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EFTA-Chile FTA Trade in Agricultural Products

EFTA-Chile FTA Trade in Agricultural Products. Eivind Skjulestad eivind.skjulestad@efta.int Officer, Geneva . Outline. Agriculture policy in the EFTA States EFTA imports of agricultural goods Agriculture goods covered in the Chile – EFTA FTA (and the WTO) Useful information links

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EFTA-Chile FTA Trade in Agricultural Products

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  1. EFTA-Chile FTATrade in Agricultural Products Eivind Skjulestad eivind.skjulestad@efta.int Officer, Geneva

  2. Outline • Agriculture policy in the EFTA States • EFTA imports of agricultural goods • Agriculture goods covered in the Chile – EFTA FTA (and the WTO) • Useful information links • Examples of exports to the EFTA States

  3. Agriculture in the EFTA States • Not a common agricultural policy, but similar • Difficult climatic and geographical conditions • High production costs • Active policy to maintain a certain level of agricultural production • High tariffs on goods from sensitive sectors; meat and dairy • Not self-sufficient, large net-importers of agricultural products (Import ca. 50 % of consumption)

  4. Agriculture in the EFTA States - Iceland • 1,1 % of GDP and 4 % of employment • Only 1 percent of the total land area cultivated • Bovine and sheep are the main productions, especially tender highland lamb of a very high quality • Icelandic horses • Very high SPS standards

  5. Agriculture in the EFTA States - Norway • 1.4 % of GDP and 3.7 % of employment • 3 percent cultivated land • Approximately 50 000 Farms • Average farm size is about 20 hectare • Average of 18 Cows on milk farms

  6. Continuation - Norway • Northernmost country in Europe • Difficult production conditions • Meat and dairy are the main productions, but also grain and some vegetables • Key employer in rural areas • Maintain farms

  7. Agriculture in the EFTA States - Switzerland • 1.3 % of GDP and 4 % of employment • Average size:16,7 ha • Meat, dairy, fruit, and wine are important productions. • Famous cheese

  8. Continuation - Switzerland • Mountainous landscape, small scale structure agriculture • Aims and tasks of agriculture according toarticle 104 of the Federal Constitution

  9. EFTA imports of agricultural goods • All EFTA States are major net-importers of agricultural goods • Main trading partner is the European Union (ca. 70%) • Major product groups that are imported: • Plants, vegetables, fruits • Coffee, tea, spices • Processed agricultural products • Beverages • Tobacco

  10. Norwegian trade with agricultural goods

  11. Main EFTA imports from Chile • Switzerland • Fruits • Nuts • Extracts of coffee and tea • beverages (wine) • Norway • fruit (mainly grapes) • processed products (of fruits, vegetables and nuts) • beverages (wine) • Iceland • beverages (wine) • grapes

  12. Framework for trade in agricultural goods between EFTA and Chile • WTO • EFTA - Chile Free Trade Agreement

  13. What is WTO • the World Trade Organization (WTO) • The only international organization dealing with the global rules of trade between nations. • Its main function is to ensure that trade flows as smoothly, predictably and freely as possible. • The goal of WTO is to improve the welfare of the peoples of the member countries.

  14. WTO Agriculture Agreement • The WTO’s Agriculture Agreement was negotiated in the 1986–94 Uruguay Round and is a significant first step towards fairer competition and a less distorted sector. It includes specific commitments by WTO member governments to improve market access and reduce trade-distorting subsidies in agriculture. • Further commitments under the “Doha round” of negotiations, which started in 2001 and is still under negotiations…..

  15. Agriculture in the Chile – EFTA FTA ARTICLE 1 Establishment of a free trade area The EFTA States and Chile hereby establish a free trade area by means of this Agreement and the complementary agreements on trade in agricultural goods, concurrently concluded between Chile and each individual EFTA State.

  16. Structure of the FTA

  17. Free Trade Agreement ARTICLE 7 Coverage [of trade in goods chapter] This Chapter applies to trade between the Parties relating to: • products falling within chapters 25 through 97 of the Harmonized Commodity Description and Coding System (hereinafter referred to as “the HS”), excluding the products listed in Annex III; • products specified in Annex IV, with due regard to the arrangements provided for in that Annex; and • fish and other marine products as provided for in Annex V.

  18. Agriculture in the Chile – EFTA FTA • Processed agricultural products • Included in the Main Free Trade Agreement in Annex IV • Basic agricultural products • Bilateralcomplementary agricultural agreements between each of the EFTA States and Chile

  19. Annex IV - Processed agricultural products • Annex IV to the EFTA – Chile FTA • Covers products like; bread, soups, chocolate, preserved fruits and vegetables, prefabricated food…. • EFTA offers Chile the same treatment as EFTA offers the EU for these products • No industrial protection. Duty based on content of certain raw materials (mainly dairy and meat products)

  20. Revised Annex IV • EFTA and Chile have merged the five tables into one table with 4 columns, indicating the concessions granted by each country. • Extended coverage and improved concessions • Still based on EU treatment • Will enter into force….

  21. Structure of the FTA

  22. Bilateralagreements

  23. Complementary Agricultural Agreements • Bilateral agreements between the respective EFTA State and Chile • Concessions spelled out in detail • Separate origin rules annexed to each agreement. (By large the same as the FTA) • The Parties undertake to achieve further liberalization • WTO Agreement applies, unless otherwise specified

  24. Agricultural products not included in the Agreement? • Some agricultural products are not included neither in Annex IV, nor in the bilateral agricultural agreements • MFN rates apply for these • Many of these products are already duty free • Confer with the national tariff books to find the exact duty for these products

  25. Useful information links • The Chile – EFTA Free Trade Agreement (including Annex IV) and the Bilateral Agricultural Agreements:http://efta.int/ • Icelandic Customs tariff: www.tollur.is • Norwegian Customs tariff: www.toll.no • Swiss Customs tariff: www.tares.ch

  26. Examples: • Dried grapes (HS 08.06) into Switzerland: • Basic product, bilateral agricultural agreement • Beer (HS 22.03) into Iceland: • Processed product, Annex IV • Yogurt (HS 04.03) into Iceland: • Processed product, Annex IV with “*” • Look into Icelandic customs tariff • Wine (HS 22.04) into Norway: • Basic products, bilateral agricultural agreement Free Free Elimination of the industrial element Free

  27. Questions ? • Questions related to agriculture in the EFTA - Chile FTA:Eivind Skjulestad, EFTA Secretariateivind.skjulestad@efta.int

  28. Thank you!

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