50th Annual Report of The European Free Trade Association 2010

50TH ANNUAL REPORT 2010OF THE EUROPEAN FREETRADE ASSOCIATION

EFTA1960

YEARS 2010

2367-RAPPORT-2011-05:1897-THIS-IS-EFTA-24 28/03/11 13:35 Page 1

Annual Report of the European Free Trade Association 2010

Editor’s note:For basic information on EFTA, please see the publication “This is EFTA”. Further information is alsoavailable on our website: www.efta.int/

• Editor: Tore Grønningsæter

• Copy Editor: Juliet Reynolds

• Printed by Drifosett, BrusselsLayout by Orangemetalic

• Printed March 2011

Cover picture: The new railway link through the Alps: the Erstfeld-Amsteg section of the Gotthard Base Tunnel,Switzerland (Reuters/Arnd Wiegmann)

Further copies of this issue are available free of charge by contacting [email protected]


EUR 1.79 billion will bemade available to projectsthat contribute to social andeconomic development in 15EU Member States in Centraland Southern Europe.

The anniversary year was alsoproductive in terms of EFTA’sfree trade relations. Following the finalisation ofnegotiations with Peru and Ukraine, the EFTA Statessigned free trade agreements with these two countriesat the EFTA Ministerial meeting in June in Reykjavik.Negotiations were launched with Hong Kong, Chinaon a comprehensive FTA, and the negotiation processwith India made significant headway in the second halfof the year.

In July, negotations on a Comprehensive Indonesia-EFTA Economic Partnership Agreement werelaunched and Joint Declarations on Cooperation weresigned with Malaysia and Panama. EFTA Ministers,together with their counterparts from Russia, Belarusand Kazakhstan, launched negotiations on a broad-based FTA on the occasion of the Ministerial meetingin November in Geneva. A joint study group was alsoestablished to begin to explore the feasibility of anFTA with Vietnam.

In addition to developing a far-reaching bilateral freetrade network, the EFTA States have continued todemonstrate their full commitment to achieving arobust multilateral trading system, and have remainedstrong supporters of the World Trade Organization andconclusion of the Doha Round.

Fifty years now underpin the work of the EFTASecretariat, which has adapted constantly to serve theneeds of its Member States and partner countries.Throughout 2010, the two Deputy Secretaries-Generaland I have strived to ensure that the Secretariatcontinues to provide the full range of services andexpertise to the EFTA States. Needless to say, theseefforts will continue to be our priority for 2011.

Kåre Bryn

Secretary-General

EFTA celebrated its 50th anniversary in 2010 andentered its sixth decade in good health by makingsignificant progress in its two core areas of activity: theEuropean Economic Area and an expanding worldwidenetwork of free trade relations.

EFTA’s 50th anniversary was celebrated in variousways during the year. Notably, an Anniversary bookwas published entitled “EFTA 1960-2010: Elements of 50 Years of European History”. The book waspresented at a reception for 200 guests in Geneva on 3 May, which marked the 50th anniversary of the entryinto force of the EFTA Convention. Special eventswere also held in connection with the EFTAMinisterial meetings in Reykjavik and Geneva.

Fifteen years after its entry into force, the EEAAgreement continues to provide a solid framework forIceland, Liechtenstein and Norway’s participation inthe Internal Market of the European Union. With acombined population of over 500 million, the EEAconstitutes the world’s biggest common market.

In 2010, 346 legal acts were incorporated into the EEAAgreement. Important additions include theRegulation on Rail Passengers’ Rights and new ruleson mobile roaming charges to include SMS messagesand the transfer of data. The EEA Joint CommitteeDecisions on the Food Law Package and ServicesDirective entered into force in May.

Through the EEA Agreement, the EEA EFTA Statesare actively involved in a number of programmes andagencies playing an increasingly important role in theEU. In this respect I would like to underline the fullparticipation of Iceland, Liechtenstein and Norway inthe European Food Safety Authority and the EuropeanAgency for Safety and Health at Work. Our 2010Bulletin provides a new and updated overview ofEFTA’s participation in 18 different EU programmes.

The first meetings of the EEA EFTA Forum of Localand Regional Authorities, established in 2009 by aDecision of the EFTA Standing Committee, took placein 2010.

Through the EEA Grants and Norway Grants, the EEAEFTA States contribute to reducing social andeconomic disparities within the EEA. As a result ofnew agreements reached in 2010, a total of

FOREWORD


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TABLE OF CONTENTS

FOREWORD 3

50TH ANNIVERSARY OF EFTA 5

EFTA COUNCIL 8

EFTA Ministerial Meetings 8The EFTA Council atAmbassadorial Level 9The EFTA Convention 9Annual Meeting of EFTA and EU Finance Ministers 9

FREE TRADE RELATIONS 10

Main Developments 11Management of EFTA’s Free Trade Agreements and JointDeclarations on Cooperation 13Technical Assistance 13Relations with the WTO 13

THE EEA AGREEMENT 16

The EEA Council 16The EEA Joint Committee 16The Standing Committee of the EFTA States 16Legal and Institutional Matters 17Free Movement of Goods 17Free Movement of Capital and Services 25Free Movement of Persons 27

Flanking and Horizontal Policies 27EFTA-EU Cooperation in the Field of Statistics 30Technical Cooperation in the Field of Statistics 31

THE EEA GRANTS AND NORWAY GRANTS 33

ADVISORY BODIES 35

The Parliamentary Committees 35The Consultative Committees 36The EEA EFTA Forum 37

INFORMATION ACTIVITIES 38

ADMINISTRATION 40

APPENDICES 41

FIGURES

Fig. 1: Joint Declarations on Cooperation and Free Trade Agreements between EFTA and Non-EU Partners 10

Fig. 2: Joint Committee Meetings in 2010 13

Fig. 3: Meetings Held and EU Acts Incorporated in 2010 18

Fig. 4: Publication in the EEA Supplement 2010 39

Fig. 5: 2010 EFTA Budget 40

Fig. 6: Contributions from the EFTA States to the 2010 EFTA Budget 40


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Anniversary Seminar

In November 2009, leaders from government andacademia participated in a seminar to celebrate the 15th anniversary of the entry into force of the EuropeanEconomic Area (EEA) in 2009 and the 50th anniversaryof EFTA in 2010.

Under the theme “EFTA 1960-2010: Partners inProgress” speakers focused on the development of EFTAin the wider European context and on the implications ofEFTA and the EEA for their Member States. ProfessorsGuðmundur Jónsson, University of Iceland, HelgePharo, University of Oslo and René Schwok, Universityof Geneva, looked back at Europe in the 1950s and thepolitical discussions that led to the creation of EFTA.They also addressed the effects of participation in EFTAon its Member States’ trade and economic growth.Professor Richard T. Griffiths from the University ofLeiden reviewed the history of EFTA in a broaderEuropean context, while Dr Ulf Sverdrup from theUniversity of Oslo outlined the experiences of the EFTAStates with the EEA Agreement and its present role inEFTA’s relations with the European Union. The sessionswere complemented by subsequent panel discussions

bringing together former Ambassadors Jón BaldvinHannibalsson of Iceland, Eivinn Berg of Norway andFranz Blankart of Switzerland. The seminar wasmoderated by Ernst Walch, former Minister of ForeignAffairs of Liechtenstein.

Anniversary Book

The Anniversary book, “EFTA 1960-2010: Elementsof 50 Years of European History”, combines thepresentations made at this seminar with several newessays and articles from earlier EFTA publications thatilluminate the history and functions of EFTA. A specialcontribution to the book is a paper written in 1988 byProfessor Paul Krugman, the 2008 Nobel Laureate ineconomics, on the basis for EFTA’s participation in theEuropean Internal Market – the economic raison d’êtrefor the EEA Agreement. The book also contains anoverview of 50 years of EFTA and the Association’sfree trade policies, in addition to a rich photo gallery.

3 May 2010 Celebration,Geneva

The Anniversary book was presented at a receptionwith close to 200 participants in Geneva on 3 May, 50 years to the day that the EFTA Convention enteredinto force. This special event was attended byrepresentatives of current and former EFTA MemberStates and EFTA’s free trade partner countries around

50TH ANNIVERSARY OF EFTA

EFTA’s Secretary-General Kåre Bryn opening the anniversary event on 3 May.


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the world. It included speeches by John Clarke, Chargéd’Affaires at the Mission of the European Union,Bozkurt Aran, Ambassador of Turkey, and EinarGunnarsson, Permanent Secretary of State of theMinistry for Foreign Affairs of Iceland, on behalf ofthe EFTA Chairmanship.

Ministerial Meeting andConcert, Iceland

EFTA’s summer Ministerial meeting was held inReykjavik in June under the chairmanship of ÖssurSkarphéðinsson, Minister of Foreign Affairs ofIceland. A special section of the meeting wasdedicated to the Association’s anniversary andMinisters discussed the importance of EFTA for theircountries’ foreign trade. A special concert featuredyoung Icelandic singers and musicians, UnaSveinbjarnardóttir, Tinna Þorsteinsdóttir, SvavarKnútur Kristinsson and Retro Stefson, a seven-piecegroup hailing from different countries.

Ministerial Workshop onTrade, Geneva

On the occasion of EFTA’s winter Ministerial meetingand under the chairmanship of Doris Leuthard, then-President of the Swiss Confederation, a workshop washeld on 22 November to celebrate the 50th anniversaryof EFTA. The workshop brought together four tradeeconomists: Senior Research Fellow Anirudh Shingal,Bern; and Professors Richard Baldwin, Geneva; PeterEgger, Zürich; and Victor Norman, Oslo; to look at“The path ahead for world trade: FTAs and themultilateral trading system in 2020”. Discussionsfocused on developments in regionalism and itsrelationship with the multilateral trading system, andon the conceptual, forward-looking political issues thatwould require policymakers’ attention in the future.

The subsequent panel discussion, chaired by PresidentLeuthard, brought together Celso Amorim, Minister ofExternal Relations of Brazil; Professor JagdishBhagwati, Columbia University; Trond Giske,Minister of Trade and Industry of Norway; Ján Kubiš,Executive Secretary of the United Nations EconomicCommission for Europe; and Pascal Lamy, Director-General of the World Trade Organization. The speakerswere unanimous in highlighting the importance of arobust multilateral system of governance for trade, andsome stressed the need for multilateralism to adapt tonewly emerging issues and challenges.

Anniversary Events in PartnerCountries: Canada, Egypt,Mexico and Korea

In spring 2010, EFTA celebrated its 50th anniversarywith several of its free trade partners, namely Canada,Egypt, Mexico and Korea. Representatives from theworld of politics, business and the media participatedin seminars in the partner countries, reflecting on thehistory of EFTA and learning more about its currentactivities and future challenges. Participantsacknowledged and welcomed the positive effects ofEFTA’s close economic relations with its partners onbilateral trade and investment flows.

The academics who contributed to the book: Guðmundur Jónsson (left),University of Iceland; René Schwok, University of Geneva; Richard T. Griffiths,University of Leiden; and Ulf Sverdrup and Helge Pharo, University of Oslo.

The Icelandic group, Retro Stefson.


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Swiss Present to EFTA

The President of the Swiss Confederation, DorisLeuthard, presented a painting to EFTA on theoccasion of the Association’s 50th anniversary. Thepresentation took place at a special celebratory dinnerin Geneva on 22 November in the presence of all theEFTA Ministers, who on the following day held theirwinter EFTA Ministerial meeting under thechairmanship of Swiss Federal Councillor JohannSchneider-Ammann.

The artist, Bernard Garo, is Swiss and the painting,Blue Solfatara, is, to quote a special postcard printedfor the event, a part of his “ARIL project 2004-2014(Alexandria, Reykjavik, Istanbul, Lisbon), fourcultural cardinal cities of Europe, with Switzerlandtaken as the centrepoint”.

Commemorative Stamps

Liechtenstein and Switzerland issued commemorativestamps in 2010, the designs of which underline thedynamic role of EFTA. The Liechtenstein stamp,presented in June, shows the changes in membershipby depicting the flags of Member States past andpresent, whereas the Swiss stamp, unveiled inSeptember, highlights the integrative and unifyingfunctions of EFTA.

“Blue Solfatara” by Swiss artist Bernard Garo.


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EFTA COUNCILEFTA Ministerial Meetings

The EFTA Council met twice at Ministerial level in2010, on 24 June in Reykjavik and on 23 November inGeneva. The Council was chaired by Iceland in thefirst half of 2010 and by Switzerland in the second.

50th Anniversary

EFTA’s founding Convention entered into force on 3 May 1960, and Ministers marked its 50th anniversaryat their meeting in Iceland, agreeing that the creation ofEFTA had made an important contribution to Europeaneconomic integration. They underlined the fact thatEFTA had been one of the cornerstones of thedevelopment of its Member States as competitiveeconomies relying on access to foreign markets. Fromthe early years of economic cooperation in Europe toits present global reach in free trade relations, EFTAhad successfully opened up opportunities for itsbusiness operators.

The International EconomicSituation

During their meetings the EFTA Ministers discussedthe state of the global economy and welcomed thestrong rebound in global trade flows in 2010. Theyreiterated EFTA’s commitment to the multilateraltrading system and highlighted the role played by freetrade agreements (FTAs) in contributing to thereinforcement of liberalisation globally. In theirNovember meeting the Ministers declared their supportfor the strong commitment expressed by G20 leaders touse the window of opportunity in 2011 to bring theDoha Round to a successful and balanced conclusion.

Preferential Trade Relations

Developments in EFTA’s preferential trade relationswith partners worldwide that Ministers reviewedduring their 2010 meetings included Joint Declarations

EFTA Ministers and EFTA’s Secretary-General at the November Ministerial meeting in Geneva: Kåre Bryn (left), EFTA Secretary-General; Johann N. Schneider-Ammann, Federal Councillor and Head of the Federal Department of Economic Affairs (Switzerland); Aurelia Frick, Minister of Foreign Affairs, Justice and Cultural Affairs (Liechtenstein); Trond Giske, Minister of Trade and Industry (Norway); and Össur Skarphéðinsson, Minister of Foreign Affairs and External Trade (Iceland).


on Cooperation with Malaysia and Panama, andcontacts (both ongoing and foreseen) with numerouscountries such as Bosnia-Herzegovina, Hong KongChina, India, Indonesia, Montenegro, Vietnam andcountries in Central America.

The Ministers also welcomed a report prepared by theEFTA Working Groups on “Trade and Environment”and “Labour Standards in EFTA Free TradeAgreements”, including model provisions.

Relations with the European Union

At their June meeting in Reykjavik, the EEA EFTAMinisters discussed the general functioning of theAgreement on the European Economic Area with aspecial focus on the economic crisis, and underlinedthe need for coordinated and comprehensive action,especially at European level. Ministers emphasised theimportance of adequate participation by the nationalauthorities of the EEA EFTA States in the newfinancial supervisory structure, on an equal footingwith the EU Member States.

With regard to new initiatives within the EEA,Ministers noted the Europe 2020 Strategy andexpressed their hope that this would serve as agenerator for growth in Europe over the next decade.

The Communiqués from the Ministerial meetings canbe found in the Appendices to this report.

The EFTA Council atAmbassadorial Level

The Council met 11 times in 2010 at the level of Headsof Permanent Delegations to EFTA in Geneva.Delegates discussed EFTA’s free trade negotiationsand the management of existing agreements. They alsoapproved a number of technical cooperation projectsand dealt with administrative and budgetary matters.

The EFTA Convention

The EFTA Council is responsible for the VaduzConvention, which is updated regularly to reflectlegislative developments in the EEA Agreement andthe Swiss-EU Agreements. In 2010, the Councilestablished a Committee on Trade Facilitation,amended Annex S to the Convention on organs,committees and other bodies assisting the Council,

and amended Appendix 1 to Annex P to theConvention on Land Transport.

Annual Meeting of EFTA andEU Finance Ministers

The annual meeting of EFTA and EU Finance Ministers(the EFTA ECOFIN) took place on 17 November.Ministers discussed intelligent fiscal supervision andfinancial market regulation and supervision.Liechtenstein presented a common EFTA paper in itscapacity as EFTA Chair, as well as the Liechtensteinposition.

The EFTA ECOFIN meeting was chaired by DidierReynders, Minister of Finance, representing theBelgian Presidency of the EU Council. Ollie Rehn,Commissioner for Economic and Financial Affairs andMichel Barnier, Commissioner for the Internal Marketand Services, presented the Commission’s position onthe two issues.

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The Norwegian Minister of Finance, Sigbjørn Johnsen (left), in discussion withOlli Rehn, Commissioner for Economic and Monetary Affairs, at the EFTA ECOFIN meeting.

The Lugano Convention

The EFTA States Iceland, Norway and Switzerlandwere parties to the 1988 Lugano Convention onjurisdiction and enforcement of judgments in civil andcommercial matters. Following the enlargement of theEU, a revised convention was adopted in 2007. The2007 Lugano Convention entered into force in the EU,Denmark and Norway on 1 January 2010 and inSwitzerland on 1 January 2011. It will enter into forcein Iceland on 1 May 2011. In September 2010, EFTAparticipated as an observer at the last meeting of theStanding Committee set up under the 1988 Conventionto ensure uniform application of the Convention.


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EFTA furthered its efforts in 2010 to expand anddeepen its preferential trade relations. With the signingof two new Free Trade Agreements (FTAs) with Peruand Ukraine, the number of EFTA’s current FTAs roseto 22, covering 31 countries.

By the end of the year, EFTA’s formal engagementwith partners outside the European Union extended to50 countries at the following levels of cooperation:

• Free Trade Agreements in ForceEFTA had fully operational FTAs with 22 partnercountries: Albania, Canada, Chile, Croatia, Egypt,Israel, Jordan, Republic of Korea, Lebanon,Macedonia, Mexico, Morocco, PalestinianAuthority, Serbia, Singapore, the Southern AfricanCustoms Union (comprising Botswana, Lesotho,Namibia, South Africa and Swaziland), Tunisia and Turkey.

FREE TRADE RELATIONS

Joint Declarations on Cooperation and Free Trade Agreementsbetween EFTA and Non-EU Partners Fig. 1

Partner Joint Declaration Free Trade Agreement Signature Signature Entry into force

Albania 10 December 1992 17 December 2009 1 November 2010Algeria 12 December 2002Canada 26 January 2008 1 July 2009Chile 26 June 2003 1 December 2004Colombia 17 May 2006 25 November 2008Croatia 19 June 2000 21 June 2001 1 April 2002Egypt 8 December 1995 27 January 2007 1 August 2007Gulf Cooperation Council (GCC)[1] 23 May 2000 22 June 2009Israel 17 September 1992 1 January 1993Jordan 19 June 1997 21 June 2001 1 September 2002Korea, Republic of 15 December 2005 1 September 2006Lebanon 19 June 1997 24 June 2004 1 January 2007Macedonia 29 March 1996 19 June 2000 1 May 2002Malaysia 20 July 2010Mauritius 9 June 2009Mexico 27 November 2000 1 July 2001Southern Common Market (MERCOSUR)[2] 12 December 2000Mongolia 28 July 2007Montenegro 12 December 2000Morocco 8 December 1995 19 June 1997 1 December 1999Palestinian Authority 16 December 1996 30 November 1998 1 July 1999Panama 20 July 2010Peru 24 April 2006 24 June 2010Southern African Customs Union (SACU)[3] 26 June 2006 1 May 2008Serbia 12 December 2000 17 December 2009 1 October 2010Singapore 26 June 2002 1 January 2003Tunisia 8 December 1995 17 December 2004 1 June 2005Turkey 10 December 1991 1 April 1992Ukraine 19 June 2000 24 June 2010

[1] Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates.[2] Argentina, Brazil, Paraguay and Uruguay.[3] Botswana, Lesotho, Namibia, South Africa and Swaziland.


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• Signed Free Trade AgreementsFTAs with Peru and Ukraine were signed in Juneand July 2010. Along with the FTAs signed withColombia in 2008 and the six Member States of theGulf Cooperation Council (Bahrain, Kuwait, Oman,Qatar, Saudi Arabia and the United Arab Emirates)in 2009, these FTAs were in the process ofratification by the parties.

• Free Trade NegotiationsIn 2010, EFTA was engaged in or about tocommence negotiation processes with eight partners(Bosnia-Herzegovina; Hong Kong, China; India;Indonesia; Montenegro and Russia, Belarus andKazakhstan). Negotiations with Algeria andThailand remained on hold.

• Joint Feasibility StudiesWork on a joint feasibility study with Vietnam wasongoing.

• Joint Declarations on CooperationIn July 2010, EFTA signed Joint Declarations onCooperation (JDCs) with Malaysia and Panama.Further JDCs were operational with Mauritius,Mongolia and the MERCOSUR States (Argentina,Brazil, Paraguay and Uruguay).

Main Developments

Ukraine

A comprehensive FTA with Ukraine was signed inReykjavik during the EFTA Ministerial meeting on 24June 2010. The parties had launched negotiations inApril 2009, building on a JDC concluded in 2000 andfurther preparatory work. Swift progress was achieved,resulting in the conclusion of the process in early June2010 after five rounds of negotiations.

With a population of 46 million, Ukraine is animportant export destination for EFTA in Europe. Totalmerchandise trade between both sides has growncontinuously over recent years to reach USD 716million in 2009, with EFTA’s exports accounting forUSD 578 million. Trade in services and directinvestments between both sides also show significantgrowth potential.

The FTA with Ukraine is EFTA’s first broad-basedFTA with a European partner, providing a solid basisfor further expanding bilateral trade and investmentflows. In addition to trade in industrial goods and

fish, the FTA notably covers trade in services,investment, intellectual property rights, governmentprocurement, competition and trade facilitation.Bilateral agreements on agricultural products,concluded by the individual EFTA States andUkraine, complement the contractual framework.

PeruThe FTA signed on 24 June 2010 by EFTA and on 14July by Peru features a broad substantive coverage,including trade in goods, intellectual property rights,investment, government procurement and technicalcooperation. The parties will resume negotiations ontrade in services within a year of entry into force of theFTA, which is expected in 2011.

The FTA with Peru is EFTA’s fourth in LatinAmerica, following those concluded with Chile,Colombia and Mexico. Negotiations commenced inMarch 2007, building on a JDC signed in 2006, andextended over five rounds. In 2009, totalmerchandise trade between the two sides reachedUSD 404 million, with Peruvian exports to the EFTAmarkets valued at USD 304 million.

Russia, Belarus and KazakhstanEFTA and the Russian Federation had startedexploring the possibility of closer trade relations in2007. A joint feasibility study was undertaken in 2008,resulting in a positive assessment of the potential for abroad-based FTA between the two sides.

A new situation arose through the announcement of theestablishment of a customs union between Russia,Belarus and Kazakhstan from the beginning of 2010.On 23 November 2010, following a review of theimplications of these developments on possible freetrade negotiations, Ministers from the EFTA States and

Össur Skarphéðinsson, Minister for Foreign Affairs and External Trade of Iceland(left) and Kostyantyn Gryshchenko, Minister for Foreign Affairs of Ukraine at thesigning of the EFTA-Ukraine Free Trade Agreement.


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the three partner countries formally announced thelaunch of negotiations on an FTA.

Russia, Belarus and Kazakhstan together were EFTA’sfifth most important export destination and fourthlargest import source outside the EU in 2009. Totalmerchandise trade between the two sides amounted toUSD 6.2 billion.

Other Partners

EFTA held two further rounds of negotiations on abroad-based FTA with India in 2010, following theirlaunch in October 2008. Fresh momentum was createdtowards the end of the year, enhancing the prospectsfor a conclusion to the negotiation process in 2011.

New negotiations on a comprehensive FTA wereopened with Hong Kong, China in January 2010.Through four full rounds and intense intersessionalwork, significant progress was achieved and severalparts of the FTA were finalised. Negotiations on theremaining issues are expected to be completed in thefirst half of 2011.

In July 2010, the EFTA Chair at Ministerial level,Swiss President Doris Leuthard, and IndonesianPresident Yudhoyono, announced the launch ofnegotiations on a Comprehensive Indonesia-EFTAEconomic Partnership Agreement. Preparations forsuch negotiations have since been carried out and afirst round is due to take place in early 2011.

Also in the South-East Asia region, EFTA andVietnam established a Joint Study Group in May2010, mandated to assess the scope for closer traderelations and the feasibility of an FTA between thetwo sides. The Group held two constructive meetingsand plans to present its findings in the first quarter of2011. EFTA signed a JDC with Malaysia in July2010, with further discussions on closer traderelations expected to follow in 2011. EFTA Ministersreiterated at their November 2010 meeting theirwillingness to resume negotiations with Thailandwhen conditions permit.

Back in Europe, in addition to the signing of an FTAwith Ukraine and the process with Russia, Belarus andKazakhstan, preparations were started in view ofopening negotiations with Bosnia-Herzegovina andMontenegro. The FTAs with Serbia and Albania,signed in December 2009, entered into force on 1October and 1 November 2010 respectively, in relationto Liechtenstein and Switzerland. Iceland and Norwaywill join as soon as domestic ratification procedureshave been completed.

The signing of the EFTA-Malaysia Joint Declaration on Cooperation: MalaysianAmbassador Hiswani Harun (left) and Councillor Mohd. Arif bin Abdul Hamid.

Elvira Nabiullina, Minister of Economic Development and Trade of the RussianFederation.


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In Latin America, further to the signing of an FTA withPeru, a Joint Declaration on Cooperation was signedwith Panama in July 2010. Exploratory talks are set tobe held in the first half of 2011 with Costa Rica, ElSalvador, Guatemala, Honduras, Nicaragua andPanama, with the objective of assessing the possibilityof closer trade relations with the broader CentralAmerican region.

In Northern Africa, negotiations with Algeria remainedsuspended during the reporting year. EFTA’s readinessto resume this process was confirmed by Ministers inNovember 2010.

Trade and SustainableDevelopment

In June 2010, an internal EFTA working groupsubmitted model provisions aimed at better reflectingthe relevance of environmental and labour standardsfor trade and economic development in EFTA’s FTAs.EFTA Ministers welcomed these model provisions,which have since been introduced into EFTA’snegotiation processes.

Management of EFTA’s FreeTrade Agreements and JointDeclarations on Cooperation

In 2010, the EFTA States held Joint Committeemeetings with six free trade partners (Canada,Republic of Korea, Mexico, Morocco, PalestinianAuthority and Singapore). On these occasions, EFTAand its partners reviewed the functioning of therespective FTAs. They also assessed the need foradjustments and extensions of commitments in lightof recent developments, notably regardingpreferential arrangements with third countries.

As a result, several decisions were taken to updateexisting FTAs, such as on the further liberalisation oftrade in precious metals and vehicles with Korea, afree trade partner since 2005. Experts also worked onpossible future amendments to existing FTAs withother partners such as Chile and the Southern AfricanCustoms Union.

Technical Assistance

Within the framework of EFTA’s technical assistancepolicy (see box), notable activities in 2010 included thefollowing:

• Seminar in Morocco on rules of origin;• Seminar in Serbia on how to export to the EFTA

States;• Workshop in Vietnam on preferential trade

relations;• Workshop in Korea on customs cooperation;• Support for a publication in Egypt on the FTA with

EFTA; and• Scholarships at the World Trade Institute in Bern

for trade officials from Lebanon and Lesotho.

Relations with the WTO

Under the World Trade Organization’s transparencymechanism for bilateral and regional tradeagreements (see box), EFTA submitted notificationsregarding the conclusion of negotiations withAlbania, the Gulf Cooperation Council, Peru, Serbiaand Ukraine, as well as the opening of negotiationswith Hong Kong, China. EFTA also notified severaldecisions adopted by Joint Committees underexisting FTAs. The WTO’s Committee on RegionalTrade Agreements examined the EFTA-SACU FTAin March 2010 and the EFTA-Canada FTA inSeptember 2010.

Joint Committee Meetings in 2010 Fig. 2

Free Trade Partner Venue and Date of MeetingJoint EFTA-Korea Committee (2nd) Geneva, 21 January 2010

Joint EFTA-Mexico Committee (5th) Mexico, 7 May 2010

Joint EFTA-Singapore Committee (3rd) Singapore, 6 July 2010

Joint EFTA-Palestinian Authority Committee (3rd) Geneva, 15 September 2010

Joint EFTA-Morocco Committee (5th) Rabat, 5 October 2010

Joint EFTA-Canada Committee (1st) Geneva, 17 November 2010


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WTO’s Monitoring of Free Trade AgreementsMost-favoured-nation (MFN) treatment is a key principleunderlying the multilateral trading system. In practice,MFN treatment means that a lower customs duty offeredby one member of the World Trade Organization (WTO)to another country must be extended to all other WTOmembers. A country may, however, enter into a free tradeagreement or customs union granting more favourableterms to the FTA partner than to the other WTO membersif certain conditions are observed, ensuring that the FTAcomplements the WTO system (notably Article XXIV ofthe General Agreement on Tariffs and Trade, and ArticleV of the General Agreement on Trade in Services).

At the time of writing, a total of 286 FTAs (orbilateral/regional trade agreements) had been notified to the WTO and were in force. A revised transparencymechanism for these agreements was established by the WTO General Council in 2006. This mechanism providesfor the early announcement and notification to the WTO of any agreement, as well as for consideration by WTOmembers of such agreements on the basis of a “Factual Presentation” prepared by the WTO Secretariat. Inaddition, the WTO should receive notification with regard to any changes affecting the implementation or theoperation of an FTA.

The EFTA Member States are committed to the rules and implementation of this mechanism, in line with theoverall priority that they give to the multilateral trading system. Since 2006, and alongside numerous notifications,six FTAs concluded by EFTA have been considered by the WTO Committee on Regional Trade Agreements(CRTA): EFTA-Canada, EFTA-Chile, EFTA-Egypt, EFTA-Korea, EFTA-SACU and EFTA-Tunisia.

EFTA’s Technical AssistanceEFTA’s technical assistance activities cover a range of projects and programmes funded by the Association. Themain objective is to support prospective partners in preparing for free trade relations with EFTA and to assistexisting partners in the implementation and promotion of the FTAs. These programmes and projects are primarilydirected at developing countries and economies in transition.

EFTA arranges training, seminars, workshops and study visits adapted to the particular needs of the partnercountries. Areas in which EFTA provides assistance include trade facilitation and trade promotion, customs andorigin matters, technical barriers to trade, sanitary and phytosanitary measures, intellectual property rights,government procurement, competition, services and statistics. EFTA also participates in EU technical assistanceprogrammes and projects aimed at third countries, especially on customs matters, standardisation and statistics.

EFTA’s technical assistance activities are organised by the EFTA Secretariat. Experts from EFTA Member Statesand partner countries participate in the projects. Individual EFTA States also have their own technical assistanceprogrammes and initiatives.

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THE EEA AGREEMENT

The EEA Council

The EEA Council was chaired by the EU in the firsthalf of 2010 and by EFTA in the second half of the year.The EEA Council met on 10 May and 22 November toreview the ongoing work in EEA cooperation and tonote the progress reports from the EEA JointCommittee. The Ministers confirmed the positiveoverall functioning and development of the EEAAgreement and appreciated the fact that new acts werebeing incorporated quickly into the Agreement. Theyalso discussed the current financial crisis and itsimplications for the EEA, including regulation of thefinancial system; the EEA Financial Mechanisms;

decision making and shaping; and energy and climatechange. In addition, the EEA Council held orientationdebates on the Europe 2020 Growth Strategy and itsimplications for the EEA, and on the European EnergyMarket. The conclusions from these meetings can befound in the appendices to this report.

The EEA Joint Committee

The Joint Committee met eight times in 2010 andadopted 139 decisions incorporating 346 legal acts.

Among the more significant decisions adopted by theJoint Committee were the Food Law Package, theBlock Exemption for Vertical Agreements, the BlockExemption for Motor Vehicles, the Decision on RailPassengers’ Rights and Obligations, and the ModifiedEnergy Star Regulation, which concerns the EnergyStar Programme, a voluntary energy efficiencylabelling programme for office supplies.

Issues discussed by the Joint Committee included theincorporation into the EEA Agreement of the EuropeanAviation Safety Agency (EASA) Regulation, theAudiovisual Media Services Directive (AVMS) andthe Renewables Directive.

The Joint Committee also incorporated the EU’sInteroperability Solutions for European PublicAdministrations (ISA) programme into the EEAAgreement.

Over the year, the European Commission provided theJoint Committee with briefings on Europe 2020, theDigital Agenda, the Monti Report on the relaunch ofthe Single Market, the Telecoms Package, theCommission’s legislative proposals for stronger EUeconomic governance, the Youth on the Moveinitiative and the Single Market Act.

The Standing Committee ofthe EFTA States

The Standing Committee was chaired by Liechtensteinin the first half of 2010 and by Iceland in the secondhalf of the year. The agendas and conclusions of theStanding Committee meetings are available on the

The Agreement on the European Economic Area (EEA) brings together the 27 EUMembers and three of the EFTA countries - Iceland, Liechtenstein and Norway -in a single internal market.

The EEA Council, 10 May 2010. © Council of the European Union


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EFTA website. On 22 November, the EFTA StandingCommittee held a joint meeting at Ministerial level inBrussels with the Committee of Members ofParliaments of the EFTA States and the ConsultativeCommittee, to discuss developments in the EEA.

Legal and InstitutionalMatters

Subcommittee V met four times in 2010. TheSubcommittee devoted considerable efforts to updatingits notes on the two-pillar structure of the EEAAgreement and its overview of market authorisationprocedures. The Subcommittee also adopted a notecontaining an overview of intellectual property rightsand a revised note on third-country provisionscontained in the EEA Agreement.

Other issues addressed by Subcommittee V in 2010included the latest EU developments with regard tocriminal law sanctions in Internal Market legislationand the imposition of fines in the EFTA pillar. Inparticular the Subcommittee discussed theincorporation into the EEA Agreement of Regulation(EC) No 216/2008, which sets out common rules in thefield of civil aviation and establishes EASA.

Finally, the ad hoc Working Group on Public Access toEFTA Documents, which was set up underSubcommittee V, continued its work.

Free Movement of Goods

A substantial part of EU legislation concerns the freemovement of goods, a principle that is appliedthroughout the Single Market. Today, about 75% oftrade in the Single Market is in goods but this does notimply that all products can circulate freely. They mustconform to requirements set for the protection oflegitimate interests, such as health, safety and theenvironment. Additionally, in order to ensure a fair andefficient market, a wide range of legislative measureshave been established in the fields of competition, stateaid and public procurement.

Subcommittee I prepares for the integration oflegislation that relates to all aspects of the freemovement of goods – competition, state aid, publicprocurement, intellectual property rights and energymatters – into the EEA Agreement. Subcommittee I isassisted by 14 working groups and 28 expert groups.The EEA EFTA States and the Secretariat started areview process of these groups in 2010. The revisedstructure, designed to further improve the efficiency ofthe EEA integration process, is expected to beimplemented during the first half of 2011.

Under the EFTA Council, two committees deal withissues related to goods, the Committee on TechnicalBarriers to Trade (TBT) and the Committee of Originand Customs Experts. In 2010, the TBT Committeeworked on the review of the standardisation system inEurope, on key European Accreditation challenges andon changes made to parts of the EFTA VaduzConvention. In addition, the TBT Committee discussedthe issue of a possible fragmentation of the Single

Meeting of the Standing Committee of the EFTA States on 9 December 2010: Bergdís Ellertsdóttir (left), Deputy Secretary-General of EFTA; Kåre Bryn, Secretary-General of EFTA; Stefán Haukur Jóhannesson, Ambassador of Iceland to the EU; and Nikulas Hannigan , Deputy Head of Mission, Icelandic Mission to the EU.


Numbers of meetings Numbers of acts

in 2010 incorporated in 2010

The Joint Committee 8 346

The Standing Committee 8 346

SUBCOMMITTEE I 7 236

Working Groups

Competition Policy - 6

Customs Matters 4 -

Efficient Trade Procedures - -

Energy Matters 6 1

Feedingstuffs - 33

Fisheries - -

Intellectual Property Rights 1 -

Plant Health - 6

Processed Agricultural Products 1 -

Product Liability - -

Public Procurement - 1

State Aid - -

Veterinary Matters 2 93

Technical Barriers to Trade (TBT) 4 6

Expert Groups under TBT

Agricultural and Forestry Tractors - 4

Appliances Burning Liquid or Gaseous Fuels - -

ATEX (equipment for use in explosive atmospheres) - -

Cableway Installations - -

Chemicals - 43

Construction - -

Cosmetics - 8

Electrical Equipment - -

Explosives - 2

Fertilisers - 1

Foodstuff - 24

Good Laboratory Practice - -

Machinery - -

Marine Equipment - 1

Maximum Residue Levels (MRLs) - -

Measuring Instruments - -

Medical Devices - -

Medicinal Products - 2

Motor Vehicles - 3

Organic Production - -

Personal Protective Equipment - -

Pressure Equipment - -

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Meetings Held and EU Acts Incorporated in 2010 Fig. 3


Numbers of meetings Number of acts

in 2010 incorporated in 2010

Product Safety and Market Surveillance 2 -

Recreational Crafts - -

Telecommunications Equipment - -

Textiles - 1

Wine and Spirit Drinks - -

Other - 1

SUBCOMMITTEE II 7 69

Working Groups

Ad hoc Working Group on Services (mandate not renewed) - 2

Company Law - 14

Electronic Communication, Audiovisual Services and Information Society 6 -

Data Protection Expert Group - -

Financial Services 4 7

Postals services - -

Transport 4 46

SUBCOMMITTEE III 7 -

Working Groups

Free Movement of Persons, Employment and Social Policy 2 -

Recognition of Professional Qualifications 2 -

Social Security 4 -

SUBCOMMITTEE IV 7 41

Working Groups

Budgetary Matters 3 -

Civil Protection 2 -

Consumer Affairs 2 2

Cultural Affairs 1 -

Education, Training and Youth 2 3

EFTA Consumers' Consultative Committee - -

Enterprise Policy 2 -

Environment 5 21

Gender Equality, Anti-Discrimination and Family Policy 1 -

Heads of National Statistical Institutes 1 7

Health and Safety at Work and Labour Law 1 6

Public Health 3 -

Research and Development 3 -

Subcommittees II and IV - 2*

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*Acts concerning the EU programmes Marco Polo and ISA.


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Market for services arising from certification andstandardisation at national level. The CustomsCommittee dealt with requests for funding of joint EU-EFTA quality infrastructure projects geared towardsthird countries, and with negotiations related to themodernisation of the Pan-Euro-Mediterraneanpreferential rules of origin concept.

Veterinary, Food and AgriculturalIssuesThe veterinary and food legislation in the EEAAgreement applies only to Iceland and Norway. Since2007, Liechtenstein has been subject to the Swiss-EUAgricultural Agreement pertaining to legislation inthese areas.

Veterinary issues

The Food Law Package, which includes key legislationon general food law, hygiene and control matters andanimal by-products, as well as an extension of certainveterinary legislation to Iceland, entered into force inthe EEA on 1 May 2010. This means that general foodlegislation in Iceland and Norway is now in line withEU law. Iceland, however, has a transitional perioduntil 1 November 2011 to transpose legislation in areasthat were not previously applicable to Iceland.

The EEA Joint Committee incorporated 93 acts in theveterinary area into the EEA Agreement in 2010. Theseincluded a large number of acts that had been on hold

until the entry into force of the Food Law Package.

Among the legal acts incorporated in 2010 wereseveral amendments to hygiene and control legislationand animal by-products legislation. Several decisionsrelated to animal diseases were incorporated, as well asupdates to legislation concerning transmissiblespongiform encephalopathy (TSE).

Animal feed

The Regulation laying down the methods ofsampling and analysis for the official control of feedwas incorporated into the EEA Agreement in 2010.Changes were also made to the maximum levels of certain substances regulated by the Directive on undesirable substances in animal feed.Approximately 30 legal acts regarding theauthorisation of feed additives were incorporatedinto the EEA Agreement.

Food

The Food Law Package ensured the full participationof the EEA EFTA States in the European Food SafetyAuthority (EFSA) including the possibility ofemployment of EEA EFTA nationals.

Several acts related to maximum levels ofcontaminants and pesticide residues in food wereincorporated into the EEA Agreement in 2010.Legislation concerning food contact materials and foodadditives were also among the acts incorporated.

CE Marking Makes Europe’s Market Yours!We often see the CE marking on the products we buy, but what does it reallymean? In 2010, under the slogan “CE marking makes Europe’s marketyours!” the European Commission and EFTA launched an informationcampaign on the CE marking. The CE marking signals that a product is incompliance with all relevant EEA legislation, making it eligible to bemarketed and sold throughout the EEA. By affixing it to a product, amanufacturer is declaring sole responsibility for having ensured that theproduct complies with all relevant legal requirements, in particular those thatguarantee health, safety and environmental protection. Legal and economic

repercussions of non-conformity abuses are so great that they will deter the vast majority of legitimate businessesfrom infringing these laws. This campaign is directed primarily at economic operators to raise their awareness andunderstanding of the CE marking.

The communication campaign consists of, among other initiatives, 30 CE marking educational events andseminars for economic operators, professional associations, consumer associations and journalists. The EEAEFTA and EU Member States are involved in organising a national CE marking information event in each country.In the EEA EFTA countries, these events will take place in 2011.


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The EEA EFTA States continued to discuss the NovelFoods Regulation and Regulations on geneticallymodified food and feed and the traceability andlabelling of genetically modified organisms (GMOs) in2010. These Regulations are not yet incorporated intothe EEA Agreement.

Preparation continued in 2010 for the incorporationinto the EEA Agreement of the new legal frameworkon organic production.

Trade in agricultural products

In 2010, Norway and the European Commissionconcluded their negotiations on the liberalisation oftrade in basic agricultural products under Article 19 ofthe EEA Agreement. The agreement is expected toenter into force at the beginning of 2011.

In September 2010, Iceland, Norway and the EuropeanCommission carried out their annual review of trade inprocessed agricultural products, in accordance withArticle 2(2) of Protocol 3 to the EEA Agreement. Theparties exchanged information on developments intheir respective agricultural policies, and on tradestatistics. They also discussed the principles ofProtocol 3 and concluded that the Protocol wasfunctioning well.

Technical Barriers to Trade

EFTA deals with the removal of technical barriers totrade (TBT) in two forums: the EFTA Committee onTBT, which reports to the EFTA Council (includingSwitzerland) and the Working Group on TBT, whichcoordinates the assessment of EEA relevance andacceptability of new EU legislation to the three EEA

EFTA Member States. Switzerland is an observer inthis Working Group.

A comprehensive revision of Annex I to the EFTAConvention on Mutual Recognition in relation toConformity Assessment entered into force on 1 September 2010. For the new Protocol of the EFTA-Turkey FTA on Mutual Recognition of ConformityAssessment of Products, signed in December 2009,two out of five ratifications were still outstanding inlate 2010.

A new EU technical infrastructure project, cofinancedby the EFTA countries, was approved by the EFTACouncil in December 2010 and is scheduled to start inMay 2011. This EUR 2.5 million regional projectinvolves Turkey and the Western Balkans, and isexpected to last just over two years.

Motor vehicles

Three technical acts on motor vehicles wereincorporated into the EEA Agreement in 2010. TheFramework Directive regarding approvals of motorvehicles and trailers is still being discussed by theEFTA Member States and awaits incorporation into theEEA Agreement.

Medicinal products

In September 2010, representatives of the EFTA Statesattended the inaugural meeting of a new process oncorporate responsibility in the pharmaceutical industry,focusing inter alia on access to medicines in Europewith regard to price and reimbursement matters. Theissue of suboptimal supply of medicinal products insmall markets – a relevant topic for the EFTA States –will be dealt with as part of that process.

EFSA's new headquarters in Parma, Italy (Illustration: Studio Valle).


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The long-pending 2004 Pharmaceutical Package,incorporated into the EEA Agreement in May 2009,entered into force in Iceland and Norway in 2009 andin Liechtenstein on 1 December 2010. The Packageupdates the rules on the authorisation and supervisionof medicinal products.

The EFTA Secretariat further monitored developmentsin 2010 relating to the 2008 Pharmaceutical Package,namely the proposed directive on falsified medicinalproducts, a proposal for a directive and regulation oninformation to patients, and a proposal for a directiveand regulation on pharmacovigilance. The newlegislation on pharmacovigilance was agreed in the EU in December 2010, and will apply from July 2012.

Chemicals

Following the introduction of the REACHRegulation in 2008, the EFTA Secretariat has, inclose cooperation with the EFTA States and theCommission, worked to ensure that the EEA EFTAStates’ obligations are fulfilled. In total, 43 actsconcerning chemicals were incorporated into theEEA Agreement in 2010.

Mutual Recognition Agreements

Mutual Recognition Agreements (MRAs) facilitatemarket access by reducing the costs and time associatedwith obtaining product certifications. Protocol 12 of theEEA Agreement ensures the smooth functioning andhomogeneity of the EEA market with regard to MRAs.In that respect, discussions with Canada were reopenedin late 2010 in order to finalise a long-pending revisionof the EEA EFTA-Canada MRA.

Market surveillance and consumer product safety

The EFTA States are fully committed to the enhancedapplication of market surveillance under the terms ofthe New Legislative Framework for the Marketing ofProducts. EFTA is represented in the Commission’sproject group on the development of guidelines forcustoms controls in the area of product safety. TheEFTA States have also participated in meetingsconducted by the Senior Officials Group forStandardisation and Conformity Assessment policy(SOGS) and the SOGS Market Surveillance Group.

The EFTA States participate in the work of PROSAFE,Europe’s product safety enforcement forum, an

informal network of market surveillance enforcementauthorities. PROSAFE’s Secretariat is located in theEFTA Secretariat’s building in Brussels.

European StandardisationThe EFTA States and the European Commission givefinancial support to the European standardisationorganisations (ESOs): CEN, the European Committeefor Standardization; CENELEC, the EuropeanCommittee for Electrotechnical Standardization; andETSI, European Telecommunications StandardsInstitute. Like the Commission, EFTA has the formalstatus of Counsellor to CEN and ETSI, and is entitledto participate in the Administrative Boards of theseorganisations, as well as the General Assemblies of thethree ESOs.

In 2010, EFTA dealt with a total of 23 mandates fornew standardisation activities, covering a wide rangeof sectors, including consumer product safety and thecharging of electrical vehicles. Annual operating grantswere signed with the three ESOs to contribute to theoperational costs of their secretariats. EFTA alsosigned 20 standardisation action grant agreements withthe ESOs in 2010.

EFTA continued its financial support in 2010 toANEC, the European association for thecoordination of consumer representation instandardisation, and to ECOS, the EuropeanEnvironmental Citizens Organisation forStandardisation, which represents consumers andenvironmental interests in standardisation. In June2010, EFTA financed a seminar on standardisation insupport of environmental policies, organised jointlyby ECOS and EFTA. The seminar was held in theEFTA Secretariat in Brussels.

EFTA continued to provide financial support toEOTA, the European Organisation for TechnicalApprovals, relating to the construction sector. The EEA EFTA States also provide financial supportto the European Office of Crafts, Trades and Smalland Medium-sized Enterprises for Standardisation,which promotes the interests of SMEs instandardisation.

European AccreditationIn 2010, EFTA signed its first Framework PartnershipAgreement with the European Co-operation forAccreditation (EA) and supported EA financially, alsofor the first time.


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Energy

One act was incorporated into the EEA Agreement inthe field of energy in 2010, the Regulation on aCommunity energy-efficiency labelling programmefor office equipment.

The EEA EFTA States followed carefully the work onthe Energy Efficiency Package, which consists of aRegulation on the labelling of tyres with regard to fuelefficiency and two Directives, on the energyperformance of buildings and energy labelling. Thetwo Directives were adopted in May 2010 and the EEAEFTA States are currently assessing the possibleincorporation of the Package into the EEA Agreement.

The Third Package for the Internal Energy Marketenters into force in March 2011 and the EEA EFTAMember States aim to incorporate it into the EEAAgreement as soon as possible.

The Directive on the promotion of the use of energyfrom renewable sources (RES Directive) is ofparticular interest to the EEA EFTA States with theirhigh share of renewables. They aim to incorporate itinto the EEA Agreement as soon as possible.

The EEA EFTA side has prepared an exchange ofletters with the US Environmental Protection Agency,concerning the Energy Star, a voluntary labellingsystem that aims to identify certain standards regardingthe energy efficiency of office equipment.

Competition Policy

A Directive on competition in the markets intelecommunications terminal equipment and aRegulation applying rules of competition to transport

by rail, road and inland waterway were incorporatedinto the EEA Agreement in 2010, as well as four blockexemptions on liner shipping companies, the insurancesector, motor vehicles and vertical agreements.Preparations for the incorporation of two blockexemptions in the fields of specialisation agreementsand research and development agreements started inDecember 2010.

A review of the acts related to the former EuropeanCoal and Steel Community (ECSC) that have beenincorporated into the EEA Agreement was put on holdpending an assessment of the bilateral agreementsbetween the EFTA States and the former ECSC.

State Aid

The EEA EFTA States participated in multilateralstate aid meetings in 2010 concerning the temporaryframework for state aid measures to support accessto finance in the current financial and economiccrisis.

Public Procurement

One act in the field of public procurement wasincorporated into the EEA Agreement in 2010: theRegulation on the revision of the CommonProcurement Vocabulary (CPV).

The EEA EFTA States assessed the recently publishedDirective on Defence and Sensitive SecurityProcurement and moved closer to the incorporationinto the EEA Agreement of the Remedies Directive,which improves the national review procedures thatbusinesses can use when they consider that a publicauthority has awarded a contract unfairly.

The EEA EFTA States participated in the meetings of theCommission’s Advisory Committee for PublicContracts, which discussed, among others, the followingtopics in 2010: Anti-crisis measures in the field of publicprocurement (state of play, experiences in 2009 and2010, and potential phasing-out); transposition of theRemedies Directive and of the Defence and SecurityProcurement Directive; new developments in greenpublic procurement; a possible initiative on concessions;increased use of e-procurement and participation ofSMEs in European public procurement.

Intellectual Property

In December 2009, the EU Council adoptedconclusions on an enhanced patent system in Europe.

Energy Star: labelling energy-efficient office equipment.


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Stimulating Discussions at the Copyright Seminar

More than 100 European stakeholders met at the EFTA building in Brussels on 30 September 2010 to discusscopyright issues related to web access to digitalised culture heritage works. Aiming to shed light on the ExtendedCollected Agreement, the so-called Nordic model, the seminar was initiated and organised jointly by EFTA, theInstitute for Private Law and the Norwegian Research Center for Computers and Law, University of Oslo.

A panel of six top copyright experts kicked off the debate on how the Nordic model can contribute to makingcultural heritage available in light of recent discussions on transborder licensing and the awaited initiative fromthe Commission on orphan works.

Among the issues analysed were the relations between the Nordic model and other international copyrightinstruments. Examples were presented from Denmark and Norway on how the model functions in practice, suchas the Bonanza-streaming web archive of the Danish Broadcasting Corporation and the Digital Bookshelf of theNorwegian National Library. Finally, the Commission gave an introduction to the complex options that they arecurrently assessing.

Three of the seminar’s panel members: Jukka Liedes, Director of theDivision for Cultural Policy, Ministry of Education and Culture of Finland(left); Tilman Lueder, Head of the Copyright Unit at the EuropeanCommission; and Haijo Ruijsenaars, Head of Intellectual Property at theEuropean Broadcasting Union (EBU).

The proposed regulation has two key aims: to bringabout a single EU Patent and to establish a Europeanand EU Patents Court. Both issues are followed closelyby the EEA EFTA States.

The expected proposal from the Commission onorphan works is of particular interest. Orphan worksare works that are still in copyright but whose ownerscannot be identified or located. In order to facilitatemass digitisation, a solution for the clearing of rights toorphan works is also needed. As a contribution to thedebate on orphan works, EFTA, together with theInstitute for Private Law and Norwegian ResearchCenter for Computers and Law, University of Oslo,organised a seminar focusing in particular on the so-called “Extended Collective Agreement”.

The progress of various EU initiatives againstcounterfeiting was monitored, particularly the EUAction Plan against Counterfeiting and Anti-Counterfeiting Trade Agreement. The EFTASecretariat and Member States are exploring options toestablish cooperation with the European Observatoryon Counterfeiting and Piracy.

Customs Matters, Safety andSecurity Matters and TradeFacilitationCustoms

In 2010, the Committee of Origin and CustomsExperts (COCE) worked on the drafting of a singleRegional Convention on Preferential Rules of Originfor the Pan-Euro-Mediterranean area in order toreplace the current network of origin protocols. Theimplementation of this Convention will also extend thePan-Euro-Mediterranean cumulation zone to theWestern Balkan countries, which is of high importanceto the EFTA States and their traders. The members ofthe Convention are currently working on its nationalaccession procedures. The Committee also addressedother customs matters related to free trade agreementswith third country partners and open technical customsissues among EFTA countries, such as the adaption ofAnnexes A, C and D of the Vaduz Convention andProtocol 4 of the EEA Agreement to the latest versionof the Harmonised System.


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Safety and security matters

The Commission’s new safety and security systemwould imply the introduction of pre-arrival/pre-departure declarations when trading with the EU. Withthe conclusion of bilateral agreements by Norway andSwitzerland with the EU, these two countries wereintegrated into EU’s safety and security system withthe consequence that traders do not have to submitsuch declarations in trade with the EU. The Norwegianbilateral agreement was implemented in Protocol 10 ofthe EEA Agreement. Discussions between the EFTASecretariat and the Commission are being conducted to find a way of setting up a joint working groupresponsible for the implementation and monitoring ofthe safety and security measures addressed under thebilateral agreement.

Free Movement of Capital andServices

Subcommittee II on the Free Movement of Capital andServices under the EFTA Standing Committeecoordinates matters of financial services, transport,information and telecommunications services,audiovisual services, postal services, company law anddata protection. Five working groups report toSubcommittee II.

Financial Services

The significant number of legislative acts launched bythe European Commission in response to the financialcrisis were monitored closely, in particular proposalsfor a new European architecture of financialsupervision. In addition to the European Systemic RiskBoard, responsible for macro-prudential supervision,three new supervisory bodies at micro-prudential levelwere established by the EU:

• The European Banking Authority, based in London;

• The European Insurance and OccupationalPensions Authority, based in Frankfurt; and

• The European Securities and Markets Authority,based in Paris.

The EEA EFTA States have followed the adoptionprocess of the new supervisory system with greatinterest and aim to ensure adequate EEA EFTAparticipation in these bodies.

Company LawNumerous acts were considered in 2010, including the proposal amending the Fourth Company LawDirective, which aims to alleviate the regulatoryburden on micro-entities, the 1st and 11th Company LawDirectives, which relate to publication and translationobligations of certain types of companies, and theproposal for a European Private Company (“SPE”).

Electronic Communications,Audiovisual Services andInformation Society

The EEA EFTA States met and discussed extensivelytheir participation in the Body of European Regulatorsin Electronic Communications (BEREC), which wasestablished in 2010 and consists of representatives ofthe national regulatory authorities.

Experts from the EEA EFTA States participated indiscussions on the harmonisation of spectrum atEuropean level, a crucial issue to achieve the ambitioustargets for Europe 2020 as set out in the EU’s DigitalAgenda.

Trade FacilitationTrade facilitation seeks to improve procedures and controls in merchandise trade across national borders byreducing associated cost burdens and maximising efficiency while safeguarding legitimate regulatory objectives.Recent developments, such as the challenge of bringing trade facilitation in line with growing safety and securityconcerns, as well as rising concerns about the use/misuse of trade procedures as trade policy tools, haveheightened the political profile of trade facilitation. The status of the trade facilitation body within EFTA changedin 2010 from a group to a committee, with a view to streamlining the structure of the various bodies working underthe EFTA Council. By mandating this body, the Council took account of the growing attention given to tradefacilitation and aimed to revitalise the trade facilitation work in EFTA.


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Data protection

EFTA followed the Commission’s work on thePlatform on Electronic Data Retention for theInvestigation, Detection and Prosecution of SeriousCrime. The Platform was set up in 2008, inter alia toassist the Commission in its evaluation of the DataRetention Directive and its impact on economicoperators and consumers. The EEA EFTA States areconsidering the possible incorporation of the Directiveinto the EEA Agreement.

Audiovisual services

Discussions continued on the incorporation of theAudiovisual Media Services Directive into the EEAAgreement.

The Media Mundus Programme, which entered intoforce on 1 January 2011, is a broad internationalcooperation programme for the audiovisual industry tostrengthen cultural and commercial relations betweenEurope’s film industry and film makers from thirdcountries. Steps were taken by the EEA EFTA States toincorporate the Programme into the EEA Agreement.

Postal ServicesDiscussions continued on the incorporation of theThird Postal Directive into the EEA Agreement.

TransportA significant number of proposals for new EU acts wereconsidered and discussed in depth with the Commissionduring the year. An important development was theincorporation of the Regulation on Rail Passengers’Rights and Obligations into the EEA Agreement.

EFTA monitored EU preparations regarding the WhitePaper on the Future of Transport, which is due to bepublished in 2011 and will identify the main trends andchallenges that will shape the future of transport policyover the coming decades.

Other important issues on the transport agenda weretwo proposals regarding passenger rights in the bus,coach and maritime sectors and a Directive and ActionPlan on Intelligent Transport Systems in Europe.

In the rail sector, high priority was given to a proposalconcerning a European rail network for competitivefreight and a proposal establishing a Single EuropeanRailway Market.

EFTA monitored proposals on cross-borderenforcement in the field of road safety and the revisionof the Directive on the charging of heavy goodsvehicles for the use of certain infrastructure.

New rules on bus and rail passengers’ rights are in force.

Net Neutrality and Next Generation Access NetworksIn March 2010, the EFTA Secretariat organised a seminar on network neutrality. Theseminar, attended by 100 participants from industry and government organisations,presented the Norwegian approach to net neutrality and heard the views of the EuropeanParliament and Commission representatives. The seminar aimed at showcasing practicesin the EFTA Member States relevant to the implementation of the Telecom Package andthe Digital Agenda. It also included a presentation on the Swiss model for Next GenerationAccess Networks.

Willy Jensen, Director General of the Norwegian Post and Telecommunications Authority, presented the Norwegian soft law approachon network neutrality at the EFTA seminar.


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The incorporation of the Maritime Safety LegislationPackage into the EEA Agreement continued to be highon the agenda. This Package, consisting of eight acts,aims to protect the oceans and coasts from maritimedisasters by improving the performance of alloperators in this sector.

The main items on the agenda in the field of airtransport were the Second Single European SkyPackage, legislation linked to the European SafetyAgency and the Second Aviation Security Package.

Free Movement of Persons

Subcommittee III on the Free Movement of Personscoordinates matters related to all aspects of themovement of persons, including the recognition ofprofessional qualifications and social security. Threeworking groups report to Subcommittee III.

Free Movement of Persons,Employment and Social PolicyIn the area of free movement, the EEA EFTA Statesdiscussed national legislation implementing theDirective consolidating the rights of EEA nationalsand their family members to move and reside freelywithin the EEA. They also monitored developments onthe EU side related to proposals for third countrynationals legally residing in the EU. The EFTA sidecontinued to participate in the meetings of the EUTechnical and Advisory Committees on the freemovement of workers.

With regard to employment, the EEA EFTA Stateswere invited to the informal meetings of the EUEmployment Committee. They also participated inEURES, a cooperation network between the EuropeanCommission and the public employment services ofthe EEA Member States that provides information andassistance to both workers and employers.

As regards social policy, the EEA EFTA Statescontinued their informal dialogue with the EU’s SocialProtection Committee and participated actively in theEuropean Year for Combating Poverty and SocialExclusion 2010.

The EEA EFTA States took part in the employment andsocial protection sections of the PROGRESSProgramme, which supports the implementation of theEuropean Employment Strategy and underpins the

EU’s coordination activities in the fight againstpoverty and social exclusion.

Attention was given to important initiatives under thenew Europe 2020 Strategy such as the Agenda for NewSkills and Jobs, Youth on the Move and the Platformagainst Poverty.

Social SecurityThe main task in the area of social security was tomonitor EU developments regarding the entry intoforce of the new social security coordination rules.The EEA EFTA States also submitted a draft EEAJoint Committee Decision (JCD) to the EUincorporating the new rules and completely replacingAnnex VI to the EEA Agreement on the coordinationof social security schemes.

The EFTA side participated in the meetings of theAdministrative Commission for the coordination ofsocial security systems and its working party, as wellas those of the Technical Commission on DataProcessing and Audit Board.

The EEA EFTA States are part of the MISSOCnetwork, a mutual information system on socialprotection in the European Union, which forms part ofthe PROGRESS Programme.

Recognition of ProfessionalQualificationsThe implementation of the Directive on theRecognition of Professional Qualifications wasdiscussed in 2010, as well as revisions of the directivecurrently being planned by the EU to better facilitatethe free movement of professionals within the InternalMarket.

The EEA EFTA States attended the meetings of theCommittee for the recognition of professionalqualifications and meetings of the Group ofCoordinators for the recognition of professionalqualifications, including its subgroup on architecture.

Flanking and HorizontalPolicies

Subcommittee IV on Flanking and Horizontal Policiesunder the EFTA Standing Committee coordinatesmatters related to all aspects of the horizontal


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provisions of the EEA Agreement, as well ascooperation outside the four freedoms. Fourteenworking groups report to Subcommittee IV.

Research and Development

EFTA followed carefully the implementation of theSeventh Framework Programme on Research (FP7).EU’s Europe 2020 Strategy and its initiatives in thearea of research and innovation were also monitoredclosely, as well as the EU’s ongoing work on newEuropean Research Area initiatives.

Preparations continued on the EFTA side for theincorporation of the Council Regulation on theCommunity legal framework for a EuropeanResearch Infrastructure Consortium (ERIC). Thisproposal is designed to facilitate the jointestablishment and operation of research facilitiesbetween several Member States and countriesassociated with the Community R&D Programme.The ERIC Regulation provides for the possibleparticipation of all four EFTA States.

EnvironmentThe EEA Joint Committee adopted several decisions inthe field of environment in 2010, more specificallyregarding eco-labels and the Directive establishing anInfrastructure for Spatial Information in the EuropeanCommunity (INSPIRE).

One of the Working Group’s priorities in 2010 wasthe finalisation of discussions with the Commissionto incorporate into the EEA Agreement the Directivethat includes aviation in the EU Emissions TradingScheme (EU ETS). The EEA EFTA States haveparticipated in this scheme since 2007. The EUdecided to include aviation in the EU ETS.Therefore, emissions from all domestic andinternational flights that arrive at or depart from an

EU airport will be covered by the EU ETS. Thissystem will apply as of 2012.

Another related issue that the Working Group started towork on in 2010 and discussed with the Commissionwas the Directive on the revision of the EU ETS. Thesecond trading period of this scheme will end in 2012.

Other initiatives that were followed carefully in2010, included a proposal for a revised directive onintegrated pollution prevention and control, aproposal for a regulation on the possibility forMember States to restrict or prohibit the cultivationof GMOs in their territory, and a proposal on waste.Several outstanding issues were discussed, includingthe Directive on the Marine Framework Directiveand the Flood Directive.

Topics discussed with the Commission includedclimate change, eco-innovation and the EnvironmentalTechnologies Action Plan, the Flood Directive, theUrban Waste Water Treatment Directive and the EU’snew approach to GMO cultivation.

Education, Training and YouthThe EEA EFTA States’ current priority in the areas ofeducation, training and youth is their participation inthe Lifelong Learning Programme (2007-2013) and theYouth in Action Programme (2007-2013).

The EEA EFTA States followed the development of theEuropean Qualification Framework, a translation toolfor comparing and transferring qualifications across theEEA. They also considered incorporating the followingrecommendations into the EEA Agreement:

• The establishment of a European Quality AssuranceReference Framework for vocational education andtraining;

The EFTA Working Group on Gender Equality, Anti-Discrimination and Family Policy met with Ms Dana Trama-Zada, Member of Cabinet Reding, on 29 April 2010. The EuropeanCommission’s DG Justice took over the Gender Equality and Anti-Discrimination portfolio from DG Employment at the beginning of the year, and Ms Trama-Zada presentedthe high priorities of her Commissioner in these areas to the Group. From left: Kåre Petter Sørlien, Counsellor at the Mission of Norway to the EU; Dana Trama-Zada, Memberof Cabinet Reding; Guðrún Sigurjónsdóttir, Counsellor at the Mission of Iceland to the EU; and Anne Camilla Hilton, EFTA Secretariat.


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• The establishment of the European Credit Systemfor vocational education and training; and

• The mobility of young volunteers across Europe.

Another key issue was EEA EFTA participation in theRights of the Child initiative. Contacts were establishedwith the High Level Group on Education and TrainingPolicies in the EU, the development of an EU Strategyfor Youth was followed and an EEA EFTA Commentwas drafted on the Commission Green Paper promotingthe learning mobility of young people.

Gender Equality, Anti-Discrimination and Family PolicyThe EEA EFTA States followed the so-calledReconciliation Package and prepared for theincorporation into the EEA Agreement of theDirective on the application of the principle of equaltreatment between men and women engaged in anactivity in a self-employed capacity. Another keyfocus was the proposal for a directive on anti-discrimination and the new EU strategy for equalitybetween women and men (2010-2015). The EEAEFTA States continued their participation in thegender equality strand of the PROGRESSProgramme and in the Daphne III Programme onCommunity action to prevent violence againstchildren, young people and women, and to protectvictims and groups at risk (2007-2013).

Health and Safety at Work andLabour Law EEA EFTA experts participated for the first time inmeetings of the Governing Board of the EuropeanAgency for Safety and Health at Work, the so-calledBilbao Agency. EU discussions on a revision to theWorking Time Directive were followed carefully, aswell as the debate on the Posting of Workers Directive.The Working Group on Health and Safety at Work andLabour Law and the EFTA Consultative Committeeheld a joint meeting in March 2010 on both issues, aswell as on transnational company agreements.Preparations for the incorporation into the EEAAgreement of the Temporary Agency Work Directivewere also ongoing.

Consumer AffairsThe EEA EFTA States followed the revision of theconsumer acquis, in particular the proposal for a

directive on consumer rights, which aims to establish anupdated and more uniform set of rules on consumerrights when purchasing goods and services. The EEAEFTA States favour a minimal harmonisation approach,as stated in their Comment of September 2010.

One of the priorities was to ensure the inclusion ofEEA EFTA data in the upcoming editions of the annualConsumer Markets Scoreboard.

The EFTA side tracked progress on consumer collectiveredress and the revision of the Package TravelDirective. The EEA EFTA States continued theirparticipation in the EU’s Consumer Policy Network.

Enterprise PolicyThe main issues in the area of enterprise policyfollowed by the EFTA side in 2010 were the SMEPolicy, the Competitiveness and InnovationProgramme, Your Europe and EU Better Regulation.Your Europe provides practical information on therights and opportunities of individuals and businessesin the Internal Market. The Better Regulation initiativeaims to improve and simplify new and existinglegislation in the EU.

EFTA monitored the development of SOLVIT, anonline network for solving problems caused by themisapplication of Internal Market law. Experts alsofollowed work on the Internal Market informationsystem, which provides a multilingual database tosupport implementation of Internal Market legislation.

Civil ProtectionThe EEA EFTA States participated in twoprogrammes in the field of civil protection: theCommunity Mechanism for Civil Protection and theCivil Protection Financial Instrument (2007-2013).Experts followed the revision of the legalinstruments in this area, as well as the merging of theEU Civil Protection and Humanitarian Assistancecrisis operating centres.

The EFTA side worked on the package concerningEuropean critical infrastructure, including the EUProgramme on prevention, preparedness andconsequence management of terrorism. Particularattention was given to the Directive on CriticalInfrastructure Protection with a view to finalising anEEA EFTA position on its possible incorporation intothe EEA Agreement.


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Cultural AffairsThe EEA EFTA States participated in theCommission’s consultation on the upcoming EUCulture Programme and submitted an EEA EFTAComment underlining:

• The role of culture as a catalyst for creativity,growth and jobs;

• International cultural cooperation; and • The promotion of digital cultural heritage.

The Lisbon Treaty gave the EU new competences inthe field of sport. In view of a possible EU SportProgramme, the EEA EFTA States considered theincorporation of sport into the EEA Agreement.

Public Health

In 2010, EFTA followed the proposal for a directive onthe application of patients’ rights in cross-borderhealthcare. The proposed directive mainly concerns thereimbursement for cross-border treatment, the qualityand safety of health care and cooperation betweennational health systems.

Particular attention was given to preparedness withregard to influenza A, H1N1; the proposal for adirective on organ donations and transplants;developments at EU level with regard to a possiblerevision of the Tobacco Products Directive; thechallenges facing Europe’s health workforce; andhealth inequalities.

In June 2010, the EEA EFTA States submitted an EEAEFTA Comment regarding the EU’s Europe 2020Strategy, emphasising the lack of health policymeasures within this initiative.

Budgetary Matters

The Working Group on Budgetary Matters monitors andcoordinates the preparation of the annual EEA EFTAbudget, which covers the EEA EFTA countries’contribution to the EU budget and allows for EEA EFTAparticipation in EU programmes, actions and agencies.

Of particular interest in 2010 were the budgetaryimplications of potential EEA EFTA participation inseveral new EU agencies, and the changes to the EUbudgetary procedures through the implementation of theLisbon Treaty. The EEA EFTA commitment to EUoperational costs in 2010 was EUR 266 million, anincrease of EUR 38 million compared to EUR 228million in 2009. The actual EEA EFTA payments in2010 were EUR 228 million, representing an increase ofEUR 11 million compared to EUR 217 million in 2009.

In addition to operational costs, the EEA EFTA Statesalso contribute to the administrative costs of theEuropean Commission. An important part of thiscontribution is the secondment of national experts. In2010, 32 EEA EFTA national experts were seconded tothe various Directorates within the EuropeanCommission dealing with EEA relevant EUprogrammes and activities.

EFTA-EU Cooperation inStatistics

The EFTA Statistical Office (ESO) was created in thecontext of the EEA Agreement to liaise betweenEurostat and the EFTA NSIs.

Heads of EFTA National StatisticalInstitutes

In 2010, the Working Group of the Heads of EFTANational Statistical Institutes (EFTA NSIs) discussedin particular:

• The development of the 2010 EEA AnnualStatistical Programme based on an assessment ofthe EEA relevance of the EU Annual StatisticalProgramme;

• The classification of EFTA States in the newRegulation on migration and internationalprotection statistics;

• The retention of Iceland under EFTA States inEurostat publications and databases;


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• New procedures for written consultations and theapproval of draft JCDs; and

• The reorganisation of Eurostat, the StatisticalOffice of the European Union.

Integration of EFTA Statistics intothe European Statistical System (ESS)

The basic legal act on Community statistics, the so-called Statistical Law of 1997, was replaced in 2009 by a revised, modernised and extended Act on EuropeanStatistics. The new Regulation was incorporated intoAnnex XXI and Protocol 30 of the EEA Agreement on 5 December 2009 and was adopted by the EU-Switzerland Joint Committee on 1 October 2010.

In addition to their core activities, ESO and the EFTANSIs ensured EFTA’s presence in the ESS in 2010 by:

• Monitoring the inclusion of EFTA data in Eurostat’sdatabases and publications;

• Renewing the Memorandum of Understandingbetween the EFTA Secretariat and Eurostat for theperiod 2011 to 2013 to ensure EFTA’s activeinvolvement in European statistical cooperationprogrammes with third countries; and

• Renewing the exchange of letters regarding EFTA’scontribution to the running and development of theEuropean Statistical Training Programme (ESTP)for the period 2011 to 2014.

Production and Dissemination of EFTA Statistics

Protocol 30 of the EEA Agreement and the Switzerland-EU Bilateral Agreement provide for statisticalinformation from all EFTA States to be transmitted toEurostat for storage, processing and dissemination. ESOcontinues to strive for the regular inclusion of EFTA datain Eurostat databases and publications. The tangibleresult of this joint initiative between ESO, the EFTANSIs and Eurostat is that inclusion of EFTA data inEurostat databases and publications is increasing, despitethere still remaining some room for improvement.

EFTA Participation in EurostatWorking Groups and Committees

Eurostat organised around 130 meetings in 2010 toprepare and implement new legislation, exchange anddevelop methodologies and follow up on data

collection. The EFTA Member States participatedactively in the relevant meetings on an equal footingwith colleagues from the EU Member States.

Technical Cooperation in theField of Statistics

EFTA cooperates closely with Eurostat on technicalcooperation in the field of statistics. This cooperationis based on an MoU that has the general objective ofensuring close cooperation between the EFTA Statesand Eurostat in a number of programmes fortechnical cooperation.

EFTA’s involvement gives priority to countries thathave concluded JDCs or FTAs with EFTA. Support isgranted mainly to countries covered by the EuropeanNeighbourhood Policy (ENP East and South), to theWestern Balkans and to Turkey, but can also includeEFTA free trade and prospective partners in otherregions of the world.

Technical Cooperation Activitiesand Projects

The main technical cooperation activities and projectsin the field of statistics in 2010 were:

• The continuation of the global assessment of TACIS(Technical Assistance to the Commonwealth ofIndependent States) countries’ national statisticalsystems project (see box on page 32);

• A training course for experts from the StateStatistics Committee and Customs Office ofUkraine on external trade statistics;

• Training courses for experts from the WesternBalkan countries on data analysis and datamodeling; and on the use of administrative registersin the production of statistics;

• A seminar on the ESS and its Code of Practice; and

• The funding of experts’ participation in internationaland regional events in the field of statistics.


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Global Assessments in the Field of Statistics

Together with Eurostat and the United Nations Economic Commission for Europe (UNECE) the EFTA StatisticalOffice conducts so-called Adapted Global Assessments (AGAs) of national statistical systems. AGAs are carriedout in Eastern Europe, Caucasus and Central Asia (EECCA) countries; Mongolia; Turkey and the WesternBalkans. They aim to:

• Assess the institutional framework of national statistical systems and their technical and organisationalcapacity to produce and disseminate official statistics in all relevant areas;

• Assess the compliance level of national statistical systems with international statistical requirements, andidentify the areas where the adoption of European standards is a relevant objective; and

• Prepare recommendations regarding the prospective fields of cooperation in future technical assistanceprogrammes of international organisations and other cooperation partners.

An AGA consists of a self assessment conducted by the country under review in preparation for the AGAmissions, followed by a peer review mission of a team of experts to consolidate the information and provide anin-depth perspective on the relevant components. The second mission includes discussions with the country’sstatistical institute on the assessors’ draft report in order to resolve any outstanding items and clarify remainingissues. The assessment is then concluded with the publication of an AGA report approved by all parties involved.

EFTA support was granted through the funding of assessors from EFTA countries in the AGAs of Armenia in 2009and Azerbaijan in 2010, and will be granted in 2011 in the Kyrgyz Republic and Ukraine. EFTA was also heavilyinvolved in the organisation of the “Strategic Management Seminar on Global Assessment”, which representedthe launch event for the AGAs.

EFTA Seconded National Experts at Eurostat

At the end of 2010, four experts from Norway and oneexpert from Switzerland were seconded to Eurostatwithin the framework of the EEA Agreement andSwitzerland-EU Bilateral Agreement respectively. TwoNorwegian experts were seconded to Eurostat as acontribution in kind within the framework of EFTA-EUtechnical cooperation to ensure continuity of support andEFTA visibility in the overall programming andmanagement of EFTA-EU activity. One Swiss expert leftEurostat in 2010.

European Statistical TrainingProgramme

An exchange of letters between the EFTA Secretariat andEurostat stipulates that the EFTA Secretariat finances atleast two ESTP courses per year in return for EFTAstatisticians having the right to participate in all courses.

In 2010, the EFTA Secretariat financed two of the closeto 30 ESTP courses: one organised by Statistics Norwayon the use of business registers in the production ofstatistics, and another by the Swiss Federal StatisticalOffice on advanced methods of survey sampling.


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Between 2009 and 2014, more long-term and strategiccooperation is being established at programme level.

2010: A Pivotal Year

2010 was a peak year for implementing and finalisingprojects under the EEA Grants and Norway Grants2004-09. In December, nine out of ten projects werestill in implementation, with the result that the majorityof projects will be completed in time for the 30 Aprildeadline.

Sector Review 2010Reducing Greenhouse GasEmissions

Findings from an independent review in 2010assessing the contribution of the EEA Grants andNorway Grants in reducing greenhouse emissionsshowed that emissions will be 173 000 tonnes less peryear as a result of the projects supported. This islargely due to the upgrading of poorly insulated public

In 2010, over 1 000 development projects financed byIceland, Liechtenstein and Norway were inimplementation across Central and Southern Europe.Important steps were also taken to set up a new periodof EEA Grants and Norway Grants to contribute to thefurther integration of the EEA.

What are the EEA Grants andNorway Grants?

Since the EEA Agreement entered into force, the EEAEFTA States have contributed towards reducing socialand economic disparities in the EEA. From 1994 to2003, this funding was reserved for Greece, Ireland,Northern Ireland, Portugal and Spain.

With the enlargement of the EU and EEA in 2004,focus turned to the ten new Member States – and from2007 also to Bulgaria and Romania – while Greece,Portugal and Spain continued to receive funding. From2004 to 2009, EUR 1.307 billion was allocated to the15 beneficiary states, while EUR 1.789 billion hasbeen set aside for 2009 to 2014. The EEA Grants arefunded jointly by Iceland, Liechtenstein and Norway,while the Norway Grants are funded by Norway alone.

The Financial Mechanism Office (FMO) of the EFTASecretariat in Brussels administers the grant schemeson behalf of Iceland, Liechtenstein and Norway.

Reducing Disparities andStrengthening Cooperation: A Dual Objective

The EEA Grants and Norway Grants aim to reducedisparities in Europe and strengthen cooperationbetween the donor and beneficiary states. Of the nearly1 250 projects awarded support between 2004 and2009, more than one in five have been implemented incooperation with entities in Iceland, Liechtenstein orNorway. This is most prevalent in the areas ofacademic research and environmental protection.

EEA GRANTSNORWAY GRANTS

Energy efficiency. Photo: Sidsel Bleken, Norwegian Ministry of Foreign Affairs.


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Preparing the Ground for theEEA Grants and NorwayGrants 2009-14

Significant progress was made in 2010 in setting up thenew funding schemes. In 2009, it was agreed thatIceland, Liechtenstein and Norway would contributeEUR 1.79 billion in the period 2009 to 2014. Theformal agreements were signed by the donor states andthe EU in July 2010, and by the end of the yearnegotiations on national priorities had been initiatedwith all 15 beneficiary states.

Annual tranches of EUR 197.7 million will be madeavailable to the 12 newest EU Member States as wellas to Greece, Portugal and Spain through the EEAGrants. Norway will provide an additional annualcontribution of EUR 160 million to the 12 newest EUMember States.

Priority Sectors for the NewFunding Period

EEA Grants• Environmental protection and management• Climate change and renewable energy• Civil society• Human and social development• Protecting cultural heritage• Research in the above sectors

Norway Grants• Carbon capture and storage• Green industry innovation• Promotion of decent work and tripartite dialogue• Research and scholarship• Human and social development• Justice and home affairs

buildings. Hundreds of hospitals and school buildingsare being upgraded to decrease their energyconsumption and limit carbon emissions and pollution.The review found that the projects are cost-efficientand strongly aligned with national environmentalpriorities in the beneficiary states. In total, 164 projectsamounting to EUR 115 million in support arecontributing to a reduction in greenhouse gasemissions. The majority of projects are focused onimproving the energy efficiency of poorly insulatedpublic buildings through renovation and theintroduction of renewable energy sources.

Vital Support to Civil Society

A second independent evaluation published in 2010found that the EEA Grants and Norway Grants’ Non-Governmental Organisation (NGO) funds constituted awell-managed, effective, significant and visiblecontribution to the ongoing development of the NGOsector in Central and Southern Europe. These fundshave demonstrated innovation, addressed inequalitiesand targeted the needs of local communities. Theyhave also helped to strengthen the capacity oforganisations in advocacy work, increase volunteerwork, build coalitions and change attitudes.

Between 2004 and 2009, Iceland, Liechtenstein andNorway established 19 NGO funds in 12 beneficiarystates, supporting them with EUR 85 million. Of themore than 1 900 NGO projects financed by thesefunds, half targeted democracy, human rights, anti-discrimination or the inclusion of disadvantagedgroups. Other key areas included environmentalgrassroots initiatives, health and childcare, and culturalheritage.

Civil Society - Photo: Civil Society Development Foundation (NROS).


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The ParliamentaryCommittees

The Committee of Members of Parliament of the EFTACountries/Committee of Members of Parliament of theEFTA States (CMP/MPS) held four meetings in 2010 andfocused their work on topics such as the latestdevelopments in EFTA third country relations; sustainabledevelopment and free trade agreements; developments inthe Internal Market; the Doha Development Agenda; andcurrent issues pertinent to the EEA.

Committee Work

The CMP/MPS meet with the EFTA Ministers twicea year, at the summer Ministerial meeting and theinformal Ministerial meeting in late autumn. At the2010 joint meetings, which took place in June inReykjavik and in November in Geneva, theParliamentarians received updates from theMinisterial Chair on the main developments in EFTAthird country relations.

The Committee members inquired about specificissues with regard to the EEA, and in November theMPS met with the EFTA Standing Committee atMinisterial level in Brussels to discuss developmentsin the EEA. These joint meetings also include theEFTA Consultative Committee and constitute anincreasingly important dialogue between the EFTACouncil and EFTA Standing Committee at Ministeriallevel on the one hand, and the Members of Parliamentof the EFTA countries on the other.

In addition to its regular meetings, a CMP delegationvisited Albania and Serbia in October with the aim ofraising awareness of the FTAs that EFTA had recentlyconcluded with both countries, strengthening traderelations and exchanging thoughts on the EU and EEA.In Tirana the delegation met with the AlbanianParliament’s Economics Committee and ForeignAffairs Committee, and had a meeting with the ForeignMinister. In Belgrade the delegation metrepresentatives from three committees in the SerbianParliament, as well as meeting the Deputy PrimeMinister and high-level officials from the Ministry ofFinance and Ministry of Trade.

The Chair of the CMP/MPS in 2010 was Mr Árni ÞórSigurðsson (Iceland) and the Vice-Chair was Mr SveinRoald Hansen (Norway).

EEA Joint Parliamentary Committee

The EEA Joint Parliamentary Committee (EEA JPC)met twice in 2010, in March in Vaduz and inNovember in Strasbourg. As with previous meetings,the EEA JPC engaged in dialogue with the EEACouncil, the EEA Joint Committee and the EFTASurveillance Authority (ESA) on the functioning of theEEA, as well as on progress regarding prior resolutionsof the EEA JPC. The EEA JPC discussed and adoptedresolutions on the functioning of the EEA Agreementin 2009; the EU’s Common Fisheries Policy and theEEA; the EEA and regional cooperation; Europe 2020:Innovation and the EEA; and the European Year forCombating Poverty and Social Exclusion. In addition,the Committee discussed a working paper on trade in

ADVISORY BODIES

Representatives from the EU institutions and the EEA-EFTA States at the EEA Joint Parliamentary Committee meeting in Strasbourg, November 2010.


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seal products. As has become customary, theCommittee forwarded its resolutions to the EEACouncil, European Commission and relevantParliamentary Committees.

The President of the EEA JPC in 2010 was Mr Pat theCope Gallagher (MEP, Ireland). Mr Árni ÞórSigurðsson was Vice-President.

The Consultative Committees

In 2010, the EFTA Consultative Committee (EFTACC) held three internal meetings and focused, amongothers, on the response to the economic and financialcrisis in financial supervision; the latest developmentswith regard to SMEs; and Europe 2020, the EU’sgrowth strategy for the next decade. The Committeealso worked on the initial draft Single Market Act andinternational trade developments. With regard to thelatter, specific emphasis was placed on EFTA’s thirdcountry policy and the relationships between trade andlabour and trade and environment. The Committeeprepared working/discussion papers and invitedspeakers from the International Labour Organization,World Trade Organization, academia, and theEuropean Economic and Social Committee, to sharetheir experiences on these issues.

Committee Work

In addition to its internal meetings, the Committee metwith the Standing Committee of the EFTA States inMarch, the EFTA Ministers in June and November, andthe EFTA Parliamentary Committee in June andNovember. In the meeting with the EFTAParliamentarians and EFTA Ministers, the focus was onthe latest developments in EFTA third country relations,including an exchange of views on the possible inclusionof a chapter on sustainable development in future EFTAfree trade agreements. Concerning the EEA, theCommittee met for a second time with the EFTAStanding Committee at Ministerial level in November inBrussels. It also invited the President of ESA to give abriefing in June on ESA’s most recent activities. TheCommittee continues to emphasise strongly theimportance of holding such joint meetings, whichcontribute to enhancing dialogue with the relevant EFTAauthorities at political, parliamentary and diplomaticlevel in the four EFTA countries.

The EFTA CC continued its cooperation with therelevant EFTA authorities at a joint meeting in Marchwith the EFTA Working Group on Health and Safety atWork and Labour Law. The key focus was employeeinvolvement in times of crisis and restructuring, and anexchange of views took place on other relevant issuessuch as the posting of workers, temporary agency workand the Bilbao Agency on Health and Safety at Work.

Throughout the year, the EFTA CC also dedicated timeto the issue of enlargement, in particular the situationin Croatia. Building on its experience as an activeobserver in the EU-Croatia Joint ConsultativeCommittee, the EFTA CC organised a two-daymeeting in May in Zagreb with its Croatiancounterparts, focusing on social dialogue, tripartiterelations and accession talks in Croatia.

EEA Consultative Committee

At its meeting in May in Vaduz, Liechtenstein, theEEA Consultative Committee (EEA CC) held anexchange of views with relevant speakers onfinancial reform in Liechtenstein, Iceland’s EUapplication and EU-Swiss relations. The EEA CCalso engaged in a dialogue with representatives ofthe EEA Joint Committee on the latest EEAdevelopments. In addition, the EEA CC discussedand adopted resolutions on “Europe 2020 and theEEA” and “Implications for the EEA of EU post-crisis financial reform”.

Chair of the EFTA Council, Johann N. Schneider-Ammann, and Chair of the EFTA Consultative Committee, Josef Beck.


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Osmosis

Cooperation between social partners in the EEA wasfurther reinforced in 2010 through the Osmosisprocedure, which allows representatives of the EFTACC to participate in the work of the EuropeanEconomic and Social Committee (EESC) and viceversa. Cooperation in 2010 included EFTAparticipation in the EESC Joint ConsultativeCommittee meetings with Croatia and Turkey; theEESC Lisbon Strategy Observatory (now with focuson Europe 2020); and the EESC Single MarketObservatory.

The Co-chairs of the EEA CC in 2010 were, for theEFTA CC Guðlaugur Stefánsson (Iceland) until Apriland Josef Beck (Liechtenstein) until November, andfor the EESC Marja-Liisa Peltola (Finland) untilNovember and Meelis Joost (Estonia) from November.

The EEA EFTA Forum

The EEA EFTA Forum of elected representativesfrom local and regional authorities (the Forum) wasestablished by the Standing Committee of the EFTAStates in 2009 as an informal body to involveelected representatives from local authorities andregions in EEA matters. The Forum has 12members, six from Iceland and six from Norway.Liechtenstein has decided not to take part in themeetings for the time being.

The Forum held its first meeting in Reykjavik on 22June to elect its chair and vice-chair. At the secondmeeting in Brussels from 25 to 26 November, theForum adopted its first opinion on waste managementrelated to bio-waste and a revision of the Directive onthe Waste Electrical and Electronic Equipment. TheForum also established formal contacts with the EU’sCommittee of the Regions.

The EEA EFTA Forum with Gerhard Stahl, Secretary-General of the EU Committee of the Regions.


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One of EFTA’s responsibilities is to inform itsstakeholders and the general public about its activitiesin an open and transparent manner. This is donethrough a website, seminars and various publications.The website contains a link to EFTA’s electronicarchive, where members of the public can access ororder EFTA documents. In addition, presentations aregiven to visitors to the Secretariat. In Brussels alone,approximately 50 groups (a total of 750 people) visitedEFTA in 2010, and during the year EFTA’s 50th anniversary was commemorated through variousspecial events (see pages 5-7).

Website

EFTA’s website was relaunched in February 2010following its migration to a new content managementsystem. The site contains news and generalinformation on EFTA’s work and had around 180 000visits in 2010.

Seminars

EFTA held numerous seminars and workshops in 2010,including the following:

• Special anniversary seminars on EFTA’s global andbilateral trade and investment relations were held inEFTA free trade partner countries, namely Canada,Egypt, Mexico and Korea.

• EFTA’s biannual two-day EEA seminar, whichprovides a thorough overview of the EEA, had aparticular focus in 2010 on issues such as bilateraltrade agreements and the Single Market towards2020. The Secretariat welcomed over 200professionals to these seminars in 2010.

• In March, the EFTA Secretariat organised a seminaron Net Neutrality and Next Generation AccessNetworks. The seminar, which brought together100 practitioners and policymakers from the EUand EFTA Member States, was aimed atshowcasing practices in the EFTA Member Statesrelevant to the implementation of the TelecomPackage and Digital Agenda.

• In June, the EFTA Statistical Office organised acourse on the European Statistical System forstatisticians involved in the production of officialstatistics in Turkey.

• In September, more than 100 Europeanstakeholders met in the EFTA Secretariat inBrussels to discuss copyright issues related to webaccess to digitalised culture heritage works.

• In October, EFTA held a seminar for customs andorigin experts in Morocco, organised jointly withthe Moroccan Ministry of External Trade.

• In December, an Export Promotion seminar wasarranged in Belgrade explaining how to benefitfrom the EFTA-Serbia Free Trade Agreement.

Publications

The Anniversary book “EFTA 1960 – 2010: Elementsof 50 years of European history” was presented in Mayin Geneva. It contains contributions from a seminarheld in Geneva in November 2009. Through articlesand photographs, this book provides a unique insightinto EFTA’s history. It can be ordered from thepublisher through the EFTA website.

The latest editions of all EFTA’s brochures areavailable on the website. Paper copies can be orderedfree of charge, subject to availability. The followingwere released in 2010:

• This is EFTA 2010: An annual publication,providing a simple overview of EFTA and itsactivities, together with useful trade and economicsstatistics.

• The EFTA Bulletin: Guide to EU programmes. A new and updated edition for 2010.

In addition, EFTA’s updated fact sheet, “EFTA at aGlance”, gives a brief introduction to EFTA and itsactivities.

INFORMATION ACTIVITIES


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The EEA Supplement

The EEA Supplement to the Official Journal of theEuropean Union is a translation into Icelandic andNorwegian of EEA relevant texts. The EEASupplement contains material from:• The EEA Joint Committee• The Standing Committee of the EFTA States• The EFTA Surveillance Authority• The EFTA Court• The EEA Consultative Committee• The European Commission

The EEA Supplement is published on the EFTA websiteonce a week. Additional documents, including EEA JointCommittee Decisions and EC Acts are printed and sentto subscribers. Since 2008, the Icelandic and Norwegianversions of the EEA Supplement have not beensynchronised with regard to content.

In 2010, the EFTA Secretariat published 72 issues ofthe EEA Supplement. The publication of actsincorporated into the EEA Agreement decreased in2010 compared to the previous year for the Norwegianversion, whilst the Icelandic version saw a significantincrease in the number of acts published in 2010.

Publication in the EEA Supplement 2010 Fig. 4

Number of pagesIcelandic Norwegian

EEA Joint Committee Decisions 282 282

EC Acts 4 068 1 864

EFTA Standing Committee 41 41

EFTA Consultative Committee 24 24

EFTA Surveillance Authority 561 561

EFTA Court 35 35

EU Institutions 1 326 1 326

Total 6 337 4 133


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At the end of 2010 there were 22 fixed term and shortterm staff based in Geneva, and 67 in Brussels andLuxembourg. The Financial Mechanism Office inBrussels employed 52 staff. All figures are on a full-time equivalent basis and include trainees.

The Secretariat’s budget is prepared according to theframework budgeting principle used by the MemberStates’ public administrations. This approach aims toincrease awareness of budgetary spending at all levels.The budget is accompanied by a performance plan inwhich the activities of the Secretariat are divided intoprojects. The plan and subsequent reports keep theMember States informed of the costs and outcomes ofthe Secretariat’s various activities.

EFTA’s budget is prepared in two currencies: Swissfrancs and euros. The total budget for 2010 wasequivalent to CHF 25 010 000.

The EFTA Board of Auditors

The EFTA Board of Auditors (EBOA), established inMay 1992, is the supreme audit authority of EFTA. Itis a permanent committee which, in cooperation withexternal auditors, performs an annual audit of the threeEFTA institutions: the EFTA Secretariat, the EFTASurveillance Authority (ESA) and the EFTA Court. Formatters related to the Secretariat, EBOA meets “atfour” (one representative from each EFTA MemberState) and reports directly to the EFTA Council. Formatters related to the EEA Agreement (ESA and theEFTA Court), EBOA meets “at three” (Iceland,Liechtenstein and Norway) and reports to theESA/Court Committee. EBOA also works incooperation with the European Court of Auditors.EBOA met three times in 2010.

EBOA’s annual audit report is made available on theEFTA Secretariat’s website when the relevant Councilprocedures for the year in question have been finalised.

ADMINISTRATION

2010 EFTA Budget (in CHF) Fig. 5

EFTA Activities 2010 BudgetTrade relations 4 540 000Managing the EEA Agreement 9 624 000EFTA/EU statistical cooperation 885 000Secretary-General’s services 2 160 000EU/EFTA and EFTA cooperation programmes 3 471 000Internal activities 4 330 000Total EFTA Secretariat 25 010 000

Contributions from the EFTA States to the 2010 EFTA Budget Fig. 6

Member State Contributions (in CHF) Share (in %)

Iceland 1 204 000 4.81Liechtenstein 219 000 0.88Norway 14 079 000 56.29Switzerland 9 508 000 38.02Total 25 010 000 100.00


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APPENDICESEFTA Parliamentary Committee Members

Iceland

Mr Árni Þór Sigurðsson Left-Green Movement (Chairman)

Ms Valgerður Bjarnadóttir Social-Democratic Alliance

Ms Þorgerður K. Gunnarsdóttir Independence Party

Mr Sigmundur D. Gunnlaugsson Progressive Party

Ms Jónína Rós Guðmundsdóttir Social-Democratic Alliance

Liechtenstein

Mr Harry Quaderer Patriotic Union

Mr Albert Frick Progressive Citizens’ Party

Norway

Mr Svein Roald Hansen Labour Party (Vice-Chairman)

Mr Harald T. Nesvik Progress Party

Ms Gina Knutson Barstad Labour Party

Ms Laila Gustavsen Labour Party

Ms Laila Marie Reiersten Progress Party

Mr Jan Tore Sanner Conservative Party

Switzerland

Mr Ignazio Cassis Liberal-Democratic Party

Ms Brigitta M. Gadient Civic-Democratic Party of Switzerland

Mr Hans Kaufmann Swiss People’s Party

Mr Eugen David Christian-Democratic Party


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EFTA Consultative Committee MembersIceland

Mr Guðlaugur Stefánsson (Chair and member until March 2010) Confederation of Icelandic Employers

Mr Róbert Trausti Árnason(Member from March 2010) Confederation of Icelandic Employers

Mr Haraldur Ingi Birgisson Icelandic Chamber of Commerce

Mr Halldór Grönvold (Chair from November 2010) Icelandic Confederation of Labour

Ms Helga Jónsdóttir Federation of State and Municipal Employees

Mr Bjarni Már Gylfason Federation of Icelandic Industries

Liechtenstein

Mr Josef Beck (Acting Chair from March to November 2010) Liechtenstein Chamber of Commerce and Industry

Mr Sigi Langenbahn Federation of Liechtenstein Employees

Norway

Mr Thomas Angell Federation of Norwegian Commercial and Service Enterprises

Ms Liz Helgesen Norwegian Confederation of Unions for Professionals

Mr Christopher Navelsaker Norwegian Confederation of Vocational Unions

Mr André Nerheim Norwegian Confederation of Trade Unions

Ms Bente Stenberg-Nilsen Norwegian Association of Local and Regional Authorities

Mr Espen Søilen Confederation of Norwegian Enterprise

Switzerland

Mr Jan Atteslander economiesuisse

Ms Ruth Derrer Balladore Confederation of Swiss Employers

Mr Marco Taddei Swiss Association of Small and Medium-sized Enterprises

Mr Jean-Pierre Monti Swiss Workers’ Federation

Mr Pierre Weiss Fédération des Entreprises Romandes Genève


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EFTA Ministerial Meeting, Reykjavik, 24 June 2010

Communiqué

On 24 June 2010, the European Free TradeAssociation (EFTA) held its summer Ministerialmeeting in Reykjavik, Iceland, chaired by ÖssurSkarphéðinsson, Minister for Foreign Affairs andExternal Trade of Iceland. Ministers from the fourEFTA States (Iceland, Liechtenstein, Norway andSwitzerland) signed a new Free Trade Agreement(FTA) with Ukraine, represented by KonstyantinGryshchenko, Minister for Foreign Affairs.

50th anniversary

Ministers marked the 50th anniversary of EFTA. TheAssociation’s founding Convention had entered intoforce on 3 May 1960. The creation of EFTArepresented an important contribution to Europeaneconomic integration.

Ministers underlined that EFTA has been one of thecornerstones of the continuous development of itsMember States as highly competitive, outward-oriented economies relying on open and predictableaccess to foreign markets worldwide. From the earlyyears of economic cooperation on the Europeancontinent to its present global reach in free traderelations, EFTA has successfully opened upopportunities for its business operators and fosteredtrade-driven growth.

The international economic situation

Ministers noted the signs of improvement in the globaleconomic situation and welcomed the rebound ofworld trade in the first half of 2010. At the same time,they voiced concern over the potential impact of theeuro zone debt crisis and expressed their hope that thepolicy measures taken in that regard will strengtheneconomic and financial stability. Ministers alsostressed the need to continue resisting protectionism inorder to sustain the current recovery. They reiteratedtheir strong support for the WTO Doha Round andcommitment to its successful conclusion.

Preferential trade relations

Ministers acknowledged the good functioning of theEFTA Convention governing economic relationsamong the four Member States. They welcomed the

addition of a comprehensive FTA with Ukraine to theexpanding EFTA network of preferential trade relation.EFTA has now concluded 21 FTAs with 30 partnercountries beyond the European Union.

Ministers welcomed the finalisation of the negotiationswith Peru and looked forward to the signing of theAgreement at the earliest possible opportunity.

Ministers discussed the ongoing negotiations on abroad-based FTA with India. They took note of thestate of the negotiations on a comprehensiveagreement with Hong Kong, China and agreed to aimat finalising this process by the end of the year.

Ministers noted the ongoing work in preparation forfree trade negotiations with Russia, taking account ofthe establishment of a customs union between Russia,Belarus and Kazakhstan. They furthermore statedtheir readiness to open free trade negotiations withBosnia-Herzegovina and with Montenegro.

Ministers commended the recent setting up of a JointStudy Group with Vietnam to examine the feasibilityof a free trade agreement. They confirmed theirreadiness to launch negotiations with Indonesia. Theyalso welcomed the finalisation of Joint Declarations onCooperation with Malaysia and Panama and lookedforward to their signing in the near future. Ministersagreed to explore the possibilities of closer traderelations with Central American countries. In addition,they will follow developments in Algeria and inThailand with a view to resuming negotiations withthose partners.

Ministers welcomed the joint final report prepared bythe EFTA Working Groups on Trade and Environmentand on Labour Standards in EFTA Free TradeAgreements, including the presented model provisions.They underlined the importance of these policy issuesand of the contribution that EFTA is making tointernational developments in that respect.

Relations with the European Union

The EEA EFTA Ministers discussed the generalfunctioning of the EEA Agreement with special focuson the economic crisis, and underlined the need forcoordinated and comprehensive action, especially atthe European level. Ministers emphasised theimportance of adequate participation of the national


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authorities of the EEA EFTA States in the newfinancial supervisory structure, on an equal footingwith the EU Member States.

Ministers noted the entry into force of the LisbonTreaty and underlined the importance of ensuring thecontinuous good functioning of the EEA Agreementwithin this new environment.

With regard to new initiatives within the EEA,Ministers noted the Europe 2020 Strategy andexpressed their hope that this would serve as agenerator for growth in Europe over the next decade.Ministers welcomed the Monti Report on “A NewStrategy for the Single Market”, which focuses oncreating a stronger and better performing SingleMarket; a matter of direct concern to the EEA EFTAMember States.

Ministers noted with satisfaction the incorporation ofseveral legislative acts into the EEA Agreement,including the Services Directive, the PharmaceuticalPackage and the Galileo Programme.

Ministers expressed their satisfaction with thesuccessful round-up of commitments under the EEAand Norwegian Financial Mechanisms 2004-2009.As of mid-May 2010, the EEA Grants and NorwayGrants are supporting a portfolio of 1 190 projects.Ministers were also pleased with the finalisation ofnegotiations of the financial contributions for theperiod 2009 to 2014 where EUR 197.7 million willbe made available per year through the EEA Grantsand EUR 160 million through the Norway Grants.

Ministers welcomed that the newly establishedForum of Elected Representatives of Local andRegional Authorities of the EEA EFTA MemberStates had held its inaugural meeting in Reykjavik on22-23 June, designating its members and electing achair and vice chair.

Representatives of the EFTA Surveillance Authorityand the EFTA Court participated in the meeting.

Advisory bodies

Ministers held meetings with EFTA’s two advisorybodies which are actively engaged in EFTA’s work: theParliamentary Committee and the ConsultativeCommittee, which represents the social partners in theEFTA countries. They had a fruitful exchange of viewswith committee members on a range of issuesincluding the most recent developments in EFTA third-country relations, and the latest developments in theEEA and in Swiss-EU relations.

Attending

Iceland: Mr Össur Skarphéðinsson,Minister for Foreign Affairs andExternal Trade (Chair)

Liechtenstein: Ms Aurelia Frick, Minister ofForeign Affairs

Norway: Mr Trond Giske, Minister ofTrade and Industry

Switzerland: Ms Doris Leuthard, President ofthe Swiss Confederation, Head ofthe Federal Department ofEconomic Affairs

EFTA: Mr Kåre Bryn, Secretary-General

EFTA Ministerial Meeting, Geneva, 23 November 2010

Communiqué

On 23 November 2010, the European Free TradeAssociation (EFTA) held a Ministerial Meeting inGeneva under the Chairmanship of Mr Johann N. Schneider-Ammann, Federal Councillor and Headof the Federal Department of Economic Affairs ofSwitzerland. Ministers from the four EFTA MemberStates were joined by Ms Elvira Nabiullina, Ministerof Economic Development and Trade of the RussianFederation, Mr Nikolai Snopkov, Minister of Economyof the Republic of Belarus, and Ms Zhanar Aitzhanova,Minister of Economic Development and Trade of theRepublic of Kazakhstan, for the official launch ofnegotiations on a broad-based free trade agreement.

The international economic situation

The EFTA Ministers discussed the current state of theglobal economy and welcomed the strong rebound inglobal trade flows. They reiterated EFTA’scommitment to the multilateral trading system andhighlighted the role played by free trade agreements incontributing to reinforcing liberalisation globally. TheEFTA Ministers supported the strong commitmentexpressed by G20 leaders to use the window ofopportunity in 2011 to bring the Doha Round to asuccessful and balanced conclusion. The Ministersunderlined the need to expeditiously translate thiscommitment into an intensified engagement tocomplete the Round.


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Launching of negotiations with Russia, Belarus andKazakhstan

The EFTA Ministers and Ministers from Russia,Belarus and Kazakhstan signed a Joint Statement onthe launching of negotiations on a broad-based freetrade agreement, mandating their representatives toenter into a formal process from January 2011. TheMinisters expressed their expectation that a free tradeagreement would advance the economic relationshipbetween the Parties by further developing trade andinvestment flows. In 2009, Russia, Belarus andKazakhstan together were EFTA’s fifth most importantexport destination and fourth largest import sourceoutside the EU, with total merchandise tradeamounting to USD 6.2 billion in that year.

Other preferential trade relations

The EFTA Ministers reviewed the state of and theoutlook for preferential trade relations with partnersworldwide. They noted the progress achieved innegotiations with Hong Kong, China and expressedthe hope that these could be concluded in a timelymanner. Ministers welcomed the recent advancesmade in talks with India, emphasising the importanceof India as a future free trade partner for the EFTAStates. They expressed their satisfaction with thework undertaken by the EFTA-Vietnam Joint StudyGroup and looked forward to receiving itsconclusions in the first quarter of 2011.

Ministers welcomed the start of a negotiatingprocess with Indonesia in early 2011. Theyreviewed the preparations for free tradenegotiations with Bosnia-Herzegovina and with

Montenegro, with a view to opening negotiatingprocesses in the course of next year.

Ministers expressed their interest in strengthening theeconomic cooperation and further promoting trade andinvestment relations with Malaysia in the frameworkof the Declaration on Cooperation that was signed inJuly. They agreed to start exploring, in the first half of2011, the possibility of establishing closer traderelations with a group of Central American States(Costa Rica, El Salvador, Guatemala, Honduras,Nicaragua and Panama). Ministers furthermoreconcurred to follow developments in Algeria andThailand with a view to resuming negotiations withthose partners when conditions allow.

The EFTA Parliamentary Committee

Ministers exchanged views with the EFTAParliamentary Committee on recent developments andpriorities in EFTA’s free trade relations with the world.

Attending

Switzerland: Mr Johann N. Schneider-Ammann, Federal Councillor,Head of the Federal Departmentof Economic Affairs (Chair)

Iceland: Mr Össur Skarphéðinsson,Minister for Foreign Affairs andExternal Trade

Liechtenstein: Ms Aurelia Frick, Minister ofForeign Affairs

Norway: Mr Trond Giske, Minister ofTrade and Industry

EFTA: Mr Kåre Bryn, Secretary-General

1. The thirty-third meeting of the EEA Council tookplace in Brussels on 10 May 2010 under thePresidency of Mr Diego LÓPEZ GARRIDO,State Secretary for the European Union of Spain.The meeting was attended by Ms Aurelia FRICK,Minister for Foreign Affairs of Liechtenstein, MrEinar GUNNARSSON, Permanent Secretary ofState for Foreign Affairs of Iceland, and Mr JonasGahr STØRE, Minister for Foreign Affairs ofNorway, by Members of the Council of theEuropean Union and by the Representative of theEuropean Commission.

2. The EEA Council noted that within theframework of the Political Dialogue, the

Ministers discussed Middle-East, Iran andRussia.

3. The EEA Council welcomed the entry into force ofthe Lisbon Treaty on 1 December 2009 andunderlined the importance that the implementationof the Treaty would have with regard to thecontinued good functioning of the EEAAgreement.

4. The EEA Council took note of the efforts made tocoordinate a comprehensive action to restoreglobal growth and to rebuild confidence in thefinancial markets. It underlined the need forcontinued focus on coordinated and timely action

Conclusions of the 33rd meeting of the EEA Council, Brussels, 10 May 2010


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among governments with regard to exitstrategies, in order to secure the medium- andlong-term sustainability of public finances.

5. The EEA Council stressed the importance ofsafeguarding the good functioning of the internalmarket. In this context, Ministers welcomed theEU’s initiative to deal with cross-border crisismanagement within the banking sector. Theyunderlined that enhanced cooperation on theEuropean level and worldwide was vital in orderto strengthen financial supervision and toimprove the regulation of financial services.Ministers welcomed the ECOFIN’s agreement ofOctober 2009 on the European Systemic RiskBoard (ESRB) based on the need for astrengthened macro prudential oversight of theEuropean financial system. Ministers alsowelcomed the ECOFIN's agreement of December2009 on the European System of FinancialSupervision (ESFS) based on decentralisedsupervision with strengthened cooperation andunderlined the significance of the participation ofsupervisors from the EEA EFTA Member Statesin these new structures once they had beenestablished. Furthermore, the EEA Councilconfirmed its support for the EU regulatoryinitiatives and reiterated the need to improve,where necessary, the practical application ofsupervisory and prudential rules provided for bythe EU banking directives.

6. The EEA Council took note of the CommissionCommunication on the Europe 2020 Strategy aswell as of the conclusions on the Strategyadopted by the EU Council on 16 March 2010.The EEA EFTA States are closely following thedevelopment of the Strategy, with a view toparticipating in relevant parts. The EEA Councilwelcomed the contribution of the EEA EFTAStates to the Strategy.

7. The “Flagship Initiatives” set out in theCommission Communication on the Europe 2020Strategy provide a good basis for reflections onhow to focus efforts on the appropriate areas andcould significantly contribute to theimplementation of the Strategy.

8. The EEA Council reiterated the importance of theThird Liberalisation Package on energy, andunderlined the importance of the involvement ofthe EEA EFTA States in an interconnectedEuropean energy market and in the establishment

of new mechanisms between regulators andsystem operators on European level. The EEACouncil welcomed the implementation of theClimate and Energy Package published in July2009. The importance of continuous closecooperation between the EU and the EEA EFTAStates in the area of energy and climate changewas underlined, and especially on the emissiontrading scheme, the promotion of low carbonenergy technologies, energy efficiency,renewable energy resources, as well as on carboncapture and storage (CCS).

9. The EEA Council welcomed the incorporationinto the EEA Agreement of the Directive onNational Emission Ceilings for CertainAtmospheric Pollutants.

10. The EEA Council noted the progress made onincorporating the Renewables Directive into theEEA Agreement. It noted that the EEA EFTAStates already have a high share of renewableenergy sources.

11. With around 1100 projects still in theimplementation phase under the EEA and theNorwegian Financial Mechanisms 2004-2009,Ministers emphasised the importance of allparties focusing on the implementation ofprojects, funds and programmes to meet theimplementation deadline of 30 April 2011.

12. The Ministers welcomed the initialling atnegotiators' level of the agreed minutes on theEEA Financial Mechanism 2009-2014 with newfinancial contributions from the EEA EFTAStates for the reduction of economic and socialdisparities in the EEA. They also welcomed theinitialling at negotiators' level of agreed minuteson a new bilateral Norwegian Financialmechanism for the same period and underlinedthe importance of related agreements onprovisional application in order to proceed in theimplementation of the new mechanisms. TheMinisters urged all contracting parties to finalisetheir internal procedures as soon as possible.

13. The Ministers welcomed the initialling atnegotiators' level of agreed minutes resultingfrom bilateral negotiations between the EuropeanCommission and Iceland and Norway concerningthe review of the quota levels for certain fish andfishery products, as laid down in the respectiveAdditional Protocols to their bilateral


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Agreements with the European EconomicCommunity.

14. Ministers took note that the Commission hadrecommended that negotiations for accession tothe European Union should be opened withIceland.

15. The EEA Council noted the Progress Report ofthe EEA Joint Committee and in particular:

• welcomed the active participation of the EEAEFTA States in the relevant parts of the SingleMarket Review and looked forward to theupcoming 2012 initiative to complete theSingle Market;

• welcomed the incorporation of the ServicesDirective into the EEA Agreement;

• welcomed the finalisation of the necessarynational parliamentary procedures by all theEEA EFTA States regarding the Food LawPackage and that the Package had entered intoforce on 1 May 2010;

• noted the progress made on the ConsumerRights Directive;

• on the ongoing issue of further liberalisation oftrade in agricultural and processed agriculturalproducts, welcomed the agreement reached atnegotiators' level in the negotiations between theEuropean Commission and Norway on furtherliberalisation of trade in agricultural products onthe basis of Article 19 of the EEA Agreement,and hoped for an expedient formalisation andimplementation of the outcome. It furtherencouraged the European Union and Norway toengage constructively in the review processwithin the framework of Article 2(2) of Protocol3 to the EEA Agreement;

• welcomed the participation of the EEA EFTAStates in EEA-relevant EU Programmes,promoting common interests towards a morecompetitive and innovative Europe. Theprogrammes are co-financed by the EEA EFTAStates. The EEA Council welcomed theparticipation of the EEA EFTA States in theEuropean Year for Combating Poverty andSocial Exclusion 2010 and looked forward tothe European Year of Volunteering 2011, withthe EEA EFTA States participating;

• welcomed the participation of the EEA EFTAStates in the Galileo programme;

• welcomed the participation of the EEA EFTAStates in the European Agency for Safety andHealth at Work, i.e. the Bilbao Agency;

• welcomed further developments of theIntegrated Maritime Policy and reiterated theimportance of close involvement of the EEAEFTA States. It looked forward to theCommission’s policy document outliningprojects and initiatives aimed at furtherdeveloping the policy;

• reiterated its commitment to the renewedsocial agenda, covering a wide range of areassuch as employment, health, migration, socialaffairs, education and equal rights andunderlined the importance of how these issueswill be followed up. The EEA EFTA States willcontinue to follow closely the proposeddirectives and policy initiatives, within thescope of the EEA Agreement. The EEACouncil underlined the importance ofinnovation to meet social needs during theeconomic crisis, and in particular the efforts tocombat poverty and social exclusion.

16. The EEA Council welcomed the EEA EFTAcontributions to the decision-shaping process ofEEA-relevant EU legislation and programmesthrough their participation in relevantcommittees, expert groups and agencies and bysubmitting EEA EFTA Comments.

17. The EEA Council held an orientation debate onEurope 2020 – implications for the EEA.

18. The Ministers underlined the importance for theContracting Parties to ascertain that relevantactors throughout the European Economic Arearemain well informed about the EEA Agreement.

19. The EEA Council underlined the importance ofinviting EEA EFTA Ministers to attend relevantinformal EU Ministerial Meetings andMinisterial Conferences on the basis of EEAEFTA participation in the Internal Market, andexpressed its appreciation to the incomingBelgian Presidency for the continuation of thispractice. The EEA Council also recalled thepractice of inviting the EEA EFTA States — atthe level of officials — to political dialogue


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1. The thirty-fourth meeting of the EEA Counciltook place in Brussels on 22 November 2010under the Presidency of Mr ÖssurSKARPHÉÐINSSON, Minister for ForeignAffairs of Iceland. The meeting was attended byMs Aurelia FRICK, Minister for Foreign Affairsof Liechtenstein and by Mr Jonas Gahr STØRE,Minister for Foreign Affairs of Norway, from theEEA EFTA side, as well as by Mr OlivierChastel, State Secretary for European Affairs ofthe Kingdom of Belgium representing theBelgian Presidency of the Council of theEuropean Union, by Members of the Council ofthe European Union and by the Representative ofthe European Commission responsible for EEACouncil matters, from the EU side.

2. The EEA Council noted that within theframework of the Political Dialogue theMinisters discussed Russia, Middle East (Gaza,Middle East Peace Process MEPP and the AdHoc Liaison Committee AHLC) and China.

3. The EEA Council welcomed the progress madein the implementation of the Lisbon Treaty andemphasised the importance of the continued goodfunctioning of the EEA Agreement.

4. The EEA Council took note of the proposals onEconomic Governance in the EU by theCommission and the European Council. It welcomed and encouraged the proposedmeasures to enhance policy coordination with aview to improve economic stability andsustainable economic growth in Europe.

5. The EEA Council welcomed the EU’s recentagreement on the establishment of a new EUSystem of Financial Supervision with threesupervisory authorities in the areas of Banking,Insurance, and Securities, and looked forwardto the new structure being operational as ofJanuary 2011. From a regulatory perspectivethe EEA EFTA States are fully integrated intothe EU’s internal market for financial services,

and the EEA Council therefore welcomed thepossibility for the EEA EFTA States toparticipate in the work of the supervisoryauthorities and looked forward to agreeing onthe modalities of their participation.Furthermore, the EEA Council expressed hopethat an agreement could also be reached for anappropriate form of participation of the EEAEFTA States’ relevant authorities in theEuropean Systemic Risk Board (ESRB).

6. The EEA Council took note of the adoption bythe European Council of the Europe 2020Strategy in June 2010. The EEA EFTA States areclosely following the unveiling of the “FlagshipInitiatives”, which will contain many EEArelevant proposals. The EEA Council welcomedthe contribution of the EEA EFTA States to theimplementation of the Strategy.

7. The EEA Council welcomed the CommissionCommunication “Towards a Single Market Act -For a highly competitive social market economy:50 proposals for improving our work, businessand exchanges with one another”, adopted by theCommission on 27 October 2010. The EEAEFTA States will follow the developmentsregarding the Communication closely and seek tocontribute to further concretisation of its content,noting that the diverse initiatives envisaged in theCommunication will revitalise and haveimmediate effects throughout the EEA.

8. The EEA Council underlined the importance ofan interconnected and competitive Europeanenergy market foreseen in the Third Packagefor the Internal Energy Market, adopted in2009. It welcomed the participation of the EEAEFTA States, inter alia in the establishment ofnew mechanisms between regulators andtransmission system operators on a Europeanlevel also strongly recalling the need for anEEA-wide perspective on the need for crucialenergy infrastructure supporting security ofenergy supply.

Conclusions of the 34th meeting of the EEA Council, Brussels, 22 November 2010

meetings at the level of relevant CouncilWorking Parties.

20. The EEA Council noted the Resolutions of theEEA Joint Parliamentary Committee adopted at

its 34th meeting in Vaduz on 29 March 2010 onThe Annual Report on the Functioning of theEEA in 2009, The Common Fisheries Policy andthe EEA and EEA and regional cooperation:New Channels for dialogue.


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9. The EEA Council looked forward to further progressbeing made in incorporating the RenewablesDirective into the EEA Agreement. In this context,the EEA Council took note of the EEA EFTA States’large share of renewable energy sources.

10. The EEA Council reiterated the importance ofmaintaining close cooperation between the EUand the EEA EFTA States in energy and climatechange polices, in particular in the areas ofemission trading, the promotion of low carbonenergy technologies, energy efficiency andrenewable energy resources, as well as on carboncapture and storage (CCS). The EEA Councilalso welcomed the progress/imminent adoptionof the aviation emissions scheme. The Ministersalso noted the progress on the inclusion of theclimate and energy package adopted in 2008.

11. The EEA Council welcomed the signing of theEEA and Norwegian Financial Mechanisms forthe period 2009-2014 and emphasised theimportance of all contracting parties finalisingtheir respective internal procedures withoutdelay. In this context, they also highlighted theimportance of ensuring provisional application ofthe related agreements in order to allow for theprompt establishment of the new mechanisms.

12. The EEA Council emphasised the importance ofan efficient finalisation of the implementation ofprojects and programmes financed under theEEA and Norwegian Financial Mechanisms2004-2009 within the stipulated timeframes.

13. The Ministers welcomed the signing ofAdditional Protocols resulting from bilateralnegotiations between the European Commissionand Iceland and Norway concerning the reviewof the quota levels for certain fish and fisheryproducts, and emphasised the importance of theparties finalising their respective internalprocedures without delay in order to allow for theprompt implementation of the new tariff quotas.

14. Ministers welcomed the launching ofnegotiations between the EU and Iceland onIceland’s accession to the European Union.

15. The EEA Council noted the Progress Report ofthe EEA Joint Committee and, in particular:

• noted the progress made on the ConsumerRights Directive and the EEA EFTA Comment

sent in early October 2010;

• noted the result of the negotiations onliberalisation of trade in agricultural productsbetween the European Commission andNorway based on Article 19 of the EEAAgreement, hoped for an expedientimplementation of the outcome and lookedforward to the foreseen review of theconditions of trade in agricultural products intwo years time, with a view to exploringpossible concessions;

• noted the outcome of the annual reviewconcerning processed agricultural products,carried out in September 2010 within theframework of Article 2(2) of Protocol 3 to theEEA Agreement and agreed to continue thedialogue on the trade regime for processedagricultural products in Protocol 3;

• welcomed the participation of the EEA EFTAStates in EEA relevant EU Programmes, notingthat these are co-financed by the EEA EFTAStates. It emphasised the importance ofincluding the EEA EFTA States in appropriateprogrammes thus contributing to building amore competitive Europe;

• took note of the progress made in thedevelopment of an Integrated Maritime Policyand welcomed the active involvement of theEEA EFTA States;

• expressed its expectation for an earlyconclusion of the process of incorporation intothe EEA Agreement of the Aviation SafetyRegulation 216/2008 and the AudiovisualMedia Services Directive.

16. The EEA Council recalled its commitment to thesocial agenda which is reinforced in the Europe2020 Strategy, covering a wide range of areassuch as employment, health, migration, socialaffairs, education and equal rights and reiteratedthe importance of how these issues will befollowed up. The EEA Council underlined that intimes of economic crisis it was important to makespecial efforts to meet social needs throughinnovation.

17. The EEA Council welcomed the EEA EFTAcontributions to the decision-shaping process ofEEA relevant EU legislation and programmes


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through their participation in relevantcommittees, expert groups and agencies and bysubmitting EEA EFTA Comments.

18. The EEA Council held an orientation debate onthe European Energy Market.

19. The Ministers stressed that it was in their commoninterest that the EEA Agreement was well knownthroughout the European Economic Area and urgedall Contracting Parties to ensure that appropriateinformation on the Agreement is available.

20. The EEA Council underlined the importance ofinviting EEA EFTA Ministers to relevant

informal EU Ministerial Meetings andMinisterial Conferences on the basis of EEAEFTA participation in the Internal Market, andexpressed its appreciation to the incomingHungarian Presidency for the continuation of thispractice. The EEA Council also recalled thepractice of inviting the EEA EFTA States - at thelevel of officials - to political dialogue meetingsat the level of relevant Council Working Parties.

21. The EEA Council noted the Resolutions of theEEA Consultative Committee adopted at its 18thmeeting in Vaduz on 18-19 May 2010 on theImplications for the EEA of EU post-crisisfinancial reform and on Europe 2020 and the EEA.


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50th Annual Report of The European Free Trade Association 2010

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