The European Free Trade Association (EFTA) is an intergovernmental organization. It is set up for the promotion of free trade and economic integration to the benefit of its Member States. The Stockholm Convention which established the EFTA was signed on January 4, 1960 in Stockholm by seven countries such as Austria, Denmark, Norway, Portugal, Sweden, Switzerland, and the UK. The four current member states of the EFTA are Iceland, Liechtenstein, Norway and Switzerland.
The EFTA manages the EFTA Convention, which forms the legal basis of the organization and governs free trade relations between the EFTA States, EFTA’s worldwide network of free trade and partnership agreements, and the European Economic Area (EEA) Agreement, which enables three of the four EFTA Member States (Iceland, Liechtenstein and Norway) to participate in the EU’s Internal Market.
The EFTA was founded in 1960 on the premise of free trade as a means of achieving growth and prosperity amongst its Member States as well as promoting economic co-operation between the Western European countries. However, the immediate aim of the association was to provide a framework for the liberalization of trade in goods amongst its Member States. EFTA was established as an economic counterbalance to the more politically driven EEC. EFTA has actively pursued trade relations with third countries in and beyond Europe. Recently, the EFTA network of free trade agreements has reached across the Atlantic and into Asia.
Three of the EFTA countries are part of the European Union Internal Market through the Agreement on a European Economic Area (EEA). The EFTA states have jointly concluded free trade agreements with a number of other countries.