European Economic Area (EEA) – General information

The Agreement on the European Economic Area (EEA) extends the Single Market of the EU to three out of the four EFTA countries, namely Iceland, Norway and Liechtenstein. Switzerland, while being a member of EFTA is not a party to the EEA, having voted against membership in December 1992. Within the EEA there is free movement of goods, services, capital and persons. Citizens of all 30 countries have the right to move freely throughout the EEA - to live, work, set up business, invest or buy real estate, with a few minor limitations in certain sectors.

Since the establishment of EFTA in 1960, the European Community has been EFTA's most important trading partner. In 1972 individual EFTA countries signed free trade agreements with the EEC with the aim of abolishing import duties on industrial products. This aim was more or less achieved by 1977. The idea of a European Economic Area dates back to a joint EFTA-EEC ministerial meeting in Luxembourg in 1984 where a declaration mentioning the establishment of a European Economic Space later "Area") was adopted.

Between 1984 and 1989 the removal of obstacles to trade was undertaken on a case- by-case basis. This approach proved inadequate in the run-up to the EU's Single Market Programme due to be completed by 1993. The need for a more structured arrangement and for common institutions became increasingly evident. In 1989, Jacques Delors, then President of the Commission, proposed a new form of partnership, which was to become the EEA Agreement. The EFTA states, at that time Austria, Finland, Iceland, Liechtenstein, Norway, Sweden and Switzerland, welcomed the ideas with enthusiasm; formal negotiations began in June 1990 and the Agreement was signed on 2 May 1992 in Oporto. The Agreement entered into force on 1 January 1994. Since 1 January 1995, Austria, Finland and Sweden have participated in the EEA as EU member states. Liechtenstein became a full participant in the EEA on 1 May 1995.

Throughout the European Economic Area, the same rules are applied to maintain a homogeneous market. The EEA Agreement is based on the primary legislation of the European Union, as developed over the past 30 years and on the succeeding secondary legislation (Acquis Communautaire). Hence, a large part of the EEA Agreement is identical to the relevant parts governing the four freedoms as laid down in the Treaty of Rome of 1957. The EEA Agreement is made up of 129 articles as well as 22 annexes and 49 protocols. The annexes refer to the Acquis Communautaire applicable in the EEA, without fully reproducing these legal texts. The protocols include provisions on specific areas such as rules on the origin of goods, transition periods for the EFTA states in certain fields and simplified customs procedures. These matters are generally not based on EU legislation.

One of the central features of the EEA Agreement, and the one which distinguishes it most from other international agreements under public international law, is that its common rules are continuously updated by adding new EU legislation. This aspect is essential given the large output of Community legislation on the internal market. Every few weeks EEA-relevant pieces of legislation are incorporated into the EEA Agreement by decision of the EEA Joint Committee.

The Agreement provides for information and consultation procedures at all stages of the Community's decision-making process. EFTA experts are consulted by the commission in its preparation of draft legislation. The EFTA EEA states can ask for consultation on matters of concern. The EFTA-EEA states can negotiate adaptations to Community legislation in its application to the EFTA side when this is called for by special circumstances and agreed by both sides.