European Free Trade Association EFTA

11 Key excerpts on "European Free Trade Association EFTA"

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  Handbook of International Trade Agreements

  Country, regional and global approaches

  • Robert E. Looney(Author)
  • 2018(Publication Date)
  • Routledge

    (Publisher)

  24

  EFTA

  Marius Vahl and Aslak Berg1

  Introduction

  The European Free Trade Association (EFTA) was set up in 1960 to promote free trade and closer economic cooperation among its members. Since its establishment, EFTA has changed considerably, both in terms of its membership and with regard to the main tasks it performs for its member states.

  Originally comprising seven countries, EFTA currently has four member states: Iceland, Liechtenstein, Norway and Switzerland. All are relatively small, advanced and open economies that are dependent on trade for their prosperity. They share generally liberal approaches to trade, while being highly protective of their agricultural sectors. In comparison with other regional trade associations, EFTA is unusual in that its four member states do relatively little trade with each other. Thus, in 2016 intra-EFTA trade only constituted 0.55 per cent of EFTA’s global trade in goods. The rationale for EFTA can therefore not be found in the depth of trade ties between its member states, but rather in historical developments and the continued utility of EFTA for managing their trade relations.

  Although intra-EFTA trade remains important in absolute terms, in practice EFTA’s main purpose today is to facilitate joint cooperation with third countries. While intra-EFTA relations used to dominate its agenda at the outset, now EFTA’s principal activities are to manage trade and economic relations with the European Union (EU) through the Agreement on the European Economic Area (EEA), and the negotiation and management of free trade agreements (FTAs) with partners across the globe.

  EFTA has a dual structure. The EFTA Convention, which regulates trade and the free movement of persons between the member states, and negotiations and trade relations with non-EU countries, are managed from EFTA’s headquarters in Geneva on behalf of all EFTA states (referred to as ‘EFTA at four’). The EEA Agreement, through which three EFTA states – Iceland, Liechtenstein and Norway (the EEA EFTA states2

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  European Enlargement across Rounds and Beyond Borders

  • Haakon A. Ikonomou, Aurélie Andry, Rebekka Byberg(Authors)
  • 2017(Publication Date)
  • Routledge

    (Publisher)

  Three out of these four countries – Iceland, Liechtenstein, and Norway – are linked to the EU through the EEA Agreement. 3 In addition to Britain, the founding members of EFTA were Austria, Denmark, Norway, Portugal, Sweden, and Switzerland. 4 “Convention establishing the European Free Trade Association”, 4 January 1960, www.cvce.eu. 5 Dirk Leuffen, Berthold Rittberger and Frank Schimmelfennig, Differentiated Integra- tion: Explaining Variation in the European Union (Basingstoke: Palgrave Macmillan, 2012). 6 On a more general note, this chapter fills a void in existing research on EFTA. Historical research on this organisation is marked by a focus on its 1960 creation and subsequent failure to bridge the divide between the EEC and the rest of the members of the Organisation for European Economic Cooperation (OEEC). For historical studies of EFTA, see Thorsten B. Olesen, “EFTA 1959–72. An exercise in Nordic Cooperation and Conflict”, in Regional Cooperation and International Organisations. The Nordic Model in Transnational Alignment, eds Norbert Götz and Heidi Haggrén (London and New York: Routledge, 2009); Mikael af Malmborg and Johnny Laursen, “The Creation of EFTA”, in Interdependence Versus Integra- tion. Denmark, Scandinavia and Western Europe 1945–1960, ed. Thorsten B. Olesen (Odense: Odense University Press, 1995); Richard T. Griffiths, “EFTA and European Integration 1973–1994 – Vindication or Marginalisation?” in EFTA 1960–2010. Elements of 50 Years of European History, eds Kåre Bryn and Guð- mundur Einarsson (Geneva: EFTA, 2010); and Wolfram Kaiser, “Challenge to the Community: The Creation, Crisis and Consolidation of the European Free Trade Association, 1958–1972”, Journal of European Integration History 3, no. 1, 1997. The predominant focus of the political science literature is on the period from 1984 onwards.

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  Oliver on Free Movement of Goods in the European Union

  Fifth Edition

  • Peter J Oliver(Author)
  • 2010(Publication Date)
  • Hart Publishing

    (Publisher)

  14 The European Economic Area I. Introduction 14.01 Relations between the EU and its trading partners in Western Europe have always been the source of the utmost interest to both sides. The reason is simple: the two groups conduct a major part of their external trade with one another. In 1960 the Convention establishing the European Free Trade Association was signed by seven countries which at that time could not, or did not wish to, join the Community, namely: Austria, Denmark, Norway, Portugal, Sweden, Switzerland and the United Kingdom. The Convention came into force in the same year. Initially, Finland was prevented by its delicate relationship with the Soviet Union from seeking full membership, so that it was only as from 1 January 1986 that Finland became a full member of EFTA. However, by virtue of the 1961 Finland–EFTA Agreement, it did for all practical purposes acquire this status much earlier. Iceland joined in 1970. In 1973 Denmark and the United Kingdom left EFTA to join the Community. This prompted the EEC to conclude a series of almost identical Free Trade Agreements (the first of their kind) with each of the remaining EFTA countries, namely: Austria, Finland, Iceland, Norway (which had just rejected accession to the Community in a referendum), Portugal, Sweden and Switzerland. 1 No treaty could be concluded with EFTA as such, since that organisation has no treaty making powers and no legal personality. These agreements, which came into force on various dates in 1973 and 1974, were supplemented by a tripartite Agreement between the EEC, Switzerland and Liechtenstein, 2 which extended the provisions of the EEC–Switzerland Agreement to the Principality. Liechtenstein was not then a member of EFTA but the EFTA Convention was applicable to it due to its customs union of 1923 with Switzerland, and a special Liechtenstein Protocol under which Switzerland represented its interests in EFTA. Liechtenstein became a member of EFTA only in 1991

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  Europe's Free Trade Area Experiment

  EFTA and Economic Integration

  • Hugh Corbet, David Robertson(Authors)
  • 2016(Publication Date)
  • Pergamon

    (Publisher)

  CHAPTER 1 ROLE OF THE FREE TRADE AREA HUGH CORBET FOR someone with the breadth of vision of Sir Frank Figgures, its first Secretary-General, the European Free Trade Association (EFTA) enlarged the possibihties of pohtical and economic action open to modern states.^* Many have indeed seen it as an example to the rest of the world. But as far as most educated opinion has been concerned, in Britain and in other member countries, EFTA has been more in the nature of a collection of obligations acquired in a fit of absence of mind. Its fons et origo was the position in the mid-1950s of the countries in Western Europe who were unable to adhere to the Treaty of Rome, the constitution of the European Economic Community (EEC),^ that was being agreed between the Six—Belgium, France, Luxem-bourg, Italy, the Netherlands and West Germany. An attempt was accordingly made shortly after to accommodate the interests of all West European countries in a large free trade area in which the EEC could have participated as a single entity. After eighteen months of negotiations, which Haruko Fukuda discusses in Chapter 2, the EEC eventually declined to compromise. Thus in 1959 the United Kingdom, along with Austria, Denmark, Nor-way, Portugal, Sweden and Switzerland, formed a smaller free trade area. It was later joined, in an associate capacity, by Finland. But a decade elapsed before Iceland joined. The aim of EFTA from the outset was to continue by other means the earlier efforts initiated under the Organization for European Economic Co-operation (OEEC) to estabhsh a single •References and notes are printed at the end of each chapter. 1 2 EFTA EXPERIMENT market in Western Europe. With the passing of a decade of considerable frustration there nonetheless remained, at the close of the 1960s, a reluctance to recognize that the situation had changed since 1959. Not the least important of the factors in the changed situation was the success which EFTA itself had mean-while achieved.

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  Toward A North American Common Market

  Problems And Prospects For A New Economic Community

  • Charles F Bonser(Author)
  • 2019(Publication Date)
  • Routledge

    (Publisher)

  The EFTA balance sheet is in almost every respect, therefore, very positive. Yet EFTA collectively and its member states individually have for much of the 30 years since the association was founded displayed profound anxiety. This anxiety has persisted despite a series of agreements with the EC from the 1960s onward which have in many ways been remarkably generous. Given the widespread hope amongst the original Six that Britain would eventually become a member of the Community, the Six's desire to maintain good relations with EFTA in the initial, British period were perhaps hardly surprising. This general goodwill continued, however, after the defection of the British and the Danes. The Community did not, it is true, treat the EFTA as such at this point, but the Free Trade Agreements with all EFTA members that were concluded in the early 1970s were virtually identical. They provided for complete free trade in industrial and processed agricultural products within a period of less than ten years. Primary agricultural products and fisheries were excluded. Joint committees were established to administer the agreements.

  In 1984, the two sides went further. Following a joint ministerial meeting between EC and all the EFTA governments at Luxembourg on April 9, 1984, at which, to quote the final declaration, they "took stock of more than a decade of cooperation and free trade and laid down orientations to continue, deepen and extend cooperation within the framework of and beyond the Free Trade Agreements," the ministers decided to work together to transform what was already, in their own words, "the largest system of free trade in the world within which one quarter of world trade took place" into a "dynamic European economic space."

  More specifically, they agreed to tackle the new generation of trade policy questions: standards, technical barriers, border facilities, rules of origin, unfair trade practices, state aids, and access to government procurement. They also agreed to broaden and deepen cooperation in research and development, with particular emphasis being placed on industrial and technological fields of the future, "such as telecommunications, information systems and the new audiovisual media." Cooperation and consultation were to be extended too to transport, agriculture, fisheries and energy, working conditions, social protection, culture, consumer protection, the environment, tourism, and intellectual property. They would also work together in multilateral fora such as the OECD, Gatt, IMF and the World Bank.

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  Outside the EU

  Options for Britain

  • Martin Westlake(Author)
  • 2020(Publication Date)
  • Agenda Publishing

    (Publisher)

  4 hopping from the smaller EFTA pillar to the already much larger EU one. The asymmetry between the two pillars became even more evident. Then, in 2004, ten new mainly central European countries joined the EU, followed a few years later by Bulgaria and Romania (2007) and, more recently, Croatia (2013), further expanding the EU pillar.

  There are people in the EFTA states who support the UK joining, or more correctly rejoining, EFTA, and then also rejoining the EEA.5 They would welcome a beefing up of the EFTA pillar and a dilution of Norway’s dominance of it. What better way to do this than by getting a wealthy G7 economy with nearly 70 million inhabitants to hop across to the other side? There are others, however, who feel that the UK could destroy the EEA. Especially from Norway, although they are not alone, the opinion is voiced that the UK is too big for the EFTA pillar in the EEA, and that because the good functioning of the Agreement depends so much on consensus decision-making, these same voices feel it is not well suited to a country that is prone to an “exceptionalist” way of thinking.

  The EEA Agreement was not envisaged by all involved in its construction as a permanent fixture in the European economic and political landscape. Some viewed it as a temporary waiting and preparatory space for countries entering into the EU. The fact that it has survived for so long is, again, a testament to the ingenuity of its construction and adaptability.

  THE FOUR FREEDOMS

  A central objective of the EEA Agreement is to extend the internal market to the EEA EFTA states. Free movement of goods, services, persons and capital is extended to Iceland, Liechtenstein and Norway. In order to enable this to happen, and for there to be a level playing field between the EFTA countries and the EU member states, the three EFTA countries consent to incorporate EU internal market legislation into national law. They agree to do this unanimously, via JCDs between the EEA EFTA states and the EU, within the two-pillar structure mentioned above. In 2019, for example, the EEA Joint Committee met eight times and adopted 319 decisions incorporating 708 legal acts. Since it came into force in 1994, more than 11,000 legal acts have been incorporated into the EEA Agreement and implemented into Norwegian law. About half of these remain in force today.

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  Merger Control Worldwide

  • Maher M. Dabbah, Paul Lasok QC(Authors)
  • 2012(Publication Date)
  • Cambridge University Press

    (Publisher)

  433 European Economic Area K. P. E. Lasok QC Monckton Chambers, London, UK The European Economic Area (EEA) was created by the Agreement on the European Economic Area, signed at Oporto, Portugal, on 2 May 1992 (‘the EEA Agreement’), which entered into force on 1 January 1994. 1 The EEA was originally intended to create an economic association between two economic blocs in Europe: the European Economic Community (now more often known as the European Union or EU) and the European Free Trade Association (EFTA). In the event, one of the members of EFTA, the Swiss Confederation, declined to ratify the EEA Agreement. Accordingly, the EEA Agreement came into effect as between the EU, and its Member States, and the remaining member states of EFTA (the Republic of Iceland, the Principality of Liechtenstein and the Kingdom of Norway). The EEA therefore comprises all the current Member States of the EU (num- bering, at the time of writing, 27) plus Iceland, Liechtenstein and Norway. EFTA remains in existence. 2 Those member states of EFTA that are also members of the EEA are often referred to as ‘the EEA EFTA States’ but, in the EEA Agreement itself, and in similar texts, the phrase ‘EFTA States’ is used. 3 In order to avoid confusion, the phrase ‘EEA EFTA States’ will be used in this chapter to describe those EFTA States that are signatories to the EEA agreement. 1. Relevant legislation and statutory standards Article 57 of the EEA Agreement provides that concentrations which create or strengthen a dominant position, as a result of which effective competition would be significantly impeded within the territory covered by the EEA Agreement or a substantial part of it, are incompatible with the Agreement. For the purposes of applying Article 57, use is made of the criteria and concepts to be found in EC Regulation No.

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  Free Trade Agreements in Southeast Asia

  • Rahul Sen(Author)
  • 2004(Publication Date)
  • ISEAS Publishing

    (Publisher)

  3. Singapore’s FTAs with Japan and EFTA 37 © 2004 Institute of Southeast Asian Studies, Singapore region. The memorandum of understanding (MOU) between JETRO and the TDB would allow both organizations to leverage on their strong networks in the region to assist these companies to jointly seek out new opportunities and new markets. The JSEPA, being a New Age FTA, also encourages joint co-operation in human resource development, which would also encourage interaction, promote understanding, and inspire new ideas, thereby encouraging technological innovation and entrepreneurship among the business community. SINGAPORE–EUROPEAN FREE TRADE ASSOCIATION FTA The European Free Trade Association (EFTA) is an RTA in Europe consisting of four countries, viz. Switzerland, Iceland, Liechtenstein, and Norway. The idea of an EFTA–Singapore FTA was first floated at the EFTA Ministerial Meeting on 12 December 2000, and after a round of exploratory talks in Geneva from 5–6 March 2001 both sides announced the launch of negotiations on 4 May 2001. After three rounds of negotiations, the FTA was signed in Egilsstadir, Iceland on 26 June 2002 and came into force on 1 January 2003. The EFTA–Singapore FTA (EFSTA) became the first bilateral FTA between the EFTA countries and a country in Asia. Highlights of the EFTA–Singapore FTA Trade in Goods and Rules of Origin The ESFTA provisions allow for both Singapore and EFTA states to reduce tariff barriers. Tariffs have been reduced or eliminated by both parties in a range of manufacturing industries, viz. chemicals and petroleum products, electrical and electronic products, plastic products, pharmaceuticals, instrumentation equipment, transport 38 Free Trade Agreements in Southeast Asia © 2004 Institute of Southeast Asian Studies, Singapore equipment, and fabricated metal products. Appropriate rules of origin have been designed to determine whether such products would qualify for preferential tariff treatment under the ESFTA.

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  The Legitimacy of International Trade Courts and Tribunals

  • Robert Howse, Hélène Ruiz-Fabri, Geir Ulfstein, Michelle Q. Zang(Authors)
  • 2018(Publication Date)
  • Cambridge University Press

    (Publisher)

  In reality, however, the Court was created by the EEA Agreement, whose Article 108 (2) states that ‘[t]he EFTA States shall establish a court of justice (EFTA Court).’ Article 27 SCA is the fulfilment of this obligation. 2 See Article 1 of Protocol 7 SCA: ‘The EFTA Court shall possess legal personality.’ 3 The reason for the Court’s official name was the expectation that all of the EFTA states would become parties to the EEA Agreement. However, the Swiss electorate rejected the agreement in a national referendum on 6 December 1992, leaving Switzerland as an EFTA state outside the EEA. 4 Convention establishing the European Free Trade Association, signed in Stockholm on 4 January 1960, revised in Vaduz on 21 June 2001. The Convention has since been amended by the EFTA Council on a number of occasions. A consolidated version may be found at the EFTA homepage www.efta.int. In addition to institutional arrangements, the EFTA Convention regulates trade between the EFTA states. In practice, however, trade between the three EFTA states parties to the EEA Agreement is governed by the more far- reaching provisions of that agreement. The practical importance of the EFTA Convention is thus limited to trade between those states on the one hand and Switzerland on the other. According to Articles 47 and 48 of the Convention, disputes are to be settled by consult- ations or, as the last resort, arbitration. 5 Convention on jurisdiction and the recognition and enforcement of judgements in civil and commercial matters, signed on 30 October 2007 by the European Community, Denmark, Iceland, Norway and Switzerland.  all of the (now only four) EFTA states on the one hand and various third countries on the other.

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  The Politics of European Union Enlargement

  Theoretical Approaches

  • Frank Schimmelfennig, Ulrich Sedelmeier(Authors)
  • 2005(Publication Date)
  • Routledge

    (Publisher)

  Liechtenstein and Iceland have so far never had persuasive economic incentives to join the EU. While Liechtenstein’s economy rests on a liberal financial services sector alongside highly specialized export industries, the Icelandic economy is very dependent on fisheries, whose management is not considered compatible with the EU’s Common Fisheries Policy. These two small states have been ‘stubborn’ because they faced not only political but also economic impediments to membership.

  As I will now discuss in more detail, Sweden, Norway and Switzerland provide particularly puzzling cases among the (former) EFTA members, since their typical aggregate balance sheet has been characterized by (net) economic incentives for and political impediments to integration.

  Economic incentives to join

  Economic theory of integration expects that small and highly industrialized states are more likely to join a common market than larger or less advanced countries. Integration allows small states to obtain advantages similar to large countries, that is, (1) the opportunity to specialize in accord with comparative advantages, (2) the ability to exploit economies of scale, and (3) the stimulating effects of increased competition (cf. van Mourik 1997; Robinson 1963).

  First, trade diversion generally threatens to reduce the welfare of non-members. From an EFTA point of view, not participating in the gradual reduction of intra- EC barriers meant that the sales of EFTA-based firms in the single market might be displaced without any offsetting increase in exports. Moreover, the likelihood of integration actually increasing welfare rises with the inherent regionalism of the members. Geographically close countries have strong economic incentives to join, especially if the Community is their main customer and if, because of their smallness, they cannot individually affect the terms of trade.

  Second, customs unions permit better exploitation of economies of scale which cannot be reaped in small domestic markets. Low unit-cost production is especially important for highly industrialized, specialized and export-oriented market economies such as the EFTA states. For the latecomers, the larger the market they join the better, since it implies a greater potential scope for division of labour and scale economies. At the same time, watching the union grow from the outside is becoming more and more costly in terms of foregone economic benefits and increasing discrimination.

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  A Constitutional Order of States?

  Essays in EU Law in Honour of Alan Dashwood

  • Anthony Arnull, Catherine Barnard, Michael Dougan, Eleanor Spaventa, Anthony Arnull, Catherine Barnard, Michael Dougan, Eleanor Spaventa(Authors)
  • 2011(Publication Date)
  • Hart Publishing

    (Publisher)

  In this respect, Article 128 EEA should be recalled. This provision stipulates that any European state becoming a member of the Union ‘shall apply to become a Party to the EEA Agreement’ and the terms and conditions for such participation shall be subject to an agreement between the contracting parties and the applicant state. This means that any candidate for EU membership has to enter into negotiations not only with the EU but also with the EFTA members of the EEA, something which has been largely ignored in existing literature on EU enlargement. From a legal point of view, and notwithstanding the fact that this is not explicitly mentioned in Article 128 EEA, an agreement with the latter has to be reached before accession to the EU takes place. In other words, the candidate state must formally adhere to the EEA in 37 Decision No 191/1999 amending Annexes VIII (Right of establishment) and V (Free movement of workers) to the EEA Agreement, [2007] OJ L124/20. 38 Emphasis added. 39 See [2004] OJ L130/59. Liechtenstein 515 order to become a EU member. This, in itself, is not surprising since the EEA is already part of the EU acquis . The EEA Enlargement Agreement with the 10 applicant states for the fifth EU enlargement was signed on 11 November 2003 40 and introduced, among other things, the necessary adjustments to the main text of the EEA Agreement. Besides the fact that, geographically speaking, the Internal Market is considerably extended, an important element of the EEA Enlargement Agreement was the insertion of a new Protocol 38a on the EEA Financial Mechanism, laying down the financial contribution of the EFTA states and members of the EEA ‘to the reduction of economic and social disparities in the European Economic Area through the grants to investment and development projects in the priority sectors listed in Article 3 [of the Protocol]’.

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