UNIVERSIDAD RICARDO PALMA

FACULTAD DE CIENCIAS
ECONÓMICAS Y EMPRESARIALES

EFTA

COURSE:
Treaties, Conventions and
International Integration

MEMBERS:
- Nahomi Cuadrao
- Karla Montoya
- Fransheska Gallegos

European Free Trade

Association (EFTA)
The European Free Trade Association (EFTA) is the intergovernmental organization of
Iceland, Liechtenstein, Norway and Switzerland, set up for the promotion of free trade
an economic cooperation between its member, within Europe and globally.

Free Trade Agreement signed in 2010,

effective from:
-July 1, 2011 with Switzerland and Liechtenstein
-October 1, 2011 with Iceland
-July 1, 2012 with Norway

The Association has responsibility for the management of:

● The EFTA Convention, which regulates economic relations between the four
EFTA States.
● The Agreement on the European Economic Area (EEA Agreement), which
brings together the Member States of the European Union (EU) and three of the
EFTA States – Iceland, Liechtenstein and Norway – in a single market, also
referred to as the “Internal Market”.
● EFTA’s worldwide network of free trade and partnership agreements.

EFTA has the following institutions:

-The secretariat that is based in Geneva.

-The EFTA Court.
-The EFTA Council.
-The EFTA Surveillance Authority.

Negotiated Chapters:
● Electronic Commerce
● Agricultural products
● Fishing
● Rules of origin
● Customs matters
● Facilitation of Commerce
● Recognition of Service Providers
● Investments
● Scientific Collaboration
● Public purchases.

The EFTA States

The four EFTA States are competitive in several sectors vital to the global economy
and score among the highest in the world in competitiveness, wealth creation per
inhabitant, life expectancy and quality of life.

Switzerland is a world leader in pharmaceuticals, biotechnology, machinery, banking

and insurance. Liechtenstein, like Switzerland, is highly industrialized and specialized
in capital-intensive and Research & Development driven technology products. The
Icelandic economy benefits from renewable natural resources, not least rich fishing
grounds, and has increasingly diversified into other industries and services. Abundant
natural resources also contribute significantly to Norway’s economic strength,
including oil and gas exploration and production, and fisheries, as well as important
service sectors such as maritime transport and energy-related services.
Free Trade Agreement between Peru and the States of the European Free Trade
Association

The Free Trade Agreement between Peru and the States of the European Free Trade
Association (EFTA) - European Free Trade Association (EFTA) of which Switzerland,
Liechtenstein, Norway and Iceland are part, was signed in Reykjavic on June 24 of
2010 and in Lima on July 14, 2010; The FTA entered into force with Switzerland and
Liechtenstein on July 1, 2011 and with Iceland on October 1, 2011. The Free Trade
Agreement with the Kingdom of Norway entered into force on July 1, 2012.

In addition, Bilateral Agreements on Agriculture have been signed with Iceland,

Norway, and Switzerland, which enter into force on the same date as the Free Trade
Agreement with the corresponding countries.

The following chapters were negotiated in this Agreement: Electronic Commerce,

Agricultural Products, Fisheries, Rules of Origin, Customs Affairs, Trade Facilitation,
Recognition of Service Providers, Investments, Scientific Collaboration, Public
Procurement.

The main export products to the EFTA states are: gold, fish oil, copper ores, fishery
and agricultural products, asparagus, textiles, avocados; Switzerland being the main
destination of these exports.
In 2010, the EFTA states have been the third export destination market for Peruvian
products. The EFTA States are not part of the European Union.

The commercial exchange between Peru and the countries that make up the EFTA
group has presented an increasing trend in the last ten years (2000-2010), registering
an average annual growth rate of 20%. 97% of this exchange is indicated by exports
and the remaining 3% by imports.

The trade balance shows a large surplus for Peru with a growing trend during the
period under study (2000-2010), a result that is associated with an average annual
increase of 21% for exports.

Since April 2006, Peru has requested a process of preparation for the negotiation of a
Free Trade Agreement with the countries of the European Free Trade Association
(EFTA) according to Switzerland, Iceland, Liechtenstein and Norway.

IMPORTANCE
EFTA member countries have the highest levels of GDP (PBI) per capita and the
Human Development Index (HDI: long and healthy life, education, and quality of life),
with Norway and Iceland being ranked number 1 worldwide, above Ireland, Sweden,
Canada, Japan and the United States. For its part, Switzerland has a higher level of
well-being than the Netherlands, Belgium, Austria, Denmark, France, Italy, England
(United Kingdom), Spain, New Zealand, Germany and Hong Kong.

The EFTA countries (Switzerland, Liechtenstein) are important financial and parent
centers of many of the world's leading multinational companies. Both countries make
significant investments abroad. For example, Switzerland is a world leader in
pharmaceuticals, machinery, watches, insurance and banking.
Norway and Iceland- on the other hand, they stand out in fishing, metalworking and
maritime transport. Thanks to its considerable natural resources, Norway is the world's
third largest oil and gas exporter.

Issues for negotiation:

- Market access for industrial goods

- Rules of origin / Customs procedures and trade facilitation
- Agriculture
- Technical barriers to trade / sanitary and phytosanitary issues
- Competition, dispute settlement, institutional provisions
- Government procurement
- Investments
- Services
- Intellectual property rights
- Trade capacity building

OBJECTIVES

● Its main objective is to attract foreign investment and generate more jobs
 ● This FTA will allow Peru's trade to improve with the countries that make up
EFTA, such as Switzerland, Iceland, Liechtenstein and Norway.

● Neither party will maintain, introduce or reintroduce export subsidies.

● Peru maintains indefinitely the possibility of applying the drawback system and
the temporary import and export regimes.

● Allow Peru to compete with more advantage as an investment destination.

● Boost the exportable supply of both blocks.

● EFTA will grant the best treatment to processed Peruvian agricultural products,
such as preserves, which is currently equivalent to what the countries of the
European Union offer.

● With the signing of the Treaty, Peruvian exporters were assured of a deal.

● Stimulate the expansion and diversification of trade in goods and services.

EVOLUTION OF EXPORTS TO EFTA

Since, in July 2012, the trade agreement with the European Free Trade Association
(EFTA), made up of Switzerland, Liechtenstein, Norway and Iceland, entered into
force, our exports to this block, on average, They have represented 9% of the total.
These markets house a population of 13.9 million people and, at the end of 2016, our
exports to this destination totaled US $ 2,602 million, of which US $ 2,571 million were
shipments to Switzerland, US $ 29.5 million to Norway and US $ 890,000 to Iceland
Thus, it is clear that Switzerland is the main market for our shipments to EFTA. Among
the main products we export are gold, copper ores, fish oil, asparagus, avocados and
textiles.
It should be noted that these countries lead important global rankings, such as the
Global Competitiveness Index, prepared by the World Economic Forum, which in its
2017-2018 edition placed Iceland, Norway and Switzerland in positions 28, 11 and 1,
respectively . Similarly, the Doing Business report, prepared by the World Bank,
placed them in positions 23, 8 and 33, respectively, in its last edition of 2018, and
highlighted important aspects to consolidate trade, such as the ease of opening a
business and the fulfillment of contracts and times, among others.

-7% of Peruvian exports were destined to this market.

-More collection of traditional products: Gold, copper, silver, coffee, fish oil, etc.
-210 companies exported to this block, of which 197 were Mipymes.
-Switzerland is the largest market in the block, with 98% participation.

POTENTIAL PRODUCTS

PERÚ - EFTA (PRODUCTS TRADITIONAL AND NON-TRADITIONAL)

The main non-traditional products that have demand and have already been
commercialized in these European markets have been analyzed:

1. Switzerland: It is the main destination of Peruvian exports within the commercial

block. Among the main non-traditional Peruvian products that were exported in
2016, we have mangoes and asparagus with amounts exceeding $ 3.1 million
and 9 million in FOB values, respectively. Other agricultural products within the
ranking are: coffee, cocoa and blueberries. Textiles include scarves, sweaters
and caps made of alpaca fibers.
2. Norway: With $ 29.5 million in FOB values, it is the second export market within
the block. The textile products demanded were mainly alpaca and sheep yarn
and, to a lesser extent, alpaca clothing. Among the imported foods we have
grapes, coffee, tangelos and trout fillets.
3. Iceland: It is the third export market within the block with $ 885 thousand in FOB
values. Among the main export products to this market we have fish egg cups,
canned asparagus in the food sector and in shawls and scarves made of alpaca
fiber, in the textile sector.
4. Liechtenstein: in 2017 there was no trade between Peru and that market.
However, it is an economy that imports agricultural products, processed foods
and textile garments.

UNIVERSITIES IN EFTA
● Universities in Switzerland
1. ETH Zurich - Swiss Federal Institute of Technology Zurich
ETH Zurich - The Swiss Federal Institute of Technology Zurich, founded in 1855, is an
educational provider based in Switzerland. ETH Zurich is a leader in Technology and
Natural Sciences and offers numerous postgraduate programs in English. The
University has produced 21 Nobel Prizes and has more than 18,500 international
students from more than 110 countries around the world.
2. University of Zurich
The University of Zurich (UZH), founded in 1833, is the largest university in
Switzerland, with 26,000 students and offers numerous study options in its seven
faculties, covering 100 thematic areas.UZH is also the leading research university in
Europe and is a member of the League of European Research Universities (LERU),
the University has produced 12 Nobel Prizes.
3. Ecole Polytechnique Federale de Lausanne
The Federal Polytechnic School of Lausanne (EPFL) is one of the Federal Institutes of
Technology of Switzerland. EPFL offers 13 undergraduate and postgraduate study
programs covering subjects such as Basic Sciences, Engineering, Life Sciences,
Architecture, Construction and Environment.
4. University of Lausanne
University of Lausanne (UNIL) is an educational provider based in Switzerland. The
study options offered cover subjects that include laws; Letters; Political Sciences;
Economic Sciences; Deal; Medicine; Biology; Social Sciences; Criminal justice;
Theology; and Public Administration. There are more than 14,000 students enrolled at
the University of Lausanne at the undergraduate and graduate levels.

5. University of Bern
University of Bern, founded in 1834, is an educational provider based in Bern,
Switzerland. Postgraduate study options are offered in English covering subjects
including Applied Economic Analysis; Biomedical engineering; Biomedical sciences;
Climate Sciences; Computer's science; Social anthropology; Ecology; Maths; and
philosophy.

● Universities in Norway
1. UNIVERSITY OF OSLO
This university was founded in 1811, and since then it was an academic institution of
the best and in addition to the largest research in Norway. It is an educational center
among the most recognized in the world, which is why it has a special prestige since it
has excellent educational programs and that are recognized for their quality, in
addition to standing out for special teaching methods.
2. UNIVERSITY OF BERGEN
It is an internationally recognized research university. Academic diversity and high
quality are fundamental for this university. UiB is the most cited university in Norway
and has seven faculties. It is located in Bergen, Norway, was founded in 1946 and
since 1825 academic activity has been developed in the Bergen museum.
 3. VID SPECIALIZED UNIVERSITY
It is one of the best specialized and private universities in Norway, which has an
enrollment of approximately 3300 students in four specialized fields: Oslo, Sandnes,
Bergen and Stavanger.
4. BI NORWEGIAN BUSSCHOOL
It is a private university of the best you can find in Norway, was founded in 1943, is
responsible for offering students knowledge and skills not only in the private sector but
also in the public.

● Universities in Iceland
1. Bifröst University
Bifröst University was founded in Reykjavik in 1918 on the model of Ruskin College. In
1955, the school moved 110km north of the capital. Bifröst University is the only liberal
arts university in the country. It was accredited as a university in 1988, first only in
business, eventually offering degrees in the Law of 2002, and in Social Sciences since
2005.

2. The University of Reykjavik

Is the largest private university in Reykjavik, the capital of Iceland and was founded in
1998. It is backed by the Chamber of Commerce, the Federation of Industries of
Iceland, and the Confederation of Employers of Iceland.

● Universities in Liechtenstein
1. University of Liechtenstein
The university was founded in 1961 for engineering education, which later
resulted in the Liechtenstein College of Engineering.
In 1992, she was recognized as the Liechtenstein University of Applied
Sciences (Fachhochschule Liechtenstein) and as Hochschule Liechtenstein in
2005. In 2008 she was granted university status and was allowed to offer
doctoral programs, bachelor's and master's degrees depending on the process
from Bologna.

PERÚ-SUIZA
Peru currently has a Free Trade Agreement with Switzerland, which gives us tariff
benefits towards that market according to the Peru-EFTA agreement in force, a trade
bloc formed by Switzerland, Norway, Iceland and Liechtenstein.
In the textile sector, our main export products to Switzerland are cotton shirts, blouses
and T-shirts, products that enter with 0% tariff.

Swiss consumer
Switzerland has one of the highest per capita income in the world, which drives the
high consumption of products. This means that more is spent on clothing than in other
countries with lower incomes. However, the typical Swiss is not a consumer of
expensive clothes. They are, in general, indifferent consumers before fashion, who
buy according to price, leaving quality in a second order. They are rational buyers who
compare prices before deciding on the purchase and are always attentive to offers.
The main expenses are in comfortable and casual clothes. However, the latest trends
among young people is spending a lot of money on well-known brands of clothing and
sports accessories.

Distribution channels
As for distribution, manufacturers sell their products to retailers, they can do it directly
or through intermediaries, such as sales centers, purchasing agents, etc. Specialty
stores play a dominant role among distribution channels in Switzerland. More than half
of the garments in Switzerland are sold in these establishments (55%), followed by
food retailers (13%), department stores (12%), postal order (11%) and low stores Price
(6%).

Products with higher demand

The highest demand for clothing in Switzerland is made up of the following items:
● Modern sportswear / casual wear: mainly young people who do not usually
exceed 30-35 years followers of the latest trends and who could be described
as “fashion victim-victims of fashion”. They are willing to spend a significant
amount of money on clothes. The main expense is in cycling, mountaineering
and skiing attire.
● Jeans: the Swiss generally give comfort and functionality priority to elegance,
so this garment is essential in your wardrobe. Except for young people looking
for brands, the money the Swiss invest in this garment is not high.
● Dresses and suits: Swiss society is not a great consumer of this type of
clothing. The suits are used, mainly, to work. Women wear jacket suits with
 skirts or pants, blouses and, commonly, a matching neck scarf. Men suit jacket,
shirt and tie.
● Ecological attire: basically among middle-aged men and women, concerned
about the environment and who are willing to pay more for the garments, as
long as nature is respected. The Swiss are very concerned about the
environment and are increasingly demanding this type of clothing.
● Cheap clothing: more indifferent consumers in the face of fashion that they buy
based on price, leaving quality in the background. In general, they care little
about outerwear. It is a fairly representative type of consumer in Switzerland
despite high per capita income.

PERÚ: MAIN MARKETS TO EXPORT

NEWS: "Peru is the main gold exporter to Switzerland, the world refinery
center"
Swiss criminologist Mark Pieth denounces that refineries in his country buy gold from
places like Peru, no matter how it was obtained. He points out that the traffic of this
metal is today an evil that surpasses drug trafficking.
Metalor, one of the world's leading refineries, which can process 500 tons of this
mineral a year, said it will stop working with artisanal miners and smaller-scale
collectors. The decision, they said, is to reduce the risks of acquiring gold of illicit origin
in countries such as Peru, the main exporter of illegal gold in Latin America and fifth
producer of this metal on the planet.

The announcement was a radical turn in the business line of this Swiss company
founded in 1852, considered as important as to set the world price of gold, but at the
same time the target of innumerable criticism for doing business with distributors
linked to illegal mining.

What Metalor said, however, came several days after a new complaint. Swiss
criminologist Mark Pieth, one of the most respected anti-corruption voices in Europe,
announced the publication of his new book "Gold Wash". This places special
emphasis on the dark side of the global gold market and the responsibility of the
companies in their country, especially Metalor. From Switzerland, Pieth spoke with El
Comercio about his findings in this industry that moves billions of dollars.

—What was the starting point of your investigation?

The initial point was the very close relationship between Switzerland and Peru
regarding gold. Peru is one of the most important gold producers in the world and
Switzerland is the world center of the refinery and one of the largest buyers of
Peruvian gold; And, well, if we talk about gold, there are many very difficult risks and
conditions. And if we talk about Peru, the most complicated places are Madre de Dios
and Puno. I was with my colleagues last year in La Rinconada [Puno]. The story I tell
in my book begins there. Many places are taken by criminal organizations, the gold
that leaves La Rinconada is not illegal, but informal.
The book analyzes the origins of the product. For example, later I visited the Swiss
refineries that receive gold from Peru. One of them is called Metalor. In Switzerland,
70% of the world's gold moves and almost the same amount comes after refined,
completely cleaned, regardless of its origin. For that reason I speak of washing.

CONCLUSIONS

-We must not lose sight of the commercial exchange with the EFTA countries, as it is
worthwhile to strengthen ties with those who lead important global rankings, such as
the Global Competitiveness Index or the Doing Business. For this, in addition to
promoting and positioning our exportable offer in that market, it is essential to improve
key aspects of commercial logistics, such as customs efficiency (which is led by
Norway), infrastructure quality, competition and quality in logistics services , the
competitiveness of international freight transport, among others.
-Peru has the potential to supply the world's most select markets. It is a matter of
exploring them and finding that niche that can be caught by our entrepreneurs.

-In conclusion, we find on the one hand buyers of expensive clothes that appreciate
more quality and on the other hand cheap clothes that represents a large segment of
the market. There is practically no room for the average price range. Therefore we
recommend establishing a strategy according to the type of product and according to
the market segment where it is required to sell.

https://www.comexperu.org.pe/articulo/evolucion-de-las-
exportaciones-hacia-efta

http://myperuglobal.com/oportunidades-para-exportar-prendas-
textiles-a-suiza/

https://elcomercio.pe/mundo/actualidad/peru-principal-exportador-
oro-ilegal-suiza-noticia-ecpm-648272