Europe after WWII: Recovery through cooperation
After the devastation of the Second World War, Western European countries shared a strong conviction: economic cooperation and liberalisation of trade were essential for the recovery and stability of the continent.
Some countries opted for integration through a series of new treaties – the European Coal and Steel Community (ECSC), the European Economic Community (EEC) and the European Atomic Energy Community (EURATOM). These agreements created a common market, supranational institutions, a harmonised legal system and a customs union with a unified trade policy.
Others, however, sought a different path. They wanted a broad free trade area across Western Europe, without the political integration implied by the EEC.
Laying the foundations of a free trade Europe
Against this background, in 1956 the United Kingdom proposed a broad European free trade area as a complement to the EEC, where the interests of non-EEC members could be mediated. However, negotiations under the Organisation for European Economic Co-operation (OEEC) – the predecessor of the Organisation for Economic Co-operation and Development (OECD) – failed to unite all of Western Europe in one system.
In June 1959, a group of like-minded countries launched their own talks to negotiate a free trade area based on the UK’s proposal. After only five months of negotiations, the seven founding members (Austria, Denmark, Norway, Portugal, Sweden, Switzerland and the UK) reached an agreement. And so the European Free Trade Association (EFTA) was born. Its members adopted and initialled the text of the Convention on 20 November 1959 in Stockholm, with the objective of promoting “economic expansion, full employment, the rational use of resources, financial stability and higher living standards” (paragraph 2 of the press communiqué). This moment marked the dawn of an alternative vision for European integration: open markets, national independence and economic partnership, without supranational control.
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EFTA Agreement between Europe's "Outer Seven", 1959. Photo: Unknown author / HAEU-EFTA-1524_8
Press release from the meeting of ministers of the Seven at Saltsjöbaden, 20-21 July 1959
Press release from the meeting of ministers of the Seven at Saltsjöbaden, 20-21 July 1959
Press release from the meeting of ministers of the Seven at Saltsjöbaden, 20-21 July 1959
Press release from the meeting of ministers of the Seven at Saltsjöbaden, 20-21 July 1959
Agreement on the Establishment of the European Free Trade Association in December 1959. Photo: ATP Bilderdients / HAEU, EFTA-1525_4
Agreement on the Establishment of the European Free Trade Association, in December 1959. Photo: Norsk Telecrambyra's / HAEU, EFTA-1525_3 on the Establishment of the European Free Trade Association, [1959]. Photo: Norsk Telecrambyra's / HAEU, EFTA-1525_3
Press Communiqué on the establishment of EFTA, 20 November 1959, HAEU, EFTA-0499
Press Communiqué on the establishment of EFTA, 20 November 1959, HAEU, EFTA-0499
EFTA’s founding treaty: Two visions, two blocs
The Stockholm Convention was signed on 4 January 1960 and came into force on 3 May 1960, after ratification. EFTA represented a pragmatic alternative to the EEC. The Stockholm Convention did not establish supranational institutions, nor did it aim to imitate the EEC by establishing a customs union or common external tariff. Member States remained free to set their own foreign trade policies but committed to dismantling barriers between their countries.
Thus, Europe now had two trading blocs – the EEC and EFTA.
EFTA’s mission: To build a free trade area
The Stockholm Convention’s preamble made EFTA’s ambition clear:
To facilitate the early establishment of a multilateral association for the removal of trade barriers and the promotion of close economic co-operation between the Members of the Organisation for European Economic Co-operation, including the Members of the European Economic Community.
In signing the Stockholm Convention, the Member States committed to dismantling trade barriers by removing import tariffs and quantitative restrictions, prohibiting export duties and harmonising revenue and internal taxation. The Convention also established common rules on origin, competition and safeguards, alongside provisions for customs cooperation and administration. All of these commitments were codified in 44 articles.
Relations with third countries
Partnerships beyond EFTA and the first free trade agreement (1967-1979)
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