European Free Trade Association (EFTA) is a trade organization of four European nations. It works to remove tariffs and other trade obstacles throughout the world for the benefit of its members. Norway and Switzerland have been full members of EFTA since it began operating in 1960. Iceland joined in 1970. Liechtenstein, an associate member since 1960, became a full member in 1991.
Five founding members—Austria, Denmark, Portugal, Sweden, and the United Kingdom—have left EFTA. Denmark and the United Kingdom left in 1972; Portugal, in 1985; and Austria and Sweden, in 1995. Denmark, Portugal, and the United Kingdom left to join the European Community (EC), another economic association. The EC later was incorporated into the European Union (EU). Austria and Sweden left EFTA to join the EU. Finland, another EFTA member, also left to join the EU in 1995. Finland had been an associate member of EFTA since 1961 and a full member since 1986.
EFTA achieved free trade in industrial goods among its members in 1966. Tariffs on industrial goods traded between EFTA countries and the EC were abolished by 1984.
In 1994, a treaty providing for a European Economic Area (EEA) went into effect. The EEA prohibited most trade barriers between the EU and two EFTA members—Norway and Iceland. In 1995, Liechtenstein joined the EEA. Most of EFTA members’ foreign trade is with the European Union. EFTA headquarters are in Geneva, Switzerland.
