RESTRICTEDWORLD TRADE
ORGANIZATIONWT/REG91/M/1
10 August 2000
(00-3277)
Committee on Regional Trade Agreements
Twenty-Sixth Session
EXAMINATION OF THE FREE TRADE AGREEMENT
BETWEEN EFTA AND MOROCCO
Note of the Meeting of 6 July 2000
Chairperson:  Ms. Silvia Ávila Seifert (Bolivia)
1. The meeting was convened in document WTO/AIR/1339.
2. Under Agenda Item D.VI of its Twenty-Sixth Session, the Committee on Regional Trade
Agreements (hereinafter CRTA or the Committee) took up the examination of the Free Trade
Agreement (FTA) between the European Free Trade Association (EFTA) and Morocco.  The
following topics were discussed:
A. G ENERAL REMARKS
B. S ECTION I - B ACKGROUND INFORMATION ON THE AGREEMENT
C. S ECTION II - T RADE PROVISIONS
D. S ECTION III - G ENERAL PROVISIONS OF THE AGREEMENT
A. GENERAL REMARKS
3. The Chairman said that the notification of the Agreement could be found in document
WT/REG91/N/1, with the text of the Agreement appearing in document WT/REG91/1.  She proposed
to use the Standard Format, document WT/REG91/3, to guide the debate.  The Secretariat had
distributed the day before a number of pages that were not available earlier due to technical problems,
in order to complete the Annex in document WT/REG91/3.1  She recalled that the terms of reference
for the examination were adopted on 5 April 2000 and were contained in document WT/REG91/2.
4. The representative of Norway, speaking on behalf of the EFTA States and Morocco, stated
that the meeting provided the Parties with the oppo rtunity to explain to the Committee the functioning
of the Agreement in more detail and reply to questions and comments by Members.  The Agreement
had been concluded on 19 June 1997 in Geneva and had entered into force on 1 December 1999
following the completion of ratification procedures by all Parties.  The Agreement and the bilateralagricultural arrangements had been notified to the Council for Trade in Goods (CTG) on
20 January 2000 in accordance with GATT Article XXIV:7(a), as contained in document
WT/REG91/N/1.  The Committee had been provided with background information to the Agreement
in line with the structure of the Standard Fo rmat in document WT/REG91/3.  The information
provided gave a comprehensive overview of the Agreement and would be useful in facilitating thetask of the Committee.  The Parties were prepared to give further clarification and replies to any
                                                     
1 A complete revision of the Standard Format is available in document WT/REG91/3/Rev.1.WT/REG91/M/1
Page 2
questions or comments the Committee might have during the meeting or, if need be, further replies
would be provided in writing to questions submitted by Members in writing.  He stated that the
Agreement was to be seen against the background of the EFTA States Mediterranean policy.  The
expansion of the EFTA network of agreements in the Mediterranean region was undertaken with a
view to create the Euro-Mediterranean Free-Trade Area by 2010.  In this context, the EFTA Stateswere at that time negotiating further trade agreements with Cyprus, Egypt, Jordan and Tunisia.  The
Agreement establishing a free-trade area in conformity with the definition set out in
GATT Article XXIV:8(b) was based on the same structure and had similar substantive provisions as
the other EFTA agreements concluded and examined by the Committee in the past.  The Agreement
covered trade in industrial products, fish and other marine products and processed agricultural
products.  The bilateral agricultural arrangements introduced substantial liberalization of trade in basic
agricultural goods and formed part of the instruments creating the free-trade area.  The Agreementprovided for asymmetric treatment in favour of Mo rocco by granting a transitional period for certain
industrial products, and bilateral cumulation of origin between the Parties.  In addition, it contained
provisions on intellectual property rights, State monopolies, State-aid and competition.  An
evolutionary clause provided for the possibility of further developing existing provisions and
extending them to areas not covered by the Agreem ent.  The Standard Format also included trade
statistics, which in response to requests made by Members in the past, included separate trade
coverage figures for industrial goods, fish and other marine products, and processed agricultural
products, as well as trade figures according to treatment at duty-free rates, reduced duty rates or
without concessions.  The Parties were of the view that the Agreement was in compliance with the
requirements and provisions of GATT Article XXIV and the Understanding on the Interpretation of
Article XXIV of the GATT 1994  (the "Understanding") and was implemented in a WTO-consistent
manner, complementary to the multilateral trading system.  The Parties were prepared to play a
constructive role in the examination process and move it towards conclusions.
5. Complementing that statement, the representative of Morocco said that the Agreement was to
be seen within the framework of the consolidation of Morocco's trade with the EFTA States and also
in line with the establishment of a free-trade area between the EFTA States and the Mediterranean
region by the year 2010.  Morocco had also entered into agreements with the European Union,
Tunisia and Jordan; others were being negotiated with Central and East European countries and
Turkey.
B. SECTION I - B ACKGROUND INFORMATION ON THE AGREEMENT
6. Noting that the Agreement and the bilateral agricultural arrangements had been signed on
19 June 1997 but had not entered into force until 1 December 1999, the representative of the
United States wondered whether any of the Parties had applied preferential rates to imports
originating in the other Party prior to 1 December 1999.  Although the Understanding provided for amaximum transition period of ten years with limited exceptions in extraordinary cases, the Agreement
provided for a twelve-year transition period for a large number of products.  He requested theprovision of information on the volume and share of trade subject to the twelve-year transition period,
and for an explanation of the exceptional circumstan ces that warranted that.  With respect to scope, he
asked how the Agreement covered all products in Ch apters 1-97 of the Harmonized System (HS).  He
appreciated the latest set of data provided by the Parties, which had not yet been reviewed by his
delegation and on which further questions were likely.  His delegation was also looking forward toreceiving data for 1998.  His delegation was of the view that excluding the bulk of a sector or
providing better than MFN greater than zero tariff treatment was not consistent with the provisions of
GATT Article XXIV.
7. The representative of Australia stated that the coverage of the Agreement, as indicated in
document WT/REG91/3, might not meet the substantially all the trade requirement.  He thereforeWT/REG91/M/1
Page 3
requested more information from the Parties on the percentage of trade between the Parties for each
Party in the industrial, fisheries and agricultural sectors, for which duties and other regulations of
commerce had been eliminated; concessions had been granted; no duties had been eliminated nor
concessions granted.  As his delegation had not had time to look at the revised Annex recently
distributed, he invited the Parties to point out whether his questions were answered therein.  He alsoasked for an explanation as to why some products should qualify for an exemption from the usual
requirement of a maximum of ten years transition period.  The representative of Japan associated
himself with the questions posed by the representative of Australia requesting additional informationon trade coverage and on the reasons for the need of a longer transition period.
8. The representative of Canada asked why the trade figures that had recently been circulated
were presented in terms of the SITC  nomenclature as opposed to HS and whether the same data could
be provided in HS Chapters.
9. Replying to the questions posed, the representative of Norway, speaking on behalf of the
EFTA States and Morocco, said that the Agreement had not been applied on a provisional basis before
it entered into force.  Concerning the transition pe riod, he said that the Agreement, similar to other
agreements such as the Euro-Mediterranean Agreement between the European Communities and
Tunisia, should be considered an exceptional circumstance as it was concluded between Europeancountries and a North African country, which were at very different levels of development.  Details
concerning the coverage and trade volume of sectors subject to the twelve-year transition period
would be provided later.  The data on trade coverage  was available in the statistics provided in the
Annex of document WT/REG91/3.  In response to Canada's request, he believed the Parties should
not have any problems in providing the trade figures in HS nomenclature instead of SITC.
10. Complementing some of the replies provided, the representative of Switzerland explained that
until very recently, the COMTRADE database used by the EFTA Secretariat was based on the SITC
nomenclature.  As regards the comment by the United States representative on the exclusion of
agriculture from the Agreement, he pointed out th at the CRTA was not examining the Free Trade
Agreement alone but different instruments used by the Parties to create the free-trade area, namely theFTA between the EFTA States and Morocco and the bilateral agricultural arrangements; thus, it could
not be said that agriculture was excluded from the free-trade area.
11. The representative of Canada said that the documentation available to the CRTA only
involved the FTA and wondered whether the bilateral arrangements could be provided for the next
round of examination.  The representative of Norway replied that Article 12 of the Agreement made
explicit reference to the agricultural arrangements, which had been submitted to the Secretariat forconsultation by interested Members.
12. The representative of the United States wondered how the FTA related to the free-trade area
and whether the rules of origin provisions, quantitative restrictions, safeguards provision and other
elements contained in the FTA also applied under the bilateral agricultural arrangements.  The
representative of Norway replied that they did not and that the contents of the bilateral arrangements
might vary.  As the EFTA States did not have a common agricultural policy, the agricultural
arrangements were separate from the overall FTA.
13. Thanking the EFTA States and Morocco for providing detailed information, the
representative of Slovenia said that it was evident that substantially all the trade was covered by the
free-trade area.WT/REG91/M/1
Page 4
C. SECTION II - T RADE PROVISIONS
14. The representative of the United States asked first that Morocco identify the products subject
to quantitative restrictions on imports from EFTA States as well as the reason for, and the duration of,
such restrictions.  Second, he asked for an explanation as to how Protocol B on rules of origin
described in Section II.3 of the Standard Format related to the pan-European system of cumulation inwhich the EFTA participated, and whether the regime applied to the agreements between Morocco
and Tunisia and Algeria.  Third, he wondered whether the safeguard provisions described in
Section II.5 of the Standard Format had been used and if so, when, how and on which products.  The
representative of Morocco said that his delegation would provide replies in writing to the questions
posed by the United States.  The representative of Norway, speaking on behalf of the EFTA States
and Morocco, said that the rules of origin in the agreements between the EFTA States and Morocco
did not apply the pan-European system of cumulation.  He also stated that no safeguard measures had
ever been applied.
D. SECTION III - G ENERAL PROVISIONS OF THE AGREEMENT
15. The representative of the United States asked whether anything contained in any of those
agreements would prevent the Parties from making MFN concessions and whether any of the Parties
were required to maintain a margin of preference for the others.  He also asked whether the Parties
intended to establish a services economic integration agreement.  The representative of Norway,
speaking on behalf of the EFTA States and Morocco, replied that there was nothing in the Agreement
limiting individual Parties' ability of making MFN concessions.  The representative of Switzerland
added that there was nothing in the Agreement preventing the Parties from lowering their MFN rates
on an MFN basis.  However, the bilateral agricultural arrangement between Switzerland and Morocco
included a few products for which the preferences were expressed in an MFN-minus way, meaning
that if the MFN rate was reduced, the preference would remain.  There were no specific plans for a
services agreement in the short term.  The evolutionary clause in the Agreement would be reviewed
by the Joint Committee, which might consider such an agreement; however, it had not yet met sincethe Agreement had only entered into force seven months earlier.
16. The Chairperson said that the first round of examination had enabled the Committee to clarify
a number of questions, but that some others were pending.  After having heard comments from the
representatives of the United States and Norway on the suggested deadlines for written questions and
answers, she asked delegations to forward additional questions to the Secretariat by
13 September 2000 and the Parties to provide their replies by 15 October 2000.  The next round of
examination could then be scheduled for a forthcoming meeting.
17. The representative of Switzerland stated that it was his delegation's understanding that written
replies would be provided on Morocco's use of quantitative restrictions and on the trade coverage of
the products for which the Parties had a transition period of twelve years.  The Chairperson confirmed
but added there might be additional questions which needed to be submitted by the agreed deadline.
18. The representative of Canada asked that the bilateral agricultural arrangements, which had
also been notified to the Council for Trade in Good s (CTG) in January 2000, be issued in time for the
next Session.  The representative of Switzerland replied that this was not the first FTA concluded by
the EFTA States and examined in the Committee which had bilateral agricultural arrangements.  Asthe bilateral agricultural arrangements were like protocols to the FTA, they had not been circulated.
Otherwise the documentation on the Agreements would be too voluminous.  The representative of theUnited States said that in the past agricultural arrangements had been integral parts of the FTA, but
the one under consideration did not apply to agricultur e in areas such as rules of origin or safeguards.
He suggested that the bilateral arrangements be described using the Standard Format.WT/REG91/M/1
Page 5
19. The representative of Norway, speaking on behalf of the EFTA States and Morocco, said that
the agricultural arrangements constituted part of the instruments creating the free-trade area just like
in other agreements between the EFTA States and its free-trade partners.  He agreed with the
representative of Switzerland that circulating additional documents would set a new precedent.
Hoping that it would clarify the situation, he re ad out Section II.8.1 of the Standard Format which
related to the bilateral agricultural arrangements and referred briefly to rules of origin.
20. The representative of the United States said that  there were a number of items other than rules
of origin, such as anti-dumping, countervailing m easures, subsidies and State-aid, or intellectual
property rights, which could be presented in the Standard Format on agricultural arrangements.
21. The representative of the European Communitie s noted that the CRTA had had such debates
when it had examined for the first time FTAs concluded by the EFTA States.  Instead of coming back
to an old debate, he invited Members to simply make statements which would reflect the divergingviews on the matter and to reserve the debate for new aspects of that examination.  He also expressed
doubts as to whether  intellectual property was an Article XXIV issue.
22. The representative of Canada suggested a compromise in the form of an addendum to
WT/REG91/3 with more information on Section II .8.1.  The representative of Switzerland said that
releasing more information on each arrangement would create too much paper, and recalled that they
could be consulted in the Secretariat.  The representative of Canada said that she was simply asking
for additional details on agriculture, not for the circulation of all the detailed material.  Therepresentative of Norway, speaking on behalf of th e EFTA States and Morocco, said that the Parties
could go along with that compromise.
23. The Committee took note of the comments made.
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