The Free Trade Agreement between the EFTA States and Ecuador was signed Sauðárkrókur, Iceland, on 25 June 2018. The ratification procedures are currently ongoing and the entry into force is pending.
As a broad-based Free Trade Agreement, it covers trade in goods, trade in services, establishment (investment), intellectual property rights, government procurement, competition, trade and sustainable development and cooperation. In the area of trade in goods, the EFTA States abolish all customs duties on imports of industrial products, including fish and other marine products, originating in Ecuador. Ecuador will gradually eliminate or reduce customs duties on industrial products, including fish and other marine products, originating in an EFTA State.
The Agreement consists of 12 Chapters, 18 Annexes and 18 Appendices, covering the following main subjects:
- Trade in Goods including Rules of Origin, Trade Facilitation, Sanitary and Phytosanitary Measures, Technical Barriers to Trade and Trade Remedies
- Trade in Services
- Establishment (Investment)
- Intellectual Property Rights
- Government Procurement
- Trade and Sustainable Development
- Institutional Provisions
- Dispute Settlement
Trade in Goods
With the entry into force of the Agreement, the EFTA States abolish all customs duties on imports of industrial products, including fish and other marine products, originating in Ecuador. Ecuador will gradually eliminate or reduce customs duties on industrial products, including fish and other marine products, originating in an EFTA State.
The Agreement also provides for tariff concessions on both basic and processed agricultural products. The schedules for tariff commitment for agricultural and industrial products including fish and other marine products are to be found in annexes I -V. Provisions abolishing export duties are contained in article 2.3.
The rules of origin and methods of administrative cooperation between customs authorities are dealt with in Annex I its and appendices 1-3. The Agreement provides for liberal rules of origin, based on the European model. The rules open up for accumulation with all types of products (industrial and agricultural) among the Parties as well as for the possibility of self-declaration of origin.
The Agreement contains detailed provisions on trade facilitation (Annex VII). Furthermore, it includes provisions on sanitary and phytosanitary measures (article 2.12), technical regulations (article .11) and trade remedies (articles 2.14-2.17) in conformity with the relevant WTO Agreements.
Trade in Services
Chapter 3 closely follows the WTO General Agreement on Trade in Services (GATS) approach. It covers trade in all services sectors under all four modes of supply. Separate annexes on financial services (Annex XI), telecommunication services (Annex XII), movement of natural persons supplying services (Annex XIII) and maritime transport services (Annex XIV) complement the chapter with additional disciplines specific to those sectors. The Parties’ lists of specific commitments and exemptions from most-favoured-nation (MFN) treatment are contained in Annexes IX and X, respectively. Those lists shall be reviewed periodically with the aim to further liberalise trade in services between both sides.
The aim of Chapter 4 is to improve the legal framework conditions for investors from the EFTA States and Ecuador investing in each other’s markets. This is achieved by granting non-discriminatory rights of establishment and operation (“commercial presence”) in economic sectors not covered by the chapter on trade in services. In certain economic areas, the Parties have included reservations to national treatment based on restrictions in their national legislations (Annex XV). The chapter is subject to periodic review, with a view to further developing the Parties’ commitments.
Protection of Intellectual Property (IPR)
The provisions on protection of intellectual property (chapter 5 and annex XVI) cover, inter alia, trademarks, copyrights, patents, undisclosed information, industrial design and geographical indications, and include provisions for the enforcement of intellectual property rights and cooperation among the Parties. The provisions are based on the WTO Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS) and provide for a high level of protection, taking into account the principles of most-favoured-nation treatment and of national treatment.
Government Procurement (GP)
The Agreement also includes provisions on government procurement (chapter 6) providing for access to the Parties’ government procurement markets on a reciprocal basis. While the principles can be found in chapter 6, more detailed provisions, covered entities and other country-specific provisions are contained in Annex XVII.
The relevant provisions stipulate what procedures must be followed by government entities which are procuring goods, services and construction services above a certain threshold. The provisions are closely aligned with the revised WTO Agreement on Government Procurement, adapted to reflect the specific interests of the Parties.
In chapter 10, the Parties recognise that anti-competitive business practices have the potential to undermine the benefits of liberalisation arising from the Agreement. They highlight the importance of cooperating on issues relating to competition law enforcement.
Trade and Sustainable Development (SD)
The Parties recognise that economic development, social development and environmental protection are interdependent. In chapter 11 they reaffirm their commitment to multilateral environmental and labour agreements and principles and undertake to uphold levels of protection while recognising the right of each Party to establish its own level of environmental and labour protection. Arbitration procedures do not apply to this chapter.
Institutional Provisions and Dispute Settlement
Chapter 10 establishes a Joint Committee to supervise and administer the Agreement and to oversee its further development. The Joint Committee, which normally meets every two years, may modify the Agreement or consider and propose amendments, as provided for in the Agreement. Chapter 11 sets out the rules and procedures applying with respect to the avoidance or settlement of any disputes that may arise between Parties concerning the interpretation or application of the Agreement.