An Analysis of Agricultural Concessions in FTA of EFTA

EFTA(European Free Trade Agreement) firmly advocates open economic policies and established several FTAs with many other countries though it has relatively low agricultural competitiveness. In principle, EFTA excludes agricultural products from tariff concessions in the main text of FTA agreements. Only non-agricultural products are included in the main agreements. Concessions for the agricultural products are dealt with in the separate bilateral agricultural agreements between individual member countries and FTA partner. Concessions for processed agricultural products, however, are provided both in the main agreement and bilateral agricultural agreement. Switzerland and Norway representing EFTA have increased the magnitude of their agricultural concessions in recent FTA negotiations but their overall levels of concessions are still very low. In addition, some products have been excluded from the concessions because such products are so sensitive to domestic agriculture, food security and multifunctionality of agriculture. While the EFTA does allow concessions for agricultural products, the process is fairly unique and complicate. It employs various concession rates and specific tariffs as well as quantity restrictions. Furthermore, it allows price compensation system using external reference prices and standard recipes for processed agricultural products. Korea, having relatively low agricultural competitiveness like the EFTA, needs to establish FTA strategies referring to the EFTA's methods in order to successfully complete a number of FTA negotiations in the near future.