EFTA and EEA at a Glance

By | October 12, 2021


According to GRADINMATH.COM, EFTA stands for European Free Trade Association.


EFTA was founded in 1960 in Stockholm (Sweden) by seven states as a kind of “competitor” to the then European Economic Community (EEC) (see graphic and table). The EFTA is often translated vaguely as “European Free Trade Area”.


Economic growth, full employment, an increase in the standard of living, among other things by removing trade barriers between the member states in the case of non-agricultural goods.

Members (4)

  1. Iceland
  2. Liechtenstein
  3. Norway
  4. Switzerland (Switzerland only takes part in EFTA activities to a limited extent)

EFTA in the founding year 1960

The graphic shows the membership status of the EEC (blue) and EFTA (yellow) in 1960 as follows:

Belgium Denmark
Germany Great Britain
France Norway
Italy Austria
Luxembourg Portugal
Netherlands Sweden

The EEC states often operated as the “Inner Six”, the EFTA states as the “Outer Seven”. In principle, it was a competition between France and Great Britain for supremacy in Europe and thus over the regaining strength of Germany, coupled with France’s striving for subsidies, especially in the agricultural sector.


Economic cooperation with the EU today extends primarily to the European Economic Area (EEA), which came into force in 1994.

The organizational and structural transformation phase from the seven to the four partnership was completed in 1995. Associated with this is an increased opening of free trade policy towards third countries.

Main organs

  1. Council as a governing body in which all member states are represented equally with one vote; Resolutions require unanimity.
  2. Court of Justice in Luxembourg, responsible for disputes in the application of the EEA Agreement (EEA = European Economic Area).
  3. Secretariat with a Secretary General at the EFTA headquarters in Geneva (Switzerland).


After 6 of the 10 members resigned (see above), EFTA is only a mini-organization in unofficial “processing”. The cohesion of the EFTA special-purpose association, which has now become very heterogeneous, is also heavily burdened, as Switzerland does not participate in the EEA.

You may also be interested in this internal website
• The EEA at a glance

members of EFTA
(current and former members in the order of their joining or leaving)

Year of joining Exit year
Norway 1960
Switzerland 1960
Denmark 1960 1973
Great Britain 1960 1973
Portugal 1960 1986
Austria 1960 1995
Sweden 1960 1995
Iceland 1970
Finland 1986 1995
Liechtenstein 1991



The European Economic Area (EEA) is a deepened free trade area between the European Union and states of the European Free Trade Association (EFTA). The EEA came into force in 1994 and de facto expands the European internal market.


Convergence or approximation of the free movement of goods, people, services and capital; Dismantling of trade barriers; Coordination in different policy areas.

Members (31)

  • 28 EU member states
  • 3 EFTA member states (Iceland, Liechtenstein and Norway)

Note: The fourth EFTA state, Switzerland, voted against participation in the EEA in a referendum in 1992.


In contrast to full EU members, the EFTA states have no decision-making power, but only certain rights to have a say and to be heard.

To enforce the EEA, the EFTA States have created additional institutions: EEA Council, Joint Committee, Joint Parliamentary Committee (made up of members of the EFTA States and the European Parliament), EFTA Surveillance Authority and EFTA Court of Justice.


In principle, the EFTA states adopt the “four freedoms” applicable to the European internal market, ie the rules for the free movement of goods, people, services and capital as well as the main features of EU competition law. Special exception rules are limited to very few sectors.

Technical barriers to trade (different dimensions or standards) are being abolished in step with the European Community (now the European Union).

The EU’s common agricultural policy will not be extended to include EFTA, but trade in agricultural and fishery products will be greatly facilitated through bilateral agreements. The cooperation also extends to consumer protection, environmental and social policy and includes coordination in the financial and monetary areas.


The EEA is considered to be the strongest economic area in the world and is usually used as a benchmark for European economic performance in international comparisons.

The “remnants” of the EFTA – already weakened by Switzerland’s non-participation in the EEA – are unlikely to be economically viable on their own in the medium term. Sooner or later, EFTA will have to be dissolved and the EFTA states will have to join the EU.

The European single market has been in force since 1993, but not yet completed; due to the non-implementation of community directives in the EU member states, including in Germany (!), obstacles still exist.

European Free Trade Association