The European Free Trade Agreement, also known as EFTA, was established in 1960 with the aim of promoting free trade among its member states. It was originally formed by seven countries, namely Austria, Denmark, Norway, Portugal, Sweden, Switzerland, and the United Kingdom. Since then, the membership has expanded and contracted, with some countries joining, leaving, and rejoining the organization over the years.
The primary objective of the EFTA was to eliminate tariffs and other trade barriers among its member states. By doing so, it aimed to increase the flow of goods, services, and capital among its member countries, which would in turn stimulate economic growth and create more job opportunities. The negotiations for establishing the agreement took place in Stockholm, and it was signed on January 4, 1960.
By the end of the 1960s, the EFTA member states had achieved significant success in promoting free trade among themselves. Intra-EFTA trade had increased by several times, and the member countries had created a well-functioning free trade area based on the principles of non-discrimination, transparency, and fair competition.
During the 1970s, the EFTA countries faced a new challenge with the formation of the European Economic Community (EEC), which later became the European Union (EU). The EEC was a supranational organization that aimed to establish a single market among its member states, which included several EFTA countries as well. The EFTA countries were faced with a choice between joining the EEC or remaining outside of it.
In the end, all EFTA countries except for Switzerland decided to join the EU one by one, with the last one being Norway in 1995. As a result, the EFTA lost its significance as a separate trade bloc and became a small group of countries that maintained some degree of cooperation and coordination on trade-related issues.
Today, the EFTA consists of four member states, namely Iceland, Liechtenstein, Norway, and Switzerland. They have developed a network of free trade agreements (FTAs) with various countries and regions outside of the EU, including Canada, Japan, and several Latin American countries.
In conclusion, the European Free Trade Agreement was a significant achievement for the seven original member states in 1960. It created a functioning free trade area that stimulated economic growth and created jobs. However, with most of its former members joining the EU, the EFTA has lost its relevance as a separate trade bloc. Nevertheless, the current member states continue to promote free trade with other countries, demonstrating the enduring legacy of the original EFTA.