WORLD TRADE
ORGANIZATIONWT/REG85/R/B/3
G/L/685
6 September 2004
(04-3692)
Committee on Regional Trade Agreements Original: English
EUROPEAN FREE TRADE ASSOCIATION
The following communication, dated 26 August 2004, is being circulated at the request of the
EFTA States.
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Biennial Report on the Operation of the Convention
Communication from the EFTA States
In accordance with the guidelines approved by the Council For Trade in Goods1, as
recommended by the Committee on Regional Trade Agreements2, and the reporting schedule
established by the WTO Secretariat3, the European Free Trade Association (EFTA) hereby submits its
periodical report on the operation of the EFTA Convention (Convention). The last such report was
issued on 8 August 20014. The EFTA Secretariat publishes annual reports, which are made available
on the EFTA Secretariat web page. The web page also provides comprehensive information on EFTA
and its activities5.
In the reporting period (July 2001 to June 2004), the Agreement amending the Convention
signed by EFTA Ministers in Vaduz, Liechtenstein, on 21 June 2001 entered into force on 1 June
2002. The EFTA Council, responsible for the Vaduz Convention, regularly updates the Convention to
reflect legislative developments in the EEA Agreement and the Swiss-EU agreements. A list of the
amendments made to the Convention since its entry into force on 1 June 2002 is set out as Annex to
this report. The consolidated version of the updated Convention is available on the EFTA Secretariat
web page6.
The services part of the Convention is subject to a separate notification to the WTO pursuant
to Article V of the GATS.7
I. BACKGROUND INFORMATION
1. Membership And Dates Of Signature, Ratification And Entry Into Force
Since 1 January 1995, the European Free Trade Association consists of Iceland,
Liechtenstein, Norway and Switzerland8. In June 1999, EFTA Ministers decided to update the EFTA
1G/L/286.
2WT/REG/4.
3WT/REG/W/48.
4WT/REG85/R/B/2.
5http://secretariat.efta.int/
6http://secretariat.efta.int/Web/EFTAConvention/EFTAConventionTexts/EFTAConventionText
7S/C/N/207, WT/REG154/2.WT/REG85/R/B/3
G/L/685
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Convention of 1960 in response to an invitation by Switzerland to extend to the EFTA partners the
same level of integration achieved under its bilateral agreements with the European Union signed on
21 June 1999.
The amendments to the Convention include modernised trade terminology, reflecting
developments in the multilateral trading system and the EFTA States’ respective relations with the
European Union (EEA Agreement and Swiss-EU bilateral agreements). The scope of the Convention
was also expanded to include new areas such as services and investment (establishment), free
movement of persons, coordination of social security, mutual recognition of diplomas, land and air
transport, public procurement and intellectual property rights. The functions of the EFTA Council
were broadened to reflect changes that have taken place in EFTA since the 1980s, in particular with
respect to EFTA’s external relations. The new Convention is expected to render the economic
relations between the four EFTA Member States more cohesive and to give the Members an improved
instrument to manage their internal relations and those with present and potential trade partners.
2. Trade Data
Trade among the four EFTA States has expanded from 1.74 billion USD to 1.95 billion USD
between 2000 and 2003, representing an increase of around 11.6%. In 2000, intra-EFTA trade
accounted for around 0.67% of the EFTA States’ total trade with the world. This share fell to about
0.63% between 2000 and 2003.
The EFTA States’ trade with the world has increased from 262.3 billion USD to 308.9 billion
USD between 2000 and 2003, a rise of about 18.2%.
Trade between the EFTA States and the current 25 EU countries has expanded from 183.9
billion USD to 225.9 billion USD between 2000 and 2003. EFTA imports from the EU increased by
25.6% between 2000 and 2003, while EFTA’s exports to the EU increased by 20.5% over the same
period. The share of the EFTA States’ trade with the EU has increased from 70.4% in 2000 to 73.1%
in 2003.
The EFTA States’ trade with their current preferential trading partners apart from the EU has
increased from around 6.3 billion USD in 2000 to 7.6 billion USD in 2003, representing an increase
of 20.8%. Its share of EFTA’s total trade has increased from 2.41% per cent in 2000 to 2.47% in
2003.
Detailed EFTA trade statistics are available at EFTA’s official website:
http://secretariat.efta.int/Web/ExternalRelations/TradeStats/
II. TRADE PROVISIONS
The details of the amendments to the Convention introduced by the Agreement signed in June
2001 can be found in the last biennial report of 8 August 2001. Limited legislative development has
taken place since the entry into force of the updated Convention as reported below.
8For information on previous membership, dates of signature, ratification, entry into force and
withdrawal, reference is made to the biennial report of 28 May 1999 (WT/REG85/R/B/1)WT/REG85/R/B/3
G/L/685
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1. Rules Of Origin
Annex B was amended in 2001 taking the occasion of the HS revision 2002 for a formal
consolidation and restructuring of the origin annex based on an agreement in the “30 countries’
meeting” held in the context of the pan-European cumulation system.
In 2002, a technical error in the specific list rule for ex 4114 in Appendix II to Annex A was
corrected.
2. Standards
2.1 Technical Regulations
In 2003, Annex I to the Convention was modified to consolidate the Annex by incorporating
new EC and Swiss federal law adopted since 1999 regarding mutual recognition in relation to
conformity assessment.
3. Sector-specific provisions
3.1 Agriculture
In 2003, a system of notification for price compensation measures for agricultural products
was introduced.
III. GENERAL PROVISIONS OF THE AGREEMENT
1. Institutional framework
In 2002, the EFTA Council revised the list of specific committees to review legislative
developments in light of corresponding updates under the EEA Agreement and the Swiss-EU
agreements and adopted model decisions and procedural guidelines with a view to regular updating of
the Vaduz Convention.
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Amendments to the Vaduz Convention since 2001
DC No. Adopted In force Title Subject
4/2001 06.12.01 01.01.02 Amendments to Annex A Origin rules
5/2002 18.06.02 n.a. Establishment of the
Committee on mutual
recognition in relation to
conformity assessmentStandards/institutional
framework
5/2002 18.06.02 n.a. Establishment of the
Committee on organic
agricultureAgriculture/institutional
framework
5/2002 18.06.02 n.a. Establishment of the
Committee on public
procurementPublic
procurement/institutional
framework
5/2002 18.06.02 n.a. Establishment of the
Committee on seedsAgriculture/institutional
framework
20/2002 09.12.02 09.12.02 Amendments to Annex A Origin rules
A-2003-CON-
D-00209.07.03 09.07.03 Modification of Appendix 1
of Annex IStandards
n.a. not applicable
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