EEA EFTA States assess impact of cross-sectoral EU initiatives on the EEA

To safeguard the EEA EFTA States’ interests in today’s changing geopolitical landscape, it is essential to conduct strategic, timely assessments of cross-sectoral EU initiatives and their impact on the internal market and EEA cooperation. This includes analysing the risk of new barriers and fragmentation in the internal market and the effects of such cross-sectoral EU initiatives on the EEA EFTA States’ interests and economic security, regardless of whether they are made part of the EEA Agreement.

This is among the key findings of a report that was presented to the EFTA Standing Committee by the Task Force on Files with Distinctive Horizontal Dimensions on 4 July 2024. 

The EU is increasingly addressing global and geopolitical challenges with broad, cross-sectoral internal market initiatives that also contain elements such as trade policy, industrial policy and economic security, as well as broader goals like the green and digital transitions. The internal market is often the EU’s preferred tool to deal with these new types of challenges. To adapt to the current geopolitical context, the EU’s understanding of the internal market has evolved, raising questions about how this development may affect EEA cooperation. 

Ensuring the integrity of the internal market and preventing its fragmentation is one of the overriding objectives of the EEA cooperation. With more EU policy initiatives and legal acts featuring cross-sectoral aspects, all parties to the EEA Agreement share a common interest in finding solutions that ensure the continued homogeneity of the internal market and a level playing field for its citizens and undertakings.

Against this background, in July 2023 the EFTA Standing Committee established a Task Force with the mandate to assess the practical effects of files with “distinctive horizontal dimensions” on the internal market and the EEA EFTA States’ participation therein, and to look for ways to ensure a holistic approach to the different files. Its main delegates are Ms Elisabeth Walaas from Norway (Chair), Ms Erna Sigríður Hallgrímsdóttir from Iceland and Dr. iur. Andrea Entner-Koch from Liechtenstein. 

“The Task Force was trusted with the essential task of reflecting and giving guidance to the EEA EFTA States on how to guarantee our interests as integral participants of the internal market in an increasingly complex landscape,” said the Task Force Chair Ms Elisabeth Walaas in her presentation to the Standing Committee.

In carrying out its work, the Task Force looked at examples of EU acts and proposals that affect the internal market while also serving broader policy objectives, blurring the lines between internal market and other policy areas such as climate, trade, industry and security. Some of these acts aim to reduce economic dependencies and protect the internal market from distortive trade practices. As economic security has become more prominent on the EU agenda, the European Commission has developed various trade policy measures impacting the internal market, including the Anti-Coercion Instrument and the International Procurement Instrument. Other acts examined by the Task Force are crucial for the EU’s ambitious climate policy objectives, such as the proposed Net Zero Industry Act, the Critical Raw Materials Act and the Chips Act. 

In the resulting report, the Task Force sets out specific recommendations for the EEA EFTA States, the EFTA Standing Committee and the EFTA Secretariat, with the aim of establishing work procedures that enable the timely, holistic and strategic assessment of all EU cross-sectoral and horizontal policy initiatives that may have an impact on the functioning of the internal market.

“By conducting strategic, holistic and timely assessments, the Task Force is convinced that the EEA EFTA States will be able to identify potential challenges and opportunities related to broader policy initiatives and specific acts early on,’’ added Ms Walaas. “The overall objective remains as clear and valid as ever: to secure the upholding of a dynamic and homogenous EEA, based on a level playing field for all actors participating in it.”

The Task Force recommends that the EFTA Standing Committee provide a plan, with the assistance of the EFTA Secretariat, to determine the way ahead. 

Read the full report