Free Trade Agreements

EFTA Free Trade Agreements (FTAs) establish a free trade area between the partners. They provide for free trade in industrial goods, including fish and other marine products; cover trade with processed agricultural products; provide for trade disciplines; govern preferential trade in goods under the FTA and contain elaborate rules on customs and origin matters, including cumulation[1]. Trade in basic agricultural products is covered by separate bilateral agreements relating to the FTA.

FTAs liberalise trade in services, investments and public procurement in more recent agreements, including those with Mexico, Singapore, Chile and the Republic of Korea. Other agreements contain rules allowing for the further development and deepening of relations in these fields through evolutionary clauses, e.g. with partners in the Mediterranean region. They include rules on competition to avoid adverse effects in the case of restraints of competition which could frustrate the liberalisation benefits of an FTA.

They provide for the protection of intellectual property rights in accordance with high standards, and contain provisions for the avoidance and settlement of disputes between the parties. They are adapted and upgraded regularly in order to remain as efficient as possible, taking into account developments in the World Trade Organization and in the bilateral trade relations of major trading partners.

[1] Cumulation: products originating in one partner country may be used as materials in the production of a product in another partner country without prejudice to the preferential status of the finished product. 

What is in an EFTA Free Trade Agreement?

All EFTA FTAs cover trade in industrial products, including fish, and processed agricultural products. They include trade disciplines as well as rules on competition, protection of intellectual property and payments and transfers. Bilateral arrangements between the individual EFTA countries and the respective partner countries cover trade in basic agricultural products. Since 2000, EFTA FTAs with a number of partners also contain substantive rules liberalising trade in services, investments and public procurement.

Different Levels of Economic Development

EFTA FTAs take into account the different levels of economic development of partner countries, sometimes leading to an asymmetrical approach. While the EFTA States normally abolish all tariffs and other restrictions on industrial products at entry into force of the FTA, less economically developed partner countries may benefit from transition periods. These periods are intended to provide the partners with the necessary time to adapt their economies to free trade conditions. 

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Joint Declarations on Cooperation

In addition to FTAs, the EFTA States have concluded several Joint Declarations on Cooperation (JDCs). These JDCs:

• Can be the first step towards free trade relations between the partners concerned. They aim to promote the harmonious development of economic relations; create an environment supportive of private entrepreneurship, free competition and economic activity based on market forces; and examine the means to expand and liberalise trade relations.
  
• Cover cooperation on trade-related issues such as technical and other barriers to trade, information on foreign trade, competition, trade in services, public procurement markets and intellectual property rights.
  
• Aim to improve conditions for the implementation of private sector cooperation projects.

The parties meet in a joint committee to review their cooperation on trade and related matters, and to discuss any other issues of mutual interest. The joint committee may formulate appropriate recommendations on cooperation between the partners concerned.  

For an overview of current JDC partners, please see the FTA Map.