European Free Trade Association

(redirected from EFTA)
Also found in: Dictionary, Legal, Acronyms, Encyclopedia, Wikipedia.

European Free Trade Association (EFTA)

a regional ‘free trade area’ established in 1959 with the general objective of securing the benefits to be derived from greater INTERNATIONAL TRADE (see TRADE INTEGRATION entry for details). There were originally seven members of EFTA: the UK, Sweden, Switzerland, Austria, Denmark, Norway and Portugal; these countries opted for a less comprehensive integration of their economies than that required by membership of the EUROPEAN UNION (EU) formed the year previously. In 1973, however, the UK and Denmark left and joined the EU, and Portugal joined the EU in 1986. Three countries have joined EFTA: Finland in 1961, Iceland in 1970 and Liechtenstein in 1991. However, the whole future of EFTA has been put in the melting pot as a further three members (Finland, Austria and Sweden) joined the European Union in 1995 and it is possible that others may follow. See EUROPEAN ECONOMIC AREA.

European Free Trade Association (EFTA)

a regional alliance established by the Stockholm Treaty, 1959, with the general objective of securing the benefits of FREE TRADE for its member countries. EFTA came about following the breakdown of attempts in the latter half of the 1950s to create a large European-based CUSTOMS UNION. Those countries in favour of the customs union approach, with its detailed commitment to long-term economic integration, duly formed the EUROPEAN UNION (EU) in 1958. The remainder, for a variety of reasons such as colonial connections and a political preference for neutrality, chose the FREE TRADE AREA route and formed EFTA.

There were seven original members of EFTA: Austria, the UK, Denmark, Norway, Portugal, Sweden and Switzerland. Finland joined in 1961, Iceland in 1970 and Liechtenstein in 1991. In 1973, however, the UK and Denmark left and joined the EU, and Finland, Sweden and Austria joined the EU in 1995.

Import restrictions on trade between member countries were abolished in stages over the period 1960–66, while each country continued to operate its own separate TARIFFS, etc., against nonmembers.

See EUROPEAN ECONOMIC AREA, GAINS FROM TRADE.