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European Free Trade Association

Regional trade organization and free trade area / From Wikipedia, the free encyclopedia

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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.

Quick facts: European Free Trade Association Native names ...
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 (Norwegian)
  • Associaziun europeica da commerzi liber (Romansh)
  • Eurohppá friddjagávpelihttu (Northern Sami)[1]
Logo of the European Free Trade Association
Location of the EFTA{{{1}}} (green)in Europe (green & dark grey)
Location of the EFTA (green)

in Europe (green & dark grey)

46°57′N 7°27′E
Largest cityOslo
59°56′N 10°41′E
Official working
Official languages
of member states
TypeRegional organization, Free-trade area
Member states
 Secretary General
Henri Gétaz
 Council Chair
 Convention signed
4 January 1960
3 May 1960
529,600 km2 (204,500 sq mi)
 2020 estimate
26.5/km2 (68.6/sq mi)
GDP (PPP)2020 estimate
$1.0 trillion[3]
 Per capita
GDP (nominal)2020 estimate
$1.1 trillion[3]
 Per capita
Time zone
 Summer (DST)
Note: Iceland observes WET all year, while Liechtenstein, Norway and Switzerland observe CET and CEST.
EFTA House in Brussels, 2022

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]

Since 1995, only two founding members remain, 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.

Whilst 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.[dubious ]