European Free Trade Association EFTA

a closed economic and trade group formed in 1960 by Austria, Denmark, Great Britain, Norway, Portugal, Sweden, and Switzerland. The EFTA convention also extends to Liechtenstein, which is joined to Switzerland through a customs union.

The EFTA came about as a result of the aggravation of inter-imperialistic contradictions. The association was set up at the initiative of Great Britain as a counterbalance to the European Economic Community (EEC). The agreement on the creation of the EFTA envisioned the abolition of customs duties and quantitative restrictions in trade between members of the association over the period 1960-70. Member countries maintain independent customs tariffs in relation to third countries. In 1961, Finland joined the EFTA as an associate member. Iceland became a member in 1970. The headquarters of the association is in Geneva; its directing body is the council of ministers, and its executive body is the secretariat.

By 1967 all the members of the association except Portugal had abolished customs duties and quantitative restrictions in trade. Portugal was permitted to continue protection of its industry with customs duties until the end of 1979. Creation of a free, intrazonal market aided the growth of commodity circulation between member countries, which from 1959 to 1968 grew by 145 percent; the overall volume of trade of these countries increased by 85 percent. Nevertheless, the EFTA remained an unstable association, weaker than the Common Market, which all the members of the EFTA, were attempting to join. An agreement was signed on Jan. 22, 1972, for the entry into the EEC as of Jan. 1, 1973, of Great Britain, the leading member of the EFTA, as well as of Den-mark and Norway. The overall balance of trade of EFTA countries is unfavorable. More than half of the deficit comes from trade with countries of the Common Market. Great Britain and, to a lesser extent, Sweden have the greatest economic potential and are the real forces in the association. Growing economic as well as political contradictions are threatening to lead to the collapse of the association.

About 5 percent of the foreign trade of the EFTA for 1970 was with the socialist countries; trade with the socialist coun-tries accounted for 16.1 percent of the imports and 15.7 per-cent of the exports of Finland, 9.4 percent of the imports and 12.9 percent of the exports of Austria, and 10.7 percent of the imports and 10.1 percent of the exports of Iceland. The total imports from the socialist countries for 1970 grew by 16.7 percent over 1969, and exports increased by 13.5 percent, with the greatest growth in imports belonging to Finland (29.6 percent) and Austria (22.1 percent), as well as to Switzerland and Sweden; the greatest increase in exports were accounted for by Sweden, Switzerland, and Iceland. Requirements of the EFTA countries dictate the necessity of further expansion of trade with the socialist countries.