 2.9 1.7 1.4 WT/REG126/3
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Trade coverage of the EFTA-Mexico FTA in 2000 (exports and imports)
Main agreement and bilateral agricultural arrangements
Source: World Trade Atlas
HS Total trade Duty free Reduced Without Duty Reduced Without
duty concessions free duty concessions
 in US dollars  in per cent
01 50,367 13,699 10,754 25,914 27% 21% 52%
02 003 2,895,166 2,895,166 100%04 5,008,760 3,463,000 3,370 1,542,390 69% 1% 30%05 19,899 19,899 100%06 296,627 296,627 100%07 589,226 580,673 8,553 99% 1%
08 1,132,843 1,130,978 1,865 99% 1%
09 14,989,359 14,988,164 1,195 99% 1%10 011 2,329 2,329 100%12 65,037 65,037 100%13 245,810 764 232,536 12,510 1% 94% 5%14 11,657 11,657 100%15 309,313 138,815 170,498 45% 55%16 7,286 7,286 100%17 1,521,812 8,928 180,139 1,332,745 1% 12% 87%18 626,727 1,494 625,233 1% 99%
19 65,036 65,036 100%
20 454,661 184,781 6,436 263,444 41% 1% 58%21 3,258,064 830 2,275,795 981,439 1% 69% 30%22 2,990,601 2,616,566 2,112 371,923 87% 1% 12%23 27,252 27,252 100%24 75,999 58,460 17,539 77% 23%25 350,025 350,025 100%26 027 23,133,611 114,407 23,019,204 1% 99%28 283,690 119,449 164,241 42% 58%29 145,969,303 112,843,398 33,125,905 77% 23%
30 72,037,652 16,305,832 55,731,820 23% 77%
31 143 143 100%32 29,233,106 15,781,721 13,451,385 54% 46%33 15,410,636 192,694 15,217,942 1% 99%34 1,810,893 1,448,455 362,438 80% 20%35 706,546 686,454 20,092 97% 3%36 1,745 427 1,318 24% 76%37 1,749,780 51,329 1,698,451 3% 97%38 16,813,189 5,412,655 11,400,534 32% 68%39 6,247,787 1,242,689 5,005,098 20% 80%40 742,760 97,283 645,477 13% 87%
41 0
42 1,109,464 668,654 440,810 60% 40%43 044 184,469 44,685 139,784 24% 76%45 7,696 7,696 100%46 2,276 2,276 100%47 1,212,327 1,212,327 100%WT/REG126/3
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HS Total trade Duty free Reduced Without Duty Reduced Without
duty concessions free duty concessions
 in US dollars  in per cent
48 1,968,610 618,288 1,350,322 31% 69%
49 722,911 168,208 554,703 23% 77%50 147,772 147,772 100%51 1,317,967 1,317,967 100%52 222,448 108,584 113,864 49% 51%53 60,692 60,692 100%54 84,299 25,523 58,776 30% 70%55 295,733 83,732 212,001 28% 72%56 44,345 36,770 7,575 83% 17%57 93,772 73,685 20,087 79% 21%58 473,876 131,385 342,491 28% 72%59 1,293,945 30,059 1,263,886 2% 98%60 4,898 964 3,934 20% 80%61 461,979 164,123 297,856 36% 64%62 862,567 93,819 768,748 11% 89%63 155,054 83,151 71,903 54% 46%64 211,682 95,620 116,062 45% 55%65 11,856 11,557 299 97% 3%66 067 0
68 666,580 106,797 559,783 16% 84%
69 334,664 282,586 52,078 84% 16%70 1,159,141 437,922 721,219 38% 62%71 5,190,429 3,663,316 1,527,113 71% 29%72 180,076 5,046 175,030 3% 97%73 5,116,680 885,818 4,230,862 17% 83%74 2,655,129 521,027 2,134,102 20% 80%75 154,851 154,851 100%76 3,273,177 1,355,289 1,917,888 41% 59%78 774 588 186 76% 24%79 956 956 100%80 3,000 3,000 100%81 54,768 54,768 100%82 9,904,014 593,346 9,310,668 6% 94%83 2,278,641 96,058 2,182,583 4% 96%84 148,651,157 96,084,124 52,567,033 65% 35%85 146,271,420 109,445,670 36,825,750 75% 25%86 2,976 2,976 100%87 42,309,089 22,783,630 19,525,459 54% 46%88 16,609 16,609 100%89 11,109,603 11,109,603 100%90 31,514,888 12,329,044 19,185,844 39% 61%91 37,055,252 975,590 36,079,662 3% 97%92 137,910 137,910 100%93 094 1,129,098 914,150 214,948 81% 19%95 564,382 554,020 10,362 98% 2%96 1,252,936 184,473 1,068,463 15% 85%97 355,553 355,553 100%98 4,950,030 4,648,456 301,574 94% 6%
Total 816,379,118 449,655,466 361,289,382 5,434,270 55% 44.3% 0.7%
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