European Free Trade Association (EFTA)

GENERAL INFORMATION

The European Free Trade Association (EFTA) is an intergovernmental organization bringing together the customs territories of four European countries that have not joined the European Union, namely the Republic of Iceland, the Principality of Liechtenstein, the Kingdom of Norway and the Swiss Confederation. It provides its Member States with a free trade regime for goods and services, and also guarantees the free movement of capital and persons.

The EFTA was founded on 4 January 1960 in Stockholm (Sweden) with the signing of the Stockholm Agreement on the EFTA. The main objective of the EFTA was to lay the foundations for the liberalization of trade in industrial goods, processed agricultural products, fish and seafood between the Member States of this international organisation. Since its inception, the EFTA has established close trade relations with the EU and other countries in Central and Eastern Europe, the Mediterranean basin, Asia, North and South America, the Middle East and Africa.

As of 2026, the EFTA has concluded 35 free trade agreements (covering 47 countries and 3 separate customs territories) with the following countries: Albania, Bosnia and Herzegovina, Hong Kong (China), Georgia, Ecuador, Egypt, Israel, India, Indonesia, Jordan, Canada, Colombia, the countries of Central America (Costa Rica, Guatemala, Panama), the MERCOSUR countries (Argentina, Brazil, Paraguay and Uruguay), Montenegro, the Republic of Korea, Lebanon, North Macedonia, Morocco, Malaysia, Mexico, Moldova, the Southern African Customs Union (SACU), Peru, the Gulf Cooperation Council (GCC), Serbia, Singapore, Thailand, Tunisia, Türkiye, the Philippines, Chile and Ukraine.

The development of trade relationship with countries and regional groupings necessitated a review by the EFTA Member States of the provisions of the Stockholm Agreement. The updated agreement was signed on 21 June 2001 in Vaduz (Liechtenstein) and entered into force on 1 June 2002, at the same time as the package of bilateral agreements between Switzerland and the EU came into force. The provisions of the revised EFTA Agreement (the Vaduz Convention) take account of the development of trade relations between EFTA Member States and the EU, as well as with other trading partners. The Vaduz Convention governs relations between EFTA Member States in the areas of trade in goods and services, competition and investment policy, economic and monetary policy, the protection of intellectual property rights, and so on.

ORGANISATIONAL STRUCTURE OF THE EFTA

The EFTA Council is the main working body of this intergovernmental organisation, within which EFTA Member States conduct negotiations, hold consultations and take decisions on the direction of EFTA’s activities. As a rule, meetings of the EFTA Council are held eight times a year at the level of the Permanent Representatives of the EFTA Member States and once a year at ministerial level. When the EFTA Council takes decisions, each Member State has one vote. Decisions of the Council are usually taken by consensus.

At its meetings, the Council discusses key issues, in particular the EFTA’s relations with third countries and matters relating to free trade agreements, as well as providing a general overview of policy towards the EU and third countries. The Council has a broad mandate to develop common policies and to promote the development of relations with other states, unions of states or international organisations.

Member States take turns to hold the presidency of the EFTA Council for a period of one year.

The EFTA Council comprises the Parliamentary Committee, the Consultative Committee, the Committee on the Development on Third-Country Relations, the Committee on Trade Facilitation, the Budget Committee, the Economic Committee, the Committee on Technical Barriers to Trade, and the Committee of Origin and Customs Experts.

Three Secretariats support the EFTA’s activities. The EFTA Secretariat in Geneva is responsible for implementing the provisions of the EFTA Agreement and developing EFTA’s cooperation with third countries, whilst the EFTA Secretariat in Brussels is responsible for EFTA’s cooperation with the EU, whilst the EFTA Secretariat in Luxembourg is responsible for EFTA’s cooperation with the European Statistical Office (Eurostat). The EFTA Secretariat employs around 90 staff, of whom one-third are based in Geneva and two-thirds in Brussels and Luxembourg.

The Geneva Secretariat facilitates negotiations on free trade agreements with non-EU countries and provides relevant support to the EFTA Council.

The Secretary-General of the EFTA is Kurt Jäger (Liechtenstein), who has headed the EFTA Secretariat in Geneva since 2024.

TRADE AND ECONOMIC RELATIONS BETWEEN UKRAINE AND THE EFTA

For Ukraine, the EFTA countries represent a market of approximately 15 million consumers with high purchasing power and a combined GDP of around US$1.33 trillion.

Ukraine and the EFTA signed a Joint Declaration on Cooperation in 2000.

Negotiations on a free trade agreement between the four EFTA States (Iceland, Liechtenstein, Norway and Switzerland) and Ukraine began in Kyiv on 21 April 2009. The Free Trade Agreement was concluded on 24 June 2010 during the EFTA Ministerial Conference in Reykjavík (Iceland). The Agreement entered into force on 1 June 2012.

The Free Trade Agreement is comprehensive, covering trade in goods (industrial and agricultural goods, fish and other sea products), trade in services, investment, trade facilitation, competition, the protection of intellectual property rights and public procurement. Bilateral agreements on trade in agricultural products concluded between the individual EFTA States and Ukraine also form part of the free trade area established between the parties. A Joint Committee set up by the parties monitors the functioning of the agreement.

On 7 December 2012, the Verkhovna Rada (Parliament) of Ukraine ratified the Free Trade Agreement between Ukraine and the EFTA States, as well as agricultural agreements between Ukraine and Norway, Ukraine and Iceland, and Ukraine and Switzerland.

In 2024, trade turnover between Ukraine and the EFTA countries totalled almost 1.3 bln euros. The average growth rate over the last five years for Ukrainian exports to EFTA countries was 4.9 %, whilst that for imports from EFTA countries to Ukraine was 9.3 %.

Main export items to Ukraine:

• fish and seafood (€ 229 mln);
• medicines and pharmaceutical products (€ 143 mln);
• weapons and ammunition (€ 77 mln);
• vehicles (€ 77 mln);
• electrical equipment (€ 44 mln).

Main items of imports into the EFTA States:

• fats and oils (€37 mln);
• gemstones and metals (€26 mln);
• clothing and accessories (€22 mln);
• furniture and mattresses (€20 mln);
• alcoholic and non-alcoholic beverages (€20 mln).

The modernized Free Trade Agreement between Ukraine and the EFTA States (Iceland, Liechtenstein, Norway and Switzerland) was signed in Kyiv on 8 April 2025.

Under the Agreement, the Parties have completely abolished customs duties on industrial products. In the agricultural section of the Agreement with the EFTA States, customs duties on a significant number of agricultural goods are being abolished or reduced. In particular:

Iceland:

• Complete exemption from customs duties of 142 goods (vegetables, wheat, foodstuffs);
• The number of goods exempt from customs duties rose by 9.8 %, whilst the number subject to partial reductions fell by a factor of 3.5 (compared with 2010).

Norway:

• Complete exemption from customs duties of 107 goods (vegetables, edible root vegetables, fresh, cooked or tinned berries and nuts, oils, juices, etc.);
• Partial reduction in customs duties on 78 goods (yoghurt, butter and spreads, eggs, vegetables, tinned fruit and nuts, etc.);
• The number of goods exempt from customs duties rose by 11.4 %, whilst those subject to a partial reduction rose by 2.7 % (compared to 2010).

Switzerland and Liechtenstein:

• Complete abolition of customs duties on 427 goods (pork, milk, cheese, honey, vegetables, fruit and berries, flour, animal and vegetable oils, tinned meat, fruit, etc.);
• Partial reduction – on 163 goods (live animals, beef, pork, meat from other animals, poultry, dairy products, eggs, pulses, vegetables, berries);
• Overall, the number of duty-free goods has increased by 66.2%.

The modernized Agreement contains the following new chapters:

• E-commerce (simplifying online trade, regulating electronic signatures and contracts, administering paperless trade, etc.);
• Small and medium-sized enterprises (improves access to information for SMEs, provides for the publication of trade and other commercial information on websites, including in English, and cooperation through dedicated SME contact points, etc.);
• Trade and sustainable development (trade relations should contribute to sustainable development).

The following provisions have been revised:

• Trade in goods, SPS measures, TBT measures and provisions will be applied on the basis of the relevant WTO agreement;
• Trade facilitation (clear rules for exporters, greater transparency regarding import licensing procedures, etc.);
• Public procurement (simplifying suppliers’ access to public procurement markets);
• Cooperation and protection of intellectual property.

The modernized Agreement is currently awaiting ratification by all signatory Parties. The Agreement is scheduled to enter into force in early 2027.