Ralf Heckner, Switzerland’s ambassador to India, has expressed optimism that European Free Trade Association’s (EFTA) deal with the country would be wrapped up before the 2024 General Elections.
India and the EFTA states are negotiating a Trade and Economic Partnership Agreement (TEPA) with a view to boost economic ties between the two regions.
EFTA currently has four member countries: Iceland, Liechtenstein, Norway and Switzerland.
EFTA countries are not part of the European Union (EU).
Under such pacts, two trading partners significantly reduce or eliminate customs duties on the maximum number of goods traded between them, besides easing norms to promote trade in services and investments.
A free trade agreement between India and four-nation bloc EFTA will help enhance two-way commerce, investment flows, job creation and economic growth.
A TEPA between EFTA and India could bring significant economic benefits, such as integrated and resilient supply chains and new opportunities for businesses and individuals on both sides leading to increased trade and investment flows, job creation, and economic growth.
European Free Trade Association (EFTA)
• The European Free Trade Association (EFTA) is an inter-governmental organisation of Iceland, Liechtenstein, Norway and Switzerland.
• It was set up in 1960 by its then seven Member States for the promotion of free trade and economic integration between its members.
• There were seven founding countries: Austria, Denmark, Norway, Portugal, Sweden, Switzerland and the United Kingdom (UK). They were joined by Iceland in 1970, by Finland in 1986 and by Liechtenstein in 1991.
• Meanwhile, in 1973, Denmark and the UK joined the EU. Portugal joined the EU in 1986. Austria, Finland and Sweden joined the EU in 1995, consequently leaving EFTA.
• EFTA does not envisage political integration. It does not issue legislation, nor does it establish a customs union.
• EFTA’s first objective was to liberalise trade between its Member States.
• EFTA countries enjoy access to one of the world’s largest networks of preferential trade relations, covering 80 per cent of EFTA’s merchandise trade.
• Currently, the EFTA States together have 29 FTAs in force or awaiting ratification covering 40 partner countries worldwide (outside Europe).
• EFTA is the European Union’s third largest trading partner in merchandise, and the second largest in services.
• India’s exports to EFTA countries during April-February 2022-23 stood at $1.67 billion as against $1.74 billion in 2021-22. Imports aggregated at $15 billion during the 11-month period as compared to $25.5 billion in 2021-22.
• The EFTA Council is the highest governing body of EFTA. The Council usually meets eight times a year at the ambassadorial level (heads of permanent delegations to EFTA) and once a year at ministerial level.
• The EFTA Secretariat is situated in Geneva.
EFTA States
• Switzerland is a world leader in pharmaceuticals, biotechnology, machinery, banking and insurance.
• Liechtenstein, like Switzerland, is highly industrialised and specialised in capital-intensive and research & development driven technology products.
• The Icelandic economy benefits from renewable natural resources, not least rich fishing grounds, and has increasingly diversified into other industries and services.
• Abundant natural resources also contribute significantly to Norway’s economic strength, including oil and gas exploration and production, and fisheries, as well as important service sectors such as maritime transport and energy-related services.
