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About European Free Trade Association (EFTA)

Focus: GS II: International Relations

Why in News?

India and the four-nation bloc EFTA recently discussed ways to resume negotiations for a free trade agreement with a view to strengthening economic ties between the two regions.

European Free Trade Association (EFTA)

Establishment and Objectives:

  • EFTA is an intergovernmental organization created by the Stockholm Convention in 1960.
  • The main objective of EFTA is to promote free trade and economic integration among its member countries within Europe and globally.

Membership and Free Trade Agreements:

  • EFTA currently has four member countries: Iceland, Liechtenstein, Norway, and Switzerland.
  • The EFTA member states have developed one of the largest networks of Free Trade Agreements (FTAs) that covers over 60 countries and territories, including the European Union (EU).

Customs Union and Governance Structure:

  • Unlike the EU, EFTA is not a customs union, which means that each EFTA member state can set its own customs tariffs and negotiate foreign trade policies independently.
  • The highest governing body of EFTA is the EFTA Council, which meets eight times a year at the ambassadorial level and twice a year at the ministerial level.
  • The EFTA Secretariat is based in Geneva and assists the EFTA Council in managing the relationships between member states and negotiating and operating FTAs.
  • The EFTA Surveillance Authority (ESA) monitors compliance with European Economic Area (EEA) rules in Iceland, Liechtenstein, and Norway.
  • The EFTA Court, located in Luxembourg, has the authority to settle internal and external disputes related to the implementation, application, or interpretation of the EEA agreement.

European Economic Area (EEA)


  • The EEA includes the Member States of the European Union (EU) and three countries of the European Free Trade Association (EFTA): Iceland, Liechtenstein, and Norway. Switzerland is not a member of the EEA.


  • The Agreement on the EEA became effective on 1 January 1994.


  • The primary objective of the EEA is to strengthen trade and economic relations among its member countries.

Pillars of the Internal Market:

  • The EEA focuses on four fundamental pillars of the internal market: the free movement of goods, people, services, and capital.


February 2024