Thursday, August 27, 2015

Free Trade Agreement Between European Free Trade Association and GCC Countries

The Free Trade Agreement (“FTA”) between European Free Trade Association (“EFTA”) States of Iceland, Liechtenstein, Norway and Switzerland and the Gulf Cooperation Council (“GCC”) was signed on 22 June 2009 in Norway. The FTA established EFTA-GCC Joint Committee as the body responsible for supervising the implementation of the FTA.

The FTA was ratified by the Sultanate of Oman by way of Royal Decree 43 of 2010 on 18 April 2010. The FTA, however, was not initially implemented in the GCC States whilst a few operational issues were being resolved. The GCC Affairs Department of the MOCI has confirmed that the FTA was implemented in Oman on 1 July 2015.

Benefits of the FTA 

Upon implementation of the FTA, the products originating from GCC States upon importation into an EFTA State will benefit from preferential treatment upon submission of a movement certificate in EUR.1 or, as per Decision No. 2/2015 of the EFTA-GCC Joint Committee, exporters of goods originating in the GCC Member States may use the Certificate of Origin of the GCC States and claim preferential treatment in the EFTA States on that basis.

The FTA includes activities such as trade in goods, trade in services and government procurement contracts and will provide national treatment to member States in addition to creating new opportunities for economic operators on both sides. The FTA also specifically provides that the members States shall have “most favoured nation treatment” in terms of both trade and services.

According to EFTA, industrial and fish products will benefit from duty-free access to the markets of all parties, with some transitional periods and exceptions applying on the GCC side. Bilateral agreements between the GCC and individual EFTA States provide for preferential trading conditions for agricultural products and form part of the instruments establishing the free trade area.

Further development of the FTA 

The commitments on services and government procurement build on the WTO framework where the aim of the FTA is to promote the multilateral trading system in a manner that is conducive to the development of regional and international cooperation.

Where intellectual property rights are concerned, member States shall have two years from the entry into force of the FTA in which to conclude negotiations on the protection and enforcement of intellectual property rights. In this regard the EFTA-GCC Joint Committee will supervise its implementation.

Over the last decade, the GCC States and EFTA States have witnessed steady growth in trade relations. Through the implementation of the FTA it is believed that the member States may further develop and strengthen their economic and trade relations through the liberalisation and expansion of trade in goods and services in their common interest and for their mutual benefit.