In this article, We learn about “European Free Trade Association (EFTA)”.Let’s Go!
The European Free Trade Association (EFTA) is an intergovernmental organization of Iceland, Liechtenstein, Norway and Switzerland.
EFTA was established to promote free trade and economic integration for the benefit of its four member states and their global trading partners.
European Free Trade Association (EFTA) was established in 1960 by the Stockholm Convention.
Relations with the EEC, later the European Community (EC) and the European Union (EU) have been central to EFTA’s activities from the very beginning.
Since the early 1990s, EFTA has actively developed trade relations with third countries inside and outside Europe.
What does EFTA do?
- Maintenance and development of the EFTA Convention, which regulates economic relations between the four EFTA countries.
- administers the European Economic Area Agreement (EEA Agreement), which brings together the member states of the European Union and the three EFTA countries in one market (also known as the “internal market”).
- Developing EFTA’s global network of free trade agreements.
Which countries are in the European Free Trade Association?
EFTA member countries are:
- Iceland
- Liechtenstein
- Norway
- Switzerland.
The four EFTA countries are competitive in a number of areas critical to the global economy, ranking among the top in the world for competitiveness, wealth creation per capita, life expectancy and quality of life.
- Switzerland is a world leader in pharmaceuticals, biotechnology, machinery, banking and insurance.
- LiechtensteinLike Switzerland, it is highly industrialized and specializes in the production of capital-intensive and R&D-driven technology products.
- Iceland’s economy benefits from renewable natural resources, especially rich fishing grounds, and is increasingly diversifying into other industries and services.
- The abundance of natural resources also contributes significantly to Norway’s economic strength, including important service sectors such as oil and gas exploration and production, fishing, and maritime and energy-related services.
How does the European Free Trade Association work?
The European Free Trade Association is an intergovernmental organization that acts as a free trade bloc.
It is administered by the European Free Trade Association Secretariat, which has offices in Geneva (Switzerland) and Brussels (Belgium).
Its activities are regulated by the ETFA supervisory body (equivalent to the European Commission) and the EFTA Court (equivalent to the European Court of Justice).
Switzerland is not involved with monitoring agencies or courts, as these agencies are responsible for regulating EFTA’s activities in the European Economic Area (of which Switzerland is not a member).
Why is EFTA important?
The four EFTA countries are all open, developed economies with trade figures well above expectations for a combined population of just under 14 million.
European Free Trade Association is the ninth largest trader in goods and the fifth largest trader in services in the world.
EFTA is the EU’s third most important trade partner in goods and the second largest trade partner in services.
What is the difference between the European Free Trade Area (EFTA) and the European Economic Area (EEA)?
The European Free Trade Area (EFTA) and the European Economic Area (EEA) are two international trade and economic organizations that are independent from the European Union but work closely with it.
The European Free Trade Association consists of Norway, Liechtenstein, Iceland and Switzerland. It provides a framework for free trade among member states and the conclusion of free trade agreements (FTAs) with other countries, particularly the 28 member states of the European Union.
The EEA bundles the three EFTA countries (Norway, Liechtenstein and Iceland) with EU member states in a single market.
EFTA and EEA promote free trade and cooperation among member states, but without most of the political obligations and financial ramifications of EU membership.
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The EU and the European Free Trade Association are “connected” through the European Economic Area.
European Economic Area unifies three EFTA countries (Norway, Liechtenstein and Iceland) with 28 EU member states in one internal market market, all national economies In this market subject to the same basic rules .
After becoming members of the European Economic Area, countries can participate in the EU single market without becoming members of the EU.
However, this means they are not involved in the negotiations for single market regulations .
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