RESTRICTEDWORLD TRADE
ORGANIZATIONWT/REG69/M/3
9 August 2000
(00-3269)
Committee on Regional Trade Agreements
Twenty-Sixth Session
EXAMINATION OF THE EURO-MEDITERRANEAN AGREEMENT
BETWEEN THE EUROPEAN COMMUNITIES AND TUNISIA
Note on the Meeting of 6 July 2000
Chairperson:  Ms. Silvia Ávila Seifert (Bolivia)
1. The meeting was convened in document WTO/AIR/1339.
2. Under Agenda Item D.V, the Committee on Regional Trade Agreements (CRTA) took up the
examination of the Free Trade Agreement (FTA) between the European Communities (EC) and
Tunisia.  The following topics were discussed:
A. G ENERAL REMARKS
B. S ECTION I - B ACKGROUND INFORMATION ON THE AGREEMENT
C. S ECTION II - T RADE PROVISIONS
D. S ECTION III - G ENERAL PROVISIONS
A. G ENERAL REMARKS
3. The Chairperson noted that was the third round of examination of the Agreement.  The first
and second rounds of examination had taken place the year before during the Twenty-third and
Twenty-fourth Sessions in July and September, respectively.  The corresponding minutes of the
meetings had been distributed as documents WT/REG69/M/1-2.  The written questions submitted to
the Parties and their responses had been circulated as document WT/REG69/4.  The Standard Format
document (WT/REG69/2) would guide the debate.
4. The representative of Tunisia hoped that the Committee would be ready to consider the
factual examination complete after that meeting so  to ask the Secretariat to draft the examination
report.  His delegation was of the view that the Agreement was in conformity with
GATT Article XXIV.  If there were further questions, the Parties would be happy to reply during that
Session or possibly afterwards.
B. SECTION I - B ACKGROUND INFORMATION ON THE AGREEMENT
5. The representative of the United States said that given the number of questions he had it was
unlikely that the Secretariat would be in a position to begin drafting the report.  His delegation was
looking forward to receiving answers to severa l questions, on which he might have follow-up
questions, particularly with respect to rules of origin.  He asked how the new generation ofWT/REG69/M/3
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Euro-Mediterranean agreements, which were referr ed to in document WT/REG69/4, differed from the
previous generation of association agreements.  While the Agreement had been applied by Tunisia
since January 1997 on a provisional basis, with joint implementation effective March 1998, it had not
been notified to the WTO until January 1999.  Th e answer to question 1 in document WT/REG69/4
indicated that the Agreement had not been notified earlier because only the provisions on tariffs, notthe full Agreement, had been applied.  His delegation's view was that agreements needed to be
notified as soon as implementation - provisional, partial or otherwise – occurred, since Members were
entitled to be informed of departures from MFN treatment when a preferential tariff was implemented.
He asked what changes, if any, had been made to Tunisia's applied rates at the time the Agreement
was under negotiation, and subsequently when it was implemented by both Parties.  He also asked
whether Tunisia was required to maintain a margin of preference for imports coming from the EC.
Regarding the answer to question 3 in document WT/REG69/4, he noted that there was a twelve year
phase-in period and referred to paragraph 3 of the Understanding on the Interpretation of
Article XXIV of the GATT 1994  (the "Understanding") which stated that ten years should be exceeded
only in exceptional circumstances.  The Committee had already considered a number of agreements
linking developed and developing countries where the maximum period was exceeded on a very
limited number of products.  However, according to his delegation's calculations, nearly one quarterof Tunisia's imports from the EC would be subject to a phase-out period exceeding ten years, which in
his view was not compatible with the provisions of the Understanding.
6. The representative of the European Communities said that further elaboration on the new
generation of agreements was not really relevant in the context of the CRTA as they also covered
issues, other than trade, which would not be of intere st to it.  As to the question of notification, which
was a systemic issue already discussed by the Committee, it was his delegation's view that the
notification of the Agreement had been timely.  The exceptional circumstances justifying an
implementation period longer than ten years had been adequately explained in the written reply
provided.
7. The representative of Tunisia added that the Agreement had been notified once all EC
member countries had ratified it; that process had been completed with a certain delay.  Tunisia had
begun to implement the Agreement in 1997, before the completion of the EC ratification process, due
to internal considerations (e.g., to stimulate investment).  The implementation period was slightly over
ten years because there was a difference in the level of development between the two Parties.  She
invited the United States representative to send his outstanding questions, including the one on
applied rates, in writing and her delegation would provide answers as soon as possible.
8. The representative of the United States appreciated the clarification regarding the notification
of the Agreement.  However, his delegation still had concerns about the number of tariff lines that
went beyond the ten year period.
C. SECTION II - T RADE PROVISIONS
9. The representative of Australia thanked the Parties for the answers provided.  Referring to
Section II 8.2 of the Standard Format where it was stated that "from 1 January 2000 the Community
and Tunisia will assess the situation of their trade in  agricultural and fisheries products with a view to
determining the liberalisation measures to be applied by the Community and Tunisia with effect from
1 January 2001", he asked for an update on that issue.
10. The representative of the United States said that while all questions would be provided in
writing after the meeting, he would raise them orally for the benefit of all delegations present.  First,
he asked for a clarification on how the rules of origin system worked with respect to Algeria and how
Algeria would be eligible for cumulation given that it was one of the countries included in theWT/REG69/M/3
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EC-Maghreb link.  Second, referring to the response to question 10 provided in
document WT/REG69/4, he asked for further clarif ication on the pan-European-Mediterranean system
of origin.  He wondered whether it was already under negotiation, how it would differ from the
pan-European system of cumulation, and what th e relationship between the two regimes would be.
Third, he asked whether the Agreement between Egypt and Tunisia, which was mentioned in thedocumentation and which seemed to be relevant in re viewing the Agreement, particularly with respect
to rules of origin, had been notified to and examined by the CRTA.  Fourth, he asked for an
explanation on how the safeguard provisions operated , what conditions needed to be met for Tunisia
to increase or re-introduce its customs tariffs, what the margin of preference available for goods
arriving from the EC was, and whether Tunisia needed to raise MFN tariffs by set amounts so as to
protect a margin of preference for goods originating in the EC.  Such a measure would appear to raise
barriers to third parties' trade, which would not be in line with either paragraphs 4 or 5 ofArticle XXIV.  With respect to the answer to question 18 in document WT/REG69/4, he asked for an
explanation on how a reference quantity differed from a tariff-rate quota and why a reference quantity
was more flexible than a tariff-rate quota.  With respect to the answer to question 19 of that same
document, he asked what measures were planned in the case that new agricultural liberalization
should be applied from 1 January 2001 onwards.
11. The representative of the European Communities said that some of the answers could be
found in the material already provided, for example in the Annexes which were available at the
Secretariat.  With respect to a common question by the United States and Australia, he said that
although the examination of further concessions and liberalization in the agriculture sector had
started, it was too early to give an indication of the results as there were still six months before theParties would begin implementing any new measur es; the Committee would however be informed in
due time.  He noted the highly technical question on rules of origin, which was a separate issue and on
which long discussions had been held earlier.  As to the hypothetical question on safeguards, an
answer would only be provided to a written question.  He finally said that answers had been given to
many of the fundamental questions and not much more could be added.
12. The representative of Canada referred to the question on safeguards and the response to
question 13 in document WT/REG69/4, which stated th at "such increased or reintroduced duties may
not exceed 25 per cent ad valorem  and shall maintain an element of preference for products
originating in the EC".  She asked what the level of  preference that needed to be maintained was and
how it would be put into place.  The representative of Tunisia said that Article 14 of the Agreement
allowed for 25 per cent increase, beyond which Tunisia was not intending to go; for example, forwine, the Agreement stated that the rate could go to up  to 25 per cent in real terms.  He clarified that
Tunisia had not had to apply any such provisions.
D. S
ECTION III - G ENERAL PROVISIONS
13. The representative of the United States asked that the answer to question 22 in
document WT/REG69/4 on the relationship with other trade agreements be expanded; and in
particular whether anything in the Agreement constrained either Party from making commitments on
an MFN basis, for example in agriculture or services.  He also asked whether the Parties were obliged
to maintain a margin of preference for each other in the area of goods (agriculture) or services, even in
the context of multilateral negotiations.  The representative of the European Communities replied in
the negative.WT/REG69/M/3
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14. The Chairperson said that the third round of examination had been completed.  She suggested
that outstanding questions be submitted in writing to the Secretariat by 21 July 2000 and Parties
provide replies before 13 September 2000.  That would enable the Committee to retain momentum in
the examination process and resume the examination of the Agreement at a later date.
15. The Committee took note of the comments made.
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