EFTA - Lebanon Free Trade Agreement enters into force

Published 01-01-2007
The Free Trade Agreement between the Member States of the European Free Trade Association (EFTA) - Iceland, Norway, Liechtenstein and Switzerland - and Lebanon entered into force on 1 January 2007.

This is the seventh Free Trade Agreement of the EFTA States with a Mediterranean partner country participating in the Barcelona process. With the entry into force of the agreement with Lebanon, the EFTA States have preferential trade relations with currently 14 States and Territories, in addition to the 27 Member States of the European Union. In addition, the Free Trade Agreement with the Southern African Customs Union (SACU) is expected to enter into force soon, and the EFTA States and Egypt have recently concluded their free trade negotiations.

The EFTA-Lebanon Free Trade Agreement (FTA) covers trade in industrial goods, including fish and other marine products, as well as processed agricultural products. In addition, bilateral agreements on basic agricultural products between the individual EFTA countries and Lebanon have been concluded and form part of the instruments creating the free trade area.

The Agreement also includes provisions relating to the elimination of other trade barriers as well as trade-related disciplines including rules of competition, state monopolies and state aid. Moreover, the Agreement contains Chapters on intellectual property, services, investment as well as payments and transfers. The Agreement establishes a Joint Committee which supervises the application of the Agreement and provides for binding arbitration.

Total bilateral merchandise trade between the EFTA States and Lebanon amounted to 440 million USD in 2005. EFTA imported goods from Lebanon for 195 million USD, a 35% increase in nominal value terms compared to 2004, and exported goods for 245 million USD, an increase of 61% compared to 2004 (in nominal value terms). The main EFTA imports from Lebanon are precious metals and stones; clocks and watches; and tobacco products, while the principle EFTA export products are precious metals and stones; pharmaceutical products; and clocks and watches.

Negotiations on the EFTA-Lebanon free trade agreement were formally launched in Beirut in April 2003 and were concluded after three rounds of negotiations. The Agreement was signed on the occasion of the EFTA Ministerial Meeting in Montreux on 24 June 2004.

Overview of Areas Covered by the Agreement

Trade in Goods
The EFTA-Lebanon FTA covers trade in industrial products, including fish and other marine products, as well as processed agricultural products. The Agreement takes into consideration the different levels of economic development between the EFTA States and Lebanon by providing for an asymmetric tariff dismantling. The EFTA States will eliminate duties and other restrictions for covered products upon entry into force of the Agreement, and Lebanon will gradually abolish its duties during a transition period starting in 2008 and ending in 2015. The Agreement contains rules of origin based on the model of the pan-Euro-Mediterranean cumulation system. Trade in basic agricultural products is covered by agreements concluded bilaterally between each EFTA State and Lebanon.

Payments and transfers, trade in services and investment Under the Agreement, payments relating to trade and investment-related transfers must not be restricted. The Parties share the goal of promoting, through different means, an attractive and stable environment for reciprocal investments.

The Parties aim to achieve gradual liberalisation and the mutual opening of their markets for trade in services in accordance with the provisions of the General Agreement on Trade in Services (GATS). Moreover, the EFTA States and Lebanon will consider extending to each other additional benefits that either side may grant to a third party.

Government Procurement
The Parties aim for a reciprocal and gradual liberalisation of procurement contracts, to be implemented on the basis of decisions by the Joint Committee which is set up under the Agreement. The Agreement opens for negotiations with a view to extending possible future additional benefits granted to third parties by either the EFTA States or Lebanon.

Economic co-operation and technical assistance
In order to facilitate the implementation of the Agreement, the EFTA States and Lebanon will elaborate modalities for technical assistance and co-operation and co-ordinate their efforts with relevant international organisations.

Protection of Intellectual Property
The Agreement sets a high standard for the protection of intellectual property rights, covering areas such as patents, copyright, undisclosed information, industrial designs and geographical indications, sometimes going beyond what is provided for under the WTO TRIPS Agreement and other international conventions and treaties.

Competition
Cartels between, and the abuse of a dominant position by, economic operators of the Parties are incompatible with the Agreement if they affect trade between the EFTA States and Lebanon. In such a case, a Party may bring the matter before the Joint Committee and, failing an agreement between the Parties concerned, may take appropriate measures. The Agreement also foresees an exchange of information between the Parties with respect to the enforcement of their competition laws.

Dispute Settlement
The chapter on dispute settlement contains rules and procedures for the settlement of disputes arising from the Agreement between one or several EFTA States and Lebanon.