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Home→The Westburn Dictionary of Marketing→E→European Free Trade Association (EFTA)

European Free Trade Association (EFTA)

Definition:
This free trade area was established in 1960, following the ratification of the Stockholm Convention signed in November 1959. EFTA originally comprised seven members: Austria, Denmark, Norway, Portugal, Sweden, Switzerland and the UK with Finland joining on 27 March 1961 as an associate member. The association was formed following the breakdown of negotiations for a wider European Free Trade Area embracing the EEC, the UK and the other members of the Organisation for European Economic Co-operation (OEEC). Typical of any free trade area, the seven undertook to abolish all tariffs, quotas and other restrictions on products which originated or were produced within member countries over a ten-year period (subsequently reduced to six years). On the other hand, unlike the EEC's external tariff they maintained their own tariffs against imports from non-member countries. As a result a system of 'declaration of origin' became essential to discriminate EFTA goods from non-EFTA goods in order to prevent the deflection of trade. EFTA's composition, however, has changed. Iceland joined on 1 March 1970, the UK and Denmark left EFTA on 31 December 1972 and Portugal left on 31 December 1985. Today's remaining EFTA countries (Austria, Finland, Iceland, Norway, Sweden and Switzerland) have negotiated separate trade treaties with the EEC. Provision has been made for maintaining free trade in most industrial goods between the UK and former EFTA partners and the elimination of duties on most industrial goods traded between other EEC members and EFTA.

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© Westburn Publishers Ltd 2002, The Westburn Dictionary of Marketing edited by Michael J Baker, ISBN 978-0-946433-01-8. www.themarketingdictionary.com. Entry: [Joanna Kinsey and Marie Clare Cameron], [1998].