The European Economic Area extends the EU single market to three countries that are not EU members: Iceland, Liechtenstein and Norway. In force since 1 January 1994, it lets goods, services, capital and people move freely across the 30 countries, in exchange for applying EU single market rules.
The European Economic Area (EEA) is an agreement that extends the EU’s internal market, also called the single market, to countries of the European Free Trade Association (EFTA). It was signed on 2 May 1992 and entered into force on 1 January 1994. Today it brings together the 27 EU member states and three of the four EFTA countries: Iceland, Liechtenstein and Norway. The fourth EFTA member, Switzerland, signed the agreement but its voters rejected it in 1992.
Joining the EEA is compulsory for EU countries and optional for EFTA countries. Its members apply the “four freedoms” of the single market: free movement of goods, persons, services and capital. They also adopt the EU rules that support these freedoms, for example on competition, consumer protection, the environment, company law, and health and safety at work. Several thousand EU acts have been incorporated into the agreement.
The EEA does not cover everything the EU does. Its binding rules do not apply to the common agricultural and fisheries policies, the customs union, the common trade policy, foreign and security policy, justice and home affairs, or the economic and monetary union. An EEA country therefore sets its own customs duties towards the rest of the world and is not part of the euro area. Separately, all four EFTA countries take part in the Schengen Area.
Example
When the EU adopts a new single market rule, it does not apply automatically in Norway. The EEA Joint Committee, made up of the ambassadors of the three EEA EFTA countries and representatives of the European Commission, decides to add it to the agreement. Norway, Iceland and Liechtenstein then transpose it into national law. They can make technical adjustments but cannot change its substance. Compliance is monitored by the EFTA Surveillance Authority and the EFTA Court, rather than by the European Commission and the Court of Justice of the EU.
Debates and limits
The EEA is often cited as a model for countries that want access to the single market without EU membership. Supporters say it offers that access while keeping agriculture, fisheries and trade policy national. Critics point out that EEA countries must take over EU single market rules without voting on them in the Council of the EU or in the European Parliament. According to the European Parliament, the EEA’s structured procedure for taking over new EU law is precisely what the older bilateral agreements with Switzerland lack.