European Free Trade Area

At present, there are four multi-lateral free trade areas in Europe, and one former free trade area in recent history. Note that there are also a number of bilateral free trade agreements between states and between trade blocks; and that some states participate in more than one free trade area.

The European Union (EU) has always operated as more than a free trade area with its predecessor, the European Economic Community (EEC) being founded as a customs union. The EU has free trade agreements to varying levels with most other European countries.

The EU shares its single market with three EFTA members via the European Economic Area agreement, and the remaining EFTA member—Switzerland—via bilateral agreements.

The European Union Customs Union is a customs union which consists of all the member states of the European Union (including four territories outside of the EU—Akrotiri and Dhekelia, Guernsey, the Isle of Man, and Jersey), Turkey, San Marino, Monaco and Andorra which are outside of the EU. In addition to allowing for free trade between states, the customs union imposes a common external tariff on all goods entering the area.

The European Free Trade Association (EFTA) was created in 1960 by the outer seven (as a looser alternative to the then-European Communities) but most of its membership has since joined the Communities/EU leaving only four countries (Iceland, Norway, Switzerland and Liechtenstein) still party to the treaty.

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