The European Free Trade Association(EFTA) was established by the stock-holm convention of 1959. The seven EFTA countries are Austria,Finland ,Lceland, Liechtenstein, Norway, Sweden,and Switzerland. EFTA’s objective is to bring about free trade in industrial goods and an expansion of trade in agricultural goods.
EFTA’S population is 10 percent of the European community. Its gross domestic product is about half that of Germany alone.
In October 1991 after 14 months of negotiations, the 12EC nations and the seven EFTA members agreed to set up a European Economic Area (EEA) in 1993. If the proposal is ratified by the European parliament and by all 19 countries, the EEA will be the world’s largest bloc,with 377 million consumers, almost one-third of world GNP(32 PERCENT) and 46 percent of world trade. The EEA will be a free trade area, not a customs union with common external tariffs. EFTA members will maintain border controls with the EC, denying them the benefit of the single market. Many EFTA countries see the European Economic area as a first step toward full membership in the European community.
Total inter-EFTA exports in 1990 were $29 billion as compared to exports to the European community of $130billion,$18 billion to the United States and Canada, $7 billion to Japan and $40 billion to the rest of the world.