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THE (EEA)

▼ What is the European ▼ Origins of the EEA Economic Area? Agreement

The European Economic Area (EEA) unites the 28 EU Since the establishment of EFTA in 1960, the Member States and the three EEA EFTA States has been EFTA's most important (, and ) in an Internal trading partner. In 1972, individual EFTA countries Market governed by the same basic rules. These rules signed free agreements with the EEC with the aim to enable goods, services, capital, and persons to aim to abolish import duties on industrial products. move freely about the EEA in an open and competitive This aim was or less achieved by 1977. environment, a concept referred to as the four freedoms. The objective of the EEA Agreement, as In the mid-1980s, the launched laid down in Article 1, is to “promote a continuous and its ambitious project for a fully integrated Internal balanced strengthening of trade and economic Market. The plan was set out in the Single European relations between the Contracting Parties… with the Act, signed in 1986. In 1984, the EFTA States and the view to creating a homogenous European Economic EC adopted a declaration on the joint establishment of Area”. a dynamic European Economic Space (EES), listing possible ways of co-operation, specifically in the field The EEA Agreement provides for equal conditions for of trade in goods. businesses across the entire Internal Market, through competition and state rules. It also contains The EFTA States acknowledged the political horizontal provisions relevant to the four freedoms, as determination of the EU to complete the Internal well as cooperation outside the four freedoms in so- Market by 1 1993 and decided to proceed with called flanking areas. The latter cover areas such as EC-EFTA relations in parallel with developments on research and technological development, information the EU side. Between 1984 and 1989, the removal of services, education, training and youth, employment, obstacles to trade was undertaken on a case-by-case enterprise and entrepreneurship, and civil protection. basis. However, it became difficult for the EFTA Co-operation is to be carried out through common States and the EC to work on the basis of a situation activities of various types, such as EEA EFTA where some areas were selected for co-operation while participation in EU programmes and agencies. others were not.

Since the establishment of the EEA Agreement in In 1989, , then President of the 1994, the EEA EFTA States have contributed European Commission, therefore proposed a new and substantial funding in order to reduce economic and more structured form of , which was to social disparities in . become the EEA Agreement. The EFTA States, at that time: , , Iceland, Liechtenstein, What does the EEA not cover? Norway, and , welcomed the idea The EEA Agreement does not cover the following EU and formal negotiations began in June 1990. The policy areas: Common and Fisheries Agreement for a European Economic Area was signed Policies (although the Agreement contains provisions on 2 1992 in and entered into force on 1 on various aspects of trade in agricultural and fish January 1994. products); a ; a Common Trade Policy; a Common Foreign and Security Policy; Justice and Switzerland voted against EEA membership in Home Affairs (even though Iceland, Norway and December 1992 and has since maintained and Liechtenstein are part of the Schengen network) and developed its relationship with the EU through the Monetary Union (EMU). bilateral agreements. Since 1 January 1995, Austria, Finland and Sweden have participated in the EEA as EU Member States. Liechtenstein became a full participant in the EEA on 1 May 1995. The EEA was expanded to include thirteen new Member States joining the EU respectively in 2004, 2007 and 2013.

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▼ Legislation and procedures legislation on the EU side. They can neither sit nor vote in the or the European The EEA Agreement is based on the primary Council (co-legislators on the EU side for most EEA- legislation ( of ) of the European Union, relevant legislation) and hence have to incorporate into and on the secondary legislation (EEA-relevant the EEA Agreement what has ultimately been decided, regulations, directives, decisions, and certain non- if not necessarily shaped, by others. binding instruments adopted by the EU institutions on an ongoing basis – also referred to as ). Hence, a large part of the EEA ▼ Institutional aspects Agreement is identical to the relevant parts governing the four freedoms as laid down in the The institutional arrangements under the EEA of 1957. Agreement are laid down in a two-pillar structure (see figure on next page) with EEA EFTA institutions The EEA Agreement is made up of 129 articles as well matching those on the EU side. Substantive decisions as 22 annexes and 49 protocols. The annexes refer to relating to the EEA Agreement and its operation are a the acquis communautaire applicable in the EEA. The joint venture and are taken by joint bodies. protocols include provisions on specific areas such as rules on the origin of goods, transition periods for the Joint bodies EEA EFTA States in certain fields, and simplified customs procedures. The EEA Council, composed of the foreign ministers of the EU and EEA EFTA States, provides political The dynamic aspects of the Agreement impetus for the development of the Agreement and guidelines for the Joint . One of the central features of the EEA Agreement is

that its common rules are continuously updated by adding new EU legislation. This aspect is essential The EEA Joint Committee is responsible for the given the large output of EU legislation on the Internal ongoing management of the EEA Agreement. It is a Market. Each month, a number of EEA-relevant pieces forum in which views are exchanged and decisions are of legislation are incorporated into the EEA taken by consensus to incorporate EU legislation in the Agreement by decisions of the EEA Joint Committee. EEA Agreement. The Joint Committee is made up of representatives of the EEA EFTA States and the EU. Decision-making All decisions by the EEA Joint Committee are taken Whenever an EEA-relevant legal act is amended or a by unanimity. new one adopted by the EU, a corresponding amendment should be made to the relevant Annex of The EEA Joint Parliamentary Committee (EEA JPC) the EEA Agreement. This is essential in maintaining comprises members of the national parliaments of the the principle of homogeneity of the EEA. Amendment EEA EFTA States and Members of the European of the EEA Agreement should ensure that the ensuing Parliament (MEPs). The Committee contributes text is as close as possible to the adopted legislation on through dialogue and debate, to a better understanding the EU side, with a view to permitting a simultaneous between the EU and the EFTA States of the fields application in the EU and in the EFTA States. The covered by the Agreement. EEA EFTA States can request for consultation on matters of concern. The EEA EFTA States can The EEA Consultative Committee comprises members negotiate adaptations to EU legislation when this is of the EFTA Consultative Committee and the called for by special circumstances and agreed on by Economic and Social Committee of the EU. The both sides. Committee works to strengthen contacts between the social partners on both sides and to cooperate in an Policy-shaping organised and regular manner to enhance awareness and provide input on the economic and social aspects The EEA EFTA States have the opportunity to of the EEA. influence the shaping of EEA-relevant legislation, i.e. proposals at the preparatory stage by the EU. This opportunity is enshrined in the EEA Agreement as a EEA EFTA bodies (EEA EFTA pillar) right for representatives of the EEA EFTA States to The Standing Committee of the EFTA States serves as participate in experts groups of the European a forum in which the EEA EFTA States consult one Commission, and to submit EEA EFTA comments on another and arrive at a common position before upcoming legislation. While the EEA EFTA States use meeting with the EU in the EEA Joint Committee. It is these opportunities to shape legislation actively, they made up of representatives of Norway, Iceland and have little influence on the final decision on the Liechtenstein and observers from Switzerland and the

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The Two-Pillar EEA Structure

*Switzerland is an observer

This figure illustrates the management of the EEA Agreement. pillar shows the EFTA states and their institutions, while the right pillar shows the EU side. The joint EEA bodies are in the middle.

EFTA Surveillance Authority. The Committee's Commission in these fields within the EU. The EFTA substructure currently consists of five Subcommittees1, Court, based in , corresponds to the Court under which there are several working groups. In of Justice of the European Union in matters relating to November 2009, the Standing Committee approved the EEA EFTA States. The Court deals with the practical merger of Subcommittee I, II, III and IV. infringement actions brought by the EFTA Surveillance Authority against an EFTA State with Two other important bodies exist under the EEA regard to the implementation, application or EFTA pillar. The EFTA Surveillance Authority, based interpretation of an EEA rule, and with the settlement in , ensures that the EEA EFTA States fulfil of disputes between two or more EFTA States. It also their obligations under the EEA Agreement. In hears appeals concerning decisions taken by the EFTA addition to general surveillance of compliance, the Surveillance Authority and gives advisory opinions to Surveillance Authority has powers in relation to courts in the EFTA States on the interpretation of EEA competition, state aid and public procurement, rule. reflecting the extended competences of the European

1Subcommittee I on the Free Movement of Goods; Subcommittee II on the Free Movement of Capital and Services and Company Law; Subcommittee III on the Free Movement of Persons; Subcommittee IV on Flanking and Horizontal Policies and Subcommittee V on Legal and Institutional Matters.

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