European Free Trade Association

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European Free Trade Association

EFTA logo.svg
Logo
Europe-EFTA.svg
Location of the EFTA (green)

in Europe  (green & dark grey)

Secretariat Geneva
46°57′N7°27′E / 46.950°N 7.450°E / 46.950; 7.450
Largest city Oslo
59°56′N10°41′E / 59.933°N 10.683°E / 59.933; 10.683
Official working
language
English
Official languages
of member states
Type Regional organization, Free-trade area
Member states
Leaders
 Secretary General
Henri Gétaz
 Council Chair
Switzerland
Establishment
 Convention signed
4 January 1960
 Established
3 May 1960
Area
 Total
529,600 km2 (204,500 sq mi)
Population
 2017 estimate
14,050,000 [2]
 Density
26.5/km2 (68.6/sq mi)
GDP  (PPP)2019 estimate
 Total
$1.0 trillion [2]
 Per capita
$72,000
GDP  (nominal)2019 estimate
 Total
$1.2 trillion [2]
 Per capita
$84,000
Currency
Time zone
 Summer (DST)
UTC+2 (CEST)
Note: Iceland observes WET all year, while Liechtenstein, Norway, and Switzerland observe CET and CEST.
Website
efta.int

The European Free Trade Association (EFTA) is a regional trade organization and free trade area consisting of four European states: Iceland, Liechtenstein, Norway, and Switzerland. [3] The organization operates in parallel with the European Union (EU), and all four member states participate in the European Single Market and are part of the Schengen Area. [4] They are not, however, party to the European Union Customs Union.

Iceland Island republic in Northern Europe

Iceland is a Nordic island country in the North Atlantic, with a population of 360,390 and an area of 103,000 km2 (40,000 sq mi), making it the most sparsely populated country in Europe. The capital and largest city is Reykjavík, with Reykjavík and the surrounding areas in the southwest of the country being home to over two-thirds of the population. Iceland is volcanically and geologically active. The interior consists of a plateau characterised by sand and lava fields, mountains, and glaciers, and many glacial rivers flow to the sea through the lowlands. Iceland is warmed by the Gulf Stream and has a temperate climate, despite a high latitude almost entirely outside the Arctic Circle. Its high latitude and marine influence keep summers chilly, with most of the archipelago having a tundra climate.

Liechtenstein Principality in western-central Europe

Liechtenstein, officially the Principality of Liechtenstein, is a German-speaking microstate in Alpine Central Europe. The principality is a semi-constitutional monarchy headed by the Prince of Liechtenstein.

Norway Country in Northern Europe

Norway, officially the Kingdom of Norway, is a Nordic country in Northwestern Europe whose territory comprises the western and northernmost portion of the Scandinavian Peninsula; the remote island of Jan Mayen and the archipelago of Svalbard are also part of the Kingdom of Norway. The Antarctic Peter I Island and the sub-Antarctic Bouvet Island are dependent territories and thus not considered part of the kingdom. Norway also lays claim to a section of Antarctica known as Queen Maud Land.

Contents

EFTA was historically one of the two dominant western European trade blocs, but is now much smaller and closely associated with its historical competitor, the European Union. It was established on 3 May 1960 to serve as an alternative trade bloc for those European states that were unable or unwilling to join the then European Economic Community (EEC), which subsequently became the European Union. The Stockholm Convention (1960), to establish the EFTA, was signed on 4 January 1960 in the Swedish capital by seven countries (known as the "outer seven": Austria, Denmark, Norway, Portugal, Sweden, Switzerland and the United Kingdom). [5] A revised Convention, the Vaduz Convention, was signed on 21 June 2001 and entered into force on 1 June 2002. [6]

A trade bloc is a type of intergovernmental agreement, often part of a regional intergovernmental organization, where barriers to trade are reduced or eliminated among the participating states.

European Union Economic and political union of European states

The European Union (EU) is a political and economic union of 28 member states that are located primarily in Europe. Its members have a combined area of 4,475,757 km2 (1,728,099 sq mi) and an estimated total population of about 513 million. The EU has developed an internal single market through a standardised system of laws that apply in all member states in those matters, and only those matters, where members have agreed to act as one. EU policies aim to ensure the free movement of people, goods, services and capital within the internal market, enact legislation in justice and home affairs and maintain common policies on trade, agriculture, fisheries and regional development. For travel within the Schengen Area, passport controls have been abolished. A monetary union was established in 1999 and came into full force in 2002 and is composed of 19 EU member states which use the euro currency.

European Economic Community international organisation created by the Treaty of Rome of 1957

The European Economic Community (EEC) was a regional organisation that aimed to bring about economic integration among its member states. It was created by the Treaty of Rome of 1957. Upon the formation of the European Union (EU) in 1993, the EEC was incorporated and renamed the European Community (EC). In 2009, the EC's institutions were absorbed into the EU's wider framework and the community ceased to exist.

Since 1995, only two founding members remain, namely Norway and Switzerland. The other five, Austria, Denmark, Portugal, Sweden and the United Kingdom, have joined the EU in the intervening years. The initial Stockholm Convention was superseded by the Vaduz Convention, which aimed to provide a successful framework for continuing the expansion and liberalization of trade, both among the organization's member states and with the rest of the world.

Austria Federal republic in Central Europe

Austria, officially the Republic of Austria, is a land-locked country in Central Europe composed of nine federated states (Bundesländer), one of which is Vienna, Austria's capital and its largest city. Austria occupies an area of 83,879 km2 (32,386 sq mi) and has a population of nearly 9 million people. It is bordered by Germany and the Czech Republic to the north, Slovakia and Hungary to the east, Slovenia and Italy to the south, and Switzerland and Liechtenstein to the west. While German is the country's official language, many Austrians communicate informally in a variety of Bavarian dialects.

Denmark Constitutional monarchy in Europe

Denmark, officially the Kingdom of Denmark, is a Nordic country. Denmark proper, which is the southernmost of the Scandinavian countries, consists of a peninsula, Jutland, and an archipelago of 443 named islands, with the largest being Zealand, Funen and the North Jutlandic Island. The islands are characterised by flat, arable land and sandy coasts, low elevation and a temperate climate. The southernmost of the Scandinavian nations, Denmark lies southwest of Sweden and south of Norway, and is bordered to the south by Germany. The Kingdom of Denmark also includes two autonomous territories in the North Atlantic Ocean: the Faroe Islands and Greenland. Denmark has a total area of 42,924 km2 (16,573 sq mi), land area of 42,394 km2 (16,368 sq mi), and the total area including Greenland and the Faroe Islands is 2,210,579 km2 (853,509 sq mi), and a population of 5.8 million.

Portugal Republic in Southwestern Europe

Portugal, officially the Portuguese Republic, is a country located mostly on the Iberian Peninsula in southwestern Europe. It is the westernmost sovereign state of mainland Europe, being bordered to the west and south by the Atlantic Ocean and to the north and east by Spain. Its territory also includes the Atlantic archipelagos of the Azores and Madeira, both autonomous regions with their own regional governments.

Whilst the EFTA is not a customs union and member states have full rights to enter into bilateral third-country trade arrangements, it does have a coordinated trade policy. [3] As a result, its member states have jointly concluded free trade agreements with the EU and a number of other countries. [3] To participate in the EU's single market, Iceland, Liechtenstein, and Norway are parties to the Agreement on a European Economic Area (EEA), with compliances regulated by the EFTA Surveillance Authority and the EFTA Court. Switzerland has a set of bilateral agreements with the EU instead.

Customs union type of trade bloc with a free trade area and common external tariff

A customs union is generally defined as a type of trade bloc which is composed of a free trade area with a common external tariff. Customs unions are established through trade pacts where the participant countries set up common external trade policy. Common competition policy is also helpful to avoid competition deficiency.

European Economic Area Area of the European Unions internal market and some of EFTA states established in 1994

The European Economic Area (EEA), which was established via the EEA Agreement in 1992, is an international agreement which enables the extension of the European Union (EU)'s single market to non-EU member parties. The EEA links the EU member states and three European Free Trade Association (EFTA) states into an internal market governed by the same basic rules. These rules aim to enable free movement of labour, goods, services, and capital within the European Single Market, including the freedom to choose residence in any country within this area. The EEA was established on 1 January 1994 upon entry into force of the EEA Agreement. The contracting parties are the EU, its member states, and three EFTA member states.

EFTA Court A supranational tribunal of the EFTA states

The Court of Justice of the European Free Trade Association States is a supranational judicial body responsible for the three EFTA members who are also members of the European Economic Area (EEA): Iceland, Liechtenstein and Norway.

Membership

History

EFTA member states
Former members, now EU member states
Rest of EU member states EFTA AELE countries and former members.svg
  EFTA member states
  Former members, now EU member states
  Rest of EU member states

On 12 January 1960, the Treaty on the European Free Trade Association was initiated in the Golden Hall of the Prince's Palace of Stockholm. [7] This established the progressive elimination of customs duties on industrial products, but did not affect agricultural or fisheries products.

Golden Hall (Stockholm City Hall) got its name from the over 18.6 million mosaic pieces of colored glass and gold that adorn the walls. Is known as the venue for the dance after the Nobel Banquet.

The Golden Hall is a banqueting hall in Stockholm City Hall. Measuring 44-metre (144 ft) in length, it received its name when its walls were decorated by mosaics created by the artist Einar Forseth on a proposal by the City Hall architect Ragnar Östberg. The hall is best known as the location of the ball after the annual Nobel Banquet in the City Hall's Blue Hall.

Stockholm Capital of Sweden

Stockholm is the capital of Sweden and the most populous urban area in the Nordic countries; 965,232 people live in the municipality, approximately 1.6 million in the urban area, and 2.4 million in the metropolitan area. The city stretches across fourteen islands where Lake Mälaren flows into the Baltic Sea. Outside the city to the east, and along the coast, is the island chain of the Stockholm archipelago. The area has been settled since the Stone Age, in the 6th millennium BC, and was founded as a city in 1252 by Swedish statesman Birger Jarl. It is also the county seat of Stockholm County.

The main difference between the early EEC and the EFTA was that the latter did not operate common external customs tariffs unlike the former: each EFTA member was free to establish its individual customs duties against, or its individual free trade agreements with, non-EFTA countries.

A tariff is a tax on imports or exports between sovereign states. It is a form of regulation of foreign trade and a policy that taxes foreign products to encourage or safeguard domestic industry. Traditionally, states have used them as a source of income. Now, they are among the most widely used instruments of protectionism, along with import and export quotas.

The founding members of the EFTA were: Austria, Denmark, Norway, Portugal, Sweden, Switzerland, and the United Kingdom. During the 1960s, these countries were often referred to as the "Outer Seven", as opposed to the Inner Six of the then European Economic Community (EEC). [8]

Finland became an associate member in 1961 and a full member in 1986, and Iceland joined in 1970. The United Kingdom and Denmark joined the EEC in 1973 and hence ceased to be EFTA members. Portugal also left EFTA for the European Community in 1986. Liechtenstein joined the EFTA in 1991 (previously its interests had been represented by Switzerland). Austria, Sweden, and Finland joined the EU in 1995 and thus ceased to be EFTA members.

Twice, in 1973 and in 1995, the Norwegian government had tried to join the EU (still the EEC, in 1973) and by doing so, leave the EFTA. However, both the times, the membership of the EU was rejected in national referenda, keeping Norway in the EFTA. Iceland applied for EU membership in 2009 due to the 2008–2011 Icelandic financial crisis, but has since dropped its bid. [9]

Current members

Contracting partyAccessionPopulation [10]
(2016)
Area (km²)CapitalGDP in millions (PPP) [note 1] GDP per capita (PPP) [note 1]
Flag of Iceland.svg  Iceland 1 January 1970332,474103,000 Reykjavík 12,831 [11] 39,223 [11]
Flag of Liechtenstein.svg  Liechtenstein 1 January 199137,666160.4 Vaduz 3,545 [note 2] 98,432 [note 2]
Flag of Norway.svg  Norway 3 May 19605,254,694385,155 Oslo 265,911 [12] 53,470 [12]
Flag of Switzerland.svg   Switzerland 3 May 19608,401,73941,285 Bern 363,421 [13] 45,417 [13]

Former members

StateAccessionLeft EFTA and
joined EU/EEC
Flag of Austria.svg  Austria 19601995
Flag of Denmark.svg  Denmark 19601973
Flag of Finland.svg  Finland 19861995
Flag of Portugal.svg  Portugal 19601986
Flag of Sweden.svg  Sweden 19601995
Flag of the United Kingdom.svg  United Kingdom 19601973

Other negotiations

Members of the European Union (blue) and
EFTA (green) EU and EFTA.svg
Members of the European Union (blue) and
EFTA (green)

Between 1994 and 2011, EFTA memberships for Andorra, San Marino, Monaco, the Isle of Man, Turkey, Israel, Morocco, and other European Neighbourhood Policy partners were discussed. [14]

Monaco, Andorra and San Marino

In November 2012, after the Council of the European Union had called for an evaluation of the EU's relations with Monaco, Andorra and San Marino, which they described as "fragmented", [15] the European Commission published a report outlining the options for their further integration into the EU. [16] Unlike Liechtenstein, which is a member of the EEA via the EFTA and the Schengen Agreement, relations with these three states are based on a collection of agreements covering specific issues. The report examined four alternatives to the current situation:

  1. A Sectoral Approach with separate agreements with each state covering an entire policy area.
  2. A comprehensive, multilateral Framework Association Agreement (FAA) with the three states.
  3. EEA membership, and
  4. EU membership.

However, the Commission argued that the sectoral approach did not address the major issues and was still needlessly complicated, while EU membership was dismissed in the near future because "the EU institutions are currently not adapted to the accession of such small-sized countries". The remaining options, EEA membership and a FAA with the states, were found to be viable and were recommended by the Commission. In response, the Council requested that negotiations with the three microstates on further integration continue, and that a report be prepared by the end of 2013 detailing the implications of the two viable alternatives and recommendations on how to proceed. [17]

As the EEA memberships are currently only open to the EFTA or EU members, the consent of the existing EFTA member states is required for the microstates to join the EEA without becoming members of the EU. In 2011, Jonas Gahr Støre, then Foreign Minister of Norway which is an EFTA member state, said that EFTA/EEA membership for the microstates was not the appropriate mechanism for their integration into the internal market due to their different requirements from those of large countries such as Norway, and suggested that a simplified association would be better suited for them. [18] Espen Barth Eide, Støre's successor, responded to the Commission's report in late 2012 by questioning whether the microstates have sufficient administrative capabilities to meet the obligations of EEA membership. However, he stated that Norway was open to the possibility of EFTA membership for the microstates if they decide to submit an application, and that the country had not made a final decision on the matter. [19] [20] [21] [22] Pascal Schafhauser, the Counsellor of the Liechtenstein Mission to the EU, said that Liechtenstein, another EFTA member state, was willing to discuss EEA membership for the microstates provided their joining, did not impede the functioning of the organization. However, he suggested that the option direct membership in the EEA for the microstates, outside of both the EFTA and the EU, should be considered. [21] On 18 November 2013, the EU Commission concluded that "the participation of the small-sized countries in the EEA is not judged to be a viable option at present due to the political and institutional reasons," and that, Association Agreements were a more feasible mechanism to integrate the microstates into the internal market. [23]

Norway

The Norwegian electorate had rejected treaties of accession to the EU in two referendums. At the time of the first referendum in 1972, their neighbour, Denmark joined. Since the second referendum in 1994, two other Nordic neighbours, Sweden and Finland, have joined the EU. The last two governments of Norway have not advanced the question, as they have both been coalition governments consisting of proponents and opponents of EU membership.

Switzerland

Since Switzerland rejected the EEA membership in a referendum in 1992, more referendums on EU membership have been initiated, the last time being in 2001. These were all rejected. Switzerland has been in a customs union with fellow EFTA member state and neighbour Liechtenstein since 1924.

Iceland

On 16 July 2009, the government of Iceland formally applied for the EU membership, [24] but the negotiation process had been suspended since mid-2013, and in 2015 the foreign ministers wrote to withdraw its application.

Faroe Islands

In mid-2005, representatives of the Faroe Islands raised the possibility of their territory joining the EFTA. [25] According to Article 56 of the EFTA Convention, only states may become members of the EFTA. [26] The Faroes are a constituent country of the Kingdom of Denmark, and not a sovereign state in their own right. [27] Consequently, they considered the possibility that the "Kingdom of Denmark in respect of the Faroes" could join the EFTA, though the Danish Government has stated that this mechanism would not allow the Faroes to become a separate member of the EEA because Denmark was already a party to the EEA Agreement. [27]

The Faroes already have an extensive bilateral free trade agreement with Iceland, known as the Hoyvík Agreement.

United Kingdom

The United Kingdom was a co-founder of EFTA in 1960, but ceased to be a member upon joining the European Economic Community. The country held a referendum in 2016 on withdrawing from the EU (popularly referred to as "Brexit"), resulting in a 51.9% vote in favour of withdrawing. A 2013 research paper presented to the Parliament of the United Kingdom proposed a number of alternatives to EU membership which would continue to allow it access to the EU's internal market, including continuing EEA membership as an EFTA member state, or the Swiss model of a number of bilateral treaties covering the provisions of the single market. [28]

In the first meeting since the Brexit vote, EFTA reacted by saying both that they were open to a UK return, and that Britain has many issues to work through. The president of Switzerland Johann Schneider-Ammann stated that its return would strengthen the association. [29] However, in August 2016 the Norwegian Government expressed reservations. Norway's European affairs minister, Elisabeth Vik Aspaker, told the Aftenposten newspaper: "It’s not certain that it would be a good idea to let a big country into this organization. It would shift the balance, which is not necessarily in Norway’s interests." [30]

In late 2016, the Scottish First Minister said that her priority was to keep the whole of the UK in the European single market but that taking Scotland alone into the EEA was an option being "looked at". [31] However, other EFTA states have stated that only sovereign states are eligible for membership, so it could only join if it became independent from the UK, [32] unless the solution scouted for the Faroes in 2005 were to be adopted (see above).

In early 2018, British MPs Antoinette Sandbach, Stephen Kinnock and Stephen Hammond all called for the UK to rejoin EFTA. [33]

Organisation

EFTA is governed by the EFTA Council and serviced by the EFTA Secretariat. In addition, in connection with the EEA Agreement of 1992, two other EFTA organisations were established, the EFTA Surveillance Authority and the EFTA Court.

Council

The EFTA Council is the highest governing body of EFTA. The Council usually meets eight times a year at the ambassadorial level (heads of permanent delegations to EFTA) and twice a year at Ministerial level. In the Council meetings, the delegations consult with one another, negotiate and decide on policy issues regarding EFTA. Each Member State is represented and has one vote, though decisions are usually reached through consensus.

The Council discusses substantive matters, especially relating to the development of EFTA relations with third countries and the management of free trade agreements, and keeps under general review relations with the EU third-country policy and administration. It has a broad mandate to consider possible policies to promote the overall objectives of the Association and to facilitate the development of links with other states, unions of states or international organisations. The Council also manages relations between the EFTA States under the EFTA Convention. Questions relating to the EEA are dealt with by the Standing Committee in Brussels.

Secretariat

The day-to-day running of the Secretariat is headed by the Secretary-General, Henri Gétaz, who is assisted by two Deputy Secretaries-General, one based in Geneva and the other in Brussels. The three posts are shared between the Member States. The division of the Secretariat reflects the division of EFTA's activities. The Secretariat employs approximately 100 staff members, of whom a third are based in Geneva and two thirds in Brussels and Luxembourg.

The Headquarters in Geneva deals with the management and negotiation of free trade agreements with non-EU countries, and provides support to the EFTA Council.

In Brussels, the Secretariat provides support for the management of the EEA Agreement and assists the Member States in the preparation of new legislation for integration into the EEA Agreement. The Secretariat also assists the Member States in the elaboration of input to EU decision making.

The two duty stations work together closely to implement the Vaduz Convention's stipulations on the intra-EFTA Free Trade Area.

The EFTA Statistical Office in Luxembourg contributes to the development of a broad and integrated European Statistical System. The EFTA Statistical Office (ESO) is located in the premises of Eurostat, the Statistical Office of the European Union in Luxembourg, and functions as a liaison office between Eurostat and the EFTA National Statistical Institutes. ESO's main objective is to promote the full inclusion of the EFTA States in the European Statistical System, thus providing harmonised and comparable statistics to support the general cooperation process between EFTA and the EU within and outside the EEA Agreement. The cooperation also entails technical cooperation programmes with third countries and training of European statisticians.

Locations

The EFTA Secretariat is headquartered in Geneva, Switzerland, but also has duty stations in Brussels, Belgium and Luxembourg City, Luxembourg. The EFTA Surveillance Authority has its headquarters in Brussels, Belgium (the same location as the headquarters of the European Commission), while the EFTA Court has its headquarters in Luxembourg City (the same location as the headquarters of the European Court of Justice).

Relationship with the European Union: the European Economic Area

In 1992, the EFTA and the EU signed the European Economic Area Agreement in Oporto, Portugal. However, the proposal that Switzerland ratify its participation was rejected by referendum. (Nevertheless, Switzerland has multiple bilateral treaties with the EU that allow it to participate in the European Single Market, the Schengen Agreement and other programmes). Thus, except for Switzerland, the EFTA members are also members of the European Economic Area (EEA). The EEA comprises three member states of the European Free Trade Association (EFTA) and 28 member states of the European Union (EU), including Croatia which is provisionally applying the agreement pending its ratification by all EEA countries. [34] [35] It was established on 1 January 1994 following an agreement with the European Community (which had become the EU two months earlier). [36] It allows the EFTA-EEA states to participate in the EU's Internal Market without being members of the EU. They adopt almost all EU legislation related to the single market, except laws on agriculture and fisheries. However, they also contribute to and influence the formation of new EEA relevant policies and legislation at an early stage as part of a formal decision-shaping process. One EFTA member, Switzerland, has not joined the EEA but has a series of bilateral agreements, including a free trade agreement, with the EU.

The following table summarises the various components of EU laws applied in the EFTA countries and their sovereign territories. Some territories of EU member states also have a special status in regard to EU laws applied as is the case with some European microstates.

EFTA member states and territoriesApplication of EU law EURATOM European Defence Agency Schengen area EU VAT area EU Customs Union EU single market Eurozone
Flag of Iceland.svg  Iceland PartialNoNoYesNoNoWith exemptions, in EEA [37] No, ISK
Flag of Liechtenstein.svg  Liechtenstein PartialNoNoYesNo, Swiss–Liechtenstein VAT areaNo, Swiss–Liechtenstein customs territoryWith exemptions, in EEA [37] No, CHF
Flag of Norway.svg  Norway, except:PartialNoParticipating non‑member stateYesNoNoWith exemptions, in EEA [37] No, NOK
Flag of Norway.svg Svalbard PartialNo Demilitarised No [38] No, VAT free [note 3] NoNo [37] [39] [40] No, NOK
Flag of Norway.svg Bouvet Island NoNoParticipatingNoNoNoNoNo, NOK
Flag of Norway.svg Peter I Island NoNo Demilitarised NoNoNoNoNo, NOK
Flag of Norway.svg Queen Maud Land NoNo Demilitarised NoNoNoNoNo, NOK
Flag of Switzerland.svg   Switzerland, except:PartialParticipating associated state [41] NoYesNo, Swiss–Liechtenstein VAT areaNo, Swiss–Liechtenstein customs territoryWith exemptions, not in EEA [note 4] No, CHF
Samnaun-coa.png Samnaun PartialParticipating with Switzerland [41] NoYesNo, VAT freeNo, Swiss–Liechtenstein customs territoryWith exemptions, not in EEA [note 4] No, CHF
Council of EuropeSchengen AreaEuropean Free Trade AssociationEuropean Economic AreaEurozoneEuropean UnionEuropean Union Customs UnionAgreement with EU to mint eurosGUAMCentral European Free Trade AgreementNordic CouncilBaltic AssemblyBeneluxVisegrád GroupCommon Travel AreaOrganization of the Black Sea Economic CooperationUnion StateSwitzerlandIcelandNorwayLiechtensteinSwedenDenmarkFinlandPolandCzech RepublicHungarySlovakiaGreeceEstoniaLatviaLithuaniaBelgiumNetherlandsLuxembourgItalyFranceSpainAustriaGermanyPortugalSloveniaMaltaCyprusIrelandUnited KingdomCroatiaRomaniaBulgariaTurkeyMonacoAndorraSan MarinoVatican CityGeorgiaUkraineAzerbaijanMoldovaArmeniaRussiaBelarusSerbiaAlbaniaMontenegroNorth MacedoniaBosnia and HerzegovinaKosovo (UNMIK)European Free Trade Association
A clickable Euler diagram showing the relationships between various multinational European organisations and agreements.

EEA institutions

A Joint Committee consisting of the EEA-EFTA States plus the European Commission (representing the EU) has the function of extending relevant EU law to the non EU members. An EEA Council meets twice yearly to govern the overall relationship between the EEA members.

Rather than setting up pan-EEA institutions, the activities of the EEA are regulated by the EFTA Surveillance Authority and the EFTA Court. The EFTA Surveillance Authority and the EFTA Court regulate the activities of the EFTA members in respect of their obligations in the European Economic Area (EEA). Since Switzerland is not an EEA member, it does not participate in these institutions.

The EFTA Surveillance Authority performs a role for EFTA members that is equivalent to that of the European Commission for the EU, as "guardian of the treaties" and the EFTA Court performs the European Court of Justice-equivalent role.

The original plan for the EEA lacked the EFTA Court or the EFTA Surveillance Authority: the European Court of Justice and the European Commission were to exercise those roles. However, during the negotiations for the EEA agreement, the European Court of Justice informed the Council of the European Union by way of letter that it considered that it would be a violation of the treaties to give to the EU institutions these powers with respect to non-EU member states.[ citation needed ] Therefore, the current arrangement was developed instead.

EEA and Norway Grants

The EEA and Norway Grants are the financial contributions of Iceland, Liechtenstein and Norway to reduce social and economic disparities in Europe. They were established in conjunction with the 2004 enlargement of the European Economic Area (EEA), which brought together the EU, Iceland, Liechtenstein and Norway in the Internal Market. In the period from 2004 to 2009, €1.3 billion of project funding was made available for project funding in the 15 beneficiary states in Central and Southern Europe. The EEA and Norway Grants are administered by the Financial Mechanism Office, which is affiliated to the EFTA Secretariat in Brussels.

International conventions

EFTA also originated the Hallmarking Convention and the Pharmaceutical Inspection Convention, both of which are open to non-EFTA states.

International trade relations

Map of free trade agreements between EFTA and other countries
EFTA
Free trade agreement
Ongoing free trade negotiation
European Economic Area
Declaration on cooperation or dialogue on closer trade relations AELE-Cooperation.svg
Map of free trade agreements between EFTA and other countries
  EFTA
  Free trade agreement
  Ongoing free trade negotiation
  European Economic Area
  Declaration on cooperation or dialogue on closer trade relations

EFTA has several free trade agreements with non-EU countries as well as declarations on cooperation and joint workgroups to improve trade. Currently, the EFTA States have established preferential trade relations with 24 states and territories, in addition to the 28 member states of the European Union. [42]

EFTA's interactive Free Trade Map gives an overview of the partners worldwide. [43]

Free trade agreements

[47]

Ongoing free trade negotiations

Declarations on cooperation or dialogue on closer trade relations

Travel policies

Free movement of people within EFTA and the EU/EEA

EFTA member states' citizens enjoy freedom of movement in each other's territories in accordance with the EFTA convention. [50] EFTA nationals also enjoy freedom of movement in the European Union (EU). EFTA nationals and EU citizens are not only visa-exempt but are legally entitled to enter and reside in each other's countries. The Citizens’ Rights Directive [51] (also sometimes called the "Free Movement Directive") defines the right of free movement for citizens of the European Economic Area (EEA), which includes the three EFTA members Iceland, Norway and Liechtenstein plus the member states of the EU. Switzerland, which is a member of EFTA but not of the EEA, is not bound by the Directive but rather has a separate bilateral agreement on free movement with the EU.

As a result, de facto, a citizen of an EFTA country can live and work in all the other EFTA countries and in all the EU countries, and a citizen of an EU country can live and work in all the EFTA countries (but for voting and working in sensitive fields, such as government / police / military, citizenship is often required, and non-citizens may not have the same rights to welfare and unemployment benefits as citizens). [52]

Dual citizenship

Since each EFTA and EU country can make its own citizenship laws, dual citizenship is not always possible. Of the EFTA countries, Iceland [53] and Switzerland allow it (in Switzerland, the conditions for the naturalization of immigrants vary regionally), but Norway only in exceptional cases, and Liechtenstein only for citizens by descent, but not for foreigners wanting to naturalize.

Some non-EFTA/non-EU countries do not allow dual citizenship either, so immigrants wanting to naturalize must sometimes renounce their old citizenship.

See also multiple citizenship and the nationality laws of the countries in question for more details.

General secretaries

StateNameYear
Flag of the United Kingdom.svg  United Kingdom Frank Figgures 1960–1965
Flag of the United Kingdom.svg  United Kingdom John Coulson 1965–1972
Flag of Sweden.svg  Sweden Bengt Rabaeus 1972–1975
Flag of Switzerland.svg   Switzerland Charles Müller1976–1981
Flag of Norway.svg  Norway Per Kleppe 1981–1988
Flag of Austria.svg  Austria Georg Reisch1988–1994
Flag of Iceland.svg  Iceland Kjartan Jóhannsson1994–2000
Flag of Switzerland.svg   Switzerland William Rossier2000–2006
Flag of Norway.svg  Norway Kåre Bryn 2006-2012
Flag of Iceland.svg  Iceland Kristinn F. Árnason2012–2018
Flag of Switzerland.svg   Switzerland Henri Gétaz2018–present

Other

Portugal Fund

The Portugal Fund came into operation in February 1977 when Portugal was still a member of EFTA. [54] It was to provide funding for the development of Portugal after the Carnation Revolution and the consequential restoration of democracy and the decolonization of the country's overseas possessions. This followed a period of economic sanctions by most of the international community, which left Portugal economically underdeveloped compared to the rest of the western Europe. When Portugal left EFTA in 1985 in order to join the EEC, the remaining EFTA members decided to continue the Portugal Fund so that Portugal would continue to benefit from it. The Fund originally took the form of a low-interest loan from the EFTA member states to the value of US$100 million. Repayment was originally to commence in 1988, however, EFTA then decided to postpone the start of repayments until 1998. The Portugal Fund has now[ when? ] been dissolved.[ citation needed ]

See also

Notes

Related Research Articles

Enlargement of the European Union The accession process of new countries to the European Union

The European Union (EU) has expanded a number of times throughout its history by way of the accession of new member states to the Union. To join the EU, a state needs to fulfil economic and political conditions called the Copenhagen criteria, which require a stable democratic government that respects the rule of law, and its corresponding freedoms and institutions. According to the Maastricht Treaty, each current member state and the European Parliament must agree to any enlargement. The process of enlargement is sometimes referred to as European integration. This term is also used to refer to the intensification of co-operation between EU member states as national governments allow for the gradual harmonisation of national laws.

The European Union has a number of relationships with nations that are not formally part of the Union. According to the European Union's official site, and a statement by Commissioner Günter Verheugen, the aim is to have a ring of countries, sharing EU's democratic ideals and joining them in further integration without necessarily becoming full member states.

Andorra–European Union relations Diplomatic relations between the Principality of Andorra and European Union

A customs union is the principal area of robust formal agreement between the Principality of Andorra and the European Union (EU).

European Free Trade Association Surveillance Authority

The EFTA Surveillance Authority (ESA) monitors compliance with the Agreement on the European Economic Area (EEA) in Iceland, Liechtenstein and Norway; the European Free Trade Association (EFTA) States which are a part of the EEA Agreement, allowing them to participate in the Internal Market of the European Union.

Norway–European Union relations

The Kingdom of Norway is not a member state of the European Union (EU). It is associated with the Union through its membership in agreements in the European Economic Area (EEA) established in 1994, and by virtue of being a founding member of the European Free Trade Association (EFTA) which was founded in 1960, one of the two historically dominant western European trade blocs. Norway had considered joining the European Community and the European Union twice, but opted to decline following referenda in 1972 and 1994.

The freedom of movement for workers is a policy chapter of the acquis communautaire of the European Union. The free movement of workers means that nationals of any member state of the European Union can take up an employment in another member state on the same conditions as the nationals of that particular member state. In particular, no discrimination based on nationality is allowed. It is part of the free movement of persons and one of the four economic freedoms: free movement of goods, services, labour and capital. Article 45 TFEU states that:

  1. Freedom of movement for workers shall be secured within the Community.
  2. Such freedom of movement shall entail the abolition of any discrimination based on nationality between workers of the Member States as regards employment, remuneration and other conditions of work and employment.
  3. It shall entail the right, subject to limitations justified on grounds of public policy, public security or public health:
  4. The provisions of this article shall not apply to employment in the public service.
Microstates and the European Union

There are a number of microstates in Europe. While there is no clear consensus on which political units qualify as "microstates", most scholars view Andorra, Liechtenstein, Monaco, San Marino and the Vatican City as examples of such states. At the same time, some academics dispute even qualifying Vatican as a true state arguing that it does not meet the "traditional criteria of statehood" and that the "special status of the Vatican City is probably best regarded as a means of ensuring that the Pope can freely exercise his spiritual functions, and in this respect is loosely analogous to that of the headquarters of international organisations." According to the qualitative definition of microstates suggested by Dumienski (2014), microstates can also be viewed as "modern protected states, i.e. sovereign states that have been able to unilaterally depute certain attributes of sovereignty to larger powers in exchange for benign protection of their political and economic viability against their geographic or demographic constraints." And indeed, all of the European microstates are sovereign states that function in a close association with their respective larger neighbour. Currently, all of the European microstates have some form of relations with the European Union.

European driving licence European driving licence

The European driving licence is a driving licence which replaced the various driving licence styles formerly in use in the member states of the European Economic Area (EEA). It is credit card-style with a photograph and even a microchip. They were introduced to replace the 110 different plastic and paper driving licences of the 300 million drivers in the EEA. The main objective of the licence is to reduce the risk of fraud.

Liechtenstein passport passport

Liechtenstein passports are issued to nationals of Liechtenstein for the purpose of international travel. The passport may also serve as proof of Liechtensteiner citizenship.

European Union Customs Union organization

The European Union Customs Union (EUCU) is a customs union which consists of all the member states of the European Union (EU), Monaco, and some dependencies of the United Kingdom which are not part of the EU. Some detached territories of EU members do not participate in the customs union, usually as a result of their geographic separation. In addition to the EUCU, the EU is in customs unions with Andorra, San Marino, and Turkey, through separate bilateral agreements.

The EEA Joint Committee is an institution of the European Economic Area (EEA). It is composed of representatives of Iceland, Liechtenstein, Norway, and the European Union. Its main function is to approve the application of European Union directives and regulations in the three EEA states which are not EU members. Once approved by the Committee these modify the EEA Agreement and thus force the three EEA states to implement them. Its decisions are taken by consensus.

Liechtenstein–European Union relations Diplomatic relations between Liechtenstein and European Union

Relations between the Principality of Liechtensteinand the European Union (EU) are shaped heavily by Liechtenstein's participation in the European Economic Area (EEA).

San Marino–European Union relations

Relations between Republic of San Marino and the European Union (EU) began in February 1983.

Monaco–European Union relations

Relations between the Principality of Monaco and the European Union (EU) are primarily conducted through France. Through that relationship Monaco directly participates in certain EU policies. Monaco is an integral part of the EU customs territory and VAT area, and therefore applies most measures on excise duties and VAT.

Continuing United Kingdom relationship with the European Union

The United Kingdom's post-Brexit relationship with the remaining European Union members could take several forms. A research paper presented to the UK Parliament in July 2013 proposed a number of alternatives to membership which would continue to allow access to the EU internal market. These include remaining in the European Economic Area (EEA) as a European Free Trade Association (EFTA) member, or seeking to negotiate bilateral terms more akin to the Swiss model with a series of interdependent sectoral agreements. An exit from the EU without a trade agreement is known as a no-deal Brexit.

The United Kingdom is a member of the European Economic Area (EEA) since 1 January 1994, following the entry into force of the 1992 EEA Agreement. Membership is one of the obligations of all members of the European Union.

Passports of the EFTA member states

Passports of the EFTA member states are passports issued by the European Free Trade Association (EFTA) member states Iceland, Liechtenstein, Norway and Switzerland.

In British politics "Norway-plus" is a proposal for a post-Brexit settlement. Proposed in November 2018 as an alternative to the Chequers plan, it would consist of membership of the European Free Trade Association (EFTA) and of membership of the European Economic Area (EEA) as an EFTA member state, combined with a separate customs union with the EU to create a trade relationship similar to that between the EU and its member states today, with the exception of the political representation in the EU's bodies. Michel Barnier, the EU’s Chief Negotiator, has always said that a model that combined EEA/EFTA and a customs union was one that he would be happy to consider.

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