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The European Free Trade Association EFTA

The European Free Trade Association EFTA

 The European Free Trade Association (EFTA) is an association of states that aims to establish a free trade area in Europe. Formedin 1960, it was enlarged several times until 1991, but gradually lost members in 1973, 1986 and 1995 when they joined the European Union.

At the initiative of the United Kingdom, the Stockholm Convention, signed by the British, Norwegian, Danish, Swiss, Portuguese, Swedish and Austrian Foreign Ministers on 4 January 1960, gave rise to the European Free Trade Association.

Its objective was to create a free trade area between European countries that are not members of the European Economic Community (EEC) and to counterbalance it by bringing together those States that did not wish to join the EEC. The aim was to create a free trade area, while the EEC was based on a customs union and a common market, as well as common policies (agriculture, transport, etc.), with the objective of gradual deepening and political union.

However, with the establishment of EFTA, the United Kingdom hoped above all to be able to establish a large free trade area with the EEC. Faced with the failure of such a project, the United Kingdom eventually applied for membership of the EEC in August 1961, which was rejected by France.

Three current EFTA countries (Iceland, Liechtenstein and Norway) and the European Union formed the European Economic Area in 1994. Switzerland was also a party to the agreement, but the Swiss citizens and cantons refused this accession by referendum on 6 December 1992, with more than half of the votes and 16 cantons out of 23. Switzerland then sought to regulate its relations with the EU through bilateral treaties.

Iceland, Norway and Switzerland were also candidates for accession to the European Union, but subsequently renounced it. This is due to many factors, which differ from country to country. Economic factors can be mentioned, such as the desire to maintain control over fisheries policy, which is of great economic and political importance for Iceland and Norway, and the desire to maintain subsidies for mountain agriculture in Switzerland. There are also more political factors, such as the desire to maintain a newly gained independence for Norway (independent of Sweden since 1905), and a tradition of independence and neutrality for Switzerland.

Norway and Iceland joined the Schengen Area in 2001, Switzerland in 2008 and Liechtenstein in 2011.

The EFTA’s Mission

The European Free Trade Association (EFTA) is an intergovernmental organization set up for the promotion of free trade and economic integration to the benefit of its four Member States – Iceland, Liechtenstein, Norway and Switzerland – and the benefit of their trading partners around the globe.

Key Figures

The four EFTA States are open, developed economies with trade figures that are substantially higher than might be expected from a total of less than 14 million people. EFTA is the ninth largest trader in the world in merchandise trade and the fifth largest in trade in services. EFTA is the third most important trading partner in goods for the EU and the second most important when it comes to services.