52nd Annual Report 2012 of the European Free Trade Association Annual Report of the European Free Trade Association 2012

Editor: Tore Grønningsæter Copy Editor: Juliet Reynolds Layout: INSPIRIT International Communication sprl Worldwide network map: Orangemetalic Published March 2013

Cover picture: Vennesla Library and Cultural Centre in Vennesla, Norway, designed by Helen & Hard. Photo: © Hufton + Crow/VIEW/Corbis

Editor’s Note: For an overview of EFTA’s activities and institutional framework, please see the publication “This is EFTA”. Further information is also available on our website: www.efta.int. Table Of Contents

FOREWORD 5 EFTA-EU Cooperation in Statistics 27 EFTA COUNCIL 6 Technical Cooperation in the Field of Statistics 28 EFTA Ministerial Meetings 6 The EFTA Council 6 EEA GRANTS AND The EFTA Convention 7 NORWAY GRANTS 30 Annual Meeting of EFTA and EU Finance Ministers 7 ADVISORY BODIES 33

FREE TRADE RELATIONS 8 The Parliamentary Committee 33 EFTA Consultative Committee 34 Main Developments 9 The EEA EFTA Forum 35 Management of EFTA’s Free Trade Agreements and Joint INFORMATION ACTIVITIES 37 Declarations on Cooperation 11 Technical Cooperation 11 ADMINISTRATION 38 Relations with the WTO 11

THE EEA AGREEMENT 13 APPENDICES 39

The EEA Council 13 FIGURES The EEA Joint Committee 14 Fig 1 Joint Declarations on Cooperation 9 The Standing Committee of and Free Trade Agreements between the EFTA States 14 EFTA and non-EU Partners Legal and Institutional Fig 2 Joint Committee Meetings in 2012 11 Fig 3 Meetings Held and EU Acts 16 Matters 14 Incorporated in 2012 Free Movement of Goods 15 Fig 4 Publication in the EEA Supplement 37 Free Movement of Capital 2012 and Services 22 Fig 5 2012 EFTA Budget 38 Fig 6 Contributions from the EFTA States to 38 Free Movement of Persons 23 the 2012 EFTA Budget Flanking and Horizontal Policies 23 4 ANNUAL REPORT OF THE EUROPEAN FREE TRADE ASSOCIATION 2012 TRADE ASSOCIATION THE EUROPEAN FREE REPORT OF ANNUAL EFTA and the 15 beneficiary countries in Central and Southern Europe. Key areas of support include Foreword environment and climate change, civil society, human and social development, cultural heritage, research and In 2012, EFTA celebrated scholarships, and justice and home affairs. the 20th anniversary of the signing of the The EFTA States have preferential free trade relations Agreement on the with 60 countries in Europe and across the world, as European Economic Area well as between themselves. This means that 80% (EEA), which in 1992 of EFTA’s merchandise trade is now covered by represented a major step preferential trading arrangements. Other important towards the realisation of economic activities such as trade in services, a genuine Internal Market cross-border investment and access to government encompassing a large part procurement markets also benefit from favourable of Europe’s economy. provisions in EFTA agreements.

Today, the EEA Agreement remains of fundamental In 2012, new free trade agreements entered into force importance for the three EEA EFTA States’ with Hong Kong China, Montenegro and Ukraine. cooperation with the European Union. It integrates Furthermore, EFTA broadened the range of its free trade them into the Internal Market and is efficient in activities in terms of both geographical and substantive ensuring its homogeneity. With a population of over coverage, with negotiations taking place with several 500 million, the EEA constitutes the world’s biggest countries in Europe, Asia and Central America. EFTA common market, and the Agreement has proved to be Ministers also signed joint declarations on cooperation a durable instrument of cooperation and a reference for with Georgia and Pakistan. European integration. 5 EFTA’s free trade agreements are fully compatible with In 2012, a particularly high number of EU legal acts were incorporated into the EEA Agreement following the multilateral trading regime and are complementary a joint effort by the EU and the EEA EFTA States to to the system. The EFTA States thus continue to streamline the relevant decision-making procedures. demonstrate their full commitment to a robust Among them were the New Legislative Framework for multilateral framework and remain strong supporters Goods, the Temporary Agency Workers Directive and of the World Trade Organization. the Regulation on Roaming on Public Communications Looking ahead, the senior management of the Networks. Decisions were also taken to secure the Association will strive to ensure that the EFTA continued participation of the EEA EFTA States in the Secretariat continues to provide a high level of services EU Emissions Trading System from 2013. to our Member States and to our partner countries Through the EEA Grants and Norway Grants, Iceland, worldwide. Liechtenstein and Norway continue to contribute to reducing economic and social disparities in the Kristinn F. Árnason EEA and strengthening bilateral relations between Secretary-General ANNUAL REPORT OF THE EUROPEAN FREE TRADE ASSOCIATION 2012 TRADE ASSOCIATION THE EUROPEAN FREE REPORT OF ANNUAL EFTA COUNCIL

EFTA Ministerial Meetings The communiqués from the 2012 Ministerial meetings can be found in the appendices to this report. The EFTA Council met twice at Ministerial level in 2012, on 28 June in Gstaad, Switzerland and on 12 November in Geneva. The Council was chaired by New Secretary-General Switzerland in the first half of 2012 and by Iceland in On 1 September, Kristinn F. Árnason of Iceland took up the second. his duties as Secretary-General of EFTA. As outgoing The EFTA Ministers discussed the state of the global Ambassador and Permanent Representative to EFTA, economy and the prospects for international trade, the World Trade Organization and other international expressing concern over weakening international organisations in Geneva, as well as former Ambassador economic activity and the projected slowdown in to Norway, he joined the Secretariat with a wealth of global trade. They underlined the importance of experience in EFTA affairs. His predecessor, Kåre policies to support economic and financial stability Bryn, stepped down on 31 August, along with Bergdís and job creation, while at the same time preventing Ellertsdóttir, Deputy Secretary-General in Brussels. At protectionism and ensuring open, competitive markets. their meeting in Gstaad, the EFTA Ministers thanked them for their excellent service to the organisation and Ministers signed joint declarations on cooperation to its members. (JDCs) with Georgia and Pakistan. They reviewed developments in EFTA’s ongoing trade negotiation processes with partners worldwide, including Bosnia 6 The EFTA Council and Herzegovina; the Central American States of Costa Rica, Guatemala, Honduras and Panama; the The EFTA Council met eight times in 2012 at the level Customs Union of the Russian Federation, Belarus and of heads of permanent delegations to EFTA in Geneva. Kazakhstan; India; Indonesia; Malaysia and Vietnam. Delegates discussed EFTA’s relations with countries Ministers decided to examine further the possibilities outside the European Union, including free trade of developing closer trade relations with potential negotiations and the management of existing free trade partners in the Sub-Saharan African region. They also agreements. They also approved a number of technical emphasised the importance of revising and updating cooperation projects and dealt with administrative and existing free trade agreements in the light of global budgetary matters. developments in this area. At their June meeting in Gstaad, EEA EFTA Ministers welcomed the 20th anniversary of the signing of the EEA Agreement, and highlighted that the Agreement was continuing to function well in accordance with the original objectives. Ministers welcomed the recent progress made with regard to the processing of acquis into the Agreement, noting that the amount of Single Market legislation awaiting incorporation had been substantially reduced since the beginning of 2012. Ministers noted with concern the difficulties ANNUAL REPORT OF THE EUROPEAN FREE TRADE ASSOCIATION 2012 TRADE ASSOCIATION THE EUROPEAN FREE REPORT OF ANNUAL encountered with regard to EEA EFTA participation in certain EU programmes and agencies and called on Iceland chaired the EFTA Council during the second half of 2012. all parties to look for pragmatic solutions in order to Ambassador Martin Eyjólfsson of Iceland chairing a meeting of the resolve these challenges. Council in Geneva. The EFTA Convention Annual Meeting of EFTA and The Council is responsible for the Vaduz Convention, EU Finance Ministers which is updated regularly to reflect legislative The annual meeting of EFTA and EU Finance developments in the EEA Agreement and the Swiss- Ministers took place on 13 November under the topic EU Agreements. In 2012, the Council adopted “Financial market integration and economic growth”. amendments to Annex E on Seeds and Annex Q on The meeting was chaired by Vassos Shiarly, Minister Air Transport. The Council further adopted substantial of Finance, representing the Cyprus Presidency of amendments to the Convention’s provisions regarding the EU Council. EFTA was represented by Sigbjørn agriculture, including the restructuring and renaming Johnsen, Minister of Finance of Norway, as EFTA of affected annexes. The entry into force of that Chair; Klaus Tschütscher, Prime Minister and Minister Decision is pending ratification by the Member States. of Finance of Liechtenstein; Katrín Júlíusdόttir, Further amendments to the Convention were made by Minister of Finance and Economic Affairs, Iceland; two decisions of the Committee on Mutual Recognition and Didier Burkhalter, Swiss Federal Councillor and in relation to conformity assessment under Annex I. Minister of Foreign Affairs.

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EFTA held its summer Ministerial meeting in Gstaad under the chairmanship of Switzerland. Kåre Bryn, Secretary-General; Össur Skarphéðinsson, 2012 TRADE ASSOCIATION THE EUROPEAN FREE REPORT OF ANNUAL Minister for Foreign Affairs and External Trade, Iceland; Aurelia Frick, Minister of Foreign Affairs, Liechtenstein; Johann Schneider-Ammann (Chair), Federal Councillor, Head of the Federal Department of Economic Affairs, Switzerland; and Trond Giske, Minister of Trade and Industry, Norway. FREE TRADE RELATIONS

EFTA pursued its ambitious free trade agenda in 2012, Signed Free Trade Agreements aimed at further expanding and deepening preferential The FTA signed in 2009 with the six members of the trade relations worldwide. Three free trade agreements Gulf Cooperation Council (GCC; comprising Bahrain, (FTAs) entered into force, bringing the total number Kuwait, Oman, Qatar, Saudi Arabia and the United of operational FTAs to 23, covering 27 countries. Arab Emirates) was pending ratification by some Another FTA was awaiting its entry into force. parties. By the end of the year, EFTA’s formal engagement Free Trade Negotiations with countries outside the EU had extended to 53 partners at the following levels of cooperation: In 2012, EFTA was engaged in negotiation processes with 11 countries (Bosnia and Herzegovina; the Free Trade Agreements Central American States of Costa Rica, Guatemala, Honduras and Panama; India; Indonesia; Vietnam; In 2012, EFTA had operational FTAs with 27 partner and the Russian Federation, Belarus and Kazakhstan). countries: Albania, Canada, Chile, Colombia, Croatia, Negotiations with Algeria and Thailand remained on Egypt, Hong Kong China, Israel, Jordan, Republic of hold. Korea, Lebanon, Macedonia, Mexico, Montenegro, Morocco, Palestinian Authority, Peru, Serbia, Joint Declarations on Cooperation Singapore, the Southern African Customs Union Joint declarations on cooperation were operational 8 (SACU; comprising Botswana, Lesotho, Namibia, with Georgia, Mauritius, Mongolia, MERCOSUR South Africa and Swaziland), Tunisia, Turkey and (comprising Argentina, Brazil, Paraguay and Uruguay) Ukraine. and Pakistan. ANNUAL REPORT OF THE EUROPEAN FREE TRADE ASSOCIATION 2012 TRADE ASSOCIATION THE EUROPEAN FREE REPORT OF ANNUAL

EFTA and Georgia signed a joint declaration on cooperation at the EFTA Ministerial meeting in Gstaad in June. Vera Kobalia, Minister of Economy and Sustainable Development of Georgia, and Swiss Federal Councillor, Johann N. Schneider-Ammann (EFTA Chair). Joint Declarations on Cooperation and Free Trade Agreements between

EFTA and Non-EU Partners Fig. 1 Partner Joint Declaration Free Trade Agreement Signature Signature Entry into Force Albania 10 December 1992 17 December 2009 1 November 2010 Algeria 12 December 2002 Canada 26 January 2008 1 July 2009 Chile 26 June 2003 1 December 2004 Colombia 17 May 2006 25 November 2008 1 July 2011 Croatia 19 June 2000 21 June 2001 1 April 2002 Egypt 8 December 1995 27 January 2007 1 August 2007 Georgia 28 June 2012 Gulf Cooperation Council (GCC)1 23 May 2000 22 June 2009 Hong Kong China 21 June 2011 1 October 2012 Israel 17 September 1992 1 January 1993 Jordan 19 June 1997 21 June 2001 1 September 2002 Republic of Korea 15 December 2005 1 September 2006 Lebanon 19 June 1997 24 June 2004 1 January 2007 Macedonia 29 March 1996 19 June 2000 1 May 2002 Malaysia 20 July 2010 Mauritius 9 June 2009 Mexico 27 November 2000 1 July 2001 Southern Common Market (MERCOSUR)2 12 December 2000 9 Mongolia 28 July 2007 Montenegro 12 December 2000 14 November 2011 1 September 2012 Morocco 8 December 1995 19 June 1997 1 December 1999 Pakistan 12 November 2012 Palestinian Authority 16 December 1996 30 November 1998 1 July 1999 Panama 20 July 2010 Peru 24 April 2006 24 June 2010 1 July 2011 Southern African Customs Union (SACU)3 26 June 2006 1 May 2008 Serbia 12 December 2000 17 December 2009 1 October 2010 Singapore 26 June 2002 1 January 2003 Tunisia 8 December 1995 17 December 2004 1 June 2005 Turkey 10 December 1991 1 April 1992 Ukraine 19 June 2000 24 June 2010 1 June 2012

1 Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates. 2 Argentina, Brazil, Paraguay and Uruguay. 3 Botswana, Lesotho, Namibia, South Africa and Swaziland.

Main Developments Negotiations on a broad-based agreement with India, commenced in 2008, were pursued through one full Broadened Negotiation Agenda round and several additional meetings at head and

expert level. While further headway was made, a 2012 TRADE ASSOCIATION THE EUROPEAN FREE REPORT OF ANNUAL EFTA further expanded its negotiation activities with number of questions remained open at the end of 2012. non-EU partner countries by opening new processes with Central American States and Vietnam, and by With the Russian Federation, along with its Customs jointly announcing the start of negotiations with Union partners Belarus and Kazakhstan, three Malaysia. comprehensive rounds of negotiations were conducted in the course of the year. The Russian Federation’s accession to the World Trade Organization (WTO), which became effective in August 2012, provided further impetus to the talks and considerable progress was achieved in several areas. The second year of negotiations towards a “comprehensive economic partnership agreement” with Indonesia saw two full rounds and a series of dedicated expert meetings. Strengthening the understanding of each side’s approaches and exploring possible outcomes remained at the centre of the work undertaken. New negotiations were started in February with the Central American States of Costa Rica, Guatemala, Ambassadors Muhammed Saleemg and Shahid Bashir signing Honduras and Panama. By the end of the year, five the EFTA-Pakistan Joint Declaration on Cooperation in Geneva in rounds had been conducted and talks had been November. substantially completed with two partners. The overall negotiations are expected to be finalised in the first half In addition to the ongoing negotiation processes of 2013. with India and two ASEAN countries (Indonesia and Vietnam), EFTA jointly announced in November the Another new negotiation process was commenced with launch of negotiations with Malaysia, and confirmed Vietnam in the spring, followed by two comprehensive its willingness to resume the negotiation process with rounds. A solid foundation was laid for the continuation Thailand when conditions permitted. Furthermore, 10 of discussions in 2013. a framework for closer ties in the areas of trade and With Bosnia and Herzegovina, the EFTA States investment was established with Pakistan through the pursued efforts to settle the last issues outstanding in signing of a JDC in November. the negotiations, which had started in 2011. In the Americas, possible updates and extensions to Further Processes existing FTAs were discussed, notably with Canada and Chile. With Canada, EFTA’s sixth largest trading In Europe, the FTAs with Montenegro and Ukraine partner, it was agreed to explore the possibility of entered into force, bringing the number of operational including trade in services, investment, government agreements with European partners outside the EU to procurement and sustainable development in the eight. While the emphasis of the FTA with Montenegro agreement which had entered into force in 2009. EFTA is on trade in goods and the protection of intellectual Ministers also expressed their readiness to continue property rights, the agreement with Ukraine also covers trade in services, investment, government exploring options for increasing trade, investment and procurement, competition and trade facilitation. With cooperation with the MERCOSUR States. a population of 45 million, Ukraine represents an In Africa, negotiations with Algeria remained important export destination for EFTA in Europe. With suspended during the reporting year, and EFTA Georgia, a new basis for closer ties was laid by a joint Ministers called for a joint assessment of the situation. declaration on cooperation signed in June. They also agreed to further seek possibilities to deepen In Asia, the FTA signed in 2011 with Hong Kong trade relations with countries in Sub-Saharan Africa in ANNUAL REPORT OF THE EUROPEAN FREE TRADE ASSOCIATION 2012 TRADE ASSOCIATION THE EUROPEAN FREE REPORT OF ANNUAL China became EFTA’s third operational agreement addition to the existing FTA with the Southern African after those with Singapore and the Republic of Korea. Customs Union (SACU). Management of EFTA’s Free On these occasions, EFTA and its partner countries reviewed the functioning of their respective FTAs. Trade Agreements and Joint They made several decisions to update existing rules Declarations on Cooperation and agreed on work plans in view of further revisions. In 2012, the EFTA States held joint committee meetings Experts also convened in preparation for amendments with six free trade partners (Canada, Egypt, Republic to agreements with other partners, including Chile, of Korea, Palestinian Authority, Serbia and Turkey). Jordan and SACU.

Joint Committee Meetings in 2012 Fig. 2

Free Trade Partner Venue and Date of Meeting Joint EFTA-Korea Committee (3rd) Seoul, 14 March 2012 Joint EFTA-Egypt Committee (2nd) Cairo, 3 May 2012 Joint EFTA-Canada Committee (2nd) Ottawa, 9-10 May 2012 Joint EFTA-Turkey Committee (10th) Ankara, 30 May 2012 Joint EFTA-Palestinian Authority Committee (4th) Geneva, 23 October 2012 Joint EFTA-Serbia Committee (1st) Geneva, 25 October 2012

Technical Cooperation Relations with the WTO Within the framework of EFTA’s technical cooperation Under the World Trade Organization’s transparency policy (see box), activities in 2012 included: mechanism for bilateral and regional trade agreements, 11 • Export promotion seminars in Montenegro and EFTA notified all new free trade negotiations in 2012, as well as the ratification and entry into force Ukraine; of FTAs. EFTA also submitted notifications to the • A seminar on government procurement in Indonesia; WTO Secretariat regarding decisions adopted by joint and committees under existing agreements. In October, • A one-week training course for Palestinian officials EFTA’s FTA with Serbia was examined by the WTO’s on trade policy. Committee on Regional Trade Agreements.

EFTA’s Technical Cooperation EFTA’s technical cooperation projects cover a range of trade-related areas and are primarily directed at developing countries and economies in transition. They are funded by the Association and organised by the EFTA Secretariat. EFTA’s projects normally involve experts from EFTA Member States and partner countries, notwithstanding the EFTA countries’ own technical cooperation programmes and initiatives. The main objectives of EFTA’s technical cooperation activities are to support prospective partner countries in preparing for free trade negotiations and to assist existing partners in the implementation and promotion of FTAs. To this effect, EFTA arranges training, seminars, workshops and study visits adapted to the particular needs of the partner countries. Areas in which EFTA provides assistance include trade facilitation and promotion, customs and origin matters, technical barriers to trade, sanitary and phytosanitary measures, intellectual property rights, government procurement, ANNUAL REPORT OF THE EUROPEAN FREE TRADE ASSOCIATION 2012 TRADE ASSOCIATION THE EUROPEAN FREE REPORT OF ANNUAL competition, services and statistics. EFTA also participates in EU technical cooperation programmes and projects aimed at third countries, especially in relation to customs matters, standardisation and statistics. Efta’s Worldwide Network

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EFTA States 4 (Free trade area) EFTA States 4 European Union 27 (Free trade area) (Free trade partner)

EFTA FreeEuropean Trade Agreements Union 27 24 Albania,(Free Canada, trade Chile, partner) Colombia, Croatia, Egypt, Gulf Cooperation Council (GCC; comprising Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and United Arab Emirates), Hong Kong China, Israel, Jordan, Republic of Korea, Lebanon, Macedonia, Mexico, Montenegro, Morocco, Palestinian Authority, Peru, Serbia, Singapore,EFTA Southern Free Trade African Agreements Customs Union 24 (SACU; comprising Botswana, Lesotho, Namibia, South Africa andAlbania, Swaziland), Canada, Tunisia, Chile, Turkey Colombia, and Ukraine. Croatia, Egypt, Gulf Cooperation Council (GCC; comprising Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and United Arab Emirates), Hong Kong China, Israel, Jordan, Republic FTA negotiationsof Korea, Lebanon, Macedonia, Mexico, Montenegro, Morocco, Palestinian Authority, Peru, Serbia, Algeria, Bosnia and Herzegovina, Central American States (Costa Rica, Guatemala, Honduras and Panama),Singapore, India, Indonesia, Southern Malaysia, African Russian Customs Federation/Belarus/Kazakhstan, Union (SACU; comprising Thailand Botswana, and Vietnam. Lesotho, Namibia, South Africa and Swaziland), Tunisia, Turkey and Ukraine. Declarations on Cooperation Georgia,FTA Mauritius, negotiations MERCOSUR (comprising Argentina, Brazil, Paraguay and Uruguay), Mongolia and Pakistan.Algeria, Bosnia and Herzegovina, Central American States (Costa Rica, Guatemala, Honduras and Free tradePanama), relations India, of individual Indonesia, EFTA States Malaysia, Russian Federation/Belarus/Kazakhstan, Thailand and Vietnam. China, Faroe Islands and Japan. Declarations on Cooperation

ANNUAL REPORT OF THE EUROPEAN FREE TRADE ASSOCIATION 2012 TRADE ASSOCIATION THE EUROPEAN FREE REPORT OF ANNUAL Georgia, Mauritius, MERCOSUR (comprising Argentina, Brazil, Paraguay and Uruguay), Mongolia and Pakistan.

Free trade relations of individual EFTA States China, Faroe Islands and Japan. THE EEA AGREEMENT

20th Anniversary of the Signing of the EEA Agreement To commemorate the 20th anniversary of the signing of the EEA Agreement in May 1992 in Porto, Portugal, EFTA issued a special Bulletin in September on “The European Economic Area and the Single Market – 20 years on”. In this publication, authors from each of the three EEA EFTA States reflect on the developments that have taken place in the European Economic Area over the years, assess the current functioning of the Agreement and discuss the future challenges faced by its signatories. In addition, the second of EFTA’s biannual seminars on the EEA focused on “The evolution of the Single Market and the EEA Agreement – 20 years on”. Presentations included an analysis of the design and purpose of the Single Market, and how it has developed over the last 20 years. Elsewhere, the EEA Consultative Committee and EEA Joint Parliamentary Committee organised a joint commemorative event in Iceland (see Advisory Bodies). 13 The EEA Council The EEA Council was chaired by the EU in the first half of 2012 and by EFTA in the second half of the year. The EEA Council met on 14 May and 26 November to review the ongoing work in EEA cooperation and to note the progress reports of the EEA Joint Committee. The Ministers confirmed the positive overall functioning and development of the EEA Agreement and appreciated the fact that new acts were being incorporated quickly into the Agreement. They also discussed the current financial crisis and its implications for the EEA, including regulation of the financial system, the EEA Financial Mechanisms, decision making and shaping, and energy and climate change. In addition, the EEA Council held orientation debates on strategies for growth in Europe and trade and regulatory cooperation with EEA neighbours. The Aurelia Frick, Minister of Foreign Affairs, Liechtenstein, and Espen conclusions from these meetings can be found in the Barth Eide, Minister of Foreign Affairs, Norway, at an EEA Council appendices to this report. meeting in Brussels. ANNUAL REPORT OF THE EUROPEAN FREE TRADE ASSOCIATION 2012 TRADE ASSOCIATION THE EUROPEAN FREE REPORT OF ANNUAL Ambassador Atle Leikvoll, Mission of Norway to the EU, chairing the meeting of the EEA Joint Committee in October.

14 The EEA Joint Committee half of the year. The agendas and conclusions of the Standing Committee meetings are available on the The EEA Joint Committee met eight times in 2012 and EFTA website. On 26 November, the EFTA Standing adopted 223 decisions incorporating 486 legal acts. Committee held a joint meeting at Ministerial level Among the more significant decisions adopted by in Brussels with the Committee of Members of the Joint Committee were those concerning the Parliament of the EFTA States and the Consultative incorporation of legal acts regarding consumer rights, Committee, to discuss developments in the EEA. roaming, the revised Emissions Trading System (ETS), the Eurovignette, the new legislative framework for Legal and Institutional Matters goods, audiovisual media services and maritime safety. Subcommittee V on Legal and Institutional Questions Discussions in the Joint Committee focused on how to further improve the processing of acquis and reduce met five times in 2012. The Subcommittee devoted the number of outstanding legal acts. considerable efforts to making general information about the EEA Agreement more available. The Over the year, the European Commission provided the revision of the comitology system in the EFTA Joint Committee with briefings on the Single Market pillar was completed and criminal law sanctions in Act II and a blueprint for a deep and genuine economic Internal Market legislation remained on the agenda. and monetary union. The Subcommittee also discussed the status of the The Standing Committee of the coal and steel sectors under the EEA Agreement and

ANNUAL REPORT OF THE EUROPEAN FREE TRADE ASSOCIATION 2012 TRADE ASSOCIATION THE EUROPEAN FREE REPORT OF ANNUAL the territorial scope of the EEA Agreement. Finally, EFTA States the Subcommittee continued to monitor two-pillar The Standing Committee was chaired by Iceland in issues in the EEA Agreement, as well as case law the first half of 2012 and by Norway in the second developments in the EEA. Free Movement of Goods Veterinary issues A substantial part of EU legislation concerns the Veterinary legislation covers animal and public health free movement of goods, a principle that is applied requirements for the production, trade and imports of throughout the Single Market. Today, about 75% of live animals and animal products, as well as issues trade in the Single Market is in goods, but this does related to the control of these products. Arrangements not imply that all products can circulate freely. They for animal welfare and the control and prevention of must conform to requirements set for the protection animal diseases are also included. of legitimate interests such as health, safety and the In 2012, the EEA Joint Committee incorporated 47 environment. Additionally, in order to ensure a fair and acts in the veterinary area into the EEA Agreement. In efficient market, a wide range of legislative measures addition, a number of legal acts were implemented by have been established in the fields of competition, state means of simplified procedure (see box). aid and public procurement. Animal feed Subcommittee I prepares for the integration into the EEA Agreement of legislation relating to all aspects Legislation in the area of animal feed concerns of the free movement of goods – competition, state marketing and labelling, undesirable substances aid, public procurement, intellectual property rights in feed, the authorisation of feed additives and the and energy matters. Subcommittee I is assisted by 11 monitoring of feed-producing establishments. working groups and 27 expert groups. In 2012, 42 legal acts related to animal feed were Three committees deal with issues related to goods incorporated into the EEA Agreement. under the EFTA Council: the Committee on Technical Barriers to Trade (TBT), the Committee of Origin and Food Customs Experts (COCE) and the Committee on Trade Facilitation (TF). 15 Veterinary, Food and Agricultural Issues

The Food Law Package ensures that the EEA EFTA States participate fully in the European Food Safety Authority (EFSA), including the possibility of employment for EEA EFTA nationals. The EEA EFTA States continued to discuss the Novel Veterinary and food legislation in the EEA Agreement Foods Regulation, as well as regulations on genetically

apply to Iceland and Norway only. Since 2007, modified food and feed, and on the traceability and 2012 TRADE ASSOCIATION THE EUROPEAN FREE REPORT OF ANNUAL Liechtenstein has been subject to the Swiss-EU labelling of genetically modified organisms (GMOs). Agricultural Agreement pertaining to legislation in These have not yet been incorporated into the EEA these areas. Agreement. Meetings Held and EU Acts Incorporated in 2012 Fig. 3

Number of meetings Number of acts in 2012 incorporated in 2012 EEA Joint Committee 8 486 Standing Committee of the EFTA States 8 – SUBCOMMITTEE I 71 319 Working Groups Competition Policy 1 – Customs Matters 4 – Customs Security Measures – – Energy Matters 4 12 Fisheries – – Food Chain2 3 147 Intellectual Property Rights 2 – Processed Agricultural Products 1 – Public Procurement 1 2 State Aid – 2 Technical Barriers to Trade (TBT) 4 6 Expert Groups under TBT Agricultural and Forestry Tractors – 10 16 Appliances Burning Liquid or Gaseous Fuels – – ATEX (equipment for use in explosive atmospheres) – – Cableway Installations – – Chemicals – 33 Ad Hoc Group on Plant Protection Products 1 – Ad Hoc Group on Good Laboratory Practice – – Construction – 15 Cosmetics – 3 Defence-Related Products (Ad Hoc) – – Electrical Equipment – – Explosives – 1 Fertilisers – 2 Machinery – – Marine Equipment – 2 Maximum Residue Levels (MRLs) – 17 Measuring Instruments – 1 Medicinal Products and Medical Devices 1 14

ANNUAL REPORT OF THE EUROPEAN FREE TRADE ASSOCIATION 2012 TRADE ASSOCIATION THE EUROPEAN FREE REPORT OF ANNUAL Motor Vehicles – 34 Organic Production – – Personal Protective Equipment – – Pressure Equipment – –

1 In November 2009, the Standing Committee approved the practical merger of Subcommittees I, II, III and IV. 2 Food Chain encompasses Veterinary Matters, Feedingstuffs, Plant Health and Foodstuffs. Number of meetings Number of acts in 2012 incorporated in 2012 Product Safety and Market Surveillance 1 1 Recreational Crafts – – Telecommunications Equipment – – Textiles – 3 Tobacco – 1 Wine and Spirit Drinks – 13 SUBCOMMITTEE II 7 75 Working Groups Company Law 0 1 Electronic Communication, Audiovisual Services and 3 13 Information Society Data Protection Expert Group 0 – Financial Services 3 13 Postal Services 0 – Transport 5 48 SUBCOMMITTEE III 7 7 Working Groups Free Movement of Persons, Employment and Social 34 1 Policy3 Recognition of Professional Qualifications 0 1 17 Social Security 3 5 SUBCOMMITTEE IV 7 85 Working Groups Budgetary Matters 1 0 Civil Protection 1 1 Consumer Affairs 3 6 Cultural Affairs 1 – Education, Training and Youth 3 – EFTA Consumers’ Consultative Committee – Enterprise Policy and Internal Market Affairs 3 2 Environment 3 64 Gender Equality, Anti-Discrimination and Family Policy 2 – Heads of National Statistical Institutes 1 9 Health and Safety at Work and Labour Law5 46 2 Public Health 2 – Research and Development 3 – Social Security (Subcommittee III) (see above) 17 ANNUAL REPORT OF THE EUROPEAN FREE TRADE ASSOCIATION 2012 TRADE ASSOCIATION THE EUROPEAN FREE REPORT OF ANNUAL SUBCOMMITTEE V 5 –

3 Temporarily merged with the Working Group on Health and Safety at Work and Labour Law from June 2011 to September 2012. 4 All meetings took place while WG PES and the WG HSLL were merged. One of the meetings was a joint meeting with the EFTA Consultative Committee. 5 Temporarily merged with the Working Group on Free Movement of Persons, Employment and Social Policy from June 2011 to September 2012. 6 Three of the meetings took place while WG PES and the WG HSLL were merged, of which one was a joint meeting with the EFTA Consultative Committee. 7 As budget lines are incorporated under Protocol 31 EEA, related JCDs are formally adopted under the Subcommittee IV structure. Preparation continued for the incorporation of the new parties exchanged information on developments in their legal framework on organic production. respective agricultural policies, and on trade statistics. They also discussed the principles of Protocol 3 and In 2012, 36 legal acts were incorporated into the EEA concluded that the Protocol was functioning well. Agreement in the foodstuffs area. A number of legal acts were also implemented by means of simplified Technical Barriers to Trade procedure. EFTA deals with the removal of technical barriers to trade in two forums: the TBT Committee, which Simplified Procedure reports to the EFTA Council, and the Working Group The simplified procedure is a derogation from the on TBT, which coordinates the assessment of EEA normal procedure for the incorporation of acts relevance and acceptability of new EU legislation to into the EEA Agreement. Until the introduction of the three EEA EFTA States. Switzerland is an observer the simplified procedure in 2001, acts were only in the Working Group on TBT. incorporated by EEA Joint Committee Decisions, In 2012, the TBT Committee gave written input which in many cases took more than half a year. to the European Parliament on the Regulation on It is essential that many of the measures in the European Standardisation, which was adopted on 14 veterinary field are implemented and applied shortly November 2012. The Regulation constitutes a new after their adoption in the EU. This is of particular legal basis for cooperation between the three European importance when it is necessary to put safeguard standardisation organisations (ESOs) and the European and protective measures in place urgently. The Commission and EFTA. The Committee discussed simplified procedure requires EEA EFTA States to policy and financial issues in relation to standardisation “simultaneously with the EU Member States take and accreditation, as well as horizontal TBT issues measures corresponding to those taken by the latter”. such as the revision of the Blue Guide (the guide to EU 18 legislation on industrial products), the alignment of the The following acts in the veterinary field are subject to New Approach Directives with the New Legislative simplified procedure: Framework for Goods, the newly established multi- • Texts of application concerning imports from third stakeholder platform for ICT standardisation policy, countries; market surveillance of goods, certification and CE • List of establishments in third countries; marking, and technical barriers to trade in the Single • Safeguard and protective measures concerning the Market. The Committee also worked on keeping the EU territory or imports from third countries; and Vaduz Convention updated and continued to follow the • Safeguard measures and listing of countries two-year EU quality infrastructure project, IPA 2011. and territories concerning the non-commercial The Working Group on TBT discussed the Goods movement of pet animals. Package, the alignment of the New Approach Directives In addition, the Food Law Regulation introduced the with the New Legislative Framework for Goods, the simplified procedure in the foodstuffs area for acts incorporation of the Standardisation Regulation and related to emergency measures concerning the EU mutual recognition agreements. It also submitted an territory or imports from third countries. EEA EFTA Comment on the Commission’s initiative to update the Blue Guide. Trade in agricultural products Motor vehicles In October 2012, Iceland, Norway and the European In 2012, 32 technical acts on motor vehicles were Commission carried out their annual review of trade incorporated into the EEA Agreement, including ANNUAL REPORT OF THE EUROPEAN FREE TRADE ASSOCIATION 2012 TRADE ASSOCIATION THE EUROPEAN FREE REPORT OF ANNUAL in processed agricultural products in accordance with the Framework Directive for the approval of motor Article 2(2) of Protocol 3 to the EEA Agreement. The vehicles and trailers. Medicinal products Market surveillance and consumer product safety The EEA EFTA States continued their discussions with the EU on the incorporation of the Paediatric The EFTA States are fully committed to the enhanced Regulation. application of market surveillance under the terms of the new legislative framework for the marketing Dangerous substances of products. In 2012, the EFTA States participated in meetings conducted by the Senior Officials Group for Standardisation and Conformity Assessment Policy (SOGS) and the SOGS Market Surveillance Group. In 2012, the European Commission worked on the preparation of a new legislative package on product safety and market surveillance. The EFTA States are actively contributing to the development of this package and will continue to support the EU in improving product safety and market surveillance. European Standardisation The EFTA States and the European Commission give financial support to the following three European standardisation organisations: the European Committee for Standardization (CEN), the European Committee for Electrotechnical Standardization (CENELEC) and 19 the European Telecommunications Standards Institute (ETSI). Like the European Commission, EFTA has Trade in and use of dangerous substances are strictly the formal status of counsellor to CEN and ETSI regulated in order to protect consumers, workers and and participates in the administrative boards of these the environment. The EEA Agreement contains both organisations, as well as in the general assemblies of general chemicals legislation and product-specific the three ESOs. legislation. In total, 30 acts concerning dangerous substances were incorporated into the EEA Agreement In 2012, EFTA dealt with 36 mandates for new in 2012. standardisation activities covering a wide range of sectors. In addition, EFTA signed 57 agreements in the Mutual recognition agreements standardisation area. Mutual recognition agreements (MRAs) facilitate EFTA continued its financial support to the European market access by reducing the costs and time associated Cooperation for Accreditation (EA), the European with obtaining product certification. Protocol 12 EEA Association for the Coordination of Consumer ensures the smooth functioning of the EEA market with Representation in Standardisation (ANEC), the regard to MRAs. In this respect, the EEA EFTA States European Environmental Citizens Organisation discussed ongoing EU negotiations and discussions on for Standardisation (ECOS) and the European new and revised MRAs, and assessed possible EEA Organisation for Technical Approvals (EOTA). EFTA follow-up. Through the Competitiveness and Innovation Programme, the EEA EFTA States also provided financial support to the European Office of Crafts, 2012 TRADE ASSOCIATION THE EUROPEAN FREE REPORT OF ANNUAL Trades and Small and Medium-sized Enterprises for Standardisation (NORMAPME), which promotes the interests of SMEs in standardisation. Furthermore, the EFTA States cofinance and contribute State Aid to projects with seconded European standardisation experts in China and India, as well as to the Europe- The EEA EFTA States incorporated one decision China Standards Information Platform (CESIP). This and one regulation with regard to the state aid rules platform is an information tool that aims to strengthen applicable to Services of General Economic Interest mutual trade and investment flow between Europe (SGEI) compensation. and China by making standards and related technical In addition, they participated in several multilateral regulations more accessible. state aid meetings related to the Commission’s State Energy Aid Modernisation (SAM) initiative, which was launched on 8 May 2012 and aims to fully reform and In 2012, 12 acts in the field of energy were incorporated update the European state aid framework by the end into the EEA Agreement, half of which concern the of 2013. labelling of energy-related products, including the Energy Labelling Framework Directive. Other acts Public Procurement incorporated relate to ecodesign requirements for Two acts were incorporated into the EEA Agreement in energy-related products and the labelling of tyres, the field of public procurement: one regulation updating as well as renewable energy action plans under the the public procurement thresholds and another related Renewable Energy Directive, which was incorporated to standard notification forms. in 2011. The EEA EFTA States followed the EU decision-making The EEA EFTA States closely monitored the EU process related to the reform of the public procurement decision-making process concerning the Energy legislative framework, following the presentation in Infrastructure Package, as well as the new Energy December 2011 of a reform package consisting of Efficiency Directive. They also moved closer towards proposals for three directives. Two of the proposals 20 incorporating the Third Package for the Internal will replace the existing procurement directives (the Energy Market into the EEA Agreement. “Utilities” Procurement Directive and the “Classical” Procurement Directive) and the third is for a new directive concerning service concession contracts. The reform focuses on simplifying existing rules; facilitating SME access to public contracts; promoting green, social and innovation procurement; and increasing the use of electronic procurement. In relation to a hearing in the European Parliament’s Internal Market and Consumer Protection (IMCO) Committee in March 2012, the EEA EFTA States submitted an EEA EFTA Comment to the EU institutions on the proposed reform package. The Comment was discussed with representatives of the European Commission, the Parliament and the Council. Intellectual Property Competition Policy In October 2012, a directive for certain permitted uses of orphan works was adopted on the EU side. Orphan The EEA EFTA States initiated a review of the acts works are works that are still in copyright but whose

ANNUAL REPORT OF THE EUROPEAN FREE TRADE ASSOCIATION 2012 TRADE ASSOCIATION THE EUROPEAN FREE REPORT OF ANNUAL that had been incorporated into the EEA Agreement owners cannot be identified or located. The EEA EFTA in relation to the former European Coal and Steel States are currently scrutinising the directive with the Community. aim of incorporating it into the EEA Agreement. In their day-to-day work, the EFTA Committee of Origin and Customs Experts (COCE) and the EEA EFTA Working Group on Customs Matters addressed other customs and origin matters related to FTAs with third-country partners, and other technical customs issues among EFTA States to guarantee good relations between customs administrations and the smooth functioning of preferential trade relations. Among others, the COCE is working towards the swift inclusion of the Western Balkan countries in the PEM cumulation system. Safety and security matters With the conclusion of bilateral agreements by Norway and Switzerland with the EU, these two countries were integrated into the EU’s safety and security system, with the result that traders do not have to submit The EU Council has agreed to a general approach to prearrival/predeparture declarations when trading a unitary patent for Europe. In addition, discussions with the EU. The Norwegian bilateral agreement are currently taking place in the European Parliament was implemented in Protocol 10 EEA, and a joint on the establishment of what is now known as the working group responsible for the implementation “Unified Patent Court”. The EEA EFTA States are and monitoring of the safety and security measures following this issue closely. addressed under the bilateral agreement was set up and In April 2012, the EU entrusted the Office for began its work in October 2012. 21 Harmonization in the Internal Market with the responsibility for the European Observatory on Infringements of Intellectual Property Rights. The Trade Facilitation EEA EFTA States participated in the first plenary meeting of the observatory in September 2012. Trade facilitation seeks to improve procedures and controls in merchandise trade across national borders In November 2012, the European Commission by reducing associated cost burdens and maximising presented a proposal for a directive on collective rights efficiency, while safeguarding legitimate regulatory management and multi-territorial licensing of rights in objectives. Recent developments, such as the musical works for online uses. The EEA EFTA States challenge of bringing trade facilitation in line with are following this issue closely. growing safety and security concerns, as well as rising concerns about the (mis)use of trade procedures as Customs Matters, Safety and trade policy tools, have heightened the political profile Security Matters and Trade of trade facilitation. The EFTA Committee on Trade Facilitation Facilitation follows EFTA’s trade negotiations and is continuously analysing the developments of trade The Regional Convention on Pan-Euro-Mediterranean facilitation within other international organisations Preferential Rules of Origin (PEM Convention), which such as the World Trade Organization, the United will replace the current network of origin protocols in Nations Economic Commission for Europe, the the various agreements of the PEM free trade zone, Organisation for Economic Co-operation and

entered into force in 2012 in all EFTA States and the Development and the World Customs Organization, 2012 TRADE ASSOCIATION THE EUROPEAN FREE REPORT OF ANNUAL EU, while most of the Mediterranean countries have which have all added trade facilitation to their agendas. yet to sign it. Free Movement of Capital and Postal Services Services Deliberations took place regarding the incorporation Subcommittee II on the Free Movement of Capital of the Third Postal Services Directive into the EEA and Services coordinates matters of financial services, Agreement. company law, electronic communications, audiovisual services, information society and data privacy, postal Transport services and transport. Five working groups report to The EEA EFTA States considered a significant number Subcommittee II. of proposals for new EU acts and discussed these in depth with the EU. An important development was Financial Services the incorporation into the EEA Agreement of the The EEA EFTA States are assessing the significant Eurovignette Directive on the charging of heavy goods number of legislative acts issued by the EU in response vehicles. to the 2008 financial crisis, in particular the regulations Other important issues on the transport agenda were creating a European architecture of financial the proposals for the revision of the guidelines for the supervision. In addition to the European Systemic Risk development of a trans-European transport network Board, responsible for macro-prudential supervision, and the Roadworthiness Package. For the latter issue, the EU established three new supervisory bodies at an EEA EFTA Comment was submitted to the EU side. micro-prudential level: • European Banking Authority; In the rail sector, high priority was given to the • European Insurance and Occupational Pensions Regulation concerning a European rail network for Authority; and competitive freight, legislation on interoperability and the proposal to establish a Single European Railway • European Securities and Markets Authority. 22 Market. Discussions are ongoing between the EEA EFTA States and the EU side on adequate EEA EFTA participation in these authorities. In January 2012, the EEA EFTA side submitted an EEA EFTA Comment on two Commission proposals concerning credit institutions and investment firms. Company Law In 2012, the EU adopted the Directive on the interconnection of central, commercial and company registers. The EEA EFTA States are currently deliberating on the incorporation of the Directive into the EEA Agreement. Electronic Communications, Audiovisual Services, Information Society and Data Privacy In electronic communications, experts from the EEA In maritime transport, the EEA EFTA States prioritised EFTA States continued to work on the incorporation the proposal for amendments to the Regulation on the ANNUAL REPORT OF THE EUROPEAN FREE TRADE ASSOCIATION 2012 TRADE ASSOCIATION THE EUROPEAN FREE REPORT OF ANNUAL of the Telecom Package into the EEA Agreement, Establishment of the European Maritime Agency and notably the role of the EEA EFTA States in the Body the Regulation on Passenger Rights. of European Regulators in Electronic Communications (BEREC). The main items on the agenda in the field of air Social Security transport were the Second Single European Sky Package and legislation linked to aviation security. New social security coordination rules were applied in Switzerland on 1 April and in Iceland, Liechtenstein Free Movement of Persons and Norway on 1 June. These new rules completely replace Annex VI to the EEA Agreement on the Subcommittee III on the Free Movement of Persons coordination of social security schemes. Their aim is coordinates matters related to all aspects of the free to modernise and simplify social security coordination movement of persons, including social security and within the EU and EEA. the recognition of professional qualifications. Three working groups report to Subcommittee III. Recognition of Professional Qualifications Free Movement of Persons, Employment and Social Policy The EEA EFTA States closely monitored the Commission’s adopted proposal to revise the In the area of free movement, the EEA EFTA States Professional Qualifications Directive. In this respect, monitored developments on the EU side related to an EEA EFTA Comment on the Commission’s proposal proposals for third-country nationals legally residing on modernising the Professional Qualifications in the EU. They also followed a potential initiative on Directive was sent to the EU side in September. the enforcement of rights of EU migrant workers and members of their families in relation to the fundamental Flanking and Horizontal Policies principle of free movement of workers. They discussed participation in the European Year of Citizenship Subcommittee IV on Flanking and Horizontal Policies 2013, concluding that the EEA EFTA States would not coordinates matters related to all aspects of the horizontal provisions of the EEA Agreement, as well participate. With regard to employment, EEA EFTA 23 experts were invited to the informal meetings of the as cooperation outside the four freedoms. 13 working EU Employment Committee (EMCO), where they groups report to Subcommittee IV. submitted a report on the labour market situation in each of the EEA EFTA States. They participated in Research and Development EURES, a cooperation network between the European The EEA EFTA States continued to follow the Commission and the public employment services of implementation of the Seventh Framework Programme the EEA Member States providing information and on Research, the Europe 2020 Strategy and its flagship assistance to workers and employers, and monitored initiatives in the area of research and innovation, as the planned reforms of this network. well as the EU’s ongoing work on new European Research Area (ERA) initiatives. They also followed As regards social policy, the EEA EFTA States the Commission’s preparation of its proposal for a continued their informal dialogue with the EU’s Social new framework programme in the field of research Protection Committee. They participated actively in and innovation – Horizon 2020, the Commission’s both the employment and social protection sections proposal to amend the Regulation establishing the of the PROGRESS Programme, which supports the European Innovation and Technology Institute (EIT) implementation of the European Employment Strategy and the Commission’s proposal for a decision on the and underpins the EU’s coordination activities in the EIT’s Strategic Innovation Agenda. fight against poverty and social exclusion, and also monitored the proposed successor instrument to the The EEA EFTA States are negotiating with the PROGRESS Programme, the Programme for Social Commission on the possibility of incorporating

Change and Innovation (2014-2020). the Council Regulation on the Community legal 2012 TRADE ASSOCIATION THE EUROPEAN FREE REPORT OF ANNUAL framework for a European Research Infrastructure Consortium (ERIC) into the EEA Agreement. Environment Education, Training and Youth The EEA Joint Committee adopted several decisions in the field of environment in 2012, namely on the inclusion of the revised EU Emissions Trading System (ETS) Package, the Carbon Capture and Storage Directive, the recast Regulation on substances depleting the ozone layer, the Directive on public participation in drawing up plans and programmes relating to the environment, the new Ecolabel Regulation and related decisions, the Eco-Management and Audit Scheme (EMAS) and various acts linked to the Infrastructure for Spatial Information in the European Community (INSPIRE). One of the main priorities for 2012 was to finalise preparation for the third ETS trading period, which starts on 1 January 2013. In this context, after several years of discussion, the revised EU ETS Package The EEA EFTA States continued to monitor the was adopted in July 2012. Since then, EEA EFTA implementation of the Lifelong Learning Programme 24 environmental experts have been concentrating on (2007-2013) and the Youth in Action Programme the incorporation of the amended ETS Union Registry (2007-2013). They followed discussions in Council Regulation into the EEA Agreement, as well as on the and in the Parliament on the Commission’s proposal ETS Monitoring and Reporting Regulation and ETS for a new programme in the field of education, Verification and Accreditation Regulation. training and youth – Erasmus for All (2014-2020), and The EEA EFTA States also submitted an EEA EFTA submitted an EEA EFTA Comment on this subject to Comment to DG Clima’s consultation on the review of the EU. the auction time profile for the EU ETS. Experts followed the 2012 Youth Report adopted by Experts focused on areas such as the mercury export Council on 27 November 2012. The report includes ban, fuel quality, the obligations of operators who a summary of how the EU Youth Strategy has been place timber and timber products on the market and implemented at national and EU level since 2010, the European Earth Monitoring Programme (GMES). and a comprehensive analysis of the situation faced Other initiatives followed by the EEA EFTA States by young people. It draws on input from Member in 2012 included a proposal to cut sulphur dioxide States, government agencies and ministries as well as emissions from shipping, a proposal establishing a consultations with young people. Candidate countries programme for environment and climate action – LIFE and EFTA countries also participated in the reporting (2014-2020), a proposal foreseeing accounting rules exercise. and action plans on greenhouse gas emissions and removals from activities related to land use, land-use Gender Equality, Anti- Discrimination and Family Policy ANNUAL REPORT OF THE EUROPEAN FREE TRADE ASSOCIATION 2012 TRADE ASSOCIATION THE EUROPEAN FREE REPORT OF ANNUAL change and forestry (LULUCF). Topics discussed with the Commission included EU The EEA EFTA States continued to participate in the air quality policy, EU waste management policy and gender equality strand of the PROGRESS Programme the latest developments regarding the roadmap on a and in the Daphne III Programme on Community resource-efficient Europe. action to prevent violence against children, young people and women, and to protect victims and main focus for 2012, in particular the IMI Regulation groups at risk (2007-2013). Experts also focused on issued in November. The EEA EFTA States submitted relevant proposals for new programmes within the an EEA EFTA Comment to the EU in March on the Multiannual Financial Framework (2014-2020), proposal for a regulation of the European Parliament and particular attention was given to the Rights and and of the Council on administrative cooperation Citizenship Programme. Experts also monitored plans through the IMI System. for an accessibility act and the proposal to increase the representation of women on company boards. Civil Protection Consumer Affairs The EEA EFTA States continued to participate actively in the Community Mechanism for Civil Protection The EEA EFTA States followed the revision of and the Civil Protection Financial Instrument (2007- consumer acquis and incorporated the Directive on 2013). Particular attention was given to the ongoing Consumer Rights into the EEA Agreement. EEA revision of the legal instruments in this area and the EFTA experts also closely monitored the proposal on Commission’s proposals for a revised mechanism and a common European sales law, submitting an EEA financial instrument. EFTA Comment to the EU. EEA EFTA Comments were also submitted on the Commission’s proposals Cultural Affairs on alternative dispute resolution and online dispute The EEA EFTA States’ main priorities in the field of resolution, which were main points of interest in 2012. culture and sport were to follow the new proposal on The EEA EFTA States were included in both editions Creative Europe (2014-2020) and to stay informed of of the Consumer Market Scoreboard published in the activities of the Commission’s “open method of 2012. coordination” (OMC) working groups. Two further priorities for 2012 were the proposal for Health and Safety at Work and 25 a Consumer Programme (2014-2020) and the new Labour Law European Consumer Agenda. In the area of health and safety at work, the EEA Enterprise Policy and Internal EFTA States followed the proposed revision of the Market Affairs Electromagnetic Fields Directive and the proposal for a directive concerning flag state responsibilities. They The main issue monitored by the EEA EFTA States also monitored the Commission strategy on health and in enterprise policy and Internal Market affairs was safety at work (2013-2020). the proposal for the Programme on Competitiveness of Enterprises and SMEs (COSME), on which they submitted an EEA EFTA Comment. Linked to this is the Horizon 2020 Programme, in particular the aspects related to innovation, growth and competitiveness. The EEA EFTA States also followed the implementation of the Services Directive, particularly the packages on services and governance, issued by the Commission in June 2012. An EEA EFTA Comment on the Commission’s Communication on “A coherent framework to build

trust in the Digital Single Market for e-commerce and 2012 TRADE ASSOCIATION THE EUROPEAN FREE REPORT OF ANNUAL online services” was also submitted to the EU. The Internal Market Information (IMI) system, which provides a multilingual database to support the implementation of Internal Market legislation, was a In the area of labour law, experts followed Public Health developments related to the planned revision of the The EEA EFTA States prepared for the incorporation Working Time Directive. They also paid particular of the Patient Mobility Directive into the EEA attention to the proposal for a directive on the Agreement and experts attended the meetings of enforcement of the Directive on Posting of Workers. the new Comitology Committee on Cross-border The EEA EFTA States also followed relevant issues Healthcare on the EU side. Particular attention was in the social dialogue, i.e. discussions, consultations, given to pandemic preparedness and health security, negotiations and joint actions involving organisations including the possible joint procurement of vaccines, representing employers and workers. developments at EU level with regard to the possible

EEA EFTA Comments in 2012 One of the ways in which the EEA EFTA States participate in shaping EU legislation is by submitting comments to the EU side on important policy issues. In 2012, 14 EEA EFTA Comments were sent to the Commission, the European Parliament and the Council on: • The Commission’s proposal for periodic roadworthiness tests for motor vehicles and their trailers – COM(2012) 382; • The Commission’s revision of the Blue Guide on EU Legislation on Industrial Products; • The Commission’s draft proposal for amendments to the Regulation on the Auction Time Profile for the EU Emissions Trading System; • The Commission’s proposal for a regulation on a common European sales law – COM (2011) 635; • The Council’s partial general approach on the Commission’s proposal for the Programme for the Competitiveness 26 of Enterprises and SMEs (COSME) 2014-2020; • The Commission’s proposal for amendments to the Directive on the Recognition of Professional Qualifications – COM(2011) 883; • The Commission’s communication on a coherent framework to build trust in the Digital Single Market for e-Commerce and Online Services – COM(2011) 942; • The Commission’s proposals for a directive on alternative dispute resolution – COM(2011) 793 – and a regulation on online dispute resolution – COM(2011) 794; • The Commission’s proposals for two new directives on public procurement – COM(2011) 895 and COM(2011) 896; • The Commission’s proposal for a regulation on administrative cooperation through the Internal Market Information System (IMI) – COM (2011) 522; • The Commission’s proposal for a regulation establishing Horizon 2020 – the Framework Programme for Research and Innovation (2014-2020) – COM(2011) 809; • The Commission’s public consultation on measures for improving the recognition of prescriptions issued in another Member State; • The Commission’s proposal for a regulation establishing “Erasmus for All” – the Union Programme for Education, Youth and Sport – COM(2011) 788; and • The Commission’s proposals for regulations on prudential requirements for credit institutions and investment firms – COM(2011) 452 – and on the access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms – COM(2011) 453.

ANNUAL REPORT OF THE EUROPEAN FREE TRADE ASSOCIATION 2012 TRADE ASSOCIATION THE EUROPEAN FREE REPORT OF ANNUAL The full list of EEA EFTA Comments can be found here: http://www.efta.int/eea/eea-efta-comments.aspx revision of the Tobacco Products Directive, challenges • Preparation for the incorporation of the European facing Europe’s health workforce and health Statistical Programme 2013-2017 into the EEA inequalities overall. The Working Group also focused Agreement; on the proposal for a new Health for Growth Programme • Amendment of Regulation (EC) No 223/2009, the (2014-2020) and a new Justice Programme, including “Statistical law”; and drugs prevention and information. • EFTA’s participation in the streamlining of the Following the launch by the Commission of a public organisational structure of the European Statistical consultation on measures for improving the recognition System (ESS). of medical prescriptions, the EEA EFTA States submitted their views in an EEA EFTA Comment to Integration of EFTA Statistics into the EU side. the European Statistical System Budgetary Matters In addition to their core activities, ESO and the EFTA NSIs ensured EFTA’s presence in the ESS by: The annual EEA EFTA Budget covers the EEA EFTA • Monitoring the inclusion of EFTA data in Eurostat’s countries’ contribution to the EU Budget and allows databases and publications; for EEA EFTA participation in EU programmes, • Ensuring EFTA’s and the EFTA NSIs’ active actions and agencies. involvement in EU technical cooperation Of particular interest in 2012 were the estimated programmes in the field of statistics with European budgetary implications of the proposal for the and non-European third countries; and Multiannual Financial Framework (2014-2020), • Contributing substantially to the European adopted by the Commission in 2011. The EEA EFTA Statistical Training Programme (ESTP). States’ commitment to EU operational costs in 2012 was EUR 312 million, an increase of EUR 50 million Production and Dissemination of 27 from 2011. EEA EFTA contributions in 2012 amounted EFTA Statistics to EUR 241 million, adjusted for the 2010 credits. Protocol 30 to the EEA Agreement and the Swiss-EU The EEA EFTA States also contribute to the Agreement in the field of statistics provide for statistical administrative costs of the European Commission, information from all EFTA States to be transmitted to an important part of which is the contribution in Eurostat for storage, processing and dissemination. kind of seconded national experts. In 2012, 34 EEA ESO continues to strive for the regular inclusion of EFTA national experts were seconded to the various EFTA data in Eurostat databases and publications. The directorates within the European Commission dealing tangible result of this joint initiative between ESO, the with EEA-relevant programmes and activities. EFTA NSIs and Eurostat is that the inclusion of EFTA data in Eurostat databases and publications was at a EFTA-EU Cooperation in good level in 2012. Statistics Special attention was given to the inclusion of The EFTA Statistical Office (ESO) was created in EFTA data in the indicator sets, which measure the the context of the EEA Agreement to liaise between performance of European countries with regard to Eurostat and the EFTA National Statistical Institutes key policy issues such as the Europe 2020 Strategy (NSIs). It is located at the premises of Eurostat in or the Sustainable Development Strategy. The EFTA Luxembourg. countries’ coverage of these very visible and much in demand indicators is high. EU policy targets do Priorities for 2012 in the field of statistics were: not apply to the EFTA States and the two strategies 2012 TRADE ASSOCIATION THE EUROPEAN FREE REPORT OF ANNUAL • Development of the 2012 EEA Annual Statistical mentioned above are not part of the EEA Agreement or Programme based on the European Statistical Work the Swiss-EU Agreement. However, the EFTA States Programme of the European Commission; agree with the general goals of the initiatives and participate in several of the programmes and actions Technical Cooperation Activities that have come out of these strategies. There is strong and Projects demand to provide users both within and outside EFTA with comparable data on the performance of as In 2012, the main activities and projects in this field many European countries as possible regarding key were: European issues. • Continuation of the global assessments/peer reviews of third countries’ national statistical EFTA Participation in Eurostat systems. EFTA support was granted through the Working Groups and Committees funding of experts from EFTA countries and ESO in the assessments of Belarus, Moldova, the Palestine Eurostat organised around 120 meetings in 2012 to Territories and Tajikistan; prepare and implement new legislation, exchange and develop methodologies and follow up on data • Launch event of the programme “Implementation collection. The EFTA States participated actively in the of the 2008 System of National Accounts” at relevant meetings on an equal footing with colleagues UNECE in Geneva and the Special Programme from the EU Member States. for the Economies of Central Asia (SPECA) Project Working Group on Statistics in Issyk Kul, ESO took part in the “table ronde” of the Swiss Kyrgyzstan, dedicated to this topic. EFTA assisted Days of Official Statistics, hosted in September by with this event through logistical support as well Liechtenstein. ESO also contributed to the annual as the funding of experts from EFTA countries and DGINS Conference, which is attended by the participants from targeted third countries; directors-general of all national statistical institutes in • Organisation and financing of a training course on Europe and the heads of the statistics divisions of UN price statistics for experts from the NSIs of ENP bodies, the Organisation for Economic Co-operation East and selected countries from Eastern Europe, 28 and Development (OECD), the International Monetary the Caucasus and Central Asia (EECCA countries), Fund (IMF), Worldbank and the European Central conducted jointly by Norway and Switzerland; Bank (ECB). • Organisation and financing of a training course for Technical Cooperation in the experts from the NSIs of the Western Balkans and ENP South countries on survey methodology and Field of Statistics sampling techniques, conducted by Switzerland; EFTA works closely with Eurostat on technical and cooperation in the field of statistics. This is based • Funding of experts’ participation in international on a Memorandum of Understanding that has the and regional events in the field of statistics. general objective of ensuring close collaboration between the EFTA States and Eurostat in a number EFTA Seconded National Experts at of programmes. Cooperation may also take the form Eurostat of joint undertakings with international organisations At the end of 2012, four experts from Statistics Norway such as the United Nations Economic Commission for and three experts from the Swiss Federal Statistical Europe (UNECE) and the IMF. Institute were seconded to Eurostat within the EFTA’s involvement gives priority to countries that framework of the EEA Agreement and the Swiss-EU have concluded joint declarations on cooperation Agreement respectively. Two Norwegian experts were or free trade agreements with EFTA. Support is seconded to Eurostat as a contribution in kind within granted mainly to countries covered by the European the framework of EFTA/EU technical cooperation

ANNUAL REPORT OF THE EUROPEAN FREE TRADE ASSOCIATION 2012 TRADE ASSOCIATION THE EUROPEAN FREE REPORT OF ANNUAL Neighbourhood Policy (ENP East and South), to the in order to ensure continuity of support and EFTA Western Balkans and to Turkey, but can also include visibility in the overall programming and management current and prospective free trade partners of EFTA in of EFTA/EU activities. other regions of the world. European Statistical Training In 2012, the EFTA Secretariat financed three of the 30 Programme ESTP courses held: two organised by Statistics Norway on the use of geographic information systems for An exchange of letters between the EFTA Secretariat making statistics and the user-friendly dissemination and Eurostat stipulates that the EFTA Secretariat must of statistics; and one by the Swiss Federal Statistical finance at least two ESTP courses per year in return Office on data analysis and data modelling. for EFTA statisticians having the right to participate in all courses.

29 ANNUAL REPORT OF THE EUROPEAN FREE TRADE ASSOCIATION 2012 TRADE ASSOCIATION THE EUROPEAN FREE REPORT OF ANNUAL EEA GRANTS AND NORWAY GRANTS

30

Biodiversity and ecosystem services in Cyprus have been allocated EUR 1.2 million for the 2009-2014 Grants period.

Through the EEA Grants and Norway Grants, Iceland, Brussels administers the grant schemes on behalf of Liechtenstein and Norway contribute to reducing Iceland, Liechtenstein and Norway. disparities in the European Economic Area and to strengthening bilateral relations with 15 EU countries Reducing Disparities and in Central and Southern Europe: Bulgaria, Cyprus, Strengthening Bilateral the Czech Republic, Estonia, Greece, Hungary, Latvia, Lithuania, Malta, Poland, Portugal, Romania, Relations Slovakia, Slovenia and Spain. Since funding from the EEA EFTA States to the Around EUR 1.789 billion in funding has been agreed less wealthy countries of the EU started in 1994, the for the period 2009-2014. The EEA Grants amount to Grants have contributed to areas such as reducing EUR 988.5 million, of which Norway provides around greenhouse gas emissions, protecting biodiversity,

ANNUAL REPORT OF THE EUROPEAN FREE TRADE ASSOCIATION 2012 TRADE ASSOCIATION THE EUROPEAN FREE REPORT OF ANNUAL 94%, Iceland close to 5% and Liechtenstein just above improving health services, promoting social inclusion, 1%. The Norway Grants amount to EUR 800 million strengthening civil society, strengthening the rule of and are funded by Norway alone. The Financial law and preserving cultural heritage. An end review Mechanism Office (FMO) of the EFTA Secretariat in of projects implemented during the last funding period concluded that they had contributed to reducing social Ex-post monitoring of 40 projects produced positive and economic disparities at local level. findings, with most activities implemented as planned, targets largely met and high value for money achieved. The Grants have increasingly contributed to A number of evaluations and reviews provided developing mutual cooperation and strengthening important lessons and guidance for the next funding bilateral relations. Under the Grants 2004-2009, period. more than one in five projects were implemented in partnership with entities from Iceland, Liechtenstein and Norway. Under the Grants 2009-2014, over half of 2012: New Funding Available the expected 146 programmes are being planned and The EEA Grants and Norway Grants 2009-2014 implemented in cooperation with public entities from are providing funding to larger programmes with the donor states. clearer objectives and more strategic partnerships, Bilateral funds at national and programme level also thereby strengthening their results-oriented approach. stimulate bilateral contacts, networking and project Emphasis is being laid on results, as well as on cooperation. Networks and partnerships that build up risk management. Strategic partnerships are being through the Grants are expected to create sustainable established to contribute to strengthening bilateral cooperation in the political, institutional, cultural and cooperation and relations between the donor and academic fields, as the programmes developed are in beneficiary countries. areas of special interest to both the beneficiaries and At least 30% of the funds have been earmarked for donors. “green programmes”: environmental protection, climate change and renewable energy, carbon capture International Partnerships and storage, and green industry innovation. Funding is also targeting vulnerable groups such as minorities, Partnerships are also established with international including the Roma, and children and youth at risk. organisations to ensure that funding is allocated with 31 Particular emphasis is being placed on gender issues. maximum efficiency and transparency. In the 2009- 2014 period, the Council of Europe is contributing with expertise on human rights, democracy and rule of law. The global anti-corruption organisation Transparency International is collaborating with the EEA Grants and Norway Grants in identifying and addressing corruption risks in the implementation of the grant schemes. 2012: High Completion Rate with Positive Results The five-year funding schemes were first established in 1994. For the 2004-2009 period, EUR 1.307 billion was made available for projects, and funding was The EEA and Norway Grants give special attention to the allocated to 1 250 projects and funds, of which the last needs of vulnerable groups, such as children and youth at risk. Photo © Christophe Vander Eecken were closed on 30 April 2012. The Grants focused on areas of need and common With the current economic crisis giving rise to interest, in line with wider European interests and intolerance and hate speech in Europe, the Grants are goals. All available funding was committed in all also contributing to combating racism and xenophobia. 2012 TRADE ASSOCIATION THE EUROPEAN FREE REPORT OF ANNUAL beneficiary countries and the implementation rate This is not only achieved by promoting the values was very high. About 97% of the projects had been of democracy, tolerance and rule of law, but also by completed by the end of April 2012. helping to reduce social and economic disparities. By the end of 2012, around one third of the • Decent work and tripartite dialogue; programmes had been approved, several calls for • Research and scholarship; projects had been launched and the first projects had • Human and social development; and started. Programmes and projects may in general be implemented until 2016. • Justice and home affairs.

In the 2009-2014 period, the EEA Grants and Norway EEA And norwAy GrAnts 2009-2014 Grants are financing programmes in the following sectors: Spain 45.9 Slovenia 26.9 Bulgaria 126.6

Slovakia 80.8 Cyprus 7.9 EEA Grants Czech Republic 131.8 • Environmental protection and management; Romania Estonia 306.0 48.6 • Climate change and renewable energy; Greece • Civil society; 63.4 Total: €1788.5 million • Human and social development; Hungary Portugal 153.3 • Protecting cultural heritage; and 58.0 • Research and scholarship. Latvia 73.0

Lithuania 84.0 Norway Grants Poland Malta 4.5 578.1 • Carbon capture and storage; • Green industry innovation; Allocation per country, 2009-2014.

Total countries_Updated version.indd 17 19/03/13 12:20

32 ANNUAL REPORT OF THE EUROPEAN FREE TRADE ASSOCIATION 2012 TRADE ASSOCIATION THE EUROPEAN FREE REPORT OF ANNUAL ADVISORY BODIES

The Parliamentary Committee Vice Speaker and relevant committees of the House of Representatives, government officials and business The EFTA Parliamentary Committee continued its representatives. active involvement in issues of relevance to EFTA The Parliamentary Committee met with EFTA cooperation in free trade relations with countries Ministers in Gstaad in June and in Geneva in outside the European Union and matters pertaining to November, receiving updates on third-country relations the EEA Agreement. The Chair of the Committee on and raising points of interest. Among other issues, the third-country issues was Kathy Riklin (Switzerland), Committee discussed the FTA negotiations with the while Harry Quaderer (Liechtenstein) chaired the Customs Union of the Russian Federation, Belarus Committee on EEA matters. and Kazakhstan, the management of the FTA with Third-Country Relations Palestine, and the linkages between EFTA and EU free trade negotiations. The Committee continued its active In February 2012, representatives of the Parliamentary engagement with respect to sustainable development Committee visited Indonesia to support the ongoing provisions in FTAs, particularly in relation to free trade negotiations by strengthening ties with negotiations in South-East Asia. Furthermore, a stakeholders in the country and exchanging views on delegation participated in the Annual Conference on the merits of free trade. Together with an observer the WTO organised jointly by the Inter-Parliamentary from the Consultative Committee, they met with the Union and the European Parliament. 33 ANNUAL REPORT OF THE EUROPEAN FREE TRADE ASSOCIATION 2012 TRADE ASSOCIATION THE EUROPEAN FREE REPORT OF ANNUAL

The EFTA Parliamentary Committee at a meeting in Geneva in November. EEA and European Affairs and met with the Standing Committee at Ministerial level for the fourth time in Brussels in November, The EEA Joint Parliamentary Committee met twice in on the margins of the EEA Council meeting. These 2012, in Akureyri, Iceland, in May and in Brussels in joint meetings include the EFTA Consultative November. The Committee took a highly active role in Committee and constitute an increasingly important the reflections on the EEA Agreement, and adopted a dialogue between Ministers and advisory bodies on report and resolution on the EEA review process at its developments in the EEA. meeting in May. As in previous meetings, the members engaged in a fruitful dialogue with the EEA Council, EFTA Consultative Committee the EEA Joint Committee and the EFTA Surveillance Authority (ESA) on the functioning of the EEA. The In 2012, the EFTA Consultative Committee* continued Committee adopted a resolution on the EEA Joint its work on international trade developments, focusing Committee’s Annual Report on the Functioning of the especially on EFTA’s third-country relations. As regards EEA, and sought to increase its influence on future European affairs, the Committee focused on the various reports by asking the Joint Committee to provide it reviews of the EEA Agreement; developments in the with the draft rather than adopted texts. In 2012, the Internal Market with specific emphasis on the free Committee also adopted resolutions on: movement of persons, professional qualifications, • The White Paper on Transport; labour law issues and the Single Market Act II; • The reform of the common fishery policy; Schengen cooperation; and responses to the economic and financial crisis. The Chair of the Committee in 2012 • EU energy policy and its implications for the EEA; was Halldór Grönvold (Iceland). • EEA EFTA participation in EU agencies; and The Committee met with the Standing Committee of the • EU programmes 2014-2020 and the participation of EFTA States in March, the EFTA Ministers and EFTA the EEA EFTA States. 34 Parliamentary Committee in June, and the Ministerial The EFTA parliamentarians continued their active Chair of the Council in November. Concerning the dialogue with the EFTA Ministers on EEA affairs, EEA, the Committee invited the Vice President of ANNUAL REPORT OF THE EUROPEAN FREE TRADE ASSOCIATION 2012 TRADE ASSOCIATION THE EUROPEAN FREE REPORT OF ANNUAL

Under the Presidency of Mr Pat the Cope Gallagher (MEP, ALDE, Ireland) and acting Vice President Mr Skúli Helgason (MP, Social Democratic Alliance, Iceland), the 39th meeting of the EEA Joint Parliamentary Committee took place in November.

* Representatives of the the social partners’ organisations in the EFTA countries. Joint Work with the EU At its meeting in May in Akureyri, Iceland, the EEA Consultative Committee adopted two resolutions on: • The EEA review; and • The enterprise dimension of the Single Market. The Committee also focused on recent developments in the EEA and Iceland’s EU accession negotiations, and organised a panel discussion on wealth inequalities and social justice in light of the present economic crisis, receiving presentations on the Nordic model and Icelandic experience. The EEA Consultative Committee and the EEA Joint Parliamentary Committee marked the 20th anniversary of the signing of the EEA Agreement by organising a joint event in The Chairs of the EFTA Parliamentary and Consultative Committees at a joint meeting with EEA EFTA Ministers in Brussels. Mr Halldór Akureyri. Grönvold, Consultative Committee, and Mr Harry Quaderer, Cooperation between social partners in the EEA Parliamentary Committee. was further reinforced in 2012 through the so-called ESA to give a briefing in June on ESA’s most recent “osmosis” procedure, which allows representatives of the EFTA side to participate in the work of the activities, and met with the EFTA Standing Committee European Economic and Social Committee and at Ministerial level in November in Brussels. The vice versa. Cooperation in 2012 included EFTA Consultative Committee members firmly believe in participation in various activities, such as meetings the importance of holding such joint meetings, which 35 with Croatia, Iceland, Macedonia, Montenegro and contribute to enhancing dialogue with the relevant Turkey; the Steering Committee on Europe 2020; and EFTA authorities at political, parliamentary and the Single Market Observatory. diplomatic level in the four EFTA countries. In March, the Committee discussed the Norwegian The EEA EFTA Forum EEA Review, and a member of the Review Committee The EEA EFTA Forum of elected representatives of presented its key findings with a particular focus on local and regional authorities was established by the the chapters on the economy, business policy and the EFTA Standing Committee in 2009 as an informal labour market. The EEA reviews were one of the main body to involve elected representatives from local topics of the EFTA social partners’ annual meeting authorities and regions in EEA matters. It currently has with the EFTA Ambassadors. The Committee also 12 members – six from Iceland and six from Norway. discussed Schengen cooperation with representatives Halldór Halldórsson (Iceland) chaired the Forum in the of the four EFTA States. first half of 2012, while the Chair in the second half of Cooperation continued with the EFTA authorities at the year was Hilde Onarheim (Norway). working group level, and in March the Consultative The Forum held two meetings in 2012, in June in Committee and the EFTA Working Group on Free Ísafjörður, Iceland, and in November in Brussels. The Movement of Persons, Working Life and Social Forum adopted opinions on: Inclusion met to discuss current labour law issues, • The review of the EEA Agreement; including working time and the Temporary Agency

Work Directive. The Committee also exchanged views • European rules on environmental impact 2012 TRADE ASSOCIATION THE EUROPEAN FREE REPORT OF ANNUAL with EU experts on corporate social responsibility assessment; and labour market trends in the context of the current • Labour migration within the EEA and impact on the economic crisis. local and regional level; • EU programmes 2014-2020 and the participation of The Forum continued its dialogue on relevant issues the EEA EFTA States; and with the Committee of Regions of the European • The Commission proposal for a general data Union, and discussed topics of common interest with protection regulation. the EFTA Parliamentary Committee in a joint meeting in November.

36

The EEA EFTA Forum of Local and Regional Authorities at its sixth meeting, which took place in Brussels in November. ANNUAL REPORT OF THE EUROPEAN FREE TRADE ASSOCIATION 2012 TRADE ASSOCIATION THE EUROPEAN FREE REPORT OF ANNUAL INFORMATION ACTIVITIES

EFTA informs its stakeholders and the general public free of charge, subject to availability. The following about its activities through a website, seminars and were released in 2012: various publications. Members of the public can • This is EFTA 2012: An annual publication providing access or order EFTA documents through a link an overview of EFTA and its activities, together on the site. Presentations are also given to visitors with useful trade and economic statistics; and to the Secretariat offices in Geneva, Brussels and • The EFTA Bulletin: The European Economic Area Luxembourg. In Brussels alone, approximately and the Single Market 20 Years on. 80 groups (nearly 1 500 people) visited EFTA in 2012. In addition, the fact sheet “EFTA at a Glance” provides a brief introduction to the organisation and its activities. Website The EEA Supplement The website contains news and general information on EFTA’s work, as well as legal texts related to The EEA Supplement to the Official Journal of EFTA’s FTAs and the EEA Agreement. The site has the European Union is a translation into Icelandic approximately 800 visitors per day. and Norwegian of EEA-relevant texts. The EEA Supplement contains material from: Seminars • The EEA Joint Committee; • The Standing Committee of the EFTA States; EFTA held numerous seminars and workshops in 2012, including: • The EFTA Surveillance Authority; 37 • In January and September, EFTA held its biannual • The EFTA Court; and seminar on the EEA Agreement. At the January • The European Commission. seminar, the Chair and Secretary of the Norwegian The EEA Supplement is published on the EFTA EEA Review Committee presented their report website once a week. Since 2008, the Icelandic and “Inside and Outside” to more than 120 participants; Norwegian versions of the EEA Supplement have not and been synchronised with regard to content. • In March, the Brussels Secretariat hosted a seminar In 2012, the EFTA Secretariat published 71 issues on the role of certification linked to standardisation. of the EEA Supplement. The publication of acts incorporated into the EEA Agreement increased in Publications 2012 compared to the previous year for the Icelandic The latest editions of all of EFTA’s brochures are version, whilst the Norwegian version saw a decrease available on the website. Paper copies can be ordered in the number of acts published in 2012.

Publication in the EEA Supplement 2012 Fig. 4

Number of Pages Icelandic Norwegian EEA Joint Committee Decisions 413 413 EU Acts 6 904 1 488

EFTA Standing Committee 15 15 2012 TRADE ASSOCIATION THE EUROPEAN FREE REPORT OF ANNUAL EFTA Surveillance Authority 502 502 EFTA Court 38 38 EU Institutions 1 450 1 450 Other 2 2 Total 9 322 3 906 ADMINISTRATION

At the end of 2012 there were 22 fixed-term and The EFTA Board of Auditors short-term staff based in Geneva, and 60 in Brussels and Luxembourg. The Financial Mechanism Office in The EFTA Board of Auditors (EBOA), established Brussels employed 62 staff. All figures are on a full- in May 1992, is the auditing authority of EFTA. It is time equivalent basis and include trainees. a permanent committee which, in cooperation with external auditors, performs an annual audit of the three The Secretariat’s budget is prepared according to the EFTA institutions: The EFTA Secretariat, ESA and the framework budgeting principle used by the Member EFTA Court. For matters related to the Secretariat, States’ public administrations. This approach aims to EBOA meets “at four” (one representative from each increase awareness of budgetary spending at all levels. EFTA State) and reports directly to the EFTA Council. The budget is accompanied by a performance plan in For matters related to the EEA Agreement (ESA and which the activities of the Secretariat are divided into the EFTA Court), EBOA meets “at three” (Iceland, projects. The plan and subsequent reports keep the Liechtenstein and Norway) and reports to the ESA/ Member States informed of the costs and outcomes of Court Committee. EBOA also works in cooperation the Secretariat’s various activities. with the European Court of Auditors. EBOA met three EFTA’s budget is prepared in two currencies: Swiss times in 2012. francs (CHF) and euros (EUR). The total budget for EBOA’s annual audit report is made available on the 2012 was equivalent to CHF 22 066 000. EFTA Secretariat’s website once the relevant Council procedures for the year in question have been finalised. 38

2012 EFTA Budget Fig. 5

Budget Posts 2012 Budget (in CHF) EFTA Council and horizontal activities 1 964 000 Administration and management 4 057 000 Trade relations with countries outside the EU 4 696 000 EU/EFTA and EFTA cooperation programmes 2 958 000 EEA-related activities 7 712 000 EFTA-EU statistical cooperation 679 000 22 066 000

Contributions from the EFTA States to the 2012 EFTA Budget Fig. 6

Member State Contributions (in CHF) Share (as %) Iceland 844 000 3.83 Liechtenstein 195 000 0.88 Norway 12 501 000 56.65 Switzerland 8 526 000 38.64 Total 22 066 000 100.00 ANNUAL REPORT OF THE EUROPEAN FREE TRADE ASSOCIATION 2012 TRADE ASSOCIATION THE EUROPEAN FREE REPORT OF ANNUAL APPENDICES

EFTA Parliamentary Committee Members1

Iceland Mr Árni Þór Sigurðsson Left-Green Movement Mr Skúli Helgason Social-Democratic Alliance Ms Þorgerður K. Gunnarsdóttir Independence Party Mr Sigmundur D. Gunnlaugsson Progressive Party Mr Sigmundur Ernir Rúnarsson Social Democratic Alliance

Liechtenstein Mr Harry Quaderer (Chair)2 Independent Mr Albert Frick Progressive Citizens’ Party

Norway Mr Svein Roald Hansen Labour Party Mr Harald T. Nesvik Progress Party 39 Ms Rannveig Kviste Andresen Socialist Left Party Ms Laila Gustavsen Labour Party Ms Laila Marie Reiersten Progress Party Mr Jan Tore Sanner Conservative Party

Switzerland Ms Kathy Riklin (Chair)3 Christian Democratic Party Mr Didier Berberat Social Democratic Party Mr Ignazio Cassis Radical-Liberal Party Mr Konrad Graber Christian Democratic Party Mr Hans Kaufmann Swiss People’s Party

1 Committee members as at October 2012. 2 Chair of members from the three EEA EFTA countries. 3 Chair of members from the four EFTA countries. ANNUAL REPORT OF THE EUROPEAN FREE TRADE ASSOCIATION 2012 TRADE ASSOCIATION THE EUROPEAN FREE REPORT OF ANNUAL EFTA Consultative Committee Members

Iceland Mr Halldór Grönvold (Chair) Icelandic Confederation of Labour Mr Róbert Trausti Árnason Confederation of Icelandic Employers Mr Haraldur Ingi Birgisson Icelandic Chamber of Commerce Ms Helga Jónsdóttir Federation of State and Municipal Employees Mr Bjarni Már Gylfason Federation of Icelandic Industries

Liechtenstein Mr Josef Beck Liechtenstein Chamber of Commerce and Industry Mr Sigi Langenbahn (Second Vice Chair) Liechtenstein Employees Association

Norway Mr Thomas Angell (First Vice Chair) Federation of Norwegian Commercial and Service Enterprises Ms Liz Helgesen Norwegian Confederation of Unions for Professionals Mr Vidar Bjørnstad Norwegian Confederation of Trade Unions Ms Bente Stenberg-Nilsen Norwegian Association of Local and Regional Authorities Mr Espen Søilen Confederation of Norwegian Enterprise 40 Mr Christopher Navelsaker Norwegian Confederation of Vocational Unions

Switzerland Mr Jan Atteslander economiesuisse Ms Ruth Derrer Balladore (Bureau member) Confederation of Swiss Employers Ms Marco Taddei Swiss Association of Small and Medium-Sized Enterprises Mr Pierre Weiss Fédération des Entreprises Romandes Genève ANNUAL REPORT OF THE EUROPEAN FREE TRADE ASSOCIATION 2012 TRADE ASSOCIATION THE EUROPEAN FREE REPORT OF ANNUAL Members of the EEA EFTA Forum of Elected Representatives of Local and Regional Authorities

Iceland Mr Sveinn Kristinsson Regional Municipal Organisation of Western Iceland Ms Albertína Elíasdóttir Regional Municipal Organisation of the Westfjords Mr Halldór Halldórsson (Vice Chair) Icelandic Association of Local Authorities Mr Bjarni Jónsson Regional Municipal Organisation of North West Iceland Mr Óttarr Ólafur Proppé Reykjavík City Ms Ásgerður Halldórsdóttir Regional Municipal Organisation of the Capital Area

Norway Mr Christian Haugen Hedmark County Council Mr Nils A Røhne Municipality of Stange Ms Hanne Braathen Storfjord Municipal Council Ms Hilde Onarheim (Chair) Bergen City Government Ms Eva Kristin Andersen Fredrikstad City Council Ms Torhild Bransdal Municipality of Vennesla

41 ANNUAL REPORT OF THE EUROPEAN FREE TRADE ASSOCIATION 2012 TRADE ASSOCIATION THE EUROPEAN FREE REPORT OF ANNUAL EFTA Ministerial Communiqués and EEA Council Conclusions

EFTA Ministerial Meeting, Gstaad, 28 June 2012 Communiqué in the negotiations with the Members of the Customs Union of Russia, Belarus and Kazakhstan. On 28 June 2012, the European Free Trade Association (EFTA) held its summer Ministerial meeting in Gstaad, Recalling the priority accorded to enhancing trade Switzerland under the Chairmanship of Mr Johann N. relations with partners in Asia, Ministers acknowledged Schneider-Ammann, Federal Councillor and Head the progress achieved in the negotiating process with of the Federal Department of Economic Affairs India and expressed their wish to move towards a of Switzerland. Ministers of the four EFTA States conclusion. They welcomed the good momentum (Iceland, Liechtenstein, Norway and Switzerland) achieved in the negotiations with Indonesia and signed a joint declaration on cooperation with Georgia, reiterated their interest in resuming negotiations with represented by Ms Vera Kobalia, Minister of Economy Thailand. Ministers expressed their satisfaction about and Sustainable Development. the start of a negotiating process with Vietnam. In the context of the official launch of these negotiations The international economic and trade environment foreseen in July 2012, the EFTA States will recognize The EFTA Ministers discussed the state of the global Vietnam’s market economy status. economy and the prospects for international trade, Ministers expressed their satisfaction with the second noting the important challenges currently faced round of negotiations with the Central American States by policy makers and economic operators. They of Costa Rica, Honduras and Panama in June 2012 underscored the importance of policies in support of and expressed the wish to move forward speedily with 42 economic and financial stability as well as to foster this process. growth and job creation. EFTA Ministers recalled the essential role of open markets in achieving sustainable Ministers also discussed current and future initiatives growth and reiterated their commitment to a strong, to expand EFTA’s free trade network. In this context, rules-based trading system under the framework of the they welcomed the ongoing exploratory work with World Trade Organisation (WTO). Malaysia and expressed their wish to begin free trade negotiations at the earliest suitable opportunity. Preferential trade relations Ministers confirmed their interest in exploring deeper The EFTA Ministers noted that EFTA’s network trade relations with the Philippines. They decided to of free trade agreements with partners outside the consider the development of closer trade relations European Union currently comprises 24 agreements with Pakistan and to propose the signing of a joint with 33 countries worldwide. Five joint declarations declaration on cooperation to this effect. on cooperation further complement this network. Ministers agreed to continue exploring possible options In this context, Ministers welcomed the entry into for increasing trade, investment and cooperation with force on 1 June 2012 of the free trade agreement the MERCOSUR States (Argentina, Brazil, Paraguay with Ukraine and the signing of a joint declaration on and Uruguay). They also agreed to further examine the cooperation with Georgia. Ministers also emphasised possibilities of developing closer trade relations with the need to further develop EFTA’s existing FTAs, e.g. potential partners in the Sub-Saharan African region. the agreements with Canada and the Republic of Korea. Relations with the European Union

ANNUAL REPORT OF THE EUROPEAN FREE TRADE ASSOCIATION 2012 TRADE ASSOCIATION THE EUROPEAN FREE REPORT OF ANNUAL Ministers discussed EFTA’s ongoing negotiating The EEA EFTA Ministers welcomed the 20th processes. They called for a swift conclusion of anniversary of the signing of the EEA Agreement, and negotiations with Bosnia and Herzegovina. They highlighted that the Agreement continues to function noted with satisfaction the progress achieved to date well in accordance with the original objectives. They discussed the general operation of the EEA Agreement Advisory bodies in the context of the financial and economic crisis in Ministers held meetings with EFTA’s two advisory Europe and underlined the need for coordinated and bodies, the Parliamentary Committee and the comprehensive action at the European level. Consultative Committees. They discussed a range Ministers welcomed the recent progress made with of issues with committee members, including recent regard to the processing of acquis in the EEA Agreement. developments in EFTA third-country relations and They noted with satisfaction that the amount of Single the latest developments in the EEA and in Swiss-EU Market legislation awaiting incorporation in the EEA relations. Agreement had been substantially reduced since the Change of Secretary-General beginning of the year. Recalling that Mr Kåre Bryn’s term as Secretary- Ministers noted with concern the difficulties General would come to an end on 31 August 2012, encountered with regard to EEA EFTA participation Ministers expressed their gratitude to him for his in certain EU programmes and agencies, in particular significant contribution to EFTA over the last six years. with regard to the European Supervisory Authorities They also thanked the outgoing Deputy Secretary- for financial markets and the European Research Area, General, Ms Bergdís Ellertsdόttir, and the former and called on all parties to look for pragmatic solutions Deputy Secretary-General, Mr Didier Chambovey, in order to resolve these challenges. They reiterated who left his post in August 2011, for their valuable the importance of close cooperation with the European contribution to the Association. Mr Bryn’s successor Union on energy and climate change and noted the will be Mr Kristinn F. Árnason of Iceland. urgency of completing the necessary measures on the EEA EFTA side to allow for the continued participation Attending of the EEA EFTA States in the common European Switzerland: Mr Johann N. Schneider-Ammann, Emissions Trading Scheme. Federal Councillor, Head of the Federal 43 Department of Economic Affairs With regard to the EEA Financial Mechanism and (Chair) the Norwegian Financial Mechanism 2009-2014, Iceland: Mr Össur Skarphéðinsson, Minister for Ministers welcomed the conclusion of the Memoranda Foreign Affairs and External Trade of Understanding with all beneficiary states. Liechtenstein: Ms Aurelia Frick, Minister of Foreign Finally, Ministers were informed on the state and the Affairs perspectives of the relations between Switzerland and Norway: Mr Trond Giske, Minister of Trade and the European Union, especially on the institutional Industry proposals made by Switzerland. EFTA: Mr Kåre Bryn, Secretary-General

EFTA Ministerial Meeting, Geneva, 12 November 2012

Communiqué Ministers expressed concern over weakening international economic activity and the projected On 12 November 2012, the European Free Trade slowdown in global trade this year. They underlined Association (EFTA) held a Ministerial Meeting the importance, in such a context, of pursuing trade in Geneva under the Chairmanship of Mr Össur and investment policies that prevent protectionism and Skarphéðinsson, Minister for Foreign Affairs and ensure open, competitive markets. External Trade of Iceland. The EFTA Ministers signed In this context, Ministers reviewed EFTA’s activities in a Joint Declaration on Cooperation with Pakistan, the area of free trade agreements. EFTA’s network of 2012 TRADE ASSOCIATION THE EUROPEAN FREE REPORT OF ANNUAL represented by Mr Shahid Bashir, Ambassador preferential trade relations outside the European Union and Permanent Representative to the World Trade currently comprises 24 free trade agreements with 33 Organisation in Geneva. countries. This network is complemented by 6 joint declarations on cooperation globally. In this respect, considerably strengthen EFTA’s network in the Ministers welcomed the signing of a Declaration with dynamic Asian region. They expressed their readiness Pakistan which will serve to strengthen economic to re-engage with Thailand at the earliest suitable cooperation and bilateral trade relations. Ministers also opportunity. They agreed to further seek possibilities emphasised the importance of revising and updating to deepen trade relations with countries in Sub- existing free trade agreements in the light of global Saharan Africa. They called for a joint assessment of developments in this area. recent developments with Algeria.

Ministers welcomed the swift progress in the free trade Ministers also discussed issues related to the negotiations with the Central American States of Costa unresolved mackerel negotiations. Rica, Guatemala, Honduras and Panama and looked Ministers met with the EFTA Parliamentary Committee forward to their early conclusion. They took stock of to discuss recent developments and priorities in EFTA’s progress made in the negotiations with the Customs trade relations with the world. Union of Russia, Belarus and Kazakhstan and called for continued momentum with a view to moving Attending: closer to a conclusion. Ministers emphasised their Iceland: Mr Össur Skarphéðinsson, Minister strong interest in remaining fully engaged with India. for Foreign Affairs and External Trade They noted the advances made in the negotiating (Chair) processes with, respectively, Indonesia and Vietnam, Liechtenstein: Ms Aurelia Frick, Minister of Foreign and expressed their wish to see these move further Affairs Norway: Mr Roger Ingebrigtsen, State Secretary, forward in a timely manner. They reiterated their Ministry of Trade and Industry call for a conclusion of negotiations with Bosnia and Switzerland: Mr Johann N. Schneider-Ammann, Herzegovina. Federal Councillor, Head of the Federal 44 Ministers welcomed the recent announcement of the Department of Economic Affairs start of negotiations on a free trade agreement with EFTA: Mr Kristinn F. Árnason, Secretary- Malaysia. An agreement with that partner would General

Conclusions of the 37th meeting of the EEA Council, Brussels, 14 May 2012

The thirty-seventh meeting of the EEA Council 2. The EEA Council held an orientation debate on took place in Brussels on 14 May 2012 under the Strategies for Growth in Europe. Presidency of Mr Villy Søvndal, Minister for Foreign Affairs of Denmark, representing the Presidency of 3. The EEA Council noted the 20th anniversary of the Council of the European Union. The meeting was the signing of the EEA Agreement on 2 May, and attended by Mr Össur Skarphéðinsson, Minister for recognised with satisfaction that the Agreement Foreign Affairs of Iceland, Mr Martin Meyer, Deputy has been a durable instrument in ensuring the Prime Minister and Acting Minister for Foreign smooth functioning of the European Economic Affairs of Liechtenstein, and Mr Jonas Gahr Støre, Area. The EEA Council looked forward to the Minister of Foreign Affairs of Norway, as well as by 20th anniversary celebrations of the Single Members of the Council of the European Union and Market later in the year. Representatives of the European Commission and the 4. The EEA Council recognised that the current European External Action Service. economic crisis was a common concern, and

ANNUAL REPORT OF THE EUROPEAN FREE TRADE ASSOCIATION 2012 TRADE ASSOCIATION THE EUROPEAN FREE REPORT OF ANNUAL 1. The EEA Council noted that within the reaffirmed the need for responsibility and framework of the Political Dialogue the Ministers solidarity among the nations of Europe in discussed North Africa / ‘Arab Spring’, Iran and tackling the challenges ahead. The EEA Council Afghanistan/Pakistan. stressed that it was in the common interest of all countries of the European Economic Area to 10. The EEA Council noted the urgency to continue restore confidence and put the economies on the discussions between the EU and EFTA sides path towards renewed and sustainable growth, on how to ensure that the significant volume of and underlined the need to take into account legislation being adopted in the EU in the financial budgetary discipline and shared social objectives services field is dealt with and included in the EEA in the measures taken to combat the crisis. In this Agreement. The EEA Council emphasised the context, the EEA Council welcomed the signing need to ensure the timely incorporation of such of the Treaty establishing the European Stability legislation, including the Regulations establishing Mechanism on 2 February 2012, and of the Treaty the European Supervisory Authorities, on which, on Stability, Coordination and Governance in the to date, limited progress has been noted. The Economic and Monetary Union on 2 March 2012. EEA Council furthermore expressed the hope that an understanding could be reached soon on 5. The EEA Council welcomed the signing of the the appropriate form of participation by the EEA Treaty concerning the Accession of Croatia to EFTA States’ relevant authorities in the European the EU on 9 December 2011. The EEA Council Systemic Risk Board (ESRB). recalled that all European States becoming a member of the European Union shall apply to 11. The EEA Council reiterated the importance become a Party to the Agreement on the European of maintaining close cooperation between the Economic Area, in accordance with Article 128 of EU and the EEA EFTA States in environment, the Agreement. energy and climate change polices, in particular in the areas of emissions trading, the promotion 6. The EEA Council welcomed the progress being of competitive, safe and sustainable low carbon made towards Iceland’s accession to the European economy, resource efficiency, energy efficiency Union following the fifth Intergovernmental and renewable energy resources, as well as in Conference in March 2012. 45 carbon capture and storage (CCS). 7. The EEA Council welcomed the progress made on 12. The EEA Council recognised the importance of the seven flagship initiatives of the Europe 2020 cooperation for the development of future-oriented Strategy. With many of the proposals contained energy technologies, among others by means of in these initiatives being EEA relevant, the advocating and supporting common research & EEA Council welcomed the EEA EFTA States’ development projects, enhancing and developing contribution to the Strategy. a framework allowing cross-border exchanges 8. The EEA Council reiterated its commitment to the of knowledge and scientific cooperation, and social objectives of the Europe 2020 Strategy with advocating a free flow of intellectual capital. its inclusive growth initiatives aimed at combating 13. The EEA Council noted the importance of the poverty and social exclusion, encouraging youth Third Package for the Internal Energy Market and mobility and matching skills with jobs, and that important work on derived legislation was underlined the importance of finding innovative currently ongoing in the new bodies, the Agency responses to the social impact of the current crisis. for the Cooperation of Energy Regulators (ACER) 9. The EEA Council welcomed the progress made and the European Network(s) for Transmission on the Single Market Act, notably the timely System Operators (ENTSOs). Since the EEA presentation of the key actions of the Act, EFTA States were already well integrated in including EEA-relevant legislative proposals. the Internal Energy Market, the EEA Council

The EEA EFTA States will continue to be actively underlined the importance of ensuring appropriate 2012 TRADE ASSOCIATION THE EUROPEAN FREE REPORT OF ANNUAL involved in the development of the Single Market EEA EFTA participation in the new bodies in and will follow up on the proposals resulting from line with the Third package and the EEA the Act. Agreement. 14. The EEA Council welcomed the recent EEA Agreement, to ensure a homogenous incorporation of the Renewables Directive into the Internal Market. In this regard, the EEA EEA Agreement, and also took note of the ongoing Council welcomed the joint efforts of the EEA work on a European Renewable Energy Strategy EFTA States and the European External Action post-2020. In this context, the EEA Council took Service to further improve the process of note of the EEA EFTA States’ already large shares preparation and incorporation of EEA relevant of renewable energy sources and acknowledged EU acquis into the EEA Agreement, including the EEA EFTA States’ commitment to attaining through the timely fulfilment of constitutional targets for their shares of renewable energy by requirements when applicable, and took note 2020. of the steady progress already achieved in reducing the relatively high number of legal 15. The EEA Council took note of the ongoing work acts not yet in force in the whole of the EEA; in the EU on a new Energy Efficiency Directive • Welcomed the final agreement reached for a and a new Regulation on Energy Infrastructure Directive on Consumer Rights, and noted in and agreed on the importance of energy efficiency this context that EEA EFTA concerns had been and infrastructure as a means of realising energy taken into account; and climate goals. • Noted that the Agreement on the further 16. The EEA Council urged for the swift incorporation liberalisation of trade in agricultural products of the revised Emissions Trading Scheme into the between the European Union and Norway EEA Agreement and underlined that all parties to based on Article 19 of the EEA Agreement the Agreement needed to complete various tasks had entered into force on 1 January 2012. this year in order to ensure that the system would The EEA Council acknowledged that the be operational throughout the entire EEA as of 1 Contracting Parties to the EEA Agreement, as 46 January 2013. set out in Article 19 of the Agreement, have undertaken to continue their efforts with a 17. The EEA Council recalled its orientation debate view to achieving progressive liberalization on commodity markets and raw materials in May of agricultural trade within the framework 2011 and welcomed the Commission’s proposal of their respective agricultural policies and of 29 February 2012 for a European Innovation on a mutually beneficial basis. To this end, it Partnership (EIP) on Raw Materials with a holistic looked forward to the upcoming review of the approach regarding access, processing, resource conditions of trade in agricultural products; efficiency, innovation and technical development • Agreed to continue the dialogue on the review for the whole value from extraction of minerals to of the trade regime for processed agricultural recirculation. products within the framework of Article 2(2) of Protocol 3 to the EEA Agreement; 18. The EEA Council furthermore emphasized the key importance of SMEs for promoting • Welcomed the participation by the EEA EFTA economic growth and employment and shared States in EEA-relevant EU programmes, the engagement in implementing the Small noting that these were co-financed by the EEA Business Act, simplifying rules and regulations EFTA States. It emphasised the importance of and facilitating SMEs access to the public including the EEA EFTA States in appropriate procurement market, the green market and the programmes, thus contributing to building international market. a more competitive, innovative and social Europe;

ANNUAL REPORT OF THE EUROPEAN FREE TRADE ASSOCIATION 2012 TRADE ASSOCIATION THE EUROPEAN FREE REPORT OF ANNUAL 19. The EEA Council noted the Progress Report of • Took note of the adoption of the Integrated the EEA Joint Committee and, in particular: Maritime Policy Work Programme for 2011- • The EEA Council underlined the importance 2012 and welcomed the active involvement of timely incorporation of legal acts in the of the EEA EFTA States in preparatory actions for a European marine observation 22. The EEA Council welcomed the publication of and data network. It noted that the EEA EFTA the Norwegian EEA Review, and looked forward States were currently looking into possible to the results of the review commissioned by the participation in activities under the new Government of Liechtenstein and the ongoing programme for the further development of the review being undertaken by the European Union. Integrated Maritime Policy; the adoption of the European Commission Communication on 23. The EEA Council underlined the importance a Maritime Strategy for the Atlantic Area was of inviting EEA EFTA Ministers to relevant also noted; informal EU ministerial meetings and ministerial conferences on the basis of EEA • Welcomed the incorporation of the European EFTA participation in the Internal Market, and Aviation Safety Agency Regulation into the expressed its appreciation to the incoming Cypriot EEA Agreement; Presidency for the continuation of this practice. • Noted that the Audiovisual Media Services Directive, the Temporary Agency Work 24. The EEA Council recalled that the EU side had Directive and the Directive on charging heavy continued the practice of inviting the EEA EFTA goods vehicles are to be incorporated into the States — at the level of officials — to political Agreement as quickly as possible; dialogue meetings at the level of relevant • Noted that the outstanding issues concerning Council working parties, and supported further the processing of the Data Retention Directive, continuation of this practice. the Directive on Deposit Guarantee Schemes, 25. Implementation of projects under the EEA and the Regulation on Novel Foods and Novel Norwegian Financial Mechanism 2004-09 closed Food Ingredients, the remaining part of the on 31 April 2012, and the EEA Council welcomed TELECOM package (including the BEREC the high overall implementation and absorption regulation), the Third Postal Directive and 47 ratio for these funds. the Regulation on medicinal products for paediatric use had not yet been solved and 26. With regard to the EEA and Norwegian Financial reiterated the expectation for a conclusion of Mechanism 2009-14, the EEA Council welcomed this process in the coming months; the high level of bilateral cooperation agreed through the Memoranda of Understanding 20. The EEA Council welcomed the EEA EFTA between the EEA EFTA States and the 15 States’ contributions to the decision-shaping beneficiary countries. process of EEA-relevant EU legislation and programmes through their participation in relevant 27. The EEA Council noted the Resolutions of the committees, expert groups and agencies, and EEA Joint Parliamentary Committee adopted at its through the submission of EEA EFTA comments. 38th meeting in Akureyri, Iceland, on 3 and 4 May 2012 on the Annual Report on the Functioning of 21. The EEA Council reiterated that it was in the the EEA Agreement in 2011, the Review of the common interest of all Contracting Parties that EEA and the White Paper on a Single European the EEA Agreement was well known throughout Transport Area, and the Resolutions of the EEA the European Economic Area, and urged them Consultative Committee adopted at its 20th to ensure that appropriate information on the meeting in Akureyri, Iceland, on 3 and 4 May Agreement is available. 2012 on the Enterprise Dimension of the Internal Market and the EEA Reviews. ANNUAL REPORT OF THE EUROPEAN FREE TRADE ASSOCIATION 2012 TRADE ASSOCIATION THE EUROPEAN FREE REPORT OF ANNUAL Conclusions of the 38th meeting of the EEA Council, Brussels, 26 November 2012

The thirty-eighth meeting of the EEA Council took 6. The EEA Council recognised that the current place in Brussels on 26 November 2012 under the economic crisis was a common concern, and Presidency of Mr Espen Barth Eide, Minister of Foreign reaffirmed the need for responsibility and Affairs of Norway. The meeting was attended by solidarity among the countries of Europe in Mr Össur Skarphéðinsson, Minister for Foreign tackling the challenges ahead. The EEA Council Affairs of Iceland, Ms Aurelia Frick, Minister for recalled in this context the orientation debates Foreign Affairs of Liechtenstein, and Mr Andreas held in previous EEA Councils on the crisis and D. Mavroyiannis, Deputy Minister to the President stressed that it was in the common interest of of Cyprus for European Affairs, representing the all countries of the European Economic Area to Presidency of the Council of the European Union, restore confidence and put the economies on the as well as by Members of the Council of the path towards renewed and sustainable growth. European Union and Representatives of the European The EEA Council underlined the need to take into Commission and the European External Action account budgetary discipline and shared social Service. objectives in the measures taken to combat the crisis. The EEA Council underlined its full support 1. The EEA Council noted that within the framework for the calls by the G20 to avoid a repetition of of the Political Dialogue the Ministers discussed the historic mistakes of protectionism of previous Israel/Palestine/MEPP, Syria, Iran and Myanmar. eras, and voiced its intention to resist all forms of protectionism in order to help safeguard the 2. The EEA Council underlined the importance of global economic recovery. 48 inviting EEA EFTA Ministers to informal EU ministerial meetings and ministerial conferences 7. The EEA Council looked forward to the accession relevant for EEA EFTA participation in the of Croatia to the EU, which is expected on 1 July Internal Market, and expressed its appreciation 2013. The EEA Council welcomed the application to the present Cyprus and the incoming Irish of Croatia to become a Party to the Agreement presidencies for the continuation of this practice. on the European Economic Area, as required by Article 128 of the Agreement. 3. The EEA Council recalled that the EU side had continued the practice of inviting the EEA EFTA 8. The EEA Council welcomed the progress being States — at the level of officials — to political made towards Iceland’s accession to the European dialogue meetings at the level of relevant Council Union following the seventh Intergovernmental Conference in October 2012. working parties, and underlined the importance of continuation of this practice. 9. The EEA Council welcomed the progress made on the seven flagship initiatives of the Europe 4. The EEA Council held an orientation debate on 2020 Strategy and the Single Market Act and the Trade and Regulatory Cooperation with EEA publication of the Single Market Act II. With many Neighbours. of the proposals contained in these initiatives 5. In light of the 20th anniversary of the Single being EEA relevant, the EEA Council welcomed Market at the end of this year, the EEA Council the contribution of the EEA EFTA States towards recognised with satisfaction that the EEA their development. The EEA Council welcomed

ANNUAL REPORT OF THE EUROPEAN FREE TRADE ASSOCIATION 2012 TRADE ASSOCIATION THE EUROPEAN FREE REPORT OF ANNUAL Agreement has been a durable instrument in the initiatives of better governance in the Single ensuring the smooth functioning of the European Market as well as the Services Package which both Economic Area. aim at reducing barriers and ensuring a timely and correct transposition and implementation of EU legislation, thereby boosting the full development reiterated the need for a conclusion of this process of the Single Market. The EEA EFTA States in the coming months. will continue to be actively involved in the

developments of the Single Market. 15. The EEA Council noted the urgency to continue discussions between the EU and EFTA sides 10. The EEA Council noted the Progress Report on how to ensure that the significant volume of of the EEA Joint Committee and expressed legislation being adopted in the EU in the financial its appreciation for the work of the EEA Joint services field is dealt with and included in the EEA Committee in ensuring the smooth functioning of Agreement. The EEA Council emphasised the the EEA. need to ensure the timely incorporation of such legislation, including the Regulations establishing 11. The EEA Council welcomed the incorporation the EU supervisory framework for financial of the revised Emissions Trading Scheme, the markets, on which, to date, limited progress has Audiovisual Media Services Directive, the been noted. The EEA Council recognised the Temporary Agency Work Directive and the complexity of the issues and the constitutional Directive on charging heavy goods vehicles into challenges for the EEA EFTA States raised by the EEA Agreement. the specific role and powers these Authorities are vested with. It encouraged all sides to actively and 12. As on the occasion of its 37th meeting in May without delay engage in a constructive and result 2012, the EEA Council again welcomed the oriented dialogue to find a mutually acceptable joint efforts to further improve the process of solution allowing for the incorporation of the preparation and incorporation of EEA relevant EU relevant acts into the EEA Agreement. acquis into the EEA Agreement. The EEA Council underlined the importance of timely incorporation 16. The EEA Council reiterated the importance of legal acts into the EEA Agreement, to ensure a of maintaining close cooperation between the 49 homogenous Internal Market and fair competition EU and the EEA EFTA States in environment, for all operators. energy and climate change polices, in particular in the areas of emissions trading, the promotion 13. In this regard, the EEA Council noted the of competitive, safe and sustainable low carbon remaining important number of legal acts, which economy, energy efficiency, renewable energy had already entered into force in the EU but not resources, carbon capture and storage (CCS), as yet in the entire EEA. The EEA Council also took well as in the development of the internal energy note that EEA EFTA notifications for a number market. of Joint Committee decisions, for which the constitutional requirements have exceeded the six 17. The EEA Council recognised the importance of month period stipulated in the EEA Agreement, cooperation for the development of future-oriented remained pending. The EEA Council encouraged energy technologies, among others by means of the parties to continue efforts to reduce the advocating and supporting common research and number of outstanding legal acts. development projects, enhancing and developing a framework allowing cross-border exchanges 14. The EEA Council noted that the outstanding of knowledge and scientific cooperation, and issues concerning the processing of the Data advocating a free flow of intellectual capital while Retention Directive, the Directive on Deposit fully respecting the rights of respective property Guarantee Schemes, the Regulation on Novel rights holders in accordance with European and Foods and Novel Food Ingredients, the remaining international legislation on intellectual property

part of the TELECOM package (including the protection. 2012 TRADE ASSOCIATION THE EUROPEAN FREE REPORT OF ANNUAL BEREC regulation), the Third Postal Directive and the Regulation on Medicinal Products for 18. The EEA Council noted the importance of the Paediatric Use had not yet been solved and Third Package for the Internal Energy Market and that important work on derived legislation Communication on a Maritime Strategy for the was currently ongoing in the new bodies, the Atlantic Area was also noted. Agency for the Cooperation of Energy Regulators (ACER) and the European Network(s) for 22. The EEA Council acknowledged that the Transmission System Operators (ENTSOs). Contracting Parties to the EEA Agreement, as set Since the EEA EFTA States were already well out in Article 19 of the Agreement, have undertaken integrated in the Internal Energy Market, the EEA to continue their efforts with a view to achieving Council underlined the importance of ensuring progressive liberalization of agricultural trade. To appropriate EEA EFTA participation in the new this end, it welcomed the negotiations on further bodies in line with the Third package and the EEA liberalisation of agricultural trade between the EU Agreement. The EEA Council welcomed that the and Iceland launched in 2012. The EEA Council work on incorporating the Third Package into the looked forward to the upcoming review in 2013/14 EEA Agreement was well under way. of the conditions of trade in agricultural products between Norway and the EU with a view to open 19. The EEA Council took note of the new Energy negotiations within the framework of Article 19. Efficiency Directive, as well as the ongoing Furthermore, the EEA Council took note that the work in the EU on a new Regulation on Energy EU deeply regrets the proposal by the Norwegian Infrastructure, and agreed on the importance of Government to increase customs duties by energy efficiency and infrastructure as a means of switching from currently applied specific duties to realising energy and climate goals. ad valorem duties for some agricultural products and that the EU strongly encourages Norway to 20. The EEA Council welcomed the new programme reverse its decision. for business competitiveness and SMEs (COSME 2014-2020) and emphasized the key importance 23. The EEA Council welcomed the discussions in 50 of SMEs for promoting economic growth and the EEA Joint meeting on processed agricultural employment. The EEA Council shared the products that took place on 16 October 2012, and engagement in implementing the Small Business agreed to continue the dialogue on the review Act, simplifying rules and regulations and of the trade regime for processed agricultural facilitating SMEs access to the green market, products within the framework of Article 2(2) and the international market and, in particular, the Article 6 of Protocol 3 to the EEA Agreement. European public procurement market. The ongoing revision of public procurement policy in 24. The EEA Council welcomed the participation the EU was particularly important in this regard. by the EEA EFTA States in EEA-relevant EU The EEA Council welcomed the EEA EFTA programmes to which they contribute financially. States’ participation in the consultation preceding It emphasised the importance of including the the publication of the revision proposals, as well EEA EFTA States in appropriate programmes, as the subsequent EEA EFTA Comment on the thus contributing to building a more competitive, revision package. innovative and social Europe.

21. The EEA Council took note of the adoption of the 25. The EEA Council welcomed the EEA EFTA Integrated Maritime Policy Work Programme for States’ contributions to the decision-shaping 2011-2012 and welcomed the active involvement process of EEA-relevant EU legislation and of the EEA EFTA States in preparatory actions for programmes through their participation in relevant a European marine observation and data network. committees, expert groups and agencies, and It noted that the EEA EFTA States were currently through the submission of EEA EFTA comments.

ANNUAL REPORT OF THE EUROPEAN FREE TRADE ASSOCIATION 2012 TRADE ASSOCIATION THE EUROPEAN FREE REPORT OF ANNUAL looking into possible participation in activities under the new programme for the further 26. The EEA Council reiterated that it was in the development of the Integrated Maritime Policy. common interest of all Contracting Parties that The adoption of the European Commission the EEA Agreement was well known throughout the European Economic Area, and urged them 29. The EEA Council underlined the importance to ensure that appropriate information on the of achieving the bilateral objective of these Agreement is available. two Financial Mechanisms, and to use the supported programmes actively to develop closer 27. The EEA Council looked forward to the findings cooperation and relations between the three EEA of the independent Eea Review commissioned by EFTA States and the 15 beneficiary countries. the Government of Liechtenstein as well as the results of the ongoing review being undertaken by 30. The EEA Council recognised the contribution of the European Union. the EEA Joint Parliamentary Committee and the EEA Consultative Committee to the functioning 28. The EEA Council emphasised the importance of and development of the EEA Agreement, and the financial contributions from the EEA EFTA looked forward to the outcome of the 39th meeting States through the EEA and Norwegian Financial of the EEA Joint Parliamentary Committee on 27 Mechanisms 2009-2014. November 2012.

51 ANNUAL REPORT OF THE EUROPEAN FREE TRADE ASSOCIATION 2012 TRADE ASSOCIATION THE EUROPEAN FREE REPORT OF ANNUAL

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The European Free Trade Association (EFTA) is an intergovernmental organisation for the promotion of free trade and economic integration to the benefit of its four Member States: Iceland, Liechtenstein, Norway and Switzerland. The Association is responsible for the management of: • The EFTA Convention, which forms the legal basis of the organisation and governs free trade relations between the EFTA States; • EFTA’s worldwide network of free trade and partnership agreements; and • The Agreement on the European Economic Area (EEA), which enables three of the four EFTA States (Iceland, Liechtenstein and Norway) to participate fully in the Internal Market of the European Union.

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