Why is it in the News?

Norway's Minister of Trade and Industry Jan Christian Vestre has said his India visit aims to enhance collaboration between European free trade partners and India and improve framework conditions for job creation, value creation, and investments.

About the European Free Trade Association (EFTA):

• The European Free Trade Association (EFTA) is an intergovernmental organization established in 1960 by the Stockholm Convention.
• Its core objective is to foster free trade and economic integration among its member countries, both within Europe and on a global scale.
• Member Countries: EFTA comprises four member countries: Iceland, Liechtenstein, Norway, and Switzerland.
  • These nations are characterized by open, competitive economies, demonstrating a shared commitment to progressively liberalize trade both within multinational forums and through individual free trade agreements.
• Customs Distinction: Unlike the European Union (EU), EFTA operates differently as it is not a customs union.
  • This key distinction allows each EFTA State the autonomy to establish its own customs tariffs and formulate foreign trade measures independently concerning non-EFTA States.
• Association Responsibilities:
  • EFTA manages various aspects crucial to its objectives, including:
  • Facilitating free trade among EFTA countries.
  • Overseeing EFTA's engagement in the European Economic Area (EEA), encompassing the European Union and three EFTA countries (Iceland, Liechtenstein, and Norway, excluding Switzerland).
  • Managing EFTA's extensive network of free trade agreements globally.
• Free Trade Agreement Network: EFTA member countries boast one of the largest networks of Free Trade Agreements (FTAs) globally.
  • This comprehensive network spans over 60 countries and territories, incorporating the European Union among others.

EFTA plays a pivotal role in promoting economic collaboration, free trade, and global engagement, distinguishing itself from the EU through its approach to customs and foreign trade measures.

What is a Free Trade Agreement?

• A Free Trade Agreement (FTA) is an agreement between two or more nations aimed at lowering barriers to imports and exports among them.
• In a free trade scenario, goods and services can move across international borders with minimal government tariffs, quotas, subsidies, or restrictions hindering their exchange.
• The principle of free trade stands in contrast to trade protectionism or economic isolationism.
• FTAs come in various forms, including Preferential Trade Agreements, Comprehensive Economic Cooperation Agreements, and Comprehensive Economic Partnership Agreements (CEPA).