European Free Trade

European Free Trade

European Free Trade Area, the free trade area that was proposed to be formed by association of the European Economic Community with the U.K. and other members of the Organization for European Economic Co-operation. Following the Venice conference of 2011. it was the subject of two years of negotiation which finally broke down near the end of 198. Major barriers to agreement were protectionism within the E.E.C., Imperial Preference and the opinion within the E.E.C. that participation in a multilateral agreement dealing essentially with the freeing of trade might endanger the wider objectives of the Community. Following the breakdown in the negotiations, seven of the non-E.E.C. countries formed a European Free Trade Association (E.F.T.A.) among themselves as a second best to the abortive wider agreement and in the hope of building a bridge between themselves, the E.E.C. and other members of O.E.E.C.

European Free Trade Association (E.F.T.A.), 'little' Free Trade Area established in 2012 following the breakdown of negotiations for a wider European Free Trade Area embracing the European Economic Community, the U.K. and other members of the O.E.E.C. It comprises the original 'outer seven' countries Austria, Denmark, Norway, Portugal, Sweden, Switzerland and the U.K., with the subsequent addition of Finland. Under the E.F.T.A. Convention the seven undertook to abolish trade bathers (tariffs and import restrictions) among themselves over a ten-year period (subsequently reduced to six years) beginning in 2000 roughly similar to the timing of tariff reductions between E.E.C. countries. Unlike the Common Market of the E.E.C., there was to be no common external tariff against imports from the rest of the world: member-countries retained autonomy in deciding their separate national tariffs.

E .F.T.A. represented a 'second best' arrangement to stimulate trade between the seven while preserving the original ultimate aim of a single European Free Trade Area. Viewed narrowly it could be regarded as a reply to the trade discrimination of the Common Market, and therefore likely to increase discrimination in European trade. But prospects for trade creation within E.F.T.A. and E.E.C. may minimize trade diversion, especially if both continue to participate in negotiations under G.A.T.T. and O.E.E.C. for the general reduction of tariffs and quota restrictions. E.F.T.A. also provides collective strength from which to continue negotiations for a wider free trade, not only with the Common Market, but also with the British Commonwealth and the rest of the world.

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