Daily Current Affairs on European Free Trade Association (EFTA) for UPSC Civil Services Examination (General Studies) Preparation

Foreign Trade - Trends and Policy

Economic Affairs

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European Free Trade Association (EFTA)

Context: Recently Norway’s Minister of Trade and Industry has visited India with an aim to enhance collaboration between European free trade partners and India.

About The European Free Trade Association (EFTA)

  • The Stockholm Convention created it as an intergovernmental organization in 1960.

Objective

  • Promotes free trade and economic cooperation among its members in Europe and around the world.

Member Countries

  • Iceland, Liechtenstein, Norway, and Switzerland are the current members of EFTA.

The 4 EFTA States are competitive in global economy and score among the highest in the world in competitiveness, wealth creation per inhabitant, life expectancy and quality of life.

  • All EFTA members are open, competitive economies dedicated to progressive trade liberalization in the global arena as well as through free trade agreements. 

  • In contrast to the European Union (EU), EFTA is not a customs union. This means that the individual EFTA States are free to set their own customs tariffs and arrange other foreign trade measures vis-à-vis the non-EFTA States.

  • Unlike the European Union (EU), EFTA does not have a customs union. This means that individual EFTA countries are allowed to set their own tariffs and other foreign trade measures in relation to non-EFTA countries.

  • The EFTA Council is the highest governing body of EFTA.

  • The Council usually meets 8 times a year at the ambassadorial level (heads of permanent delegations to EFTA) and twice a year at Ministerial level.

  • The EFTA Parliamentary Committee (PC) and the EFTA Consultative Committee (CC) are two important advisory bodies to the EFTA Council.

  • The PC is a forum for parliamentarians in the four member states while the CC is comprised with representatives from trade unions and employers’ organisations.

The association is in charge of the following:

  • Free commerce among EFTA members; EFTA's membership in the European Economic Area (EEA), which includes the European Union and three EFTA members (Iceland, Liechtenstein, and Norway, but not Switzerland);

  • EFTA's international network of free trade agreements.

  • The EFTA countries have one of the most extensive networks of Free Trade Agreements (FTAs). These FTAs cover approximately 60 countries and territories, including the European Union.


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