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Revision as of 18:49, 10 May 2009

European Free Trade Association (EFTA)
Logo of the European Free Trade Association
Logo
SecretariatGeneva, Switzerland
Official languagesGerman, French, Norwegian, and Icelandic
TypeTrade bloc
Member states Iceland
 Liechtenstein
 Norway
 Switzerland
Establishment3 May 1960
• EFTA Convention
4 January 1960
Area
• Total
529,600 km2 (204,500 sq mi)
Population
• 2007 estimate
12,660,623
• Density
100.6/km2 (260.6/sq mi)
GDP (PPP)2007 (IMF) estimate
• Total
$567.5 billion
• Per capita
$44,828
GDP (nominal)2007 (IMF) estimate
• Total
$743.3 billion
• Per capita
$58,714
CurrencyIcelandic króna, Norwegian krone, Swiss franc (ISK, NOK, CHF)
Time zoneUTC+0 / +1 (WET / CET)
• Summer (DST)
UTC+1 / +2 (WEST / CEST)

The European Free Trade Association (EFTA) was established on 3 May 1960 as a trade bloc-alternative for European states who were either unable to, or chose not to, join the then-European Economic Community (EEC) (now the European Union (EU)).

The EFTA Convention was signed on 4 January 1960 in Stockholm by seven states. Today only Iceland, Norway, Switzerland, and Liechtenstein remain members of EFTA (of which only Norway and Switzerland are founding members). The Stockholm Convention was subsequently replaced by the Vaduz Convention.

This Convention provides for the liberalisation of trade among the member states. Three of the EFTA countries are part of the European Union Internal Market through the Agreement on a European Economic Area (EEA), which took effect in 1994; the fourth, Switzerland, opted to conclude bilateral agreements with the EU. In addition, the EFTA states have jointly concluded free trade agreements with a number of other countries.

In 1999 Switzerland concluded a set of bilateral agreements with the European Union covering a wide range of areas, including movement of persons, transport and technical barriers to trade. This development prompted the EFTA States to modernise their Convention to ensure that it will continue to provide a successful framework for the expansion and liberalization of trade among them and with the rest of the world.

Membership history

  EFTA member states
  Former member states, now EU member states

The founding members of 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.[1] Finland became an associate member in 1961 (becoming a full member in 1986), and Iceland joined in 1970. The United Kingdom and Denmark joined the European Communities in 1973 (together with Ireland), and hence ceased to be EFTA members. Portugal also left EFTA for the European Community in 1986. Liechtenstein joined in 1991 (previously its interests in EFTA had been represented by Switzerland). Finally, Austria, Sweden and Finland joined the European Union in 1995 and hence ceased to be EFTA members.

Current members

Flag State Official name Accession Population Area (km²) Capital GDP in millions (PPP) GDP per capita (PPP)
Iceland Iceland Republic of Iceland 1 January 1970 320,000 103,000 Reykjavík 12,144 39,168
Liechtenstein Liechtenstein Principality of Liechtenstein 1 January 1991 34,247 160.4 Vaduz 4,160 118,000
Norway Norway Kingdom of Norway 3 May 1960 4,721,600 385,155 Oslo 247,416 53,152
Switzerland Switzerland Swiss Confederation (Confoederatio Helvetica ) 3 May 1960 7,591,400 41,285 Bern 300,186 41,265

General Secretaries

General Secretaries of EFTA:

Institutions

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.

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 the European Commission's role as "guardian of the treaties" for the EFTA countries, while the EFTA Court performs the European Court of Justice's role for those countries.

The original plan for the EEA lacked the EFTA Court or the EFTA Surveillance Authority, and instead had 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 they considered that giving the EU institutions powers with respect to non-EU member states would be a violation of the treaties, and therefore the current arrangement was developed instead.

The EEA and Norway Grants are administered by the Financial Mechanism Office, which is affiliated to the EFTA Secretariat in Brussels.

Locations

The EFTA Secretariat is headquartered in Geneva, Switzerland. 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 (the same location as the headquarters of the European Court of Justice).

Portugal Fund

The Portugal Fund was established in 1975 when Portugal was still a member of EFTA, to provide funding for the development and reconstruction of Portugal after the Carnation Revolution. When Portugal left EFTA in 1985 to join the EEC, the remaining EFTA members decided to nonetheless continue the Portugal Fund, so Portugal would continue to benefit from it. The Fund originally took the form of a low-interest loan from the EFTA member states to Portugal, to the value of 100 million US dollars. Repayment was originally to commence in 1988, but EFTA then decided to postpone the start of repayments until 1998. The Portugal Fund has now been dissolved by the Member States.

International conventions

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

Relationship to the European Economic Area

The EFTA members, except for Switzerland, are also members of the European Economic Area (EEA).

International relationships

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 20 States and Territories, in addition to the 27 Member States of the European Union.[2]

Free Trade Agreement

Nations the EFTA has an FTA with in dark blue, negotiating an FTA with in dark cyan, has a declaration on cooperation with in purple, and is in a "joint workgroup" with in dark red; the EFTA is light green.

Signed agreement 2008, not yet ratified

Finalised negotiations 2008

Currently negotiating agreements

Declarations on Cooperation

Joint workgroups

Future

The Norwegian electorate has rejected treaties of accession to the EU in two referenda. At the time of the first referendum (1972) their neighbours the Kingdom of Denmark joined. The second time (1994) two other Nordic neighbours, Sweden and Finland joined the EU. The two last governments of Norway have been unable and unwilling to advance the question, as they have both been coalition governments consisting of both proponents and opponents.

Since Switzerland rejected the EEA in 1992, referenda on EU membership have been initiated, the last time in 2001. These were rejected by clear majorities.

Iceland, on the other hand, may join the EU in the near future, following the global financial crisis of 2008, which has particularly affected the local economy.

In mid-2005, representatives of the Faroe Islands have hinted at the possibility of their territory joining EFTA. However, the chances of the Faroes' bid for membership are uncertain because, according to the EFTA Convention, only states may become members of the Association.[citation needed]

It is speculated that Morocco may join the EFTA by 2012.[citation needed]

EFTA and the European Union

This 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
sovereign territories
 Application of
EU law
 Enforceable in local courts?
 EURATOM?
 EU citizenship?
 EU elections?
 Schengen area?
 EU VAT area?
 EU customs territory?
 EU single market?
 Eurozone?
 Iceland Template:Bg-yellow | Partial No No No No Yes No No Yes[3] No, ISK
 Liechtenstein Template:Bg-yellow | Partial Unclear No No No Template:Bg-yellow | Set to implement later No No Yes[3] No, CHF
 Norway, except: Template:Bg-yellow | Partial Unclear No No No Yes No No Yes[3] No, NOK
Norway Svalbard Template:Bg-yellow | Partial Unclear No No No No[4] No[5] No Yes[3][6][citation needed] No, NOK
Norway Bouvet Island Template:Bg-yellow | Partial Unclear No No No Yes[7][citation needed] No No Yes[3][8][citation needed] No, NOK
Norway Peter I Island Template:Bg-yellow | Partial Unclear No No No Yes[7][citation needed] No No Yes[3][8][citation needed] No, NOK
Norway Queen Maud Land Template:Bg-yellow | Partial Unclear No No No Yes[7][citation needed] No No Yes[3][8][citation needed] No, NOK
 Switzerland Template:Bg-yellow | Partial Unclear No No No Yes No No Yes[9] No, CHF
Member states and
sovereign territories 		Application of
EU law 		Enforceable in local courts? EURATOM? EU citizenship? EU elections? Schengen area? EU VAT area?
 EU customs territory?
 EU single market? Eurozone?

See also

References

  1. ^ Now, the Seven and a Half - TIME
  2. ^ Official EFTA site
  3. ^ a b c d e f g European Economic Area
  4. ^ Norway and Iceland Schengen association agreement Article 14
  5. ^ Because of the Svalbard treaty it is even outside of the Norway taxation area.
  6. ^ Agreement on the European Economic Area - Protocol 40 on Svalbard No source showing such exemption is activated, thus considering it included.
  7. ^ a b c Not explicitely mentioned in the treaty as excluded, thus considering it included.
  8. ^ a b c Agreement on the European Economic Area, Article 126 Not explicitely mentioned in the treaty as excluded, thus considering it included.
  9. ^ Through multiple sectoral agreements
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