EFTA: European Free Trade Association
European Free Trade Association, abbreviated as EFTA by abbreviationfinder, is a free trade zone founded on January 4, 1960 as a reaction to the formation of the EEC and entered into force on May 3, 1960. Founding members were Denmark, Great Britain, Norway, Austria, Portugal, Sweden and Switzerland. In the course of its existence, the composition of the EFTA has changed significantly: in 1973 Great Britain and Denmark, in 1986 Portugal joined the European Communities (EC) and in 1995 Finland (full member since 1985), Austria and Sweden joined the EU and thus left EFTA. The free trade area now (since 1995) consists of four countries (Iceland [member since 1970], Liechtenstein [since 1991], Norway and Switzerland) and only covers an area of around 530,000 km 2 (previously: 1,339,000 km 2) with around 13 million residents (previously: around 33 million residents).
Organization: The highest decision-making body is the EFTA Council, in which all member countries are represented equally (each member has one vote) and which usually has to achieve unanimity in order to bring about decisions. The task of the Council is to monitor the application and implementation of the EFTA Treaty and to settle disputes; its resolutions and recommendations are not legally binding. Several standing committees made up of national government representatives and advisory working groups have been set up by the Council for administrative tasks. The day-to-day administration and coordination work is carried out by the EFTA Secretariat (seat: Geneva), which is headed by a Secretary General. In 1994, the EFTA Court of Justice was established in Geneva, whose powers are comparable to those of the European Court of Justice. The EFTA Court of Justice is responsible for the EFTA states participating in the European Economic Area (EEA), i.e. not for Switzerland. Its main task is to monitor compliance with the obligations under the EEA Agreement. Withdrawal from the EFTA is possible at any time with a notice period of 12 months.
Goals and developments: The main aim of EFTA is to increase mutual trade in industrial products by reducing tariffs and non-tariff trade barriers between the member states without, in contrast to the EU states, further obligations in relation to the establishment of a common market or enter into the formation of an economic and political union. The Council can make non-binding recommendations on the abolition of state subsidies and the prohibition of cartels which lead to distortions of competition within the Community. As a free trade area, the EFTA does not apply a common external tariff to third countries, but allows its members to choose to individually agree tariffs or quantity restrictions in their trade policy towards third countries. A harmonization of the regulatory and economic policy of the member states is also not planned. The complete dismantling of trade tariffs and export restrictions between the member states, as stipulated in the EFTA Treaty, was achieved step by step on December 31, 1966. Agricultural products are largely excluded from the liberalization of the trade in goods.
The EFTA had its greatest expansion in 1970 after Iceland joined with eight member states. After an initial phase of relatively great distance, the EFTA and the EC became increasingly intertwined in the early 1970s. Initially, in 1972 and 1973, after the conversion of the first two EFTA states, the EC concluded individual agreements with individual countries in the free trade area, which extended to the free movement of industrial and commercial products (exception: agricultural products). In the 1980s there were already more than 280 bilateral agreements between EFTA and the EC. At the beginning of the 1990s, the abolition of non-tariff trade barriers, the standardization of technical standards and scientific and technical cooperation were the focus of the cooperation, which finally created the world’s largest closed economic area, the EEA, in 1994. The EEA enables free trade in goods, services and capital to be improved without creating a customs union between the EC and EFTA. The cooperation extends z. B. also on research and development, consumer and environmental protection as well as social policy.
History: The plans to achieve the political integration of Europe, especially through a European economic community, were initially out of the question for some European industrialized countries for political or economic reasons (e.g. for Great Britain with regard to its ties to the Commonwealth, for Switzerland, Sweden and Austria due to their neutrality). After the plan to merge all the states united in the OEEC in a (large) European free trade area, which, unlike the EEC, does not affect questions of sovereignty, failed because of the conflicting interests between France and Great Britain, the EFTA was formed in 1960 as a “small free trade area”. After the departure of Finland, Austria and Sweden on January 1st. The loss of importance associated with 1995 was initially considered to be the dissolution of EFTA in mid-1995. As a contracting party to that which came into force on January 1, 1994 In the European Economic Area, to which all the other EFTA states except Switzerland belong, it will continue to exist for the time being.