Free Trade Agreement between the Gulf Cooperation Council (GCC) and the European Free Trade Association (EFTA) States
The Free Trade Agreement between the GCC and EFTA states – signed in Hamar, Norway on June 22, 2009 – consists of a total of 93 Articles and 16 annexes, and covers a broad range of areas including trade in goods, trade in services, government procurement, intellectual property rights, administration and dispute settlement and competition. The EFTA-GCC Joint Committee, established by the agreement, will supervise the implementation of the agreement which also provides a dispute settlement mechanism through arbitration. In addition, bilateral agreements on agricultural products between each of the three individual EFTA States and the GCC form an integral part of the agreement.
Key Clauses of the Agreement
The parties recognise that anti-competitive business practices may restrict trade between them. Accordingly, each party agrees to adopt or maintain competition laws with a view to avoiding such practices. They also commit to cooperating on matters relating to competition law enforcement. Furthermore, a consultation mechanism is established. A joint committee will review the provisions on competition, especially after the adoption of the competition legislation by parties not currently having such laws in force.
Trade in Goods
Industrial goods, including fish and other marine products, benefit from duty free access to the respective markets of the EFTA States. For products imported into the GCC, most customs duties are eliminated. Certain products become duty free after a transitional period of 5 years, while some others remain excluded from tariff dismantling or from the scope of application. The agreement also provides for tariff concessions on processed agricultural products. Basic agricultural products are covered by the bilateral agricultural agreements, which are part of the instruments establishing the free trade area between the parties. With regard to the rules of origin, the agreement is based on the European model, incorporating EUR.1 movement certificates. It furthermore includes provisions on antidumping, state trading enterprises and subsidies, as well as sanitary and phytosanitary measures and technical regulations.
Trade in Services
The chapter on Trade in Services closely follows the GATS approach which is currently followed in the GCC FTA negotiations with other countries and economic blocs. Positive listing of the commitments is followed as a basis to determine the obligations taken by each party. Both sides’ commitments under the FTA go beyond their current level of obligations in the WTO. Moreover, additional commitments are accorded by the UAE in this FTA, such as professional services, environmental, construction, health, tourism, transportation, telecommunication and maritime services. The Trade in Services chapter will ensure that each party will treat services supplier no less favourably than his domestic supplier in similar circumstances. It will also reduce the restrictions on market access.
Both sides agree to include a side letter in the agreement that commit parties to start negotiation on non-services sectors (agriculture and industrial) no later than two years from the date the agreement enters into force.
An annex on E-Commerce has been included in the GCC-EFTA FTA which aims to strengthen the exchange of information, cooperation and partnership in this field and to follow the latest development of other countries in this sector.
Intellectual Property Rights (IPR):
In the area of IPR, the parties essentially confirm the WTO TRIPS Agreement. They commit to concluding negotiations on an annex related to IPR not later than two years after the agreement enters into force. In the meantime, a special consultation mechanism is foreseen in case of problems in the area of IPR affecting trade conditions between the parties.
The free trade agreements between the GCC and FTA includes a chapter concerning government procurement with precise rules and principles that will address and allow the participation of Gulf companies in the governmental tenders in the EFTA States and vice versa. The chapter aims to ensure and grant the transparency and market access based on non-discrimination principles such as national treatment. The chapter on Government Procurement deals with the procedures to be followed by a government entity which is procuring goods, services and construction services above certain thresholds.
Administration and Dispute Settlement:
A joint committee is established which supervises and administers the agreement and oversees its further development. The joint committee may take decisions in cases provided for in the agreement and make recommendations in other matters.