2486-RAPPORT-2012-06_AR 20/03/12 16:11 Page1

51ST ANNUAL REPORT 2011 OF THE EUROPEAN FREE TRADE ASSOCIATION 2486-RAPPORT-2012-06_AR 20/03/12 16:11 Page2

Annual Report of the European Free Trade Association 2011

• Editor: Tore Grønningsæter

• Copy Editor: Juliet Reynolds

• Layout by Orangemetalic

• Published March 2012

Cover picture: The border between Liechtenstein and Switzerland (iStockphoto/Shiran De Silva)

Editor’s note: For basic information on EFTA, please see the publication “This is EFTA”. Further information is also available on our website: www.efta.int/. 2486-RAPPORT-2012-06_AR 20/03/12 16:11 Page3

FOREWORD

EFTA made good progress in environment and climate change, civil society, human 2011 in its two main areas of and social development, cultural heritage, research and activity: The management of scholarships, and justice and home affairs. the European Economic Area Agreement and the further In 2011, Hong Kong China and Montenegro joined the expansion of EFTA’s global expanding network of EFTA’s free trade partners, network of free trade relations. which now comprises 24 agreements with 33 countries The year marked the outside the EU. Thus, the EFTA States have 20th anniversary of the EFTA preferential free trade relations with 60 countries in Statistical Office in Europe and the rest of the world, as well as with each Luxembourg, which acts as a other. This means that 80% of EFTA’s merchandise liaison between the statistical trade is now covered by preferential trading office of the European Union, arrangements. In addition, other important economic Eurostat, and the EFTA national statistical institutes. activities such as trade in services, cross-border investment and access to government procurement The EEA Agreement, which entered into force in 1994, markets also benefit from favourable provisions in provides a solid framework for Iceland, Liechtenstein EFTA agreements. and Norway’s integration into the Single Market of the European Union. With a population of over 500 EFTA was also engaged in a number of important million, the EEA constitutes the world’s biggest free trade negotiations in 2011, including with common market. Bosnia and Herzegovina, India, Indonesia and the members of the Customs Union of Russia, Belarus In 2011, 373 legal acts were incorporated into the EEA and Kazakhstan. Preparations took place for Agreement, thereby ensuring that the entire EEA is still negotiations with Central American countries and governed by homogeneous rules, which is a Vietnam, while exploratory processes were pursued prerequisite for the effective functioning of the EEA. with MERCOSUR and Malaysia. Important additions include the Renewable Energy Directive, the new Social Security Regulation and the The EFTA bilateral agreements are fully compatible inclusion of aviation activities in the EU Emissions with the multilateral trading system. They are Trading Scheme. The EEA EFTA States are actively complementary and not an alternative to this system. involved in a number of programmes and agencies The EFTA States, therefore, continue to demonstrate which play an increasingly important role in the EU. In their full commitment to a robust multilateral 2011, the Media Mundus Programme was included in framework and remain strong supporters of the World the EEA Agreement, supporting international Trade Organization. cooperation in the audiovisual industry. For more than 50 years the EFTA Secretariat has Through the EEA Grants and Norway Grants, Iceland, constantly adapted its processes and working Liechtenstein and Norway continue to contribute to methods to serve the needs of its Member States in reducing economic and social disparities in the EEA the best way possible. The two Deputy Secretaries- and strengthening bilateral relations between EFTA General and I have also endeavoured in the last year and the 15 beneficiary countries in Central and to improve our efficiency in delivering the range of Southern Europe. Key areas of support include services and expertise that our members expect, and that work will continue.

Kåre Bryn Secretary-General 2486-RAPPORT-2012-06_AR 20/03/12 16:11 Page4

TABLE OF CONTENTS

FOREWORD 3 EFTA/EU Cooperation in Statistics 25 EFTA COUNCIL 5 Technical Cooperation in the Field of Statistics 26 EFTA Ministerial Meetings 5 The EFTA Council 6 EEA GRANTS AND The EFTA Convention 6 NORWAY GRANTS 28 Annual Meeting of EFTA and EU Finance Ministers 6 ADVISORY BODIES 30

FREE TRADE RELATIONS 7 The Parliamentary Committees 30 The Consultative Committees 31 Main Developments 8 The EEA EFTA Forum 32 Management of EFTA’s Free Trade Agreements and Joint INFORMATION ACTIVITIES 33 4 Declarations on Cooperation 10 Technical Cooperation 10 ADMINISTRATION 35 Relations with the WTO 10 APPENDICES 36 THE EEA AGREEMENT 13 FIGURES The EEA Council 13 The EEA Joint Committee 13 Fig. 1: Joint Declarations on Cooperation and Free Trade Agreements between The Standing Committee of EFTA and Non-EU Partners 7 the EFTA States 16 Fig. 2: Joint Committee Meetings in 2011 10 Legal and Institutional Matters 16 Fig. 3: Meetings Held and EU Acts Free Movement of Goods 16 Incorporated in 2011 14 Free Movement of Capital Fig. 4: Publication in the EEA Supplement 2011 34 and Services 20 Fig. 5: 2011 EFTA Budget 35

ANNUAL REPORT OF THE EUROPEAN FREE TRADE ASSOCIATION 2011 TRADE ASSOCIATION THE EUROPEAN FREE REPORT OF ANNUAL Free Movement of Persons 22 Fig. 6: Contributions from the EFTA States Flanking and Horizontal to the 2011 EFTA Budget 35 Policies 22 2486-RAPPORT-2012-06_AR 20/03/12 16:11 Page5

EFTA COUNCIL EFTA Ministerial Meetings Preferential Trade Relations

The EFTA Council met twice at Ministerial level in Ministers reviewed developments in EFTA’s preferential 2011, on 21 June in Schaan, Liechtenstein and on 14 trade activities with partners worldwide, including November in Geneva. The Council was chaired by relations with Bosnia and Herzegovina; the Customs Liechtenstein in the first half of 2011 and by Norway Union of Russia, Belarus and Kazakhstan; India; in the second. Indonesia; Malaysia; MERCOSUR (Argentina, Brazil, Paraguay and Uruguay); Vietnam; and countries in The International Economic Central America. They also signed free trade agreements with Hong Kong China and Montenegro, and decided to Situation explore the possibility of developing closer trade relations with Sub-Saharan Africa. During their meetings, the EFTA Ministers discussed the international economic and trade environment. Ministers also endorsed the outcome of discussions at a They underlined the importance of continuing to technical level on the further liberalisation of trade in refrain from protectionist measures and of promoting agricultural products between the EFTA Member States. policies that enhance growth and financial and economic stability at European and international level. Relations with the European Union They reiterated their strong commitment to the multilateral trading system but expressed their deep At their June meeting in Schaan, the EEA EFTA concern over the lack of progress in the World Trade Ministers discussed the general functioning of the EEA Organization’s Doha negotiations. Agreement with a focus on the difficult economic 5 ANNUAL REPORT OF THE EUROPEAN FREE TRADE ASSOCIATION 2011 TRADE ASSOCIATION THE EUROPEAN FREE REPORT OF ANNUAL

The EFTA Ministerial meeting in June 2011: Kåre Bryn, EFTA Secretary-General; Aurelia Frick, Minister of Foreign Affairs, Liechtenstein; Össur Skarphéðinsson, Minister of Foreign Affairs and External Trade, Iceland; Rikke Lind, State Secretary, Ministry of Trade and Industry, Norway; and Johann N. Schneider-Ammann, Federal Councillor, Head of the Federal Department of Economic Affairs, Switzerland. 2486-RAPPORT-2012-06_AR 20/03/12 16:11 Page6

situation. They underlined the need for coordinated “Ensuring Financial Sector Stability”, the meeting was and comprehensive action at European level. They also chaired by Jan Vincent-Rostowski, Minister of expressed their satisfaction that the EEA EFTA States Finance, representing the Polish Presidency of the EU would soon participate in the new system of EU Council. EFTA was represented by Eveline Widmer- financial supervisory architecture, which began Schlumpf, Federal Councillor, Head of the Federal operating on 1 January 2011. Department of Finance, Switzerland, as EFTA Chair; Klaus Tschütscher, Prime Minister and Minister of Ministers welcomed the conclusion of the majority of Finance of Liechtenstein; Steingrímur Sigfússon, projects, programmes and funds under the EEA and Minister of Finance of Iceland; and Sigbjørn Johnsen, Norwegian Financial Mechanisms 2004-2009, and the Minister of Finance of Norway. agreements on the two mechanisms for 2009-2014.

The communiqués from the 2011 Ministerial meetings can be found in the appendices to this report. The EFTA Council

The Council met eight times in 2011 at the level of heads of permanent delegations to EFTA in Geneva. Delegates discussed EFTA’s relations with countries outside the European Union, including free trade negotiations and the management of existing free trade agreements. They also approved a number of technical cooperation projects and dealt with administrative and budgetary matters. 6 The EFTA Convention

The Council is responsible for the Vaduz Convention, which is updated regularly to reflect legislative developments in the EEA Agreement and the Swiss- EU Agreements. In 2011, the Council amended Annex A on Rules of Origin, Annex C on Agriculture, EFTA Ministers of Finance in Brussels in November 2011: Klaus Tschütscher, Appendix I to Annex P on Land Transport and the Liechtenstein; Eveline Widmer-Schlumpf, Switzerland; Steingrímur Sigfússon, Appendix to Annex Q on Air Transport. The Iceland; and Sigbjørn Johnsen, Norway. Committee on Mutual Recognition in relation to Conformity Assessment also adopted amendments to Annex I on Mutual Recognition. Throughout the year, negotiations were held between agricultural experts from the EFTA States regarding the further liberalisation of intra-EFTA trade in agricultural The Lugano Convention products. At the Ministerial meeting in Geneva on 14 November, EFTA Ministers endorsed the Iceland, Norway and Switzerland were parties to the understanding reached by the experts, and the Council 1988 Lugano Convention on jurisdiction and is expected to adopt amending measures in early 2012. enforcement of judgments in civil and commercial

ANNUAL REPORT OF THE EUROPEAN FREE TRADE ASSOCIATION 2011 TRADE ASSOCIATION THE EUROPEAN FREE REPORT OF ANNUAL matters. Following the enlargement of the European Annual Meeting of EFTA and Union, a revised Convention was adopted in 2007. The 2007 Lugano Convention entered into force in the EU, EU Finance Ministers Denmark and Norway on 1 January 2010, in Switzerland on 1 January 2011 and in Iceland on The annual meeting of EFTA and EU Finance 1 May 2011. EFTA participates as an observer in the Ministers took place on 8 November. With the topic of work of the Convention’s Standing Committee. 2486-RAPPORT-2012-06_AR 20/03/12 16:11 Page7

FREE TRADE RELATIONS

EFTA pursued an ambitious agenda in 2011, aimed at extended to 51 partners at the following levels of expanding and deepening its preferential trade cooperation: relations worldwide. With the signing of two new free trade agreements (FTAs) with Hong Kong China and Free Trade Agreements Montenegro, the number of EFTA’s FTAs rose to 24, covering 33 countries. EFTA had operational FTAs with 24 partner countries in 2011: Albania, Canada, Chile, Colombia, Croatia, By the end of the year, EFTA’s formal engagement Egypt, Israel, Jordan, Korea, Lebanon, Macedonia, with countries outside the European Union had Mexico, Morocco, Palestinian Authority, Peru, Serbia, 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 7 Croatia 19 June 2000 21 June 2001 1 April 2002 Egypt 8 December 1995 27 January 2007 1 August 2007 Gulf Cooperation Council (GCC)[1] 23 May 2000 22 June 2009 Hong Kong China 21 June 2011 Israel 17 September 1992 1 January 1993 Jordan 19 June 1997 21 June 2001 1 September 2002 Korea, Republic of 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 MERCOSUR[2] 12 December 2000 Mexico 27 November 2000 1 July 2001 Mongolia 28 July 2007 Montenegro 12 December 2000 14 November 2011 Morocco 8 December 1995 19 June 1997 1 December 1999 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 2011 TRADE ASSOCIATION THE EUROPEAN FREE REPORT OF ANNUAL 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] 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. 2486-RAPPORT-2012-06_AR 20/03/12 16:11 Page8

Singapore, the Southern African Customs Union Main Developments (SACU; comprising Botswana, Lesotho, Namibia, South Africa and Swaziland), Tunisia and Turkey. New Agreements with Hong Kong Signed Free Trade Agreements China and Montenegro

Free trade agreements with Hong Kong China and Launched in January 2010, negotiations on a Montenegro were signed in June and November 2011 comprehensive free trade agreement with Hong Kong respectively. Together with the FTAs signed with the China were concluded in March 2011 after five rounds, six Member States of the Gulf Cooperation Council and the FTA was signed in Schaan, Liechtenstein on 22 (GCC; comprising Bahrain, Kuwait, Oman, Qatar, June. Merchandise trade between the two sides reached Saudi Arabia and the United Arab Emirates) in 2009, USD 8.3 billion in 2010, with exports from the EFTA and with Ukraine in 2010, they are in the process of States to Hong Kong China valued at USD 6.5 billion. being ratified by the parties. Bilateral trade in services and investments were also significant. For the first time in an EFTA FTA, a chapter on trade and environment was incorporated and an agreement on labour was concluded in parallel. The FTA with Hong Kong China is EFTA’s third agreement with a partner in East Asia, following those already concluded with Singapore and Korea.

From the launch of negotiations in March 2011 on a free trade agreement with Montenegro, progress was swift and an FTA was signed in Geneva on 14 November. The emphasis of the FTA is on trade in goods and the protection of intellectual property rights, 8 and it also contains a chapter on trade and sustainable development. Trade between EFTA and Montenegro is still at a relatively low level but has increased strongly since the country’s independence in 2006. With this Signing of EFTA’s free trade agreement with Montenegro in November 2011: agreement, EFTA has further consolidated its ć Ljubiša Perovi , Ambassador, Permanent Mission of Montenegro, Geneva; and preferential trading network in South East Europe, Vladimir Kavarić, Minister of Economy, Montenegro.

Free Trade Negotiations

In 2011, EFTA was engaged in or about to commence negotiation processes with ten partners (Bosnia and Herzegovina; the Central American States of Costa Rica, Guatemala, Honduras and Panama; India; Indonesia; and Russia, Belarus and Kazakhstan). Negotiations with Algeria and Thailand remained on hold. Joint Feasibility Studies

Work on a joint feasibility study with Vietnam was concluded in February 2011. ANNUAL REPORT OF THE EUROPEAN FREE TRADE ASSOCIATION 2011 TRADE ASSOCIATION THE EUROPEAN FREE REPORT OF ANNUAL Joint Declarations on Cooperation

Joint declarations on cooperation (JDCs) are operational Celebrations following the signing of EFTA’s free trade agreement with Hong Kong China in June 2011: Gregory So Kam-leung, Acting Secretary for Commerce with Malaysia, Mauritius, Mongolia and MERCOSUR and Economic Development of Hong Kong China; and Aurelia Frick, EFTA Chair (Argentina, Brazil, Paraguay and Uruguay). and Minister of Foreign Affairs, Liechtenstein. 2486-RAPPORT-2012-06_AR 20/03/12 16:11 Page9

Representatives of EFTA and Central American States announcing the start of free trade negotiations in November 2011: Kåre Bryn, EFTA Secretary-General; Johann N. Schneider-Ammann, Federal Councillor, Head of the Federal Department of Economic Affairs, Switzerland; Ronald Saborio Soto, Ambassador, Permanent Mission of Costa Rica, Geneva; Trond Giske, Minister of Trade and Industry, Norway; Aurelia Frick, Minister of Foreign Affairs, Liechtenstein; Diana Salazar, Vice Minister, Chief Trade Negotiator, Panama; Dacio Castillo, Ambassador, Permanent Mission of Honduras, Geneva; and Einar Gunnarsson, Permanent Secretary of State of the Ministry for Foreign Affairs and External Trade, Iceland. adding to its existing FTAs with Albania, Croatia, February and three full rounds were held during the 9 Macedonia and Serbia. course of the year. Particular attention was given to explaining each side’s approach to the various fields, Emerging Markets including technical cooperation. A renewed dialogue with MERCOSUR (Argentina, In 2011, EFTA reinforced its focus on closer trade Brazil, Paraguay and Uruguay) was established in relations with major emerging market partners. September in the framework of the joint declaration on cooperation between the two sides. EFTA and Negotiations on a broad-based agreement with India, MERCOSUR agreed to pursue a joint assessment of commenced in 2008, gained new momentum with four the available options for increasing trade, investment rounds of talks and additional meetings conducted and cooperation in 2012. throughout the course of 2011. Significant progress was achieved and the likelihood increased that Further Processes negotiations would be concluded in 2012. In Europe, negotiations on a free trade agreement with In January 2011, EFTA entered into formal Bosnia and Herzegovina commenced in March. After negotiations with the Russian Federation, along with three rounds of talks, several parts of the FTA were its customs union partners Belarus and Kazakhstan, completed. Negotiations on the remaining issues are followed by another two rounds of talks. Sound expected to be finalised in the first half of 2012. foundations were laid for this ongoing process, which

will also benefit from Russia’s accession to the World 2011 TRADE ASSOCIATION THE EUROPEAN FREE REPORT OF ANNUAL Trade Organization, as adopted at the eighth WTO In Asia, EFTA concluded a joint feasibility study at Ministerial Conference in December 2011. technical level with Vietnam in February, examining the prospects for a preferential trade agreement. Negotiations towards a “Comprehensive Economic Based on positive recommendations made by the Partnership Agreement” with Indonesia started in joint study group, a dialogue continued towards 2486-RAPPORT-2012-06_AR 20/03/12 16:11 Page10

launching negotiations between the two sides in its partner countries reviewed the functioning of 2012. With Malaysia, a first joint committee meeting their respective FTAs. They also assessed the need under the declaration on cooperation of 2010 was for adjustments and extensions of existing held in June 2011. Exploratory work is being commitments in light of recent developments, pursued with the perspective of possible free trade notably new preferential arrangements with third negotiations with this partner in the near future. countries. EFTA’s willingness to resume negotiations with Thailand when conditions permit was reiterated by As a result, several decisions were made to update Ministers at their 2011 meetings. existing FTAs and work plans were agreed in view of making further revisions, such as with Israel on In Latin America, FTAs with Colombia and Peru agriculture. Experts also worked on possible future entered into force on 1 July (for Liechtenstein and amendments to existing FTAs with other partners, Switzerland), bringing the number of operational notably Canada, Korea and Turkey. EFTA agreements in the region to four (together with those already concluded with Chile and Mexico). Based on a JDC concluded with Panama in 2010, Technical Cooperation exploratory talks took place with five Central American countries. EFTA Ministers announced the Within the framework of EFTA’s technical cooperation start of negotiations at their meeting on 14 November, policy (see box on page 12), activities in 2011 included and in December modalities for the negotiating process the following: were agreed with Costa Rica, Guatemala, Honduras and Panama. A first round of negotiations is anticipated • Export promotion seminars in two locations in for the first quarter of 2012. Albania; • An export promotion seminar in Jordan; In Northern Africa, negotiations with Algeria remained • A workshop in Vietnam on possible preferential suspended during the reporting year, but EFTA trade relations; and 10 Ministers confirmed their readiness to resume this • Support to the Palestinian Authority for process. EFTA Ministers also agreed to further participation in two international trade fairs. examine the possibility of developing closer trade relations with countries in Sub-Saharan Africa (in Relations with the WTO addition to the existing FTA with the Southern African Customs Union). Under the World Trade Organization’s transparency mechanism for bilateral and regional trade Management of EFTA’s Free agreements, EFTA notified all new free trade Trade Agreements and Joint negotiations in 2011, as well as signings, ratifications and the entry into force of FTAs. EFTA Declarations on Cooperation also submitted notifications to the WTO Secretariat regarding decisions adopted by joint committees In 2011, the EFTA States held joint committee under existing agreements. No EFTA FTAs were meetings with four free trade partners (Chile, Israel, examined by the WTO’s Committee on Regional Jordan and SACU). On these occasions, EFTA and Trade Agreements during the reporting year.

Joint Committee Meetings in 2011 Fig. 2

ANNUAL REPORT OF THE EUROPEAN FREE TRADE ASSOCIATION 2011 TRADE ASSOCIATION THE EUROPEAN FREE REPORT OF ANNUAL Free Trade Partner Venue and Date of Meeting Joint EFTA-Jordan Committee (3rd) Amman, 23 February 2011 Joint EFTA-Chile Committee (3rd) Geneva, 5 May 2011 Joint EFTA-SACU Committee (2nd) Geneva, 1 July 2011 Joint EFTA-Israel Committee (8th) Jerusalem, 23 November 2011 2486-RAPPORT-2012-06_AR 20/03/1216:11Page11

EFTA’S WORLDWIDE NETWORK

EFTA States 4 (Free trade area)

European Union 27 (Free trade partner)

EFTA Free Trade Agreements 24 Albania, Canada, Chile, Colombia, Croatia, Egypt, the Gulf Cooperation Council (GCC; comprising Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates), Hong Kong China, Israel, Jordan, Korea, Lebanon, Macedonia, Mexico, Montenegro, Morocco, Palestinian Authority, Peru, Serbia, Singapore, the Southern African Customs Union (SACU; comprising Botswana, Lesotho, Namibia, South Africa and Swaziland), Tunisia, Turkey and Ukraine.

FTA negotiations Algeria, Bosnia and Herzegovina, Central American States (Costa Rica, Guatemala, Honduras and Panama), India, Indonesia, Russia/Belarus/Kazakhstan and Thailand.

Declarations on Cooperation Malaysia, Mauritius, MERCOSUR (comprising Argentina, Brazil, Paraguay and Uruguay) and Mongolia.

Dialogue/study on closer trade and investment relations Central American States (El Salvador and Nicaragua) and Vietnam.

Free trade relations with individual EFTA States China, Faroe Islands and Japan. 2486-RAPPORT-2012-06_AR 20/03/12 16:11 Page12

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 may involve experts from Member States and partner countries, notwithstanding the EFTA States’ 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, competition, services and statistics. EFTA also participates in technical cooperation programmes and projects of the European Union aimed at third countries, especially in relation to customs matters, standardisation and statistics.

A New Convention on Rules of Origin for the Euro-Mediterranean Region A free trade agreement contains rules of origin which normally limit preferential treatment under that agreement 12 to producers and exporters from the contracting states, according to certain criteria.

The rules of origin concluded as part of the so-called “Pan-Euro-Mediterranean (PEM) Cumulation System”, however, go further than this: All participating countries recognise each other’s originating products if corresponding FTAs are in place. As a result, industries established in the PEM zone may source input material from any other country in that zone and still benefit from preferential treatment for the final product, which in most cases is duty-free access to markets.

The system dates back to the 1970s when the EFTA States concluded free trade agreements with the EU that allowed for the “cumulation” of origin between the two blocs. It was later extended to Turkey and Central European States that have since joined the EU. In the late 1990s, the system was expanded further to countries in the Mediterranean region in the context of the EU’s “Barcelona Process”. Today, in addition to the EU and the EFTA States, 11 other partners participate in the PEM Cumulation System[1].

On 15 June 2011, a new legal instrument, the “Regional Convention on Pan-Euro-Mediterranean Preferential Rules of Origin”, was opened for signature by the above-mentioned members of the PEM Cumulation System, as well as by additional countries in the Western Balkans[2].

From 2012[3], the new Convention will replace the largely identical rules of origin contained in FTAs concluded between the PEM countries. It will simplify the management of the cumulation system and allow for a single regulatory reference for traders operating in the 49 participating countries and territories. Further partners may ANNUAL REPORT OF THE EUROPEAN FREE TRADE ASSOCIATION 2011 TRADE ASSOCIATION THE EUROPEAN FREE REPORT OF ANNUAL join the PEM Convention in the future.

As most of the substantive rules included in the PEM Convention were initially conceived in the 1970s, they no longer fully reflect today’s trading patterns and production requirements. A revision of the Convention has therefore already begun. The EFTA States have a strong interest in simpler and more effective rules of origin and are therefore fully supportive of this revision process.

[1] Algeria, Egypt, Faroe Islands, Israel, Jordan, Lebanon, Morocco, Palestinian Authority, Syria, Tunisia and Turkey. [2] Albania, Bosnia and Herzegovina, Croatia, Kosovo, Macedonia, Montenegro and Serbia. [3] The PEM Convention entered into force in the first three states (Norway, Liechtenstein and Switzerland) on 1 January 2012. At the end of 2011, it had been signed by nine further parties, including the European Union and Iceland, with ratification pending. 2486-RAPPORT-2012-06_AR 20/03/12 16:11 Page13

THE EEA AGREEMENT

of public procurement, the Waste Framework Directive, the Media Mundus Programme and the Framework for the Deployment of Intelligent Transport Systems. Issues discussed by the Joint Committee included specific legal acts such as the Regulation establishing the European Supervisory Authorities for financial markets, the Third Postal Directive, the Audiovisual Media Services (AVMS) Directive and, more generally, how to further improve the processing of acquis in the EEA Agreement.

Over the year, the European Commission provided the The EEA Council, 15 November 2011. Joint Committee with briefings on the Resource- The EEA Council Efficient Europe flagship initiative, the Maritime Transport Strategy, the Energy Efficiency Plan and the Single Market Act. The EEA EFTA States also The EEA Council was chaired by the EU in the first half provided a briefing on the EFTA Ministerial meeting of 2011 and by EFTA in the second half of the year. The of 21 June 2011. EEA Council met on 23 May and 15 November to review the ongoing work in EEA cooperation and to note the progress reports from the EEA Joint Committee. The Ministers confirmed the positive overall functioning and 13 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 raw materials and the measures taken to address the current economic crisis. The conclusions from these meetings can be found in the appendices to this report. The Standing Committee of the EFTA States at Ministerial level on 15 November The EEA Joint Committee 2011: Ambassador Jacques de Watteville, Mission of Switzerland to the EU; Ambassador Atle Leikvoll, Mission of Norway to the EU; and Minister of Foreign Affairs Jonas Gahr Støre, Norway. The EEA Joint Committee met eight times in 2011 and adopted 164 decisions incorporating 373 legal acts.

Among the more significant decisions adopted by the Joint Committee were those concerning the incorporation of the Renewables Directive, the European Aviation Safety Agency (EASA) 2011 TRADE ASSOCIATION THE EUROPEAN FREE REPORT OF ANNUAL Regulation, aviation activities in the scheme for greenhouse gas emission allowance trading, the Ecodesign Framework Directive, modernised social security coordination rules, Solvency II on insurance regulation, the revised Remedies Directive in the area 2486-RAPPORT-2012-06_AR 20/03/12 16:11 Page14

Meetings Held and EU Acts Incorporated in 2011 Fig. 3

Numbers of meetings Numbers of acts held in 2011 incorporated in 2011 The Joint Committee 8 343 The Standing Committee 8 - SUBCOMMITTEE I 7 221 Working Groups Competition Policy - 2 Customs Matters 5 - Efficient Trade Procedures - - Energy Matters 7 14 Fisheries - - Food Chain[1] 1 151 Intellectual Property Rights 3 1 Processed Agricultural Products 1 - Product Liability - - Public Procurement 1 3 State Aid - - Technical Barriers to Trade (TBT) 4 - Expert Groups under TBT 14 Agricultural and Forestry Tractors - 3 Appliances Burning Liquid or Gaseous Fuels - 1 ATEX (equipment for use in explosive atmospheres) - - Cableway Installations - - Chemicals - 25 Construction - - Cosmetics - - Electrical Equipment - - Explosives - - Fertilisers - 1 Good Laboratory Practice - - Machinery - - Marine Equipment - - Maximum Residue Levels (MRLs) - - Measuring Instruments - 4 Medical Devices - 1 Medicinal Products - 5

ANNUAL REPORT OF THE EUROPEAN FREE TRADE ASSOCIATION 2011 TRADE ASSOCIATION THE EUROPEAN FREE REPORT OF ANNUAL Motor Vehicles - 6 Organic Production - - Personal Protective Equipment - - Pressure Equipment - 3 Product Safety and Market Surveillance 1 - Recreational Crafts - - 2486-RAPPORT-2012-06_AR 20/03/12 16:11 Page15

Numbers of meetings Number of acts held in 2011 incorporated in 2011 Telecommunications Equipment - - Textiles - 1 Wine and Spirit Drinks - - SUBCOMMITTEE II 7 64 Working Groups Company Law 1 6 Electronic Communication, Audiovisual Services and Information Society 3 5 Data Privacy Expert Group - 4 Financial Services 4 3 Postal Services - - Transport 5 46 SUBCOMMITTEE III 7 29 Working Groups Recognition of Professional Qualifications 1 1 Social Security 3 28

SUBCOMMITTEES III AND IV - - 15 Working Group Free Movement of Persons, Working Life and Social Inclusion[2] 1-

SUBCOMMITTEE IV 7 59

Working Groups Budgetary Matters 3 - Civil Protection 2 - Consumer Affairs 3 - Cultural Affairs 1 - Education, Training and Youth 2 - Enterprise Policy and Internal Market Affairs 2 2 Environment 4 23 Gender Equality, Anti-Discrimination and Family Policy 2 1 Heads of National Statistical Institutes 1 30 Health and Safety at Work and Labour Law[3] 1[4] 3[5] Public Health 2 - Research and Development 2 - ANNUAL REPORT OF THE EUROPEAN FREE TRADE ASSOCIATION 2011 TRADE ASSOCIATION THE EUROPEAN FREE REPORT OF ANNUAL

[1] Food Chain encompasses Feedingstuffs, Plant Health and Foodstuffs. [2] Temporary merger of the Group on Free Movement of Persons, Employment and Social Policy and the Group on Health and Safety at Work and Labour Law in June 2011. [3] Merged temporarily with the Group on Free Movement of Persons, Employment and Social Policy in June 2011. [4] Prior to the merger. [5] Two acts were incorporated in this field prior to the merger and one after. 2486-RAPPORT-2012-06_AR 20/03/12 16:11 Page16

The Standing Committee of 12 working groups and 26 expert groups. The EEA EFTA States and the Secretariat undertook a review the EFTA States process of these groups in 2010 and 2011, and the revised structure, designed to further improve the The Standing Committee was chaired by Norway in the efficiency of the EEA integration process, was first half of 2011 and by Liechtenstein in the second implemented in 2011. half of the year. The agendas and conclusions of the Standing Committee meetings are available on the Two committees deal with issues related to goods EFTA website. On 15 November, the EFTA Standing under the EFTA Council: The Technical Barriers to Committee held a joint meeting at Ministerial level in Trade (TBT) Committee and the Committee of Origin Brussels with the Committee of Members of Parliament and Customs Experts (COCE) (see page 20). of the EFTA States and the Consultative Committee, to discuss developments in the EEA. In 2011, the TBT Committee gave written input to the European Commission on the review of the Legal and Institutional standardisation system in Europe, and to the EU institutions on the Commission’s proposal for a new Matters regulation on standardisation.

Subcommittee V on Legal and Institutional Questions The Committee also focused on keeping the Vaduz met six times in 2011. The Subcommittee devoted Convention updated, and on the entry into force of considerable efforts to the issue of comitology in the Protocol E (mutual recognition of conformity EFTA pillar and how to deal with criminal law assessments) to the EFTA-Turkey Free Trade sanctions in Internal Market legislation. The Agreement on 5 July 2011. A new EU quality Subcommittee also discussed the status of the coal infrastructure project, IPA 2011, cofinanced by EFTA, and steel sectors under the EEA Agreement, social was approved by the EFTA Council in December 2010 16 security rules in the EEA and the territorial scope of and began in August 2011, following the termination the EEA Agreement. Finally, the Subcommittee of IPA 2008. This EUR 2.5 million regional project continued to monitor two-pillar issues in the EEA involves Turkey and the Western Balkans, and is Agreement, as well as case law developments in expected to last just over two years. the EEA. Finally, the Committee continued its discussions on the Free Movement of Goods issue of a possible fragmentation of the Single Market for Services arising from certification and standardisation at A substantial part of EU legislation concerns the free national level, and cooperated with Nordic Innovation in movement of goods, a principle that is applied its third study on the certification of services. throughout the Single Market. Today, about 75% of trade in the Single Market is in goods, but this does not Veterinary, Food and Agricultural imply that all products can circulate freely. They must conform to requirements set for the protection of Issues legitimate interests such as health, safety and the environment. Additionally, in order to ensure a fair and The veterinary and food legislation in the EEA Agreement only applies to Iceland and Norway. Since efficient market, a wide range of legislative measures 2007, Liechtenstein has been subject to the Swiss-EU have been established in the fields of competition, state Agricultural Agreement pertaining to legislation in aid and public procurement. these areas. ANNUAL REPORT OF THE EUROPEAN FREE TRADE ASSOCIATION 2011 TRADE ASSOCIATION THE EUROPEAN FREE REPORT OF ANNUAL Subcommittee I prepares for the integration into the Veterinary issues EEA Agreement of legislation relating to all aspects of the free movement of goods – competition, state The Food Law Package, which includes key legislation aid, public procurement, intellectual property rights on general food law, hygiene and control matters, and and energy matters. Subcommittee I is assisted by animal by-products, and the extension of certain 2486-RAPPORT-2012-06_AR 20/03/12 16:11 Page17

veterinary legislation to Iceland, entered into force in Technical Barriers to Trade the EEA in May 2010. This means that general food legislation in Iceland and Norway is now in line with EFTA deals with the removal of technical barriers to EU law. Iceland, however, had a transitional period of trade in two forums: The TBT Committee, which until 1 November 2011 to transpose legislation in areas reports to the EFTA Council (including Switzerland) that were not previously applicable to Iceland. (see previous page) and the Working Group on TBT, which coordinates the assessment of EEA relevance The EEA Joint Committee incorporated 64 acts in the and acceptability of new EU legislation to the three veterinary area into the EEA Agreement in 2011. EEA EFTA Member States. Switzerland is an observer in this Working Group. In addition to clearing acts, the Animal feed Working Group discussed the following issues in 2011: The Goods Package, the Alignment Package and 34 legal acts regarding the authorisation of feed Mutual Recognition Agreements. additives were incorporated into the EEA Agreement in 2011. Motor vehicles Food Six technical acts on motor vehicles were incorporated The Food Law Package ensures full participation by into the EEA Agreement in 2011. The Framework the EEA EFTA States in the European Food Safety Directive regarding approvals of motor vehicles and Authority (EFSA) including the possibility of trailers is still being discussed by the EFTA States and employment for EEA EFTA nationals. awaits incorporation into the EEA Agreement.

The EEA EFTA States continued to discuss the Novel Medicinal products Foods Regulation and Regulations on genetically modified food and feed and the traceability and The EFTA States continued discussions with the EU on labelling of genetically modified organisms (GMOs). the incorporation of the Paediatric Regulation. 17 These Regulations have not yet been incorporated into the EEA Agreement. Dangerous substances

Preparation continued for the incorporation into the Trade in and use of dangerous substances are strictly EEA Agreement of the new legal framework on regulated in order to protect consumers, workers and the organic production. environment. The EEA Agreement contains both general chemicals legislation and product-specific legislation. In Approximately 40 legal acts were incorporated into the total, 23 acts concerning dangerous substances were EEA Agreement in the foodstuffs area in 2011. incorporated into the EEA Agreement in 2011.

Trade in agricultural products Mutual recognition agreements

Following the conclusion of negotiations between Mutual recognition agreements (MRAs) facilitate Norway and the European Commission in 2010 on the market access by reducing the costs and time liberalisation of trade in basic agricultural products associated with obtaining product certifications. under Article 19 of the EEA Agreement, the Agreement Protocol 12 to the EEA Agreement ensures the smooth is expected to enter into force at the beginning of 2012. functioning and homogeneity of the EEA market with regard to MRAs. In that respect, discussions with In November 2011, Iceland, Norway and the European Canada were reopened in late 2010 and continued in Commission carried out their annual review of trade in 2011 in order to finalise a long-pending revision of the

processed agricultural products in accordance with EEA EFTA-Canada MRA. 2011 TRADE ASSOCIATION THE EUROPEAN FREE REPORT OF ANNUAL Article 2(2) of Protocol 3 to the EEA Agreement. The parties exchanged information on developments in their Market surveillance and consumer product safety respective agricultural policies, and on trade statistics. They also discussed the principles of Protocol 3 and The EFTA States are fully committed to the enhanced concluded that the Protocol was functioning well. application of market surveillance under the terms of 2486-RAPPORT-2012-06_AR 20/03/12 16:11 Page18

the new legislative framework for the marketing of Environmental Citizens Organisation for Standardisation, products. EFTA was a member of the Commission’s which represents consumer and environmental project group on the development of guidelines for interests in standardisation. customs controls in the area of product safety and contributed directly to their preparation, including the In December 2011, EFTA cofinanced a CEN workshop presentation of the draft guidelines to the European on standardisation in support of resource efficiency. Parliament’s Internal Market Committee. The EFTA States also participated in meetings conducted by the EFTA continued to provide financial support to EOTA, Senior Officials Group for Standardisation and the European Organisation for Technical Approvals, Conformity Assessment Policy (SOGS) and the SOGS relating to the construction sector. The EEA EFTA Market Surveillance Group. States also provided financial support to the European Office of Crafts, Trades and Small and Medium-sized The EFTA States participate in the work of PROSAFE, Enterprises for Standardisation, which promotes the Europe’s product safety enforcement forum, which is interests of SMEs in standardisation. an informal network of market surveillance enforcement authorities. PROSAFE’s Secretariat is Energy located in the EFTA Secretariat’s building in Brussels. EFTA participates as an advisory member of the In the field of energy, 14 acts were incorporated into PROSAFE Board. PROSAFE is engaged in a joint the EEA Agreement in 2011, 12 of which were related action on market surveillance and has contributed to to ecodesign requirements for energy-using products. the development of EU Commission guidelines on One act was related to the inter-TSO compensation cooperation between market surveillance authorities mechanism for Transmission System Operators in the and customs authorities. The PROSAFE Board European Electricity Market, and another was the monitors the financial management of the joint actions Renewables Directive, which had been of particular and develops the strategic direction of PROSAFE in interest to the EEA EFTA States for a long time due to the ongoing development of European market their high share of renewables. 18 surveillance.

European Standardisation The EEA EFTA States monitored the follow-up to the Energy Strategy 2011 carefully, including a The EFTA States and the European Commission give communication on smart grids and work on developing financial support to the European standardisation an energy infrastructure instrument. Significant focus organisations (ESOs): CEN, the European Committee was put on the Commission’s proposal for a new Energy for Standardization; CENELEC, the European Efficiency Directive, which was presented in June 2011 Committee for Electrotechnical Standardization; and and will be among the most important energy-related ETSI, the European Telecommunications Standards initiatives to be discussed in the EU in 2012. Institute. Like the Commission, EFTA has the formal status of counsellor to CEN and ETSI, and is entitled to participate in the administrative boards of these organisations, as well as in the general assemblies of the three ESOs.

In 2011, EFTA dealt with over 19 mandates for new standardisation activities covering a wide range of sectors. In addition, EFTA signed 58 agreements in the standardisation area, including for the first time a Framework Partnership Agreement with ANEC, the ANNUAL REPORT OF THE EUROPEAN FREE TRADE ASSOCIATION 2011 TRADE ASSOCIATION THE EUROPEAN FREE REPORT OF ANNUAL European association for the coordination of consumer representation in standardisation.

EFTA continued its financial support to ANEC; to the EAAB, the Association for European Cooperation for Accreditation; and to ECOS, the European 2486-RAPPORT-2012-06_AR 20/03/12 16:11 Page19

The Third Package for the Internal Energy Market 20 December 2011. Two of the proposals will replace entered into force in March 2011 and the EEA EFTA the existing procurement directives (the “Utilities” States aim to incorporate it into the EEA Agreement as Procurement Directive 2004/17/EC and the “Classical” soon as possible. Procurement Directive 2004/18/EC), whereas the third proposal is for a new directive concerning service Competition Policy concession contracts.

Two block exemptions in the fields of specialisation Intellectual Property agreements and research and development agreements In May, the Commission published a proposal for were incorporated into the EEA Agreement in certain permitted uses of orphan works. Orphan works February 2011. are works that are still in copyright but whose owners cannot be identified or located. On 13 December 2011, The EEA EFTA States initiated a review of the acts the EEA EFTA States provided the Commission with related to the former European Coal and Steel comments to its proposal for a directive. Community that had been incorporated into the EEA Agreement. State Aid

The EEA EFTA States followed the work on reforming the state aid rules applicable to Services of General Economic Interest (SGEI) compensation closely. The Reform Package entered into force in the EU on 31 January 2012, and the EEA EFTA States foresee its quick incorporation into the EEA Agreement. 19 In addition, the EEA EFTA States participated in multilateral state aid meetings in 2011 concerning the amendment of regional aid guidelines, the amendment of reporting obligations, state aid to shipbuilding, state aid to broadband networks and state aid to audiovisual works (film). The EU Council has agreed to a general approach to a Public Procurement unitary patent for Europe. In addition, discussions are currently taking place in the Council on the Three acts in the field of public procurement were establishment of what is now known as the “Unified incorporated into the EEA Agreement in 2011: The Patent Court”. The EEA EFTA States are following Remedies Directive, which sets out review procedures this issue closely. related to the award of public contracts; and two regulations relating to threshold values and standard A European Observatory on Counterfeiting and Piracy notification forms. was launched by the Commission in April 2009 and, The EEA EFTA States followed the Commission’s following a dialogue between the Working Group on consultation on reforming EU public procurement Intellectual Property Rights and the Commission, it legislation closely. The reform focuses on simplifying was agreed that the EFTA Member States would existing rules; facilitating SME access to public participate as observers. ANNUAL REPORT OF THE EUROPEAN FREE TRADE ASSOCIATION 2011 TRADE ASSOCIATION THE EUROPEAN FREE REPORT OF ANNUAL contracts; promoting green, social and innovation procurement; and increasing the use of electronic In October, EFTA hosted a workshop organised by procurement. Norway provided feedback and the EEA CEPI, EUROCINEMA, FERA, IMPALA and SAA, EFTA States participated in the follow-up conference organisations from the world of film, cinema and to the consultation. A reform package consisting of audiovisual services, on the financing and taxation of proposals for three directives was presented on the cultural industry. The workshop was organised 2486-RAPPORT-2012-06_AR 20/03/12 16:11 Page20

within the framework of the European Platform on Safety and security matters the Potential of Cultural and Creative Industries. With the conclusion of bilateral agreements by Norway Customs Matters, Safety and and Switzerland with the EU, these two countries were Security Matters and Trade integrated into the EU’s safety and security system, with the result that traders do not have to submit Facilitation prearrival/predeparture declarations when trading with the EU. The Norwegian bilateral agreement was Customs implemented in Protocol 10 to the EEA Agreement, and a joint working group responsible for the In June, the EFTA States signed the Regional implementation and monitoring of the safety and Convention on Pan-Euro-Mediterranean Preferential security measures addressed under the bilateral Rules of Origin that will replace the current network of agreement is currently being set up. origin protocols in the various agreements of the free trade zone. Ratification and implementation of the Convention have started in the contracting parties to Free Movement of Capital and the Convention, which will create a preferential trading zone throughout Europe and the Mediterranean Services region (for further information on the PEM Convention see box on page 12). In parallel, the Subcommittee II on the Free Movement of Capital and Committee of Origin and Customs Experts is working Services coordinates matters of financial services, on the revision of the European rules of origin, aimed company law, electronic communications, audiovisual at completely modernising and simplifying European services, information society and data privacy, postal origin provisions. services and transport. Five working groups report to Subcommittee II. The Committee addressed other customs and origin matters related to free trade agreements with third- 20 Financial Services country partners, and other open technical customs issues among EFTA countries to guarantee good The EEA EFTA States monitored closely the relations between customs administrations and the significant number of legislative acts issued by the smooth functioning of preferential trade relations. European Commission in response to the financial Among others, the Committee agreed with the crisis, in particular the regulations creating a new Secretariat of the Central European Free Trade European architecture of financial supervision. In Agreement (CEFTA) to start diagonal cumulation on 1 addition to the European Systemic Risk Board, January 2012 between the EFTA States and the responsible for macro-prudential supervision, the EU Western Balkan countries – Albania, Croatia, established three new supervisory bodies at micro- Macedonia and Serbia. prudential level:

Trade Facilitation Trade facilitation seeks to improve procedures and controls in merchandise trade across national borders by reducing associated cost burdens and maximising efficiency, while safeguarding legitimate regulatory objectives. Recent developments, such as the challenge of bringing trade facilitation in line with growing safety and security concerns, as well as rising concerns about the use/misuse of trade procedures as trade policy tools, have heightened the political profile of trade facilitation. At the beginning of 2011, the EFTA Committee on Trade ANNUAL REPORT OF THE EUROPEAN FREE TRADE ASSOCIATION 2011 TRADE ASSOCIATION THE EUROPEAN FREE REPORT OF ANNUAL Facilitation elaborated a trade facilitation template for EFTA’s ongoing and future trade negotiations, and the Committee is continuously analysing the developments of trade facilitation within other international organisations such as the World Trade Organization, the United Nations Economic Commission for Europe, the Organisation for Economic Co-operation and Development and the World Customs Organization, which have added trade facilitation to their agendas. 2486-RAPPORT-2012-06_AR 20/03/12 16:11 Page21

• The European Banking Authority Transport • The European Insurance and Occupational Pensions Authority A significant number of proposals for new EU acts • The European Securities and Markets Authority were considered and discussed in depth with the EU during the year. An important development was the The EEA EFTA States continued to work on adequate incorporation of the Regulation on common rules for EEA EFTA participation in these bodies. the operation of air services and the Regulation establishing the European Aviation Safety Agency Company Law (EASA).

Several acts were reviewed in 2011, including the proposal on the interconnection of central, commercial and company registers and, more recently, the proposal for a European Foundation Statute. Electronic Communications, Audiovisual Services, Information Society and Data Privacy

In the realm of electronic communications, experts from the EEA EFTA States continued to work on the incorporation of the Telecom Package into the EEA Agreement, notably on the role of the EEA EFTA States in the Body of European Regulators in Electronic Communications (BEREC). 21 The EEA EFTA States submitted a Comment on the The EEA EFTA States finalised their discussion on the White Paper on the Future of Transport, which was incorporation of the Data Retention Directive into the published in March and identifies the main trends and EEA Agreement. challenges that will shape the future of transport policy over the coming decades. In the area of audiovisual services, the Media Mundus Programme was incorporated into the EEA Agreement. Other important issues on the transport agenda were This is a broad international cooperation programme the Directive on Intelligent Transport Systems in for the audiovisual industry to strengthen cultural and Europe and a proposal for the revision of the commercial relations between Europe’s film industry guidelines for the development of a trans-European and film makers from third countries. transport network.

In the rail sector, high priority was given to the Regulation concerning a European rail network for competitive freight and a proposal to establish a Single European Railway Market.

Discussions continued on the possible incorporation of The proposal for amendments to the Regulation on the the Audiovisual Media Services (AVMS) Directive establishment of the European Maritime Agency and into the EEA Agreement. the Regulation on Passenger Rights were prioritised in

the field of maritime transport. 2011 TRADE ASSOCIATION THE EUROPEAN FREE REPORT OF ANNUAL Postal Services The main items on the agenda in the field of air Deliberations took place regarding the incorporation of transport were the Second Single European Sky the Third Postal Services Directive into the EEA Package, legislation linked to aviation security and the Agreement. EASA Regulation. 2486-RAPPORT-2012-06_AR 20/03/12 16:11 Page22

Free Movement of Persons to the planned revision of the Working Time Directive, the debate between the Council and Parliament over the Pregnant Workers Directive, and the proposed Subcommittee III on the Free Movement of Persons revision of the Electromagnetic Fields Directive. The coordinates matters related to all aspects of the free Working Group also held a joint meeting with the movement of persons, working life and social EFTA Consultative Committee in Luxembourg, where inclusion, social security and the recognition of they mainly discussed issues related to the posting of professional qualifications. Three working groups workers and temporary agency work. report to Subcommittee III. Social Security Free Movement of Persons, Working Life and Social Inclusion New social security coordination rules were incorporated into the EEA Agreement in 2011. These Following the provisional merger between the new rules completely replace Annex VI to the EEA Working Group on free movement of persons, Agreement on the coordination of social security employment and social policy and the Working Group schemes. Their aim is to modernise and simplify social on health and safety at work and labour law, the new security coordination within the EU and EEA. Working Group discussed various horizontal issues such as the EU Multiannual Financial Framework Recognition of Professional (2014-2020); the Green Paper on Public Procurement, which is linked to the social priorities of the Europe Qualifications 2020 Strategy; and the Single Market Act. Attention was also given to the relevant flagship initiatives under Work relating to the proposal to revise the Professional Europe 2020. Qualifications Directive was monitored closely. In this respect, an EEA EFTA Comment on the Green Paper In the area of free movement, the EEA EFTA States on Modernising the Professional Qualifications 22 monitored, for information purposes, developments on Directive was sent to the EU side in September. the EU side related to proposals for third-country nationals legally residing in the EU. Flanking and Horizontal With regard to employment, the EEA EFTA States were Policies invited to the informal meetings of the EU Employment Committee, where they submitted a report on the labour Subcommittee IV on Flanking and Horizontal Policies market situation in each of the EEA EFTA States. They coordinates matters related to all aspects of the participated in EURES, a cooperation network between horizontal provisions of the EEA Agreement, as well as the European Commission and the public employment cooperation outside the four freedoms. There are 13 services of the EEA Member States that provides working groups reporting to Subcommittee IV. information and assistance to both workers and employers, and monitored the planned reforms of this network. Research and Development As regards social policy, the EEA EFTA States continued their informal dialogue with the EU’s Social The EEA EFTA States continued to follow the Protection Committee and discussed their potential implementation of the Seventh Framework Programme participation in the European Year for Active Ageing on Research (FP7), the Europe 2020 Strategy and its 2012. The EEA EFTA States participated actively in flagship initiatives in the area of research and both the employment and social protection sections of innovation, and the EU’s ongoing work on new the PROGRESS Programme, which supports the European Research Area (ERA) initiatives. They also ANNUAL REPORT OF THE EUROPEAN FREE TRADE ASSOCIATION 2011 TRADE ASSOCIATION THE EUROPEAN FREE REPORT OF ANNUAL implementation of the European Employment Strategy followed closely the Commission’s preparation of its and underpins the EU’s coordination activities in the proposal for a new framework programme in the field fight against poverty and social exclusion. of research and innovation – Horizon 2020.

In the areas of health and safety at work and labour The EEA EFTA States are negotiating with the law, EEA EFTA experts followed developments related Commission on the possibility of incorporating the 2486-RAPPORT-2012-06_AR 20/03/12 16:11 Page23

Council Regulation on the Community legal The EEA EFTA States monitored the work of the High framework for a European Research Infrastructure Level Group on Education and Training Policies in the Consortium (ERIC) into the EEA Agreement. EU and submitted an EEA EFTA Comment on the Communication on Early Childhood Education and Environment Care. They also continued to follow the development of the Rights of the Child initiatives and the relevant parts The EEA Joint Committee adopted several decisions in of the Rights and Citizenship Programme (2014-2020). the field of environment in 2011, namely on the inclusion of aviation activities in the EU Emissions Trading Gender Equality, Anti- Scheme (ETS), the ETS single EU registry, ambient air Discrimination and Family Policy quality, the control of priority substances in water and the EU Waste Framework Directive. The Directive on the application of the principle of equal treatment between men and women engaged in an One of the Working Group’s main priorities for 2011 activity in a self-employed capacity was incorporated was to continue to prepare for the incorporation of the into the EEA Agreement in July 2011. The EEA EFTA revised EU ETS Package into the EEA Agreement. The States continued their participation in the gender equality second trading period for this scheme will end in 2012, strand of the PROGRESS Programme and in the Daphne so preparations for the third trading period were at the III Programme on Community action to prevent violence centre of the Working Group’s work and discussions against children, young people and women, and to with the Commission. protect victims and groups at risk (2007-2013). Experts also focused on relevant proposals for new programmes The experts also focused on areas such as the within the Multiannual Financial Framework (2014- incorporation of acts related to the INSPIRE Directive 2020) and monitored plans for an accessibility act and and the incorporation of the new EU Ecolabel attempts to increase the representation of women on Regulation and related acts. company boards. 23 Other initiatives that the Working Group followed Consumer Affairs carefully in 2011 included a proposal for a regulation on the possibility for Member States to restrict or prohibit The EEA EFTA States followed the revision of the cultivation of GMOs in their territory, a proposal on consumer acquis and assessed in particular the waste electrical and electronic equipment (WEEE) and a proposal on the control of major accident hazards involving dangerous substances (Seveso III).

Topics discussed with the Commission included forest protection and action against invasive species, and the evaluation of the Commission’s Sixth Environment Action Programme. The Working Group also received briefings from the EU presidencies on their priorities in the field of environment and climate change. Education, Training and Youth

The EEA EFTA States’ current priority in the area of education, training and youth is their participation in the Lifelong Learning Programme (2007-2013) and the Youth in Action Programme (2007-2013). The EEA 2011 TRADE ASSOCIATION THE EUROPEAN FREE REPORT OF ANNUAL EFTA States followed the Commission’s preparatory work for the post-2013 programme – Erasmus for All – and submitted an EEA EFTA Comment on future Diana Wallis, then Vice-President of the European Parliament, presenting her programmes in the field of education, training and views as Rapporteur on a Common European Sales Law to the EFTA Working youth (2014-2020). Group on Consumer Protection. 2486-RAPPORT-2012-06_AR 20/03/12 16:11 Page24

Directive on Consumer Rights in view of its possible Protection with a view to incorporating it into the EEA incorporation into the EEA Agreement. EEA EFTA Agreement. experts also followed closely the newly-issued proposal on a Common European Sales Law and Cultural Affairs proposals on alternative dispute resolution and online dispute resolution. The EEA EFTA States’ main priority in the field of culture and sport was to follow the new proposal on The EEA EFTA States received confirmation from the Creative Europe (2014-2020) closely, as well as the Commission that they would be fully included in all sports part of the Erasmus for All Programme. upcoming editions of the Consumer Market Scoreboard.

Two further priorities for 2011 were the upcoming Public Health Consumer Programme (2014-2020) and the new Consumer Policy Strategy. The Working Group on Public Health prepared for the incorporation of the Patient Mobility Directive into the Enterprise Policy and Internal EEA Agreement and attended the meetings of the new Comitology Committee on cross-border healthcare on Market Affairs the EU side. Particular attention was given to pandemic preparedness and health security, including possible joint The main issues monitored by the EEA EFTA States in procurement of vaccines; developments at EU level with the area of enterprise policy and Internal Market affairs regard to a possible revision of the Tobacco Products in 2011 were the new proposal for the Programme on Directive; and challenges facing Europe’s health Competitiveness of Enterprises and SMEs (COSME) workforce and health inequalities overall. The Group and the innovation, growth and competitiveness aspects also focused on the proposal for a new Health for Growth of the Horizon 2020 Programme. The EEA EFTA States Programme (2014-2020) and a new Justice Programme, also followed the SME policy, the implementation of the including drugs prevention and information. 24 Services Directive, e-commerce, the Internal Market Information (IMI) system, which provides a multilingual Budgetary Matters database to support implementation of Internal Market legislation, and the Better Regulation initiative, which The Working Group on Budgetary Matters monitors and aims to improve and simplify new and existing coordinates the preparation of the annual EEA EFTA legislation in the EU. Budget, which covers the EEA EFTA countries’ contribution to the EU Budget and allows for EEA EFTA Finally, the EEA EFTA States monitored the participation in EU programmes, actions and agencies. development of SOLVIT, an online network for solving problems caused by the misapplication of Of particular interest in 2011 were the estimated Internal Market law, as well as the “Your Europe” budgetary implications of the proposal for the portal, which provides practical information on the Multiannual Financial Framework (2014-2020), rights and opportunities available to individuals and adopted by the Commission on 30 June 2011. The businesses in the Internal Market. Secretariat prepared a working document that was circulated to the relevant working groups. The EEA Civil Protection EFTA commitment to EU operational costs in 2011 was EUR 262 million, an increase of EUR 36 million The EEA EFTA States continued to participate actively from 2009. EEA EFTA payments in 2010 amounted to in the Community Mechanism for Civil Protection and EUR 215 million, adjusted for the 2009 credits. the Civil Protection Financial Instrument (2007-2013). Particular attention was given to the ongoing revision The EEA EFTA States also contribute to the ANNUAL REPORT OF THE EUROPEAN FREE TRADE ASSOCIATION 2011 TRADE ASSOCIATION THE EUROPEAN FREE REPORT OF ANNUAL of the legal instruments in this area and the administrative costs of the European Commission, an Commission’s proposals for a revised mechanism and important part of which is the contribution in kind of financial instrument. seconded national experts. In 2011, 34 EEA EFTA national experts were seconded to the various The Working Group and Subcommittee finalised their directorates within the European Commission dealing position on the Directive on Critical Infrastructure with EEA-relevant programmes and activities. 2486-RAPPORT-2012-06_AR 20/03/12 16:11 Page25

EFTA/EU Cooperation in Heads of EFTA National Statistical Statistics Institutes The EFTA Statistical The Working Group of the Heads of EFTA NSIs Office (ESO) celebrated reports to Subcommittee IV. In 2011, the Working its 20th anniversary in Group dealt in particular with: 2011. The office was EFTA Statistical Office created in 1991 in • The development of the 2011 EEA Annual Luxembourg as a Statistical Programme based on the EU Annual liaison office between Eurostat, the statistical office of Statistical Programme; the European Union, and the EFTA national statistical institutes (NSIs). Since then, the combined efforts of • The impact of the new legislative procedures ESO and Eurostat have resulted in close and well- introduced by the Lisbon Treaty; functioning cooperation, as well as in the sustained integration of Iceland, Liechtenstein, Norway and • Possible implications of the EU Financial Switzerland into the European Statistical System (ESS). Supervisory Architecture for NSIs; and

EFTA celebrated the anniversary with a reception and • The significant reorganisation of Eurostat due to its panel discussion on the Statistical Office's past, present strengthened verification powers as regards the and future. quality of statistical data.

To mark the occasion ESO also published a new edition Integration of EFTA Statistics into of the EFTA/EU Statistical Cooperation Handbook. This the European Statistical System updated edition, published as part of the EFTA Bulletin series, describes the institutional and practical aspects of In addition to their core activities, ESO and the EFTA EFTA/EU statistical cooperation. NSIs ensured EFTA’s presence in the ESS by: 25 ANNUAL REPORT OF THE EUROPEAN FREE TRADE ASSOCIATION 2011 TRADE ASSOCIATION THE EUROPEAN FREE REPORT OF ANNUAL

Panel participants at ESO’s 20th anniversary event: Pieter Everaers, Director for External Cooperation, Eurostat; Olav Ljones, Deputy Director-General, Statistics Norway; Wilfried Oehry, Director-General, Liechtenstein Office of Statistics; Gabriel Gamez, Regional Adviser for the Statistics Division of UNECE and former Head of ESO; Heinrich Brüngger, former Director of the Statistics Division of UNECE and former Head of ESO; and Andrea Scheller, Head of ESO (moderator). 2486-RAPPORT-2012-06_AR 20/03/12 16:11 Page26

• Monitoring the inclusion of EFTA data in Eurostat’s such as the United Nations Economic Commission databases and publications; for Europe (UNECE) and the International Monetary Fund (IMF). • Ensuring EFTA’s and the EFTA NSIs’ active involvement in EU technical cooperation EFTA’s involvement gives priority to countries that programmes in the field of statistics with European have concluded JDCs or FTAs with EFTA. Support is and non-European third countries; and granted mainly to countries covered by the European Neighbourhood Policy (ENP East and South), to the • Contributing substantially to the European Western Balkans and to Turkey, but can also include Statistical Training Programme (ESTP). EFTA free trade and prospective partners in other regions of the world. Production and Dissemination of EFTA Statistics Technical Cooperation Activities and Projects Protocol 30 to the EEA Agreement and the Swiss-EU Agreement in the field of statistics provide for 2011 was an exceptional year in terms of the statistical information from all EFTA States to be geographical coverage of regions that benefited from transmitted to Eurostat for storage, processing and EFTA technical cooperation, including Eastern dissemination. ESO continues to strive for the regular Europe, Caucasus and Central Asia (EECCA), Turkey, inclusion of EFTA data in Eurostat databases and the Western Balkans, the Mediterranean, Latin publications. The tangible result of this joint initiative America and the Caribbean. The main activities and projects were: between ESO, the EFTA NSIs and Eurostat is that the inclusion of EFTA data in Eurostat databases and • The continuation of the global assessments of the publications is at a good level, despite there still EECCA countries’ national statistical systems. remaining some room for improvement. 26 EFTA support was granted through the funding of assessors from EFTA countries and ESO in the EFTA Participation in Eurostat assessments of the Kyrgyz Republic and Ukraine; Working Groups and Committees • A joint EFTA/Eurostat/UNECE high-level seminar Eurostat organised around 110 meetings in 2011 to on streamlining statistical production for experts prepare and implement new legislation, exchange and from the Western Balkan countries; develop methodologies and follow up on data • A training course for experts from the national collection. The EFTA Member States participated statistical offices of the 23 Economic Commission actively in the relevant meetings on an equal footing for Latin America and the Caribbean (ECLAC) with colleagues from the EU Member States, and ESO countries on the use of administrative registers in prepared a guide on participation in Eurostat working the production of statistics; groups for participants to get the most out of these meetings and make their opinions heard. • A training course for experts from the French- speaking Mediterranean countries (Algeria, Technical Cooperation in the Lebanon, Morocco and Tunisia) on advanced Field of Statistics methods for sample surveys; • A joint IMF/EFTA/UNECE course on government EFTA works closely with Eurostat on technical finance statistics for experts from the

ANNUAL REPORT OF THE EUROPEAN FREE TRADE ASSOCIATION 2011 TRADE ASSOCIATION THE EUROPEAN FREE REPORT OF ANNUAL cooperation in the field of statistics. This is based on Commonwealth of Independent States and several a Memorandum of Understanding that has the other countries; and general objective of ensuring close collaboration between the EFTA States and Eurostat in a number of • The funding of experts’ participation in programmes. Cooperation may also take the form of international and regional events in the field of joint undertakings with international organisations statistics. 2486-RAPPORT-2012-06_AR 20/03/12 16:11 Page27

European Statistical Training Programme

An exchange of letters between the EFTA Secretariat and Eurostat stipulates that the EFTA Secretariat finances at least two ESTP courses per year in return for EFTA statisticians having the right to participate in all courses.

In 2011, the EFTA Secretariat financed three of the close to 25 ESTP courses that were held: One organised by Statistics Norway on the set-up, use and maintenance of business registers, and two by the ESO Heads past and present: Heinrich Brüngger, Andrea Scheller (current Head Swiss Federal Statistical Office on data analysis and of ESO), Ib Thomsen and Gabriel Gamez. data modelling, and survey methodology and sampling techniques. EFTA Seconded National Experts at Eurostat

At the end of 2011, three experts from Norway and two experts from Switzerland were seconded to Eurostat within the framework of the EEA Agreement and the Swiss-EU Agreement respectively. One more from each country will start their secondments in early 2012. Two Norwegian experts were seconded to Eurostat as 27 a contribution in kind within the framework of EFTA/EU technical cooperation to ensure continuity of support and EFTA visibility in the overall programming and management of EFTA/EU activity. Two experts completed their secondments and returned to Statistics Norway in 2011. ANNUAL REPORT OF THE EUROPEAN FREE TRADE ASSOCIATION 2011 TRADE ASSOCIATION THE EUROPEAN FREE REPORT OF ANNUAL 2486-RAPPORT-2012-06_AR 20/03/12 16:11 Page28

EEA GRANTS AND NORWAY GRANTS Through the EEA Grants and Norway Grants, 2011: Over 1 000 Projects Iceland, Liechtenstein and Norway contribute to reducing disparities in the EEA and to strengthening Completed bilateral relations with the 15 beneficiary countries in Central and Southern Europe. Key areas of Projects awarded support under the EEA Grants and support include environment and climate change, Norway Grants 2004-2009 were to be implemented by civil society, human and social development, cultural 30 April 2011. By that date, 90% of the 1 215 projects heritage, research and scholarships, decent work, and supported were completed, while some 100 projects justice and home affairs. were granted a one-year extension.

EUR 1.789 billion in funding has been agreed for the Evaluating Results period 2009-2014, up from EUR 1.307 billion for the previous five-year period. Norway represents Two sector evaluations of projects funded by the EEA approximately 97% of the total funding. and Norway Grants 2004-2009 were completed in 2011. The Financial Mechanism Office (FMO) of the EFTA Secretariat in Brussels administers the grant schemes Significant Funding for Research 28 on behalf of Iceland, Liechtenstein and Norway. An evaluation assessing academic research funding Reducing Disparities and found that the support provided both a relevant and significant source of funding, complementing wider Strengthening Relations EU funding schemes. The evaluation also showed that that all funded projects had met their immediate Since funding from the EEA EFTA States to the least developed countries and regions of the EU started in 1994, the Grants have contributed to a variety of areas, such as reducing greenhouse gas emissions, protecting biodiversity, improving health services, promoting social inclusion and strengthening civil society.

In addition, the Grants have increasingly contributed to developing mutual cooperation and strengthening bilateral relations. Under the EEA Grants and Norway Grants 2004-2009, donor and beneficiary state entities cooperated to implement over 900 projects, both small and large.

More strategic cooperation is being established ANNUAL REPORT OF THE EUROPEAN FREE TRADE ASSOCIATION 2011 TRADE ASSOCIATION THE EUROPEAN FREE REPORT OF ANNUAL between 2009 and 2014. Over half of the expected 140 programmes will be planned and implemented in cooperation with public entities from the donor states. Bilateral funds at national and programme level will also spur bilateral contacts, networking and project cooperation. Lake monitoring in Estonia (Photo: I. Ansko). 2486-RAPPORT-2012-06_AR 20/03/12 16:11 Page29

strengthening the national migration management system, paying special attention to the situation of unaccompanied children seeking asylum.

For the current funding period, support for programmes dealing with environment, climate change and green innovation is expected to represent around one-third of the total. The EEA Grants and Norway Grants contribute to programmes in the following areas:

EEA Grants • Environmental protection and management • Climate change and renewable energy “Walk the Grants“, an event organised by the Norwegian Embassy in Warsaw, • Civil society brought together representatives of all funded projects in Poland (Photo: • Research and scholarship Mateusz Pieczko). • Human and social development • Protecting cultural heritage objectives and conducted their activities as planned. Research cooperation contributed to strengthened Norway Grants bilateral relations. • Carbon capture and storage • Green industry innovation Addressing Health Challenges • Decent work and tripartite dialogue • Research and scholarship The evaluation of the health and childcare funding • Human and social development concluded that the projects addressed relevant EU and • Justice and home affairs national health challenges, as well as local needs. The impact on target areas and groups was generally 29 reported to be positive. The report also concluded that Allocation per country, 2009-2014 almost all evaluated projects had achieved at least the (in million EUR) planned deliverables, with some even exceeding their predefined objectives. Spain 46 Slovenia 27 Bulgaria 127 Cyprus 8 Slovak Republic 81 Czech Republic 132 2011: Preparing for New Estonia 49 306 Funding Romania Greece 63 Hungary 153 Portugal 58

Important steps were taken in 2011 to prepare the Latvia 73 funding under the EEA Grants and Norway Grants Lithuania 84 5 2009-2014. By the end of the year, funding priorities Poland 578 Malta and institutional arrangements had been agreed in TOTAL: 1 789 Memoranda of Understanding (MoUs) with 13 of the 15 beneficiary countries.

Under the EEA Grants and Norway Grants 2009-2014, the donor states provide support to larger programmes rather than projects. This approach strengthens the strategic and impact-oriented approach of the Grants.

The programme areas are agreed in the MoUs. 2011 TRADE ASSOCIATION THE EUROPEAN FREE REPORT OF ANNUAL

In 2011, the first two programmes were approved. The first is a fund for decent work and tripartite dialogue covering the 12 newest EU and EEA Member States, and the second is a programme in Greece aimed at 2486-RAPPORT-2012-06_AR 20/03/12 16:11 Page30

ADVISORY BODIES The Parliamentary for the Committee members. Among other issues, the Committee discussed the FTA negotiations with the Committees Customs Union of Russia, Belarus and Kazakhstan, and showed an interest in strengthening free trade The Committee of Members of Parliament of the with emerging markets and the relation between EFTA Countries (CMP) and Committee of Members of development aid and trade. The Committee continued Parliament of the EFTA States (MPS) continued their its active engagement with respect to sustainable active involvement in EFTA third-country relations development provisions in free trade agreements, and cooperation with the EU. The Chair of the which have been incorporated into all EFTA CMP/MPS in 2011 was Mr Svein Roald Hansen negotiations since the model chapter was agreed in (Norway) and the Vice Chair was Mr Harry Quaderer 2010. The Committee met with WTO officials in (Liechtenstein). November to discuss the Doha Round and the relationship between the multilateral and bilateral Third-Country Relations approach to trade.

In February 2011, representatives of the CMP/MPS Cooperation with the EU visited Vietnam to support the ongoing dialogue on possible free trade negotiations by strengthening ties The EEA Joint Parliamentary Committee (EEA JPC) with stakeholders in Vietnam and sharing their views met twice in 2011, in Svalbard in April and in on the merits of free trade. Together with an observer Strasbourg in October. The EEA JPC took a highly from the Consultative Committee, the parliamentarians active role in the reflections on the EEA Agreement, 30 met with the Speaker and relevant committees of the and as a joint committee, its members gathered National Assembly, government officials and business information and insights from both the EU and EFTA representatives. sides on the ongoing EEA review processes. A working document entitled “The Review of the EEA” was The CMP/MPS met with EFTA Ministers in Schaan in developed for the spring meeting, and will be June and Geneva in November, receiving updates on developed further in the coming period. As with third-country relations and raising points of interest previous meetings, the EEA JPC engaged in a fruitful ANNUAL REPORT OF THE EUROPEAN FREE TRADE ASSOCIATION 2011 TRADE ASSOCIATION THE EUROPEAN FREE REPORT OF ANNUAL

Discussions at a joint seminar in Oslo on 13 December 2011 between the EFTA Consultative Committee and representatives of the European Economic and Social Committee’s Single Market Observatory: Elisabeth Walaas, Director-General, Ministry of Foreign Affairs, Norway; and Halldór Grönvold, Chair of the Consultative Committee, Icelandic Confederation of Labour (ASÍ). 2486-RAPPORT-2012-06_AR 20/03/12 16:11 Page31

The Consultative Committees

The EFTA Consultative Committee (EFTA CC) held four internal meetings in 2011 and focused, among others, on developments in the Internal Market, with specific emphasis on the implementation of the Single Market Act and a citizen’s approach; responses to the economic and financial crisis; innovation in the energy field; and a new flagship/agenda for skills and jobs (Europe 2020). The Committee also continued its work on international trade developments, focusing especially on EFTA’s third-country relations. Committee Work

The EFTA CC met with the Standing Committee of the EFTA States in March, the EFTA Ministers in Members of the EFTA Parliamentary Committee at the EFTA Ministerial meeting in Geneva on 14 November 2011: Harry Quaderer (Independent), Liechtenstein; June and the Ministerial Chair of the Council in and Svein Roald Hansen (Labour), Norway. December, and the EFTA Parliamentary Committee in June. In November, the Parliamentary and dialogue with the EEA Council, the EEA Joint Consultative Committees held a joint seminar on the Committee and the EFTA Surveillance Authority on financial and economic crisis, focusing especially on the functioning of the EEA. The meeting in Svalbard developments in smaller economies, featuring case also had the High North on the agenda, attracting studies from the EFTA countries. notable interest from the European Parliament. 31 Furthermore, the EEA JPC took an initiative to Concerning the EEA, the EFTA CC met with the EFTA establish a refund scheme for beverage packaging by Standing Committee at Ministerial level in November adopting a resolution in the October meeting calling on in Brussels. It also invited the Vice President of ESA to the European Commission to introduce a mandatory give a briefing in June on ESA’s most recent activities. EEA-wide system. The EEA JPC also adopted The Committee continues to emphasise strongly the resolutions on the Digital Agenda and the EEA Grants importance of holding such joint meetings, which and Norway Grants. contribute to enhancing dialogue with the relevant EFTA authorities at political, parliamentary and Furthermore, the MPS continued its active dialogue diplomatic level in the four EFTA countries. with the EFTA Ministers on EEA affairs, and met with the Standing Committee at Ministerial level for the In March, the EFTA CC held an exchange of views third time in Brussels in November. These joint with the European External Action Service, the EFTA meetings also included the EFTA Consultative Ambassadors to the EU and a representative of a Committee and constitute an increasingly important Brussels-based think tank on the future of the EEA and dialogue between the Ministers and the advisory EU-Swiss relations. bodies on developments in the EEA. Furthermore, the EFTA CC continued its cooperation with the EFTA authorities at EFTA working group level. In March, the Committee and the EFTA Working Group

on Health and Safety at Work and Labour Law organised 2011 TRADE ASSOCIATION THE EUROPEAN FREE REPORT OF ANNUAL a visit to the EFTA Court in Luxembourg, where they observed the hearing on the Icelandic Posting of Workers case, discussed with a Commission representative the latest developments in the labour market field, and met with the President of the EFTA Court. 2486-RAPPORT-2012-06_AR 20/03/1216:11Page32 32 ANNUAL REPORT OF THE EUROPEAN FREE TRADE ASSOCIATION 2011 EESC, MeelisJoost(Estonia). EFTA CC, HalldórGrönvold(Iceland)and,forthe The Co-chairsoftheEEA CCin2011 were,forthe EESC SingleMarketObservatory. EESC SteeringCommitteeonEurope2020;andthe meetings withCroatia, Turkey andMacedonia;the participation intheEESCJointConsultativeCommittee vice versa.Cooperationin2011 includedEFTA European EconomicandSocialCommittee(EESC) Consultative Committeetoparticipateintheworkof procedure, whichallowsrepresentativesoftheEFTA further reinforcedin2011 throughtheOsmosis Cooperation betweensocialpartnersintheEEA was Osmosis Single Market Act andinnovationintheenergy field. and discussedadoptedtworesolutionsonthe Committee andESA onthelatestEEA developments, dialogue withrepresentativesoftheEEA Joint Mechanism. Furthermore,theEEA CCengagedina that hadreceivedfundingfromtheEEA Financial accession negotiations.Italsovisitedaprojectin Tartu European economicgovernanceandonIceland’s EU Consultative Committee(EEA CC)focusedon At itsmeetinginMay Tartu, Estonia,theEEA EEA Consultative Committee directive onenergy efficiency. context, andtheEuropeanCommission’s draft governance intheEEA,publicservicesEEA the EUPublicProcurementDirective,multilevel Forum adoptedopinionsontheplannedrevisionof second inBrusselsfrom14to15November. The Hamar, Norway, from31Mayto1June,andthe meetings in2011, thefirstin The Forumheldtwo for thetimebeing. to takepartinthemeetings Liechtenstein hasdecidednot Iceland andsixfromNorway. has 12members,sixfrom in EEA matters. The Forum local authoritiesandregions elected representativesfrom informal bodytoinvolve the EFTA Statesin2009asan by theStandingCommitteeof (the Forum)wasestablished local andregionalauthorities elected representativesfrom The EEA EFTA Forumof The EEAEFTA Forum 1 June2011. Regional Authorities from EEA EFTA Forum ofLocal and was asnewChairofthe elected Association ofLocal Authorities, Halldór Halldórsson, Icelandic 2486-RAPPORT-2012-06_AR 20/03/1216:11Page33 In October, EFTA hostedaworkshopwith around • In June,around90participantsfromboththe public • In May, theEFTA Secretariat,incollaborationwith • In February, anexportpromotionseminarwas • including thefollowing: EFTA held severalseminarsandworkshopsin2011, Seminars site hasapproximately800visitorsperday. free tradeagreementsandtheEEA Agreement. The EFTA’s work,aswelllegaltextsrelatedtoEFTA’s The websitecontainsnewsandgeneralinformationon Website groups (atotalof1250people)visitedEFTA in2011. Luxembourg. InBrusselsalone,approximately70 Secretariat offices inGeneva,Brusselsand Furthermore, presentationsaregiventovisitorsthe or orderEFTA documentsthroughalinkonthesite. various publications.Membersofthepubliccanaccess about itsactivitiesthroughawebsite,seminarsand EFTA informsitsstakeholdersandthegeneralpublic INFORMATION ACTIVITIES financing andtaxationoftheculturalindustries. range ofculturalandcreativesectorstodiscussthe 50 representativesoforganisations fromawide Energy Market. which hadaspecialfocusontheEU’s Internal Brussels forEFTA’s regularseminarontheEEA, and privatesectorsintheEEA countriesmetin security. a roundtablediscussionondataprotectionand the stakeholderorganisation Science|Business, held Chambers ofIndustryandCommerce. Ministry ofIndustryand Trade andtheJordanian organised in Amman byEFTA, theJordanian organisation anditsactivities. Glance”, providesabriefintroductiontothe In addition,EFTA’s updatedfactsheet,“EFTA at a TheEFTA Bulletin:EFTA/EU Statistical • ThisisEFTA 2011: An annualpublication, • were releasedin2011: free ofcharge, subjecttoavailability. The following available onthewebsite.Papercopiescanbeordered The latesteditionsofallEFTA’s brochuresare Publications Cooperation Handbook. A newandupdatededition. together withusefultradeandeconomicstatistics. providing anoverviewofEFTA anditsactivities, 33 ANNUAL REPORT OF THE EUROPEAN FREE TRADE ASSOCIATION 2011 2486-RAPPORT-2012-06_AR 20/03/12 16:11 Page34

The EEA Supplement The EEA Supplement is published on the EFTA website once a week. Since 2008, the Icelandic and Norwegian versions of the EEA Supplement have not The EEA Supplement to the Official Journal of the been synchronised with regard to content. European Union is a translation into Icelandic and Norwegian of EEA-relevant texts. The EEA In 2011, the EFTA Secretariat published 71 issues of Supplement contains material from: the EEA Supplement. The publication of acts incorporated into the EEA Agreement decreased in • The EEA Joint Committee 2011 compared to the previous year for the Icelandic • The Standing Committee of the EFTA States version, whilst the Norwegian version saw an increase • The EFTA Surveillance Authority in the number of acts published in 2011. • The EFTA Court • The European Commission

Publication in the EEA Supplement 2011 Fig. 4 Number of pages Icelandic Norwegian EEA Joint Committee Decisions 325 325 EC Acts 3 132 2 811 EFTA Standing Committee 28 28 EFTA Surveillance Authority 694 694 EFTA Court 47 47 EU Institutions 1 344 1 344 34 Total 5 570 5 249 ANNUAL REPORT OF THE EUROPEAN FREE TRADE ASSOCIATION 2011 TRADE ASSOCIATION THE EUROPEAN FREE REPORT OF ANNUAL 2486-RAPPORT-2012-06_AR 20/03/12 16:11 Page35

ADMINISTRATION

At the end of 2011 there were 22 fixed-term and short- The EFTA Board of Auditors term staff based in Geneva, and 63 in Brussels and Luxembourg. The Financial Mechanism Office in The EFTA Board of Auditors (EBOA), established in Brussels employed 52 staff. All figures are on a full- May 1992, is the supreme audit authority of EFTA. It time equivalent basis and include trainees. is 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, the EFTA framework budgeting principle used by the Member Surveillance Authority (ESA) and the EFTA Court. For States’ public administrations. This approach aims to matters related to the Secretariat, EBOA meets “at increase awareness of budgetary spending at all levels. four” (one representative from each EFTA State) and The budget is accompanied by a performance plan in reports directly to the EFTA Council. For matters which the activities of the Secretariat are divided into related to the EEA Agreement (ESA and the EFTA projects. The plan and subsequent reports keep the Court), EBOA meets “at three” (Iceland, Liechtenstein Member States informed of the costs and outcomes of and Norway) and reports to the ESA/Court Committee. the Secretariat’s various activities. EBOA also works in cooperation with the European Court of Auditors. EBOA met three times in 2011. EFTA’s budget is prepared in two currencies: Swiss francs (CHF) and euros (EUR). The total budget for EBOA’s annual audit report is made available on the 2011 was equivalent to CHF 23 654 000. EFTA Secretariat’s website once the relevant Council procedures for the year in question have been finalised.

35

2011 EFTA Budget Fig. 5

Budget Posts 2011 Budget (in CHF) Trade-related activities 4 682 000 EEA-related activities 8 824 000 EFTA/EU statistical cooperation 747 000 Secretary-General's services (information, horizontal and Council activities) 1 964 000 EU/EFTA and EFTA cooperation programmes 3 245 000 Administration and Management 4 192 000 23 654 000

Contributions from the EFTA States to the 2011 EFTA Budget Fig. 6

Member State Contributions (in CHF) Share (in %) Iceland 1 025 000 4.33 2011 TRADE ASSOCIATION THE EUROPEAN FREE REPORT OF ANNUAL Liechtenstein 205 000 0.87 Norway 13 510 000 57.12 Switzerland 8 914 000 37.68 Total 23 654 000 100.00 2486-RAPPORT-2012-06_AR 20/03/12 16:11 Page36

APPENDICES EFTA Parliamentary Committee Members[1]

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 Magnús Orri Schram Social-Democratic Alliance

Liechtenstein

Mr Harry Quaderer Independent Mr Albert Frick Progressive Citizens’ Party

Norway 36 Mr Svein Roald Hansen Labour Party (Chair CMP/MPS and President of the EEA JPC) Mr Harald T. Nesvik Progress Party Ms Gina Knutson Barstad Socialist Left Party Ms Laila Gustavsen Labour Party Ms Laila Marie Reiersten Progress Party Mr Jan Tore Sanner Conservative Party

Switzerland

Mr Ignazio Cassis Radical-Liberal Party Mr Didier Berberat Social Democratic Party Mr Eugen David Christian Democratic Party Ms Brigitta M. Gadient Civic Democratic Party

ANNUAL REPORT OF THE EUROPEAN FREE TRADE ASSOCIATION 2011 TRADE ASSOCIATION THE EUROPEAN FREE REPORT OF ANNUAL Mr Hans Kaufmann Swiss People’s Party

[1] Committee members as at October 2011. 2486-RAPPORT-2012-06_AR 20/03/12 16:11 Page37

EFTA Consultative Committee Members

Iceland

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

Liechtenstein

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

Norway

Mr Thomas Angell (First Vice Chair) Federation of Norwegian Commercial and Service 37 Enterprises (Virke) Ms Liz Helgesen Norwegian Confederation of Unions for Professionals (Unio) Mr Vidar Bjørnstad Norwegian Confederation of Trade Unions (LO) Ms Bente Stenberg-Nilsen Norwegian Association of Local and Regional Authorities (KS) Mr Espen Søilen Confederation of Norwegian Enterprise (NHO) Mr Christopher Navelsaker Norwegian Confederation of Vocational Unions (YS)

Switzerland

Mr Jan Atteslander economiesuisse Ms Ruth Derrer Balladore Confederation of Swiss Employers Ms Jean-Pierre Monti Swiss Workers’ Federation and Swiss Federation of Employees ANNUAL REPORT OF THE EUROPEAN FREE TRADE ASSOCIATION 2011 TRADE ASSOCIATION THE EUROPEAN FREE REPORT OF ANNUAL Ms Marco Taddei Swiss Association of Small and Medium-sized Enterprises Mr Pierre Weiss Fédération des Entreprises Romandes Genève (FER Genève) 2486-RAPPORT-2012-06_AR 20/03/12 16:11 Page38

EFTA Ministerial Communiqués and EEA Council Conclusions EFTA Ministerial Meeting, Schaan, 21 June 2011

Communiqué They furthermore expressed their readiness to engage in free trade negotiations with Malaysia. On 21 June 2011, the European Free Trade Association (EFTA) held its summer Ministerial meeting in With the objective of continuing to strengthen relations Schaan, Liechtenstein, chaired by Ms Aurelia Frick, with countries in Europe, Ministers were pleased to Minister of Foreign Affairs of Liechtenstein. Ministers note the start of negotiations in early 2011 with the of the four EFTA States (Iceland, Liechtenstein, three members of the Customs Union of Russia, Norway and Switzerland) signed a Free Trade Belarus and Kazakhstan, as well as with Bosnia and Agreement with Hong Kong, China, represented by Mr Herzegovina and with Montenegro. Gregory So, Acting Secretary for Commerce and Economic Development. Minsters also expressed their wish to deepen the relations with countries on the American continent. The international economic and trade environment They discussed the exploratory work conducted with five Central American States (Costa Rica, El Salvador, The EFTA Ministers welcomed the robust rebound in Guatemala, Honduras and Panama) to date and trade flows recorded in 2010. They underlined the decided to continue preparations for possible importance to continue to refrain from protectionist negotiations. They also agreed to explore the measures and to strengthen economic and financial possibility for closer trade relations with MERCOSUR stability. They reiterated their strong commitment to (Argentina, Brazil, Paraguay and Uruguay) based on the multilateral trading system. In this connection, they the existing Joint Declaration on Cooperation. expressed their deep concern over the lack of progress in the WTO Doha negotiations. EFTA Ministers urged Relations with the European Union 38 all parties to the negotiations to engage constructively in order to complete the Round. The EEA EFTA Ministers discussed the general functioning of the EEA Agreement with a focus on the Preferential trade relations economic crisis. They underlined the need for coordinated and comprehensive action at European The EFTA Ministers welcomed the addition of the Free level. Ministers expressed their satisfaction that the Trade Agreement (FTA) with Hong Kong, China to EEA EFTA States would soon participate in the new EFTA’s network of preferential trade relations. Hong system of EU financial supervisory architecture, which Kong, China is one of EFTA’s major trading partners began operating on 1 January 2011. globally and the Agreement further reinforces EFTA’s engagement with Asia. EFTA has now concluded 23 Ministers reiterated the importance of close FTAs with 32 countries and territories outside the cooperation with the European Union on energy and European Union. climate change, and welcomed the incorporation of the aviation emissions scheme into the EEA Agreement. In light of the priority accorded to improving trade relations with important partners in Asia, Ministers Ministers welcomed the conclusion of the majority of discussed the state of the negotiations with India and the projects, programmes and funds under the EEA expressed their hope that these would come to a Financial Mechanism and the Norwegian Financial conclusion in 2011. They welcomed the start of Mechanism 2004-2009 and the Agreements on the negotiations with Indonesia earlier in the year. EEA Financial Mechanism and Norwegian Financial Ministers furthermore reiterated their wish to resume Mechanism 2009-2014. They expressed their hope for ANNUAL REPORT OF THE EUROPEAN FREE TRADE ASSOCIATION 2011 TRADE ASSOCIATION THE EUROPEAN FREE REPORT OF ANNUAL negotiations with Thailand when conditions allow. the rapid completion of the Memoranda of Understanding with the beneficiary states. Ministers expressed their satisfaction at the positive conclusions reached on the feasibility of a free trade Ministers noted the EU Council Conclusions of agreement in the Report from the EFTA-Vietnam Joint December 2010, in particular the statement that the Study Group and expressed their readiness to launch very good and close relations with the EFTA countries negotiations at the earliest possible opportunity. had further intensified. 2486-RAPPORT-2012-06_AR 20/03/12 16:11 Page39

Advisory bodies Attending

Ministers met with the EFTA advisory bodies that are Liechtenstein: Ms Aurelia Frick, Minister of actively engaged in EFTA’s work: the Parliamentary Foreign Affairs (Chair) Committee and the Consultative Committee. A fruitful Iceland: Mr Össur Skarphéðinsson, exchange of view with committee members took place Minister for Foreign Affairs and on a range of issues, including EFTA’s third-country External Trade relations. Concerning the EEA they in particular Norway: Ms Rikke Lind, State Secretary, discussed the economic crisis, Europe 2020 and the Ministry of Trade and Industry reviews of the EEA undertaken by Liechtenstein, Switzerland: Mr Johann N. Schneider- Norway and the EU. Ammann, Federal Councillor, Head of the Federal Department of Economic Affairs EFTA: Mr Kåre Bryn, Secretary-General

EFTA Ministerial Meeting, Geneva, 14 November 2011

Communiqué Announcement of negotiations with Central American partners On 14 November 2011, the European Free Trade Association (EFTA) held a Ministerial Meeting in The EFTA Ministers States announced the start of Geneva under the Chairmanship of Mr Trond Giske, negotiations on a comprehensive free trade agreement Minister of Trade and Industry of Norway. Ministers with Costa Rica, Honduras and Panama. Both sides from the four EFTA Member States and Montenegro declared their readiness to open negotiations early next 39 signed a Free Trade Agreement (FTA). Together with year. Other Central American countries may join the Costa Rica, Honduras and Panama, the EFTA Ministers process at a later stage. announced the start of free trade negotiations. Other preferential trade relations The international economic and trade environment The EFTA Ministers reviewed the state of and the The EFTA Ministers discussed the current outlook for preferential trade relations with partners international economic and trade environment. They worldwide. They welcomed the significant progress emphasised the importance of promoting policies to made in the negotiations with India and expressed the enhance growth and financial and economic stability wish that these could be finalised in early 2012. They at European and international level. They reiterated also welcomed the progress achieved in 2011 in the their strong commitment to the multilateral trading negotiating process with the Members of the Customs system. In view of the upcoming WTO Ministerial Union of Russia, Belarus and Kazakhstan. In this Conference the Ministers expressed their deep context, they expressed their great satisfaction with the concerns over the lack of progress in the WTO/Doha recent conclusion of the negotiations on Russia’s negotiations and recognised that, in order to deliver accession to the WTO. Ministers further noted the on the Doha mandate, there is a need to explore new positive developments in the negotiations between negotiating approaches. EFTA and Indonesia. They took note of the progress achieved in the negotiations with Bosnia and EFTA-Montenegro Free Trade Agreement Herzegovina and looked forward to a rapid finalisation of the Agreement. 2011 TRADE ASSOCIATION THE EUROPEAN FREE REPORT OF ANNUAL The EFTA Ministers welcomed the addition of the Free Trade Agreement with Montenegro to EFTA’s network Ministers expressed their desire to continue the of agreements, thereby bringing the total to 24 FTAs dialogue with Malaysia with the aim of launching free with 33 countries and territories outside the European trade negotiations. Based on a Joint Feasibility Study Union. EFTA now has five FTAs with partners in at technical level with Vietnam, they looked forward to South-Eastern Europe. opening negotiations as soon as possible. They also 2486-RAPPORT-2012-06_AR 20/03/12 16:11 Page40

confirmed their interest in exploring ways to further Appointments develop trade relations with MERCOSUR (Argentina, Brazil, Paraguay and Uruguay). The Ministers To succeed Secretary-General Kåre Bryn on 1 discussed prospects for developing closer trade September 2012, Ministers appointed Ambassador relations with countries in Sub-Saharan Africa and Kristinn F. Árnason of Iceland. They also appointed Mr decided to explore the possibilities with potential Ivo Kaufmann of Switzerland to the post of Deputy partner countries in the region. They furthermore Secretary-General in Geneva. Norway will nominate a concurred to follow developments in Algeria and candidate to the post of Deputy Secretary-General in Thailand with a view to resuming negotiations with Brussels to be appointed at a later stage. Ministers those partners when conditions allow. furthermore appointed Mr Georges Baur of Liechtenstein as Assistant Secretary-General in Brussels. Further liberalisation of intra-EFTA trade in agricultural products Attending

Ministers endorsed the outcome of discussions at Norway: Mr Trond Giske, Minister of technical level on the further liberalisation of trade in Trade and Industry (Chair) agricultural products among the EFTA Member States. Iceland: Mr Einar Gunnarsson, Permanent Secretary of State of the Ministry The EFTA Parliamentary Committee for Foreign Affairs and External Trade Ministers exchanged views with the EFTA Liechtenstein: Ms Aurelia Frick, Minister of Parliamentary Committee on recent developments and Foreign Affairs priorities in EFTA’s trade relations with the world. Switzerland: Mr Johann N. Schneider- Ammann, Federal Councillor, Head of the Federal Department of Economic Affairs 40 EFTA: Mr Kåre Bryn, Secretary-General

Conclusions of the 35th meeting of the EEA Council, Brussels, 23 May 2011

1. The thirty-fifth meeting of the EEA Council took relations with the EFTA countries, which where place in Brussels on 23 May 2011 under the already considered to be very good and close in Presidency of Mr János Martonyi, Minister of 2008, have further intensified in the past two Foreign Affairs of Hungary, representing the years. The EEA Council is looking forward to Presidency of the Council of the European continue the positive relationship. Union. The meeting was attended by Mr Jonas Gahr Støre, Minister of Foreign Affairs of 4. The EEA Council welcomed the adoption of the Norway, Ms Aurelia Frick, Minister for Foreign seven “Flagship Initiatives” of the Europe 2020 Affairs of Liechtenstein, and Mr Thorir Ibsen, by the Commission. With many of the proposals Ambassador, Head of the Mission of Iceland to contained in these initiatives being EEA relevant, the EU, as well as by Members of the Council of the EEA Council welcomed the contribution of the European Union and by Representatives of the EEA EFTA States to the Strategy. the European Commission and the European External Action Service. 5. The EEA Council welcomed the progress made on the Single Market Act, recalling that the Single 2. The EEA Council noted that within the Market has a key role to play to deliver growth and ANNUAL REPORT OF THE EUROPEAN FREE TRADE ASSOCIATION 2011 TRADE ASSOCIATION THE EUROPEAN FREE REPORT OF ANNUAL framework of the Political Dialogue the employment and promote competitiveness. The Ministers discussed North Africa, Middle East EEA Council furthermore welcomed the EEA and Piracy off the coast of Somalia. EFTA Comment to the Act received on 10 March. The EEA EFTA States will follow up to the various 3. The EEA Council noted the Council Conclusions proposals resulting from the Act and will continue from December 2010, in particular that the EU to contribute to its development. 2486-RAPPORT-2012-06_AR 20/03/12 16:11 Page41

6. The EEA Council welcomed the launch of the reaching the EUs 20% energy saving target as European semester of economic policy well as helping to realise the EU's longterm coordination in January 2011 and took note of the energy and climate goals. recently adopted Euro Plus Pact aimed at further strengthening policy coordination to improve 11. The EEA Council reiterated the importance of competitiveness and achieve a higher degree of maintaining close cooperation between the EU convergence. and the EEA EFTA States in energy and climate change polices, in particular in the areas of 7. The EEA Council welcomed that the new system emission trading, the promotion of competitive of European Financial Supervision, including the low carbon economy, energy efficiency and three supervisory authorities in the areas of renewable energy resources, as well as on carbon Banking, Insurance, and Securities, had begun capture and storage (CCS). The EEA Council operating on 1 January 2011. The EEA Council also welcomed the incorporation of the aviation welcomed that the EEA EFTA States would emissions scheme into the EEA Agreement. participate in the authorities and looked forward to conclude a formal agreement on the modalities 12. The EEA Council welcomed the conclusion of of their participation. The EEA Council most projects, programmes and funds under the furthermore expressed the hope that an EEA and Norwegian Financial Mechanisms understanding can be reached soon on the 2004-09 by the implementation deadline 30 April appropriate form of participation of the EEA 2011. The EEA Council emphasised the EFTA States’ relevant authorities in the European importance of ensuring that projects with one- Systemic Risk Board (ESRB). year extensions will be completed within this final deadline. 8. The EEA Council welcomed the entry into force on 3 March 2011 of the Third Package for the 13. The EEA Council welcomed the progress made Internal Energy Market aimed at creating an in the implementation of the EEA and Norwegian interconnected and competitive European energy Financial Mechanisms 2009-2014, including 41 market. With the EEA EFTA States being fully specification of programme areas to be integrated in the internal energy market, the EEA supported. The EEA Council urged all parties to Council underlined the importance of a timely strive for rapid completion of the negotiations on participation of the EEA EFTA States in the new the country specific Memoranda of bodies, Agency for the Cooperation of European Understanding to ensure sufficient time for Regulators (ACER) and the European Network implementation of programmes. of Transmission System Operators (ENTSO) which will play an important role for the 14. The EEA Council welcomed the implementation cooperation between European energy regulators of the Additional Protocols resulting from and transmission system operators. bilateral negotiations between the European Commission and Iceland and Norway concerning 9. The EEA Council welcomed the progress made the review of the quota levels for certain fish and in incorporating the Renewables Directive into fishery products. the EEA Agreement. In this context, the EEA Council took note of the EEA EFTA States’ large 15. Ministers noted the progress made in the shares of renewable energy sources. negotiations between the EU and Iceland on Furthermore, the EEA Council acknowledged the Iceland's accession to the European Union. EEA EFTA States’ commitment to ambitious targets for their share of renewable energy by 16. The EEA Council noted the Progress Report of 2020. the EEA Joint Committee and, in particular: ANNUAL REPORT OF THE EUROPEAN FREE TRADE ASSOCIATION 2011 TRADE ASSOCIATION THE EUROPEAN FREE REPORT OF ANNUAL 10. The EEA Council took note of the Energy • welcomed that in March 2011, the European Efficiency Plan 2011, published on 8 March Parliament had a debate on a Commission 2011, along with a Roadmap for moving to a proposal for a directive of the European competitive low carbon economy in 2050. The Parliament and of the Council on consumer Plan constitutes an important contribution to rights , and that it continues its constructive 2486-RAPPORT-2012-06_AR 20/03/12 16:11 Page42

work towards the adoption of that directive, initiatives, in particular the EU Platform against and noted in this context that the EEA EFTA Poverty and Social Exclusion and the Agenda for Comment had been taken into consideration; New Skills and Jobs and reiterated the importance of how these issues will be followed • noted the result of the negotiations on up. The EEA Council underlined and encouraged liberalisation of trade in agricultural products efforts to meet social needs through innovation. between the European Commission and Norway based on Article 19 of the EEA 18. The EEA Council welcomed the EEA EFTA Agreement, hoped for an expedient contributions to the decision-shaping process of implementation of the outcome and looked EEA relevant EU legislation and programmes forward to the foreseen review of the through their participation in relevant conditions of trade in agricultural products in committees, expert groups and agencies and by two years time, with a view to exploring submitting EEA EFTA Comments. possible concessions; 19. The EEA Council held an orientation debate on • agreed to continue the dialogue on the trade Raw Materials. regime for processed agricultural products within the framework of Article 2(2) of 20. The Ministers reiterated that it was the common Protocol 3 of the EEA Agreement; interest of all Contracting Parties to ensure appropriate information on the EEA Agreement • welcomed the participation of the EEA EFTA within the European Economic Area. States in EEA relevant EU Programmes, noting that these are co-financed by the EEA EFTA 21. The EEA Council underlined the importance of States. It emphasised the importance of inviting EEA EFTA Ministers to relevant including the EEA EFTA States in appropriate informal EU Ministerial Meetings and programmes thus contributing to building a Ministerial Conferences on the basis of EEA 42 more competitive, innovative and social EFTA participation in the Internal Market, and Europe; expressed its appreciation to the incoming Polish Presidency for the continuation of this practice. • took note of further progress made in the The EEA Council also recalled the practice of development of an Integrated Maritime Policy inviting the EEA EFTA States - at the level of and welcomed the active involvement of the officials - to political dialogue meetings at the EEA EFTA States. It noted that the EEA EFTA level of relevant Council Working Parties. States are currently looking into the possible participation in the new programme for the 22. The EEA Council noted the Resolutions of the further development of the Integrated EEA Joint Parliamentary Committee adopted at Maritime Policy; its 35th meeting in Strasbourg on 24-25 November 2010 on the European Year for Combating • noted that since the last meeting of the EEA Poverty and Social Exclusion and on Europe Council, the Aviation Safety Regulation 2020: Innovation and the EEA and at its 36th 216/2008 and the Audiovisual Media Services meeting in Spitsbergen on 13 April 2011 on the Directive have not yet been incorporated into the High North: Opportunities and Policy EEA Agreement and expressed its expectation Challenges and on the Annual report of the EEA for an early conclusion of this process; JPC on the functioning of the EEA in 2010, and the Resolutions of the EEA Consultative • recalled the adoption in 2007 of the Horizontal Committee adopted at its 19th meeting in Tartu, Food Law Package, and looked forward to its Estonia, on 12-13 May 2011 on the Single Market

ANNUAL REPORT OF THE EUROPEAN FREE TRADE ASSOCIATION 2011 TRADE ASSOCIATION THE EUROPEAN FREE REPORT OF ANNUAL full implementation by all contracting parties Act and on Innovation and Energy. by 1 November 2011.

17. The EEA Council recalled its commitment to the EU's social agenda reinforced in the Europe 2020 Strategy and welcomed the new inclusive growth 2486-RAPPORT-2012-06_AR 20/03/12 16:11 Page43

Conclusions of the 36th meeting of the EEA Council, Brussels, 15 November 2011

1. The thirty-sixth meeting of the EEA Council took 6. The EEA Council welcomed the progress made place in Brussels on 15 November 2011 under the on the Single Market Act, including the recent Presidency of Ms Aurelia Frick, Minister for presentation of legislative proposals of several of Foreign Affairs of Liechtenstein. The meeting was the 12 key actions of the Act, and looks forward attended by Mr Jonas Gahr Støre, Minister of to the other actions to follow soon. Special Foreign Affairs of Norway, Mr Einar Gunnarson, priority should be given to the growth-enhancing representing the Minister for Foreign Affairs of measures. The EEA EFTA States will continue to Iceland, Mr Marcin Korolec, Deputy State be actively involved in the development of the Secretary of the Ministry of Economic Affairs of Single Market and will follow up on the Poland, representing the Presidency of the Council proposals resulting from the Act. The EEA of the European Union, as well as by Members of Council also welcomed the achievements of the the Council of the European Union and by Single Market Forum, which took place in Representatives of the European Commission and Krakow on 3-4 October 2011, and the Krakow the European External Action Service. declaration made by the Forum .

2. The EEA Council noted that within the 7. The EEA Council welcomed the successful framework of the Political Dialogue the conclusion of the European semester of Ministers discussed North Africa/ the Middle economic policy coordination and took note of East, Promotion of International Criminal the proposal of the European Commission for a Justice, Afghanistan – 10 years after, and new Multiannual Financial Framework for 2014- Myanmar. 2020.

3. The EEA Council recognised that the current 8. The EEA Council welcomed the Council economic crisis is a common concern, and conclusions of 29 September 2011 on a 43 reaffirmed the need for responsibility and Competitive European Economy: Industrial solidarity among the nations of Europe in competitiveness in the light of resource efficiency tackling the challenges ahead. The EEA Council and looked forward to further work in this area, in stressed that it is in the common interest of all particular on competitiveness proofing. countries of the European Economic Area to restore confidence and put the economies on the 9. The EEA Council noted the ongoing path towards renewed and sustainable growth, discussions between the EU and EFTA sides on and underlined the need to take into account how to ensure that the significant volume of budgetary discipline and shared social objectives legislation currently being adopted in the EU in in the measures taken to combat the crisis. the financial services field, including the Regulation establishing the European 4. The EEA Council welcomed the conclusion of Supervisory Authorities, can be dealt with and the Agreement on the participation of Bulgaria included in the EEA agreement. The EEA and Romania in the EEA, a step through which Council emphasised the need to ensure the the EEA will be formally enlarged to an timely incorporation of such legislation. The economically integrated entity of 500 million EEA Council furthermore expressed the hope people with 30 Member States fully participating that an understanding can be reached soon on in the Internal Market. the appropriate form of participation of the EEA EFTA States' relevant authorities in the 5. The EEA Council welcomed the progress made European Systemic Risk Board (ESRB).

on the seven “Flagship Initiatives” of the 2011 TRADE ASSOCIATION THE EUROPEAN FREE REPORT OF ANNUAL Europe 2020 strategy by the Commission. With 10. The EEA Council welcomed the new system of many of the proposals contained in these delegated and implementing acts replacing the initiatives being EEA relevant, the EEA system as it existed before the entry into force of Council welcomed the contribution of the EEA the Lisbon Treaty. The EEA Council further EFTA States to the Strategy. noted with satisfaction that the new system 2486-RAPPORT-2012-06_AR 20/03/12 16:11 Page44

confirms the continued involvement of the EFTA 16. The EEA Council reiterated the importance of side in expert groups and committees, and maintaining close cooperation between the EU underlined the importance of its implementation and the EEA EFTA States in energy and climate for all Contracting Parties. change polices, in particular in the areas of emission trading, the promotion of competitive, 11. The EEA Council noted that the Third Package safe and sustainable low carbon economy, for the Internal Energy Market had entered into energy efficiency and renewable energy force in the EU on 3 March 2011, and that resources, as well as on carbon capture and important work on derived legislation was storage (CCS). currently ongoing in the new bodies, - the Agency for the Cooperation of Energy 17. The EEA Council recognised the importance of Regulators (ACER) and the European cooperation for the development of future- Network(s) for Transmission System Operators oriented energy technologies, among others by (ENTSOs). Since the EEA EFTA States were means of advocating and supporting common already well integrated in the internal energy Research & Development projects, enhancing market, the EEA Council underlined the and developing a framework allowing cross- importance of ensuring appropriate EEA EFTA border exchanges of knowledge and scientific participation in the new bodies in line with the cooperation and advocating a free flow of Third Package and the EEA Agreement. intellectual capital.

12. The EEA Council welcomed the adoption of the 18. The EEA Council underlined the need to Regulation on Energy Market Integrity and continue constructive work on the revised Transparency, which creates a framework of emissions trading system to ensure that it is consistent rules tailored to the particularities of operational in the whole EEA as of 1 January the energy markets (electricity and natural gas), 2013. aiming at the prevention and effective detection 44 of market abuse. 19. The EEA Council welcomed the high level of implementation of projects under the EEA and 13. The EEA Council welcomed the progress made Norwegian Financial Mechanisms 2004-09, and in incorporating the Renewables Directive into emphasized the importance of ensuring the EEA Agreement. In this context, the EEA completion of extended projects by the final Council took note of the EEA EFTA States’ deadline of 30 April 2012. already large shares of renewable energy sources and acknowledged the EEA EFTA States’ 20. The EEA Council urged all parties to strive for a commitment to targets for their share of rapid conclusion of the remaining country renewable energy by 2020. specific Memoranda of Understanding for the EEA and Norwegian Financial Mechanisms 14. The EEA Council took note of the Commission 2009-14, in order to ensure sufficient time for proposal for a new Energy Efficiency Directive, the implementation of programs. presented on 22 June 2011. The EEA Council agreed to the importance of energy efficiency to 21. The EEA Council welcomed the progress made realise energy and climate goals. concerning the process of Iceland's accession to the European Union following the third 15. The EEA Council welcomed the Commission Intergovernmental Conference in October 2011 Communication titled “The EU Energy Policy: and the launch of substantive negotiations Engaging with Partners beyond Our Borders”, between the EU and Iceland. which had been presented on 7 September

ANNUAL REPORT OF THE EUROPEAN FREE TRADE ASSOCIATION 2011 TRADE ASSOCIATION THE EUROPEAN FREE REPORT OF ANNUAL 2011. In this regard, the EEA Council 22. The EEA Council noted the Progress Report of underlined the importance of the strong ties the EEA Joint Committee and, in particular: between the EU and the EEA EFTA States in the energy field. The EEA Council looks • welcomed the final agreement reached for a forward to the discussions of the EU Council directive of the European Parliament and of meeting of 24 November in this respect. the Council on consumer rights , and noted in 2486-RAPPORT-2012-06_AR 20/03/12 16:11 Page45

this context that EEA EFTA concerns had been been solved and reiterated the expectation for a taken into account; rapid conclusion of this process;

• noted the conclusion of an Agreement on • noted the importance of maintaining close further liberalisation of trade in agricultural cooperation between the EU and the EEA products between the European Union and EFTA States on postal reforms while Norway based on Article 19 of the EEA addressing the concerns on the implementation Agreement, hoped for an expedient of the Third Postal Directive (2008/6/EC); implementation of the new agreement and looked forward to the continuation of reviews • recalled the adoption in 2007 of the Horizontal of the conditions of trade in agricultural Food Law Package, which required full products in accordance with Article 19, with a implementation by all contracting parties by 1 view to exploring possible concessions; November 2011;

• agreed to continue the dialogue on the trade • recalled its commitment to the social regime for processed agricultural products objectives of the Europe 2020 Strategy and its within the framework of Article 2(2) of inclusive growth initiatives which are aimed at Protocol 3 of the EEA Agreement, noted that a combating poverty and social exclusion, meeting is taking place on 15 November 2011 encouraging youth mobility and matching in Brussels for the purpose, and underlined the skills with jobs. The EEA Council underlined importance of deepening the dialogue; the importance of finding innovative responses to the social impact of the crisis and • welcomed the participation of the EEA EFTA encouraged the need for solidarity among the States in EEA relevant EU Programmes, noting nations of Europe in tackling the challenges that these are co-financed by the EEA EFTA ahead. States. It emphasised the importance of 45 including the EEA EFTA States in appropriate 23. The EEA Council welcomed the EEA EFTA programmes thus contributing to building a contributions to the decision-shaping process of more competitive, innovative and social EEA relevant EU legislation and programmes Europe; through their participation in relevant committees, expert groups and agencies and by • took note of further progress made in the submitting EEA EFTA Comments. development of an Integrated Maritime Policy and welcomed the active involvement of the 24. The EEA Council held an orientation debate on EEA EFTA States in preparatory actions for a Measures taken to address the current Economic European marine observation and data Crisis. network. It noted that the EEA EFTA States are currently looking into the possible 25. The EEA Council reiterated that it was in their participation in activities under the new common interest that the EEA Agreement was programme for the further development of the well known throughout the European Economic Integrated Maritime Policy; Area and urged all Contracting Parties to ensure that appropriate information on the Agreement is • welcomed that since the last meeting of the available. EEA Council, the outstanding issues concerning the Aviation Safety Regulation 26. The EEA Council underlined the importance of (216/2008/EC) had been resolved and looked inviting EEA EFTA Ministers to relevant

forward to its rapid incorporation into the EEA informal EU Ministerial Meetings and 2011 TRADE ASSOCIATION THE EUROPEAN FREE REPORT OF ANNUAL Agreement; Ministerial Conferences on the basis of EEA EFTA participation in the Internal Market, and • noted that the outstanding issue concerning the expressed its appreciation to the incoming incorporation of the Audiovisual Media Danish Presidency for the continuation of this Services Directive (2007/65/EC) had not yet practice. The EEA Council also recalled the 2486-RAPPORT-2012-06_AR 20/03/12 16:11 Page46

practice of inviting the EEA EFTA States - at the level of officials - to political dialogue meetings at the level of relevant Council Working Parties.

27. The EEA Council noted the Resolutions of the EEA Joint Parliamentary Committee adopted at its 37th meeting in Strasbourg on 25-27 October 2011 on EU Digital Agenda and the EEA, European Refund Scheme for Drinks Containers, and EEA and Norwegian Grants: Contributing to the social and economic cohesion in Europe.

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