European Free Trade Association
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.[4] 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.[5] They are not, however, party to the European Union Customs Union.
Not to be confused with European Economic Area.
European Free Trade Association
Native names:
- Europäische Freihandelsassoziation (German)
- Fríverslunarsamtök Evrópu (Icelandic)
- Association européenne de libre-échange (French)
- Associazione europea di libero scambio (Italian)
- Det europeiske frihandelsforbund (Bokmål)
- Det europeiske frihandelsforbundet (Nynorsk)
- Associaziun europeica da commerzi liber (Romansh)
- Eurohppá friddjagávpelihttu (Northern Sami)[1]
- Europäische Freihandelsassoziation (German)
- Fríverslunarsamtök Evrópu (Icelandic)
- Association européenne de libre-échange (French)
- Associazione europea di libero scambio (Italian)
- Det europeiske frihandelsforbund (Bokmål)
- Det europeiske frihandelsforbundet (Nynorsk)
- Associaziun europeica da commerzi liber (Romansh)
- Eurohppá friddjagávpelihttu (Northern Sami)[1]
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), the main predecessor of the EU. 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).[6] A revised Convention, the Vaduz Convention, was signed on 21 June 2001 and entered into force on 1 June 2002.[7]
After 1995 only two founding members remained, namely Norway and Switzerland. The other five, Austria, Denmark, Portugal, Sweden and the United Kingdom, had joined the EU at some point 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 The initial Stockholm Convention was superseded by the Vaduz Convention, which aimed to provide a successful framework for continuing the expansion and liberalization of trade, both among the organization's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.
While 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.[4] As a result, its member states have jointly concluded free trade agreements with the EU and a number of other countries.[4] 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 multilateral agreements with the EU and its member states instead.
International conventions[edit]
EFTA also originated the Hallmarking Convention and the Pharmaceutical Inspection Convention, both of which are open to non-EFTA states.
Portugal Fund[edit]
The Portugal Fund came into operation in February 1977 when Portugal was still a member of EFTA.[104] 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 was dissolved in January 2002.[105]
