What is EFTA?
The European Free Trade Association (EFTA) is the intergovernmental organisation of Iceland, Liechtenstein, Norway and Switzerland, set up for the promotion of free trade and economic cooperation between its members, within Europe and globally.
When was EFTA established?
The founding members – Austria, Denmark, Norway, Portugal, Sweden, Switzerland and the United Kingdom – established EFTA by signing a Convention in Stockholm on 4 January 1960.
Why was EFTA established?
EFTA was established to foster economic cooperation and promote free trade between its seven founding Member States. The formation of the EFTA trade bloc was a response to the European Union’s predecessor, the European Economic Community (EEC), which was established in 1957 as a project for European integration. EFTA was founded as an alternative model for European integration through an intergovernmental model, by countries that were either unwilling or unable to join the EEC. Another key difference between the two blocs was that EFTA did not establish a customs union, thus allowing its members to retain a greater degree of sovereignty.
What does EFTA do?
The Association is responsible for the management of:
- The EFTA Convention, which regulates economic relations between the four EFTA States.
- EFTA’s worldwide network of free trade and partnership agreements with third countries.
- The Agreement on the European Economic Area (EEA Agreement), which brings together the Member States of the European Union (EU) and three of the EFTA States – Iceland, Liechtenstein and Norway – in a single market, also referred to as the Internal Market.
What is the difference between EFTA at four and EFTA at three?
EFTA consists of four countries – Iceland, Liechtenstein, Norway and Switzerland. However, only three of them are members of the EEA, with Switzerland having its own set of bilateral agreements with the EU instead. Thus, when speaking of EEA-related matters, the term “EFTA at three” is often used to highlight that these only concern Iceland, Liechtenstein and Norway. “EFTA at four” is used when needing to clarify that all four Member States are concerned, usually in the context of the EFTA Convention or EFTA’s third-country relations.
What are the advantages of EFTA membership?
The EFTA States have the possibility to negotiate free trade agreements (FTAs) together as one bloc of like-minded countries, and share an economic framework for intra-EFTA trade. The EFTA-at-three countries also benefit from the Association’s joint management of the EEA Agreement. More generally, the EFTA States enjoy the provision of secretarial services with regard to both the EEA and third-country trade negotiation processes.
What is the EFTA Council?
The EFTA Council is the highest governing body of EFTA. It usually meets seven times a year at ambassadorial level in Geneva and once at ministerial level in one of the Member States, determined on an annual rotating basis. During these meetings, the Council discusses substantive matters relating to the EFTA Convention and the development and management of EFTA trade relations with third countries. Each Member State is represented, and decisions are taken by consensus.
What is the EFTA Convention?
EFTA was established by a Convention signed in Stockholm on 4 January 1960. The main objective of the Association is to foster economic cooperation and promote free trade between its members. The Convention outlined the fundamental rules for free trade in goods and related areas.
A revised version, known as the Vaduz Convention, was signed on 21 June 2001 and came into effect on 1 June 2002. The Vaduz Convention incorporated significant changes, notably integrating principles and rules from agreements between the EU and the EEA EFTA States under the EEA Agreement, as well as between the EU and Switzerland in bilateral agreements. Key additions included provisions for the free movement of people, services trade and capital flow, and intellectual property protection.
The EFTA Convention is amended by the EFTA Council when appropriate.
What does the EFTA Convention say about new states joining EFTA?
According to Article 56 of the EFTA Convention, “any State may accede to the Convention provided that the EFTA Council decides to approve its accession, on such terms and conditions as may be set out in that decision”.
A request for membership of EFTA would be considered by the EFTA Council, which is the highest governing body of EFTA.
If a state were to join EFTA, would it automatically become party to the EEA Agreement?
Not automatically, as each EFTA State decides on its own whether to apply to be party to the EEA Agreement. According to Article 128 of the EEA Agreement, “any European State becoming a member of the Community shall, and the Swiss Confederation or any European State becoming a member of EFTA may, apply to become a party to this Agreement. It shall address its application to the EEA Council.” The EEA Council takes political decisions leading to the amendment of the EEA Agreement, including the possible enlargement of the EEA. Decisions of the EEA Council are taken by consensus between all EU Member States on the one side and the three EEA EFTA States – Iceland, Liechtenstein and Norway – on the other.
If a state were to join EFTA, would it automatically become party to EFTA’s free trade agreements?
According to Article 56 of the EFTA Convention, any state that becomes a member of EFTA has an obligation to apply to become a party to EFTA’s existing free trade agreements (FTAs). The accession of a new Member State to an EFTA FTA can only be negotiated with the consent of the other party or parties to the agreement. Every EFTA FTA includes provisions that regulate accession to the FTA in question, stipulating that terms and conditions have to be agreed upon by the acceding party and all existing parties to the FTA.
How is EFTA different from the EU?
EFTA and the EU are two distinct entities with different objectives and different Member States.
EFTA focuses primarily on promoting free trade and economic cooperation among its Member States, and with the EU and third countries through agreements that reduce trade barriers and enhance economic relations. Decision making in EFTA involves consensus among its Member States.
The EU consists of 27 Member States and emphasises broader political, economic and social integration objectives. Decision making in the EU is more complex and involves institutions such as the European Commission, European Parliament and European Council, with laws and regulations that are binding on all Member States.
What is the European Economic Area?
The European Economic Area (EEA) was established by the EEA Agreement, which entered into force on 1 January 1994. Its objective is to extend the EU’s Internal Market to the three participating EFTA States (Iceland, Liechtenstein and Norway), creating a homogeneous European Economic Area based on common rules and equal competition conditions, enforced through legal mechanisms. The EEA Agreement guarantees equal rights and obligations within the Internal Market for individuals and businesses operating in the EEA.
What is covered by the EEA Agreement?
All relevant Internal Market legislation is incorporated into the EEA Agreement in order for it to apply throughout the whole of the EEA. The rules relate to the free movement of goods, capital, services and persons throughout the 30 EEA States. In addition, the EEA Agreement covers horizontal areas such as social policy, consumer protection, environment, company law, statistics, tourism and culture. To ensure equal conditions of competition throughout the EEA, the EEA Agreement mirrors the EU Treaties’ competition and state aid rules. It also provides for EEA EFTA participation in EU programmes in areas such as research and education.
What is not covered by the EEA Agreement?
The EEA Agreement does not cover EU common agricultural and fisheries policies, although it does contain provisions on trade in agricultural and fish products. It does not entail a customs union, nor does it include a common trade policy, common foreign and security policy, justice and home affairs, harmonised taxation or economic and monetary union.
Schengen is not part of the EEA Agreement. However, all four EFTA States participate in Schengen and Dublin through bilateral agreements. They all apply the provisions of the relevant acquis.
Is Switzerland part of the EEA?
Switzerland is not party to the EEA Agreement, as it rejected EEA accession in a popular referendum held in 1992. Since then, it has negotiated numerous bilateral sectoral agreements with the EU. As an EFTA State, Switzerland enjoys observer status in the EFTA pillar of the EEA Agreement. This enables Switzerland to monitor closely and follow developments both in the EEA and in EU law.
How do the EEA EFTA States contribute financially to the EU?
The financial contributions of the EEA EFTA States to the EU in relation to the EEA Agreement are twofold.
First, the EEA EFTA States contribute towards reducing economic and social disparities in the EEA through the EEA Grants. In addition to the EEA Grants, Norway has been funding a parallel scheme since 2004 – the Norway Grants. The funding period covering 2014–2021 has a total financial envelope of approximately EUR 400 million per year. These contributions are not managed by the EU but by the EFTA Financial Mechanism Office, in collaboration with the beneficiary countries. Find more information about the EEA and Norway Grants here.
Second, the EEA EFTA States contribute towards the EU programmes and agencies in which they participate on the basis of the EEA Agreement. These contributions are added to the EU budget, increasing the total financial envelopes of the programmes and agencies in question. For the current 2014–2020 EU multiannual budget period, the total EEA EFTA contribution to EU programmes and agencies is approximately EUR 460 million per year.
What is the EEA Joint Committee?
The EEA Joint Committee (EEA JC) is responsible for the management of the EEA Agreement and typically meets eight times a year. It is a forum in which views are exchanged and decisions are taken by consensus to incorporate EU legislation into the EEA Agreement.
The EEA JC is composed of the ambassadors of the EEA EFTA States and representatives of the Secretariat-General of the European Commission. The Presidency of the EEA JC alternates every six months between the EU side and an EEA EFTA State.
How many acts are incorporated into the EEA Agreement per year?
The number of legal acts incorporated into the EEA Agreement varies from year to year. Typically, the number falls somewhere between 500 and 600 legal acts.
What is the process that takes place between the Member States before an EEA Joint Committee meeting?
Before an EEA Joint Committee meeting, the EEA EFTA States come together in the Standing Committee to consult one another and arrive at a common position before meeting with the EU.
Since all decisions in the EEA Joint Committee are taken by consensus, what happens if the EFTA States and the EU disagree?
The three EEA EFTA States speak with one voice in the EEA Joint Committee, and decisions are taken by consensus with the EU. Therefore, if a common position is not reached in the Joint Committee, a decision will not be taken at that point in time. This does not happen often though.
How do the Member States prepare for the incorporation of new EU legislation into the EEA Agreement?
The EEA EFTA States already start to follow the development of potentially EEA-relevant acts from the initiative and proposal stage on the EU side. Preparation for the incorporation of these acts takes place in two main ways: first, in individual Member States, where national experts assess both the EEA relevance of acts independently from the EU and the possible need for adaptations; and second, in EFTA working groups, where national experts from all three EEA EFTA States meet and discuss their findings and concerns with each other.
What is the backlog and how is EFTA working to reduce it?
The “backlog” refers to the total number of EEA-relevant EU legal acts awaiting incorporation into the EEA Agreement. There will always be an inherent backlog of acts due to the fact that the incorporation procedure only starts after they have been formally adopted and published in the Official Journal of the European Union. In order to reduce the backlog, it is important to ensure the speedy assessment of relevant acts and foster a close dialogue with the EU. This can be facilitated by already starting to monitor relevant acts closely when they are at the proposal stage in the EU.
Can the EEA EFTA States select which EU legal acts they want to incorporate into the EEA Agreement?
The incorporation process of new EU legal acts into the EEA Agreement is determined by the scope of the Agreement. The EEA Agreement covers the four freedoms (free movement of goods, services, capital and persons), competition and state aid rules, and certain horizontal and flanking policies, such as environment, gender equality and public health. Therefore, EU legislation that falls within these categories is assessed as a first step in the incorporation process. It is important to note that although new EU legislation may be marked as “EEA relevant”, this marking is only indicative. Moreover, the EEA EFTA States can consider the incorporation of EU legislation outside of the scope of the EEA Agreement through Protocol 31 on cooperation in specific fields outside the four freedoms.
How can the EEA EFTA States influence decision making in the EU?
During the decision-making process on the EU side, the EEA EFTA States have little or no formal opportunity to influence the Council or the European Parliament. The EEA EFTA States do, however, take an active part in the decision shaping of EEA legislation, i.e. the preparatory work undertaken by the European Commission when preparing new EU legislative proposals. In this phase, the EEA EFTA States can provide input through EEA EFTA Comments, the involvement of EEA EFTA experts and participation in Commission committees.
What happens if an EEA EFTA State does not comply with the EEA Agreement?
The EFTA Surveillance Authority (ESA) monitors compliance with the EEA Agreement in Iceland, Liechtenstein and Norway. If ESA considers that an EEA EFTA State is in breach concerning the implementation, application or interpretation of EEA law, it may start infringement procedures and ultimately bring the case to the EFTA Court.
What is a free trade agreement?
A free trade agreement (FTA) is an agreement between two or more countries that aims to reduce trade barriers between the participating states, for example through the lowering of trade tariffs or reduction of other barriers to trade. Additionally, an FTA provides businesses in the participating countries with a stable, legal framework for trade. FTAs also open markets for service providers and may allow contractors to bid on foreign government procurement tenders. EFTA’s current FTAs include numerous provisions related to other aspects of trade, such as trade and sustainable development, intellectual property rights, electronic commerce, and small and medium-sized enterprises.
Which countries does EFTA have free trade agreements with?
EFTA has one of the world’s largest free trade networks, with 31 agreements covering 42 partner countries outside the EU. The coverage can be viewed on EFTA’s dedicated webpage to global trade relations. More than 80% of EFTA’s merchandise trade is currently covered by the trade bloc’s preferential agreements, and efforts are continuing to increase trade coverage further, with several ongoing trade negotiation processes. Additionally, EFTA has signed joint declarations on cooperation with several countries, which could lead to FTAs further down the road.
How do negotiations towards a new free trade agreement work?
Each negotiation process is different, but they all share some similarities. EFTA has developed a set of model texts corresponding to the chapters that it would like to see included in an FTA. These model texts continue to evolve over the years. Today, the text package includes chapters on digital trade, general and institutional provisions, government procurement, intellectual property rights, small and medium-sized enterprises, technical cooperation, trade in goods, trade facilitation, trade and sustainable development, sanitary and phytosanitary measures, technical barriers to trade, and trade in services.
EFTA presents a prospective FTA partner country with its model texts, and then the partner can revert with its additions and modifications. The closer the parties are at the initial stages of negotiations, the faster the process will be. If there are stark differences, negotiations can span many years, with experts and politicians trying to find common ground. If they succeed in doing so, the agreement will be subject to a thorough legal review to ensure its validity and consistency. Subsequently, all participating parties must sign and then ratify the FTA before it enters into force.
How long does it usually take to conclude a new free trade agreement?
As mentioned above, this is subject to how closely aligned the countries were at the starting point. However, the timeline is also influenced by political will (or lack thereof) to conclude the agreement, as well as economic and political sensitivities. Two agreements concluded in 2023 and 2024 – with Moldova and India respectively – illustrate how trade negotiations can be both quick and slow. The Moldova FTA took two years to conclude, whereas the India FTA was only concluded after 16 years of negotiations.
Can the EFTA States also sign bilateral free trade agreements?
Yes, the EFTA States are not obliged by the EFTA Convention to conclude preferential trade agreements as a group. They maintain the full right to enter into bilateral third-country arrangements.
Where is the EFTA Statistical Office?
The EFTA Statistical Office (ESO) is located at the same premises as Eurostat, the statistical authority of the EU, in Luxembourg. This proximity fosters close collaboration between the two organisations and facilitates efficient communication and execution of tasks and services related to statistical cooperation, both within the EEA Agreement and as part of the broader European Statistical System (ESS).
Why does EFTA have a statistical office?
EFTA maintains its statistical office to ensure the smooth integration and participation of its national statistical institutes (NSIs) in the European Statistical System, and to facilitate statistical cooperation within the European Economic Area. ESO serves as a liaison office between the NSIs of the Member States and Eurostat. This statistical cooperation supports the core objective of the EEA Agreement, namely the successful functioning of the Internal Market.
What work does ESO do?
The EFTA Statistical Office (ESO), established in 1991, plays a key role in facilitating the participation of EFTA’s national statistical institutes (NSIs) in the broader European Statistical System (ESS), with the objective of ensuring reliable and comparable data to monitor the functioning of the European Internal Market. While ESO mainly serves as a liaison office between the EFTA NSIs and Eurostat, its responsibilities also extend beyond this. Today, its key tasks encompass:
- Legal and institutional developments: ESO coordinates the incorporation of new EU acts into the EEA Agreement in the field of statistics, and facilitates cooperation between EFTA and the EU in this process.
- Data visibility: ESO monitors the inclusion of EFTA data in Eurostat databases and publications.
- EU statistical programme participation: ESO facilitates participation in EU statistical programmes and actions, including the secondment of experts from EFTA NSIs to Eurostat.
- Technical cooperation in the field of statistics: ESO’s reach extends beyond the EEA. It also provides technical assistance to partner countries outside of EFTA and the EU in developing their statistics so that they align with European standards, often in collaboration with other international organisations like Eurostat and the United Nations Economic Commission for Europe (UNECE).
- EU policy assessment: ESO identifies and assesses new EU policies relevant to official statistics, analysing their potential relevance to official statistics and to the EFTA NSIs.
Which countries does the EFTA Secretariat cooperate on statistics with?
Beyond the European Statistical System, EFTA collaborates with a range of countries to strengthen their statistical capacity, often in cooperation with Eurostat and other international organisations like UNECE. The basis for this cooperation is an administrative arrangement – a renewable three-year agreement with Eurostat.
Technical cooperation with partner countries outside the ESS includes the following regions and countries:
- EU candidate and potential candidate countries: Albania, Bosnia and Herzegovina, Georgia, Kosovo, Moldova, North Macedonia, Montenegro, Serbia, Türkiye and Ukraine.
- EU Neighbourhood Policy (ENP) countries: Algeria, Egypt, Israel, Jordan, Lebanon, Libya, Morocco, Northern Cyprus, Palestinian Authority, Syria and Tunisia (ENP South) and Armenia, Azerbaijan, Georgia, Moldova and Ukraine (ENP East).
- Caucasus and Central Asian countries: Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan (in collaboration with UNECE).
Where is the EFTA Secretariat located?
Geneva: The Headquarters in Geneva services the EFTA Council and supplies services for policy development, negotiations and the implementation of free trade and cooperation agreements with countries outside the European Union.
Brussels: At its largest duty station – EFTA House in Brussels – the Secretariat supports the management of the EEA Agreement and assists Member States in the elaboration of input to EU decision making, working closely with the European Commission and the missions and ministries in Iceland, Liechtenstein and Norway.
Luxembourg: The EFTA Statistical Office in Luxembourg contributes to the development of the European Statistical System and fosters statistical cooperation with Eurostat.
What is the EFTA Secretariat’s mission?
The EFTA Secretariat is a committed and trusted partner, providing high quality expertise and advice to its Member States in promoting free trade and economic integration.
How can I work for the EFTA Secretariat?
Vacancies at the EFTA Secretariat are open to EFTA nationals (Iceland, Liechtenstein, Norway and Switzerland) and sometimes to EU nationals. Open vacancies are published under Careers. All applications must be submitted through EFTA’s recruitment system.
Recent graduates and young professionals from the EFTA States are encouraged to apply for EFTA’s Junior Professional Programme, which opens for applications in February/March every year. The programme starts in September and lasts for 11 months.
How can I get access to EFTA documents?
The EFTA Secretariat keeps a public register of documents drawn up by the EFTA Secretariat, accessible in the Public Journal.
Documents published on the EFTA website are available in the document library.
The EEA Supplement to the Official Journal of the European Union is available here.
The EFTA Secretariat deposits its archives at the Historical Archives of the European Union (HAEU), located at the European University Institute in Florence, Italy. The fonds, which includes EFTA documents that are over 30 years old, has been inventoried and is accessible here. The documents are fully available to the public and may be consulted at the HAEU.
It is possible to consult documents that are less than 30 years old at EFTA’s Headquarters in Geneva by written request. To request document access, please contact access [at] efta.int (access[at]efta[dot]int) or see the Public Access page for more information.
How can I visit the EFTA Secretariat?
The EFTA Secretariat welcomes requests for presentations on EEA- and trade-related matters from groups of government officials, politicians, organisations and students visiting Brussels or Geneva. You can request a visit using our online booking tool.
For further questions about visiting the Secretariat, please contact us at visits [at] efta.int (visits[at]efta[dot]int).
How can I contact the EFTA Secretariat?
Contact details for all staff members at the EFTA Secretariat are available in the staff directory.
For questions or media requests, please contact our Head of Information and Communications, Asdis Olafsdottir.
How did the United Kingdom’s relations with the EEA EFTA States change when it left the European Union and the European Economic Area?
The United Kingdom (UK) ceased to be a contracting party to the EEA Agreement after its withdrawal from the European Union on 31 January 2020. This follows from the two-pillar structure and Article 126 of the EEA Agreement, which states that the EEA Agreement applies to the territory of the EU and the three EEA EFTA States. Nevertheless, during the transition period (which ended on 31 December 2020) the UK continued to be treated as an EEA State. The trade relationship between the EEA EFTA States and the UK after the transition period had to be agreed in negotiations between the EEA EFTA States and the UK.
How did the United Kingdom’s departure from the European Union impact EEA EFTA and UK citizens who were already residing or working in an EEA EFTA State or the United Kingdom?
The EEA EFTA States and the UK signed a Separation Agreement on 28 January 2020.
The Separation Agreement mirrors the relevant parts of the EU–UK Withdrawal Agreement and secures the rights of EEA EFTA and UK citizens already residing or working in an EEA EFTA State or the UK, respectively. In addition to provisions on citizens’ rights, the Separation Agreement covers other separation issues – such as goods placed on the market before the end of the transition period, intellectual property rights, ongoing police and judicial cooperation, judicial procedures, data protection and public procurement – and institutional provisions.
Further information on the EEA EFTA – UK Separation Agreement can be found here.
Does the United Kingdom have a free trade agreement with the EEA EFTA States?
The EEA EFTA States and the UK signed a comprehensive Free Trade Agreement on 8 July 2021.
The agreement covers the full range of trade in goods, services and investment, digital trade, capital movements, government procurement, intellectual property, competition, subsidies, small and medium-sized enterprises, good regulatory practices and regulatory cooperation, recognition of professional qualifications, and trade and sustainable development. It also encompasses legal and horizontal issues including dispute settlement.
Further information on the EEA EFTA – UK Free Trade Agreement can be found here.
Since Switzerland is an EFTA State but not a part of the EEA, what is the trade relationship between Switzerland and the United Kingdom?
In order to ensure that the mutual rights and obligations in Switzerland’s relationship with the United Kingdom continue to apply as far as possible beyond the UK's withdrawal from the EU, and to create a basis for expanding relations in the future, Switzerland has concluded agreements with the UK in certain areas, including trade. The Switzerland–UK Trade Agreement came into force on 1 January 2021 and contains provisions on trade in goods – including provisions on preferential tariffs, tariff rate quotas and non-tariff measures such as sanitary and phytosanitary measures; intellectual property, including geographical indications; and government procurement.
Due to Liechtenstein’s participation in the Swiss customs territory, parts of this agreement have also been extended to Liechtenstein.
Further information on the Switzerland–UK Trade Agreement can be found here.