54th Annual Report of the European Free Trade Association 2014 Table of Contents Foreword 3 Annual Report of the The EFTA Council 4 European Free Trade Association Free Trade Relations 7 The EEA Agreement 16 2014 EEA Grants and Norway Grants 39 Advisory Bodies 40 Information Activities 43 The Secretariat 45 Editor: Tore Grønningsæter Appendices 47 Copy Editor: Juliet Reynolds Concept and Design by Tuuli Sauren, INSPIRIT International Communication sprl Published April 2015 Cover picture: © Egorych/iStock Editor’s note: For an overview of EFTA’s activities and institutional framework, please see the publication “This is EFTA”. Further information is also available on our website: www.efta.int. 2 ANNUAL REPORT OF THE EUROPEAN FREE TRADE ASSOCIATION 2014 Foreword The four countries forming the European Free Trade Association (EFTA) – Iceland, Liechtenstein, Norway and Switzerland – have created a global trading network that extends to over 60 countries across the globe and accounts for some 80% of the total trade of the EFTA States. The most comprehensive agreement is the Agreement on the European Economic Area (the EEA Agreement), which serves as the main instrument for trade and cooperation between the three EFTA States that are parties to that agreement – Iceland, Liechtenstein and Norway – and the Member States of the European Union (EU). Efforts launched by the EEA EFTA States in 2013 to reduce the overall time needed to incorporate acts into the EEA Agreement started to bear fruit in 2014. New internal EFTA procedures were adopted and more legal acts were incorporated into the EEA Agreement than in any year since the late 1990s. The introduction of new procedures has contributed to a significant reduction in the number of legal acts awaiting incorporation into the EEA Agreement. The Agreement on the Accession of Croatia to the EEA and the incorporation of the new generation of EU programmes for the 2014-2020 period were among the key decisions adopted during the year. Finally, negotiations on a continuation of the EEA Financial Mechanism were launched in 2014. EFTA has 25 free trade agreements (FTAs) in force with 35 countries. In 2014, EFTA Ministers signed a joint declaration on cooperation with the Philippines, setting the stage for the launch of free trade negotiations in 2015. Ministers also met with representatives of Guatemala to discuss the development of closer trade relations in view of Guatemala’s forthcoming accession to the EFTA-Central America FTA. Founded in 1960, EFTA has become a highly practical and flexible platform for promoting economic integration, and for ensuring competitive terms of trade for the EFTA States. Looking ahead, EFTA has an ambitious agenda for extending its FTA network, in terms of both geographical and substantive coverage. As always, the maintenance of a homogeneous Internal Market on the basis of the EEA Agreement will remain a priority. Kristinn F. Árnason Secretary-General 3 ANNUAL REPORT OF THE EUROPEAN FREE TRADE ASSOCIATION 2014 The EFTA Council EFTA Ministerial Meetings The EFTA Council met twice at Ministerial level in 2014: on 23 June in the Westman Islands, Iceland, and on 17 November in Geneva, Switzerland. The Council was chaired by Iceland in the first half of 2014 and by Switzerland in the second half. EFTA held its summer Ministerial meeting in the Westman Islands under the chairmanship of Iceland. From left: Norbert Frick, Ambassador and Permanent Representative, Permanent Mission of Liechtenstein in Geneva; Gunnar Bragi Sveinsson, Minister for Foreign Affairs and External Trade, Iceland (Chair); Monica Mæland, Minister of Trade and Industry, Norway; Johann N. Schneider-Ammann, Federal Councillor, Head of the Federal Department of Economic Affairs, Education and Research, Switzerland; and Kristinn F. Árnason, Secretary-General, EFTA. 4 ANNUAL REPORT OF THE EUROPEAN FREE TRADE ASSOCIATION 2014 The EFTA Ministers welcomed the positive outcome of the Ninth World Trade Organization (WTO) Ministerial Conference, held in Bali in December 2013, and called on all WTO members to continue working with flexibility and pragmatism to ensure that the momentum was maintained. At their meeting in November in Geneva, they also welcomed the announcement of a breakthrough between India and the United States (US), which paved the way for the implementation of the Trade Facilitation Agreement and the rest of the Bali Package. Ministers signed a joint declaration on cooperation (JDC) with the Philippines and met with Guatemala to discuss the development of closer trade relations between the two sides, in view of Guatemala’s forthcoming accession to the EFTA-Central America Free Trade Agreement (FTA). They also met with Ambassador Michael Punke, Deputy US Trade Representative (USTR), to pursue a trade policy dialogue with the US and exchange information on the status of negotiations between the US and the European Union (EU) on a Transatlantic Trade and Investment Partnership (TTIP). Ministers reviewed developments in EFTA’s ongoing trade negotiation processes with partners worldwide, including India, Indonesia, Malaysia and Vietnam. They discussed exploring further relations with free trade associations and countries in Sub-Saharan Africa, and stressed the importance of updating and further developing existing trade agreements. In this context they welcomed the work undertaken so far on the expansion of the FTA with Turkey. They also agreed to continue exploring options for expanding existing FTAs with other partners such as Canada and Mexico. At their June meeting in the Westman Islands, the EEA EFTA Ministers took stock of recent developments in the EEA Agreement. They noted that while considerable progress had been made in a number of areas, several challenging issues remained unresolved. They further noted that negotiations on a new Financial Mechanism for the period after 2014 had been launched and that discussions were continuing in order to reach a mutually acceptable solution. Ministers acknowledged that it was the joint responsibility of the EU and the EEA EFTA States to ensure the smooth functioning of the EEA Agreement, emphasising that urgent solutions were needed with regard to EEA EFTA participation in several EU agencies. They reiterated that a reduction in the number of EU legal acts awaiting incorporating into the EEA Agreement was a priority and welcomed the At the EFTA Ministerial meeting in November, the Ministers adoption of new EFTA Standing Committee procedures to achieve this. Lastly, Switzerland informed Ministers and the Parliamentary Committee met with Ambassador about the state and perspectives of its relations with the EU after the adoption in a referendum on 9 February Michael Punke (right), Deputy USTR and Permanent 2014 of an initiative “against mass immigration”. Representative to the WTO. Also pictured: Kathy Riklin, Christian Democratic Party, Switzerland; and Johann N. The communiqués from the 2014 Ministerial meetings can be found in the appendices to this report. Schneider-Ammann (EFTA Chair), Federal Councillor, Head of the Federal Department of Economic Affairs, Education and Research, Switzerland. 5 ANNUAL REPORT OF THE EUROPEAN FREE TRADE ASSOCIATION 2014 The EFTA Council The EFTA Council met eight times in 2014 at the level of heads of permanent delegations to EFTA in Geneva. Delegates discussed EFTA’s relations with countries outside the EU, including free trade negotiations and the management of existing FTAs. They also approved a number of technical cooperation projects and dealt with administrative and budgetary matters. 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 2014, the Council adopted an amendment to Annex Q on Air Transport. In addition, an amendment concerning basic agricultural products adopted in October 2013 entered into force on 1 April 2014. Annual Meeting of EFTA and EU Finance Ministers Switzerland chaired the EFTA Council in the second half of 2014. Ambassador Remigi Winzap (left) and Marc Wey, Deputy The annual meeting of EFTA and EU Finance Ministers took place on 14 October in Luxembourg. EU and EEA Permanent Representative of the Mission of Switzerland to EFTA EFTA Ministers adopted conclusions on the incorporation into the EEA Agreement of the EU Regulations and the WTO. establishing the European Supervisory Authorities in the area of Financial Services. The main topics discussed were supervision, regulation, sustainable growth and employment. The meeting was chaired by Mr Pier Carlo Padoan, Minister for Finance, representing the Italian Presidency of the EU Council. EFTA was represented by Mr Adrian Hasler, Prime Minister and Minister of Finance of Liechtenstein, as EFTA Chair; Mr Bjarni Benediktsson, Minister of Finance and Economic Affairs of Iceland; Ms Siv Jensen, Minister of Finance of Norway; and Ms Eveline Widmer-Schlumpf, Swiss Federal Councillor and Minister of Finance. 6 ANNUAL REPORT OF THE EUROPEAN FREE TRADE ASSOCIATION 2014 Free Trade Relations In 2014, EFTA continued its ambitious pursuit of a worldwide network of free trade agreements. Negotiations with Guatemala were finalised, paving the way for Guatemala to join the FTA between the EFTA States and the Central American States of Costa Rica and Panama, and a joint declaration on cooperation was signed with the Philippines. 2014 also saw the entry into force of the EFTA-Central America FTA and the FTA with