. /.  WORLD TRADE  
ORGANIZATION  WT/REG138/4 
17 September 2004  
 
(04-3924) 
Committee on Regional Trade Agreements Original:   English 
   
EUROPEAN ECONOMIC AREA 
 
Questions and Replies
 
  
 The following communication, dated  15 Septembe r 2004, is being circulated at the request of 
the Delegation of the European Commission. 
  This document reproduces the questions addressed  to the Parties and the responses submitted. 
The questions and replies set out below are or ganized in accordance with document WT/REG138/2. 
 
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I. BACKGROUND INFORMATION ON THE AGREEMENT 
3. Scope 
Thank you for responding to previous quest ions concerning the general exception for 
activities that are connected, even occasionally, wi th the exercise of official authority. While we 
can see that this provision may have the same objective GATS Art. I:3 (b) and (c), the GATS provisions address services supplied in the exercise of “government authority” which are subsequently defined as those supplied “neither on  a commercial basis, nor in competition with 
one or more service suppliers.” Since the EEA provision contains no definition of official 
authority, and further refers to activities that  are connected, even occasionally, with such 
government authority, it would appear that the EEA exception may well be broader than that of 
the GATS. Can you please comment. 
 The Court of Justice, in the cases submitted to its attention on this subject, has always applied 
a very narrow and restrictive interpretation of the ex clusion of Article 45 of the EC Treaty, which is 
similar to Article 32 of the EEA Agreement. It has ruled that “the derogation provided for in Article 
45 must be restricted to activities which in themselv es are directly and specifically connected with the 
exercise of official authority”. On the basis of su ch interpretation, and gi ven that the wording of 
Article I:3 of the GATS excludes from the scope of  GATS services which are “supplied neither on a 
commercial basis, nor in competition with one or mo re service suppliers”, it does not appear that the 
EEA exception is broader than Article I:3 GATS. 
 
In addition, although the information provided concerning decisions by the European 
Court of Justice is helpful, these decisions do no t appear to address majo r service sectors where 
government entities are engaged in the co mpetitive supply of services, such as 
telecommunications, express delivery, energy, or even banking and insurance services. With 
respect to service sectors such as these, could you please explain how market access and national 
treatment is assured through the EEA. 
 The EEA Agreement includes a list of specific provisions regarding freedom of 
establishment, freedom to provide services and freedom  of movement of persons, which apply to all WT/REG138/4 
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services, including the services mentioned in the ques tion. The following provisions are particularly 
relevant:  
- Article 28(2) which provides that freedom of m ovement of persons “shall entail the abolition 
of any discrimination based on nationality betw een workers of EC Member States and EFTA 
States as regards employment, remuneration and ot her conditions of work and employment”;  
 - Article 31(1) which provides that “Within the frame work of the provisions of this Agreement, 
there shall be no restrictions on the freedom of establishment of nationals of an EC Member 
State or an EFTA State in the territory of any other of these States”;  
 
- Article 36(1) which provides that “Within the frame work of the provisions of this Agreement, 
there shall be no restrictions on freedom to provide services within the territory of the 
Contracting Parties in respect of nationals of EC Member States and EFTA States who are 
established in an EC Member State or an EFTA State other than that of the person for whom 
the services are intended”. 
   
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