Central American States (Costa Rica, Guatemala and Panama)
The EFTA States signed a Free Trade Agreement with the Central American States in Trondheim, Norway, on 24 June 2013. The EFTA States and the Central American States signed the Protocol of Accession of Guatemala to the EFTA-Central America Free Trade Agreement in Schaan, Liechtenstein, on 22 June 2015. The Agreement entered into force on 19 August 2014 for Costa Rica, Panama and Norway, on 29 August 2014 for Liechtestein and Switzerland and on 5 September 2014 for Iceland. The entry into force is pending for Guatemala. Negotiations with Honduras are on hold.
As a broad-based agreement, the FTA covers trade in goods, trade in services, investment, competition, the protection of intellectual property rights, government procurement, trade and sustainable development, and cooperation. In the area of trade in goods, EFTA abolishes all customs duties on industrial products as of the entry into force of the Agreement, whereas the Central American States will do so after a transitional period. The Agreement foresees the possibility for other Central American States to join the FTA.
The Agreement consists of 13 Chapters and 21 Annexes. The Agreement covers the following main subjects:
- Trade in Goods
- Rules of Origin
- Trade Facilitation
- Sanitary and Phytosanitary Measures (SPS)
- Technical Barriers to Trade (TBT)
- Trade Remedies
- Trade in Services
- Protection of Intellectual Property (IPR)
- Government Procurement
- Trade and Sustainable Development
- Institutional Provisions
- Dispute Settlement
Trade in Goods
Industrial Goods and Fish and marine products
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 Central American States. The participating Central American States will gradually eliminate all customs duties on industrial products, including fish and other marine products, originating in an EFTA State (Annexes IV and V). All such goods will be duty free by 2029 at the latest.
The Agreement provides for tariff concessions on both basic and agricultural products, as covered by the bilateral Annexes IX to XVI of the Agreement.
Rules of Origin
The rules of origin and methods of administrative cooperation between customs authorities are dealt with in Annex I. 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 in certain cases.
The Agreement contains detailed provisions on trade facilitation (Annex VII), inter alia opening up for advance rulings as well as limiting the possibility of new fees and charges.
Sanitary and Phytosanitary Measures (SPS)
Sanitary and phytosanitary measures are dealt with in Chapter 2, referring to WTO law.
Technical Barriers to Trade (TBT)
Technical regulations are dealt with in Chapter 2, referring to WTO law.
The Agreement includes provisions on state trading enterprises, subsidies and countervailing measures, anti-dumping as well as disciplines on safeguard measures.
Trade in Services
The Chapter on trade in services (Chapter 4) 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, with the exception of air traffic. A separate annex on financial services (Annex XVII) complements the chapter with additional disciplines specific to that sector. The Parties’ lists of specific commitments (with an attachment on additional commitments on telecommunication services) and exemptions from most-favoured-nation (MFN) treatment are contained in Annexes XV and XVI, respectively. Those lists shall be reviewed periodically with the aim to further liberalise trade in services between both sides.
The aim of Chapter 5 is to improve the legal framework conditions for investors from the EFTA and Central American States 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 XVIII). The Chapter foresees a periodical review of such reservations, with the aim of increasing the Parties’ commitments over time.
Protection of Intellectual Property (IPR)
The provisions on protection of intellectual property rights (Chapter 6 and Annex XIX) cover, inter alia, trademarks, copyrights, patents and geographical indications, and include provisions for the enforcement of intellectual property rights and cooperation among the Parties. They 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.
The Agreement provides for the mutual opening of government procurement markets of the Parties. Covered government entities as well as the goods and services are listed in Annex XX. Chapter 7 deals with the procedures to be followed by an entity when procuring, including provisions on national treatment and transparency, and contains a review clause. The chapter is based on the revised WTO Government Procurement Agreement but has been adapted in some areas to reflect the Parties’ specific interests.
In Chapter 8, 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
The Parties recognise that economic development, social development and environmental protection are interdependent. In Chapter 9, they reaffirm their commitment to multilateral environmental and labour agreements and principles and undertake to uphold their levels of protection. Trade in forest-based products are dealt with in a separate provision. Arbitration procedures do not apply to this Chapter.
Chapter 11 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 12 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.
In Chapter 10, the Parties declare their readiness to facilitate the implementation of the objectives of the Agreement through cooperation. Possible fields of cooperation, such as the promotion of exports, as well as methods, such as seminars and technical assistance, are specified in the Chapter.
In Chapter 13, the Agreement foresees that any Member State of the Central American Economic Integration Sub-System may accede to the FTA, provided that the Joint Committee approves such accession.
Free Trade Agreement
Annexes - English
Notifications regarding processed agricultural products (PAPs)
Joint Declaration on Cooperation
|Joint Declaration on Cooperation with Panama - English|
|Declaración conjunta de Cooperación con Panamá - Español|