The European Free Trade Association

The European Free Trade Association (EFTA) was the British alternative to the European Communities. It was established in 1959 with signing the Treaty of Stockholm by some European states, and the organization expanded further to include the UK, Austria, Denmark, Norway, Portugal, Sweden, and Switzerland among others. The other states had different reasons for joining this new European organization—Denmark and Norway had important economic links with the UK, and thus needed to be in the same organization as the UK in order to have access to the British market. Austria, Switzerland, and Sweden had the status of neutrality in the Cold War, and could not join the European Communities because it was seen by communists as an organization against the workers of the world supported by the USA and hence against the Soviet Union.

Joining the organization meant joining one side of the Cold War against the other. On the other hand, Portugal was not a democratic country as it was under the power of dictatorship built by Salazar, and a democratic system was a requirement for joining the European Communities; Portugal could not join it. The EFTA gave international backing to the Portuguese regime plus the important economic ties the country had with the UK. The new organization proposed a different model for uniting Europe, one mainly based on trade and common agreements, without integration or any loss of national independence, following the ideas formerly expressed by the UK. T

he working system was based on the good faith of the partners and their will to collaborate with each other, reaching common positions based on consensus. In practical matters it was an organization based on industrial production trade, excluding agricultural products, an area of free trade based on the British tradition without any political meaning. The organization initially worked, and more countries joined the organization, and Europe was divided in two main markets, two main economic areas. But the member states of the European Communities were performing economically better, growing faster and increasing their economic role in Europe. At the same time, British economy had many problems and the market of the EFTA was not big enough for its economy to solve its problems.

As the UK was being left behind France and Germany, and its economy was in crisis, their government had no choice other than asking for membership in the European Communities, even when this decision was against their political beliefs based on cooperation and free trade. In practical matters it meant the end of the EFTA, because its main partner was going to join the European Communities, and hence the EEC market, with common borders against any other external country or economic area. The free trade area had no chance to grow without access to the British market, and Ireland, Norway, and Denmark asked at the same time as the UK for membership in the European Communities. Once they joined, the stature of the EFTA decreased and became a mere annex to the EEC market