45 ANNUAL REPORT 2005 OF THE EUROPEAN FREE ......African Customs Union, SACU. This in itself broke...
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45 TH ANNUAL REPORT 2005 OF THE EUROPEAN FREE TRADE ASSOCIATION
Transcript of 45 ANNUAL REPORT 2005 OF THE EUROPEAN FREE ......African Customs Union, SACU. This in itself broke...
45TH ANNUAL REPORT 2005OF THE EUROPEAN FREETRADE ASSOCIATION
2005 April 2006
• Editor: Pal A. HvistendahlAssistant Editors: Carole Berthelot and Helena Saele
• Photo Copyright: Keystone Cover: Isopix
• Printed by Micrographex, BrusselsLayout by David Schürmann
The EFTA annual report is now in a new format. The report for 2005 is shorter and focuses on EFTA'smain activities during the year. For basic information on EFTA, please see the publication "This is EFTA".Further information can also be found on our website: http://secretariat.efta.int/
FOREWORD
© Studio Casagrande
Dear Reader,
The year 2005 was successful for our organisation inits two main fields of activity: relations with theEuropean Union and free trade and cooperation policy.
EFTA's free trade policy has reached a symbolicturning point: EFTA has now the world's largestnetwork of free trade partners. It signed a free tradeagreement with the Republic of Korea, the world'sseventh largest economy, and concludednegotiations with the five countries of the SouthernAfrican Customs Union, SACU. This in itself brokenew ground for EFTA, as one of SACU's membersis a least developed country.
But perhaps more important than EFTA'sachievements in 2005 are the potential tradepartnerships that the organisation will be engagingin in the near future. EFTA is directing its prioritiestowards its largest economic interests bycontinuously exploring ways to strengthen traderelations with important new partners. The EFTAStates have decided to give high priority to thestrengthening of trade relations with China, Japanand other Asian countries with the aim of initiatingfree trade negotiations.
With these policy orientations, EFTA is set to becomean even more efficient and effective mechanism forlinking the economies of its Member States witheconomic engines of growth around the world.
On the European scene, the year 2005 saw aconsolidation of EFTA's very close relations withthe European Union. With the positive outcome inJune of the referendum on the Schengen/DublinAgreement, Switzerland has finalised the secondseries of bilateral agreements with the EU. In manyrespects they mirror the EEA Agreement, to whichthe other three EFTA Member States are parties.
The EEA continues to work well after its enlargementin 2004. Established to support social and economiccohesion within the enlarged EEA, the EEAFinancial Mechanism and the Norwegian FinancialMechanism saw their first full year of operations in2005. In total — with the bilateral contributions fromSwitzerland — the EFTA countries will make over1.8 billion euros of financial support available to theEuropean Union over five years.
EFTA's remarkable achievement in 2005 are notcharacteristics of an exceptionally fruitful year. Onthe contrary, they are the result of a steadyintensification of the activities of the organisation inrecent years. This rising importance of EFTA as amajor player in international trade policy is, in myview, worth a closer look. We have thereforeincluded in this Annual Report an article with anoverview of EFTA's main internal and externalachievements in the last five years. The conclusionis an obvious one: contrary to what many believedin the early 1990s, EFTA has proved to be a keyinstrument for the formulation and implementationof an effective trade policy for its Member States.
There is in my view no doubt that the verydemanding international economic and tradecontext of the early 21st century will call for agrowing role of EFTA in this area.
William Rossier
Secretary-General
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FOREWORD 3
EFTA OVER THE LAST FIVE YEARS-A TIME OF CONSOLIDATIONAND NEW DYNAMICS 6
THE EFTA CONVENTION 10
The EFTA Convention 10
The EFTA Council 10
Third-Country Relations 10
• Introduction 10• Republic of Korea 10• SACU 12• Network of EFTA Free Trade
Agreements 13• Management of EFTA Free Trade
Agreements and Declarations on Cooperation 13
THE EEA AGREEMENT 18
EFTA and the EEA Agreement 18
The EEA Council 18
The Joint Committee 18
The Standing Committee 19
Decision-Shaping 20
Consultative Committees 20
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Parliamentary Committees 21
Joint EFTA-EU Projects 22
Free Movement of Goods 22
• Trade in Agricultural Products 23• Customs Matters/
Rules of Origin 23• Trade in Fish and other
Marine Products 24• Veterinary, Feedingstuffs and
Phytosanitary Matters 24• Technical Barriers to Trade 24• Energy 28• Competition Policy 29• State Aid 30• Public Procurement 30• Intellectual Property 31• Conventions on Common
Transit and the Simplification ofFormalities in Trade in Goods 31
• Group of Experts on Efficient Trade Procedures 31
• The EFTA Committee on Technical Barriers to Trade 32
• Mutual Recognition of Tests and Inspections 33
Free Movement of Services and Capital 33
• Services 33• Financial Services 33• Company Law 34• Information and
Telecommunications Services 34• Audio-visual Services 34• Postal Services 35• Transport 35
TABLE OF CONTENTS
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EU Horizontal Policies and Reforms 36
Free Movement of Persons 36
• Free Movement of Workers and Employment 36
• Social Security 36• Recognition of Professional
Qualifications 37
Flanking and Horizontal Policies 37
• Research and Development 38• Environment 38• Education, Training and Youth 38• Gender Equality and
Family Policy 38• The Disabled, the Elderly
and Social Exclusion 39• Health and Safety at Work
and Labour Law 39• Consumer Protection 39• Consumers' Consultative
Committee 40• Enterprise Policy 40• Civil Protection 41• Culture 41• Public Health 41• Budgetary Matters 41
Legal and Institutional Matters 42
EEA Cooperation in the Field of Statistics 42
• Main EEA Activities in 2005 42
Technical Cooperation in the Field of Statistics 44
EEA Enlargement 46
Financial Mechanisms 2004-2009 46
Financial Instrument 1999-2003 48
Financial Mechanism 1994-1998 48
EEA Seminar 48
EEA Info Kit and Publications 48
EEA Supplement 49
ADMINISTRATION 50
APPENDICES 52
The four EFTA countries, collectively a sizeableplayer in international trade, have actively takenpart in world economic changes and developmentsin international trade over the last five years. Thisactive participation has posed and continues topose substantial challenges for the organisation.Three such challenges can be distinguished.
Consolidation of EFTA-EU andEFTA Internal Relations
In 2000, EFTA's main preoccupation was the furtherrebalancing of the discrepancies in the relations of itsdifferent Member States with their most importanttrading partner, the EU. These discrepancies wereessentially caused by Switzerland's non-adherence tothe Agreement on a European Economic Area (EEA),which entered into force in 1994.
The first set of bilateral agreements between the EUand Switzerland, completed in 1999, was animportant step towards achieving, in a number ofareas, similar solutions to those applicable in theEEA. In 2004, a second set of Swiss-EU bilateralagreements was concluded. In the same year, theEEA Agreement and the first set of Swiss bilateralagreements were amended to include the 10 newEU Member States. Of the 10, 8 already had freetrade agreements (FTAs) with EFTA.
In connection with the enlargement of the EU, theEFTA States took a significant step by agreeing toshare in its cost. They accepted the financial burdenof assisting the new EU Member States to catch upeconomically with the more wealthier countries of
Europe. The EEA and Norwegian FinancialMechanisms provide to the EU financial supportworth 1.2 billion euros over a five-year period(2004-2009), while Switzerland will contribute 670 million euros for a five-year term.
One result of the EEA and the bilateral agreementsbetween Switzerland and the EU was that the EU-EFTA treaty relations had become closer than therespective relations between the EFTA States. Torectify this, the EFTA Convention was re-negotiatedwith a view to extending the substance of the Swiss-EU agreements to the other EFTA countries. The newConvention was signed in Vaduz on 21 June 2001.
Another reason for updating the EFTA Conventionwas the growing importance of trade in services,investment and intellectual property in internationaltrade policy. These elements had been partlyaddressed in the new WTO agreements, but were notadequately covered in the EFTA Convention which isthe basis not only for EFTA's internal cooperation,but also its negotiations with third countries.
Through the EEA Agreement, the two sets of Swissbilateral agreements and the Vaduz Convention, theEFTA States largely managed to achieve, over thepast five years, their objective of re-balancing andconsolidating their relations with the EU.
In addition to an effective management of the EEAAgreement, EFTA was now set to give its fullattention to its second main challenge, the openingup of new markets.
EFTA OVER THE LAST FIVEYEARS- A TIME OF CONSOLIDATION AND NEW DYNAMICS
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1 It is noteworthy that the EFTA countries support the initiative under the “Barcelona Process” of the EU to create a Euro-Mediterranean free trade area by 2010.
Consequently, the EFTA States have been expanding their network with Mediterranean countries. In parallel, EFTA Countries also contributed to the elaboration of
common pan-Euro-Mediterranean rules of origin, which will eventually bind 44 European and Mediterranean countries and territories in a network allowing for
Euro-Mediterranean “diagonal cumulation”.2 Including the Agreement with the Palestinian Authority and the one with the SACU States (signature pending).
An Ambitious Policy :Opening new Markets Across the Globe
The fundamental changes that the world economyhas been undergoing since the 1980s - mainly due toimportant technological innovations - and that arecommonly referred to as “globalisation”, werefurther accelerated after the end of the Cold War. Anunprecedented growth of international trade (notleast in services) and capital flows (investments)was the consequence. Institutionally thesedevelopments were reflected in important regionaland multilateral initiatives: the completion of theEU's internal market; the creation of the NorthAmerican Free Trade Area (NAFTA) and theestablishment of the WTO were all achievements ofthe first half of the 1990s.
When the EU, in the course of the 1990s, was reachingout with their partnership agreements to Central andEastern Europe and afterwards to the Mediterraneanarea, the EFTA States undertook to match the freetrade initiatives of the EU, mainly with a view toavoiding discrimination against their industries1.
Having focused on free trade initiatives in Europeand the Mediterranean area for the main part of the1990s, EFTA adjusted its third-country policy,towards the end of the decade, with the objective ofmaintaining its competitive position in anincreasingly global economy, considering alsotranscontinental FTAs. As a matter of fact, the EFTAcountries strongly felt the necessity to develop linkswith the new engines of growth, particularly theemerging economies in Asia and the Americas. Consequently, in the year 2000, EFTA extended itsnetwork to the Americas through the signing of anFTA with Mexico and a Declaration on Trade andInvestment Co-operation with Mercosur. In 2002,the network was further extended to Asia - a noveltyfor European countries - when the EFTA Statessigned a comprehensive FTA with Singapore.EFTA's most recent free trade partners includeChile (2003), Lebanon and Tunisia (2004), SouthKorea (2005) and the Southern African CustomsUnion, SACU (2006). EFTA countries are currently
negotiating with Egypt and Thailand and alsopursuing closer links with some of the world'slargest economies, such as Japan, China and India.
The current EFTA free trade-policy is based on twoMinisterial Declarations: in 1995 Ministers decidedin Bergen (Norway) that cooperation may alsoextend to countries beyond Europe, and in December1999, in a Declaration to mark EFTA's 40th
anniversary in Geneva, they agreed to activelydevelop EFTA's network of FTAs and to widen thescope of the agreements to possibly include fieldssuch as services, investment and public procurement,which are of growing importance in the modernworld economy. Therefore, most of EFTA's morerecent FTAs contain chapters covering these fields.
Today, the EFTA States are part of the world's largestnetwork of FTAs. The network covers 50 countriesacross the globe (EFTA 4, EU 25, others 21 - seeTable 1)2 while, five years ago, there were 34. Tradewith free trade partners represents nearly 80% of theEFTA countries' total trade. The respective marketstogether number 850 million consumers (see Table 2),and the countries forming part of the networkrepresent 30% of the world's total GDP (see Table 3).
Organisational and ManagerialReforms
To meet the new challenges of EFTA, theSecretariat had to carry through substantial reformsover the past five years. This process started withthe development of appropriate skills and includedthe filling of some key positions. It was followed upwith the introduction of modern management toolsto ensure that the Secretariat's staff can accomplishits tasks in an efficient and flexible manner.
Major reforms were made in four areas:organisation, human resources, finance andinformation technology.
The organisational structure of the Secretariat wasstreamlined. Existing units were merged, new oneswere established. A major innovation was theadoption of different tools commonly subsumed
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under the term of New Public Management (NPM).Strategic planning and objective-orientedmanagement were therefore introduced and willcontinue to be implemented on all managerial levels.
One of the most important management tools is, ofcourse, a modern and effective human resourcespolicy. The cornerstone of such policy is aprofessional recruitment system. Using state-of-the-art selection techniques enables an organisation tohire staff with the best possible qualifications. Suchtechniques have successfully been introduced in theSecretariat. Strong emphasis is also placed oncontinuous training of staff members.
In 2004, a new budgeting system (frameworkbudgeting) was introduced, as has recently been thecase in other international organisations as well as innational administrations of the Member States.Together with an annual performance plan, it increasesthe flexibility and efficiency of the Secretariat, makingit easier to adjust to new needs of the Member States.
An important reform was the introduction in 2005of a new remuneration system with salary scalesaccording to the procedures of the “Co-ordinatedOrganisations”, which was also adopted by theother two EFTA institutions (EFTA SurveillanceAuthority, EFTA Court). This system increasesflexibility, transparency and predictability, andensures that EFTA's salary structure is in line withthat of comparable international organisations.
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In 2004 a new Information Management Programme
for electronic document handling and archiving was
introduced. This system allows all documents to be
stored in one location so that they are accessible to
all relevant users. The Secretariat has also
modernised its face to the outside world via a new
internet website.
Outlook
The evolution of EFTA's activities over the last five
years confirms the continued and even increased
importance of EFTA for its Member States and their
partners. EFTA has made it possible for the
economic operators of its Members to have free
access to markets of countries around the world
with a total of 850 million consumers. As the
world's 9th largest trading partner for goods and the
5th largest for services, as well as the 5th most
important source of foreign investments, the EFTA
States, collectively, clearly have the critical mass to
further develop their network of FTAs.
The evolution of the policies and the organisational
adjustments in the recent past create excellent
conditions for the Organisation to take up new
challenges in the years to come. The key objectives
are already set: further consolidating EFTA's links
with the EU, and, in parallel, pursuing free trade
relations and developing cooperation with the
world's leading economies.
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-61
1961
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1970
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1972
-79
1979
-81
1981
-86
1986
-91
1991
-92
1992
-93
1993
-95
1995
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1997
-98
1998
-00
2000
-01
2001
-02
2002
-03
2003
-04
2004
-05
2005
-06
2006
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EFTA Free Trade Relations Network Table 1
EFTA States and their Free Trade Partners (including EU), 1960-2006
Source: Import and Export Figures 2004: World Trade Atlas.Note: EFTA Free Trade Partners consist of EU Member States and the countries and territories with which EFTA has concluded
a free trade agreement (FTAs). EFTA States and their partners are counted individually.
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400
500
600
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Time period
1960
-61
1961
-70
1970
-72
1972
-79
1979
-81
1981
-86
1986
-91
1991
-92
1992
-93
1993
-95
1995
-97
1997
-98
1998
-00
2000
-01
2001
-02
2002
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2003
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2004
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2005
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EFTA and its Free Trade Partners: Table 2
duty-free access to over 800 million consumers
Source: World Bank Development Indicators.Note: Based on Table 1, population figures are extrapolated from the 2003 figure as an approximation.
1960-72: EFTA only (full free trade in industrial products between EFTA countries as of 1.1.1967);
1972-91: EFTA-EC (from the signature of bilateral FTAs between EFTA States and the EEC to the signature of the EEA Agreement);
1991-2000: EFTA-EC-Euromed (EFTA concludes FTAs with a range of Euro-Mediterranean countries);
2000-current: Greater free trade zone extending beyond Europe (EFTA concludes FTAs with a range of overseas partners such as Mexico,Singapore, Chile, Korea, etc.).
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4 000
6 000
8 000
10 000
12 000
Time period
1960
-61
1961
-70
1970
-72
1972
-79
1979
-81
1981
-86
1986
-91
1991
-92
1992
-93
1993
-95
1995
-97
1997
-98
1998
-00
2000
-01
2001
-02
2002
-03
2003
-04
2004
-05
2005
-06
2006
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EFTA and its Free Trade Partners: a zone accounting Table 3
for over 10,000 bn USD of GDP
Source: World Bank Development Indicators.Note: Based on Table 1, cumulated GDP figures are extrapolated from the 2003 figure as an approximation.
The EFTA Convention
The EFTA Council, responsible for the VaduzConvention, regularly updates the Convention toreflect legislative developments in the EEAAgreement and the Swiss-EU agreements. In 2005,the Council amended Annex A to the Convention onrules of origin.
The EFTA Council
Liechtenstein was in the EFTA chair in the first halfof 2005 and Norway in the second half. The Councilmet 9 times at the level of Heads of PermanentMissions to EFTA in Geneva. In addition, theCouncil met twice at ministerial level: at a formalmeeting in Vaduz in June and at an informalmeeting in Geneva in December.
In 2005, the Council discussed the advancement ofEFTA's relations with third countries and agreed toopen free trade negotiations with Thailand. It alsodiscussed the management of existing agreementsand ongoing free trade negotiations. The Council alsoapproved a number of technical cooperation projectsand agreed on administrative and budgetary matters.
The EFTA Board of Auditors
The EFTA Board of Auditors (EBOA) is the
supreme audit authority of EFTA and reports directly
to the EFTA Council. It is responsible for auditing
matters relating to the EEA Agreement and for
establishing relations with the Court of Auditors of
the European Union (ECA). Members of the Board
are completely independent in the performance of
their duties. In 2005, the Board recommended to the
Budget Committee to approve the accounts for 2004
and made recommendations for the further
improvement of EFTA's operations.
Third-Country Relations
Introduction
The year 2005 was eventful for EFTA's third-country
policy. The EFTA States and the Republic of Korea
signed a Free Trade Agreement (FTA) on the fringes
of the World Trade Organization's 6th Ministerial
Conference. Negotiations for an FTA between EFTA
and the Southern African Customs Union (SACU —
Botswana, Lesotho, Namibia, South Africa and
Swaziland) were also finalised. The EFTA-Tunisia
FTA entered into force. Negotiations for an FTA with
Thailand started, and the possibility for an FTA with
Algeria was discussed. The EFTA States signed a
Record of Understanding with Indonesia and formed
the Joint EFTA-Indonesia Study Group to evaluate
the feasibility of a future trade agreement. EFTA
also engaged in numerous economic cooperation
and technical assistance activities.
This dynamism, stretching over several continents,underlines the importance that the EFTA MemberStates attach to their Association and its endeavourto create stronger economic relations with partnercountries worldwide.
Besides the free trade relations with the EuropeanUnion — comprising a population of 465 million —the EFTAStates have an FTAnetwork with 20 partnerswith a total population of 385 million. In addition, theEFTA States have Declarations on Cooperation withanother 7 partners (Albania, Algeria, Egypt, the GulfCooperation Council, MERCOSUR, Serbia andMontenegro and Ukraine).
Republic of Korea
On 15 December 2005, the EFTA States signed acomprehensive FTA with the Republic of Korea.They are the first European States to sign an FTA
THE EFTA CONVENTION
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with the Republic of Korea, the world's 11th largesteconomy and Asia's 3rd largest exporter. This isSouth Korea's 3rd such agreement — the other 2 having been signed with Chile and Singapore,with which EFTA has FTAs as well.
According to Korean estimates, the FTA is likely to
boost EFTA exports by 715 million US dollars, with
gains in the machinery and mechanical appliances,
steel and metal products, chemical, and fish and
marine sectors. Similarly, Korean exports could
receive a boost of 666 million US dollars, with
particular gains in the automobile, shipping and boat,
electronic machinery, and textiles and apparel sectors.
The impact of liberalising services, which was not a
part of the calculation, is expected to have an
additional significant positive effect. In 2004,
overall trade between the Korea and the EFTA
States amounted to 2 679 billion US dollars.
The Agreement covers all major areas of traderelations, including trade in goods, trade inservices, government procurement, competitionand intellectual property.
Most industrial goods — among them fish and othermarine products — will benefit from duty-freeaccess to the markets covered by the Agreement,once it enters into force. Customs duties on some ofthe EFTA products exported to Korea are to beeliminated after a transition period or a joint reviewby the parties. The Agreement provides for liberalrules of origin and allows for the use of up to 60%of non-originating input in the production of certainproducts. It also provides for concessions onprocessed agricultural products.
The chapter on trade in services covers all the 4 modes of supply of a service, as definedunder the GATS, and addresses all servicessectors, except financial services which are dealt with in another chapter. Separate annexesdeal with specific commitments, MFN (MostFavoured Nation) exemptions, mutual recognition,telecommunications services, and co-productionof broadcasting programmes. On competition, the free trade agreement mainly addresses thecooperation, notification, consultation andexchange of non-confidential information between
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Signing of the EFTA-Korea FTA in Hong Kong, China; December 2005. © Dagens Næringsliv
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the parties. The parties reiterated that the WTOAgreement on Government Procurement (WTOGPA) governs their rights and obligations in thisfield. This chapter also enables that the parties toenjoy an “early harvest” of the outcome of theirown negotiations in the context of ongoing WTOGPA negotiations.
The Agreement sets a high standard for the protectionof intellectual property rights, covering areas such aspatents, trademarks and copyrights. In certain areas,the Agreement goes beyond what is provided forunder the WTO Agreement on Trade-Related Aspectsof Intellectual Property Rights (TRIPS) and otherinternational conventions and treaties.
The EFTA States and Korea also concludedbilateral agreements on basic agriculturalproducts, and Korea concluded an agreement oninvestment with Iceland, Liechtenstein andSwitzerland. This agreement covers both marketaccess and the protection of investments. Thethree EFTA States and Korea grant each othernational treatment for the establishment ofinvestors, except for a few cases where the partieshave lodged reservations based on restrictions in
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their national legislation. The agreement alsoforesees direct dispute settlement between aninvestor and the party on whose territory theinvestment is located. A Joint Committeesupervises and administers the application of theEFTA-Korea FTA. Under the Agreement, theEFTA Secretariat and the Ministry of ForeignAffairs and Trade for Korea act as focal points(“Secretariat”) for communications between theparties. A separate chapter on dispute settlementin the FTA contains rules and procedures for theavoidance or settlement of disputes arising fromthe Agreement between one or several EFTAStates and Korea.
SACU
The EFTA States and the Southern African CustomsUnion (SACU — Botswana, Lesotho, Namibia,Swaziland and South Africa) concludednegotiations for a free trade agreement in 2005. Itwill be the first FTA between the EFTA States and apartner comprising a group of countries withdiverse levels of economic development, includinga least developed country. The Agreement isexpected to be signed in spring 2006.
First round of negotiations of the EFTA-Thailand Free Trade Agreement in Phuket,Thailand; 15 October 2005.
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Network of EFTA Free TradeAgreements
In addition to signing an FTA with the Republic ofKorea, the EFTA States also finalised negotiationsfor an FTA with the Southern African CustomsUnion (SACU — Botswana, Lesotho, Namibia,South Africa and Swaziland).
The EFTA States also completed the first full-fledged round of negotiations with Thailand during2005. Thai officials estimate that an FTA withEFTA would generate a 15% boost in bilateral trade.
Moreover, EFTA Ministers signed a Record ofUnderstanding with Indonesia, thereby establishingthe Joint EFTA-Indonesia Study Group to evaluatethe feasibility of a future trade agreement. The StudyGroup's final report is expected by December 2006.
At their 3rd Joint Committee meeting, under theirDeclaration on cooperation in Algiers which tookplace in November 2005, Algeria and the EFTAStates discussed the possibility of free tradenegotiations in 2006. A prospective FTA between theEFTA States and Algeria would contribute further tothe establishment of the Euro-Mediterranean FreeTrade Area as envisaged by the Barcelona Process.
Management of EFTA Free TradeAgreements and Declarations onCooperation
The EFTA States held 3 Joint Committee meetings
with different free trade partners in 2005 (see
Figure 1). EFTA and its partner countries usually
meet at least once every other year. They review
the functioning of the FTAs and assess the need to
make adjustments in the light of relevant trade
policy developments, including those arising in
the framework of the WTO.
The Joint Committees addressed a wide range ofissues during their meetings in 2005. Thesemeetings resulted in the adoption of severalformal decisions that update the legal texts of theFTAs in question.
The EFTA States also held Joint Committeemeetings in 2005 with partners with which theyhave Declarations on cooperation (Albania,Algeria and Ukraine, please see figure on page16). Additionally, the EFTA States established orpursued contacts with other countries in variousregions, notably in Asia, with a view toestablishing preferential trade relations.
EFTA signs a Record of Understanding with Indonesia, Geneva, Switzerland; 29 November 2005.From left to right:William Rossier, EFTA Secretary-General; Geir H. Haarde (Iceland), Minister for Foreign Affairs; Odd Eriksen (Norway), EFTA Ministerial Chair, Minister forTrade and Industry; Gusmardi Bustami (Indonesia), Ambassador to the UN, Geneva; Rita Kieber-Beck (Liechtenstein), Minister for Foreign Affairs and Federal Councillor,Joseph Deiss (Switzerland), Head of the Federal Department of Economic Affairs.
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EFTA’s economic cooperation and technical assistance activities cover a series of projects and
programmes funded through the Association’s budget. The main objective of these activities is to prepare
actual and prospective trading partners for free trade relations with EFTA and to assist them in the
implementation of EFTA free trade agreements. The programmes and projects are essentially directed at
developing countries and economies in transition. The focus is on Mediterranean countries and recent and
prospective partners in other areas, including countries in the Balkan region and to the east of the
boundaries of the enlarged EU.
EFTA arranges trainings, seminars, workshops and study visits adapted to the particular needs of the
individual partner countries in areas such as competition, customs and origin, intellectual property rights,
market opportunities, public procurement, sanitary and phytosanitary measures, services, state aid,
statistics, technical barriers to trade, trade facilitation or trade promotion. Moreover, EFTA participates in
EU technical assistance programmes and projects aimed at third countries, especially with regard to
customs matters, standardisation and statistics.
The EFTA Secretariat and/or the relevant EFTA Committees1 organise the activities. In most cases, experts
and consultants from the Member States, the Secretariat and the partner countries are involved in the
preparation and execution of the projects which normally take place in EFTA or partner countries.
Projects financed by EFTA in 2005 include:
• a seminar to train Lebanese customs officers and officials dealing with intellectual property to combat
counterfeit and pirated products;
• workshops on trade and cooperation between EFTA and Algerian experts;
• executive courses for civil servants from EFTA partner countries at the World Trade Institute, the
University of Iceland, and the DiploFoundation;
• continued support for the Eurocustoms Secretariat in Paris and EU projects under the CARDS,
MEDA, PHARE and TACIS programmes (see page 22);
• involvement of EFTA experts in EU projects, mainly CARDS and MEDA;
• Seminar on Preferential Rules of Origin and Cumulation for South Eastern European (SEE)
countries, coorganized by EFTA and the Stability Pact for SEE;
• seminars on external trade statistics, strategic management, and advanced sampling survey
techniques;
• quality infrastructure projects;
• seminar and workshop to promote the New Approach and the European standardisation.
In 2005, the budget allocated for EFTA projects, including projects co-financed with the EU, amounted to
1.6 million Swiss francs. This does not, however, include bilateral programmes and initiatives which are
undertaken by individual EFTA Member States in addition to the EFTA activities.
EFTA Economic Cooperation and Technical Assistance
1 Committee on technical barriers to trade, Committee of origin and customs experts (COCE) and its Subcommittee on technical assistance and training in customs
matters, Working group of EFTA Heads of national statistical institutes.
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A model protocol on rules of origin, i.e. the Pan-Euro-Mediterranean Protocol on Rules of Origin (Euro-
Med Protocol), was endorsed by the Euro-Mediterranean Trade Ministerial Conference in Palermo on
7 July 2003. The Protocol is part of the follow-up to the Barcelona Process — launched in 1995 — to create
a Euro-Mediterranean free trade area by 2010. Although not formally part of the Barcelona Process, the
EFTA countries support this initiative and are therefore expanding their network of free trade agreements
with Mediterranean countries.
In this context, the potential partners identified a need to introduce a common model to extend the pan-
European cumulation system in the field of rules of origin to the Mediterranean countries. This common
model ensures improved market access for products from the partner countries of the enlarged pan-Euro-
Mediterranean zone and creates a linkage between different agreements through the cumulation of origin.
The new model was prepared under the auspices of a Working Group on Rules of Origin, with the
participation of customs experts from the countries participating in the pan-European cumulation system,
including the EFTA and Mediterranean countries. The Working Group was set up in 2001 with the task to
create a system containing all the necessary elements for Euro-Mediterranean diagonal cumulation.
The system binds European and Mediterranean free trade agreements together and generates significant
advantages for economic operators and customs administrations. The same rules of origin apply for all
partner countries in the pan-Euro-Mediterranean zone. Producers are allowed to use input originating
anywhere in this zone for the production of originating products. Adoption of the Euro-Med Protocol by
the pan-Euro-Med partners in free trade agreements is a precondition for participation in the diagonal
cumulation system. Once all relevant agreements have been updated accordingly, 44 European and
Mediterranean countries will participate in the network.
The introduction of the Euro-Med Protocol on Rules of Origin in existing EU association agreements is
well advanced. The new Protocol has been included in the Arab-Mediterranean Free Trade Agreement
between Morocco, Tunisia, Jordan and Egypt (Agadir Agreement), signed in February 2004.
As for the EFTA States, the new provisions were included in the relevant annexes to the EFTA Convention
and the EEA Agreement in 2005. The provisions have already been integrated in the FTAs concluded with
Lebanon and Tunisia and will be included in the FTA being negotiated with Egypt. The Joint EFTA-
Jordan, EFTA-Morocco, EFTA-Turkey and EFTA-Israel Committees have agreed to incorporate the new
Protocol in the respective FTAs. The aim is to do so in all FTAs with EFTA partners in the Mediterranean
at the earliest opportunity.
Implementation of the Pan-Euro-Mediterranean Protocol on Rules and Origin
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In 2005, the WTO Committee on Regional Trade Agreements (CRTA) had 141 regional trade agreements
under examination, 110 of them in trade in goods and 31 in trade in services.
The CRTA undertook the third round of examination of the EFTA-Croatia and the EFTA-Jordan Free
Trade Agreements, and the second round of examination of the EFTA-Singapore Free Trade Agreement
(goods and services). The EFTA-Tunisia Agreement was notified to the WTO in June, and the terms of
reference for its examination were adopted on 15 July 2005. The factual examination of the EFTA-Croatia
and the EFTA-Jordan Free Trade Agreements has been completed.
Due to differences of opinion between WTO Members, notably on the application or interpretation of
existing WTO provisions on regional trade agreements, no examination reports have been adopted by the
CRTA. However, the CRTA continues its factual examination work.
The EFTA Secretariat continued to follow the work of several bodies of the Organisation for Economic
Cooperation and Development (OECD) as an observer. The Deputy Secretary-General in Geneva attended
the annual meeting of the OECD Council at ministerial level and the meetings of the OECD Executive
Committee in Special Session. Other members of the Secretariat attended the meetings of the Trade
Committee, the Competition Committee and the Investment Committee.
In 2005, the EFTA Secretariat participated in meetings organised by UNCTAD on issues relevant to the
work of the Secretariat, such as the UNCTAD International Forum on Trade Facilitation. It also followed
developments in the United Nations Economic Commission for Europe (UNECE).
EFTA - Relations with the WTO, OECD and other International Organisations
Joint Committee Meetings, 2005 Figure 1
Free Trade Agreement Venue and Date of Meeting Joint EFTA-Mexico Committee (3rd) Mexico City, 3 March 2005
Joint EFTA-Israel Committee (6th) Tel Aviv, 15 June 2005
Joint EFTA-Croatia Committee (2nd) Geneva, 5 December 2005
Declaration on Cooperation Venue and Date of Meeting Joint EFTA-Albania Committee (3rd) Tirana, 3 November 2005
Joint EFTA-Algeria Committee (3rd) Algiers, 8 November 2005
Joint EFTA-Ukraine Committee (2nd) Geneva, 16 November 2005
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Relations between EFTA and Third Countries Figure 2
Country Joint Declaration Free Trade Agreement Signature Signature Entry into force
Albania 10 December 1992
Algeria 12 December 2002
Bulgaria 10 December 1991 29 March 1993 1 July 1993
Chile 26 June 2003 1 December 2004
Croatia 19 June 2000 21 June 2001 1 April 2002
Egypt 8 December 1995
Gulf Cooperation Council (GCC) 23 May 2000
Israel 17 September 1992 1 January 1993
Jordan 19 June 1997 21 June 2001 1 September 2002
Korea (Rep.) 15 December 2005
Lebanon 19 June 1997 24 June 2004
Macedonia 29 March 1996 19 June 2000 1 May 2002
Mexico 27 November 2000 1 July 2001
Southern Common Market
(MERCOSUR) 12 December 2000
Morocco 8 December 1995 19 June 1997 1 December 1999
Palestinian Authority 16 December 1996 30 November 1998 1 July 1999
Romania 10 December 1991 10 December 1992 1 May 1993
Southern African Customs Union (SACU) Pending
Serbia & Montenegro 12 December 2000
Singapore 26 June 2002 1 January 2003
Tunisia 8 December 1995 17 December 2004 1 June 2005
Turkey 10 December 1991 1 April 1992
Ukraine 19 June 2000
EFTA and the EEA Agreement
After 10 years of existence, the EEA Agreementcontinued to well in 2005. The number of decisionsand legal acts integrated into the Agreement in2005 remained high and comparable to that ofprevious years.
The EEA Council
The EEA Council provides political impetus andguidance for the implementation and developmentof the EEA Agreement. The Council bringstogether the EEA EFTA Ministers of ForeignAffairs, the incumbent and incoming EUpresidencies, the Commissioner for ExternalRelations and the High Representative of the EU'sCommon Foreign and Security Policy. The EUside chaired the Council the first half of the yearand EFTA the latter half.
In 2005 the EEA Council met on 14 June and 21November. The EEA Council reviewed the ongoingwork in EEA cooperation and noted the progressreports from the EEA Joint Committee. TheMinisters positively assessed the overall functioningand development of the EEA Agreement andappreciated that new acts were being incorporatedinto the Agreement at a high speed. They alsodiscussed the recent enlargement of the EU and theEEA, as well as the upcoming membership ofRomania and Bulgaria, the European NeighbourhoodPolicy, the Lisbon Strategy and the Better RegulationInitiative. (The full text of the conclusions from thesemeetings is in the appendices).
The Joint Committee
The EEA Joint Committee is responsible for theongoing management of the EEA Agreement. It is aforum in which views are exchanged and decisions aretaken by consensus to incorporate EU legislation intothe EEA Agreement. The Joint Committee, whichgenerally meets once a month, is made up ofAmbassadors of the EEA EFTA States to the EU,representatives of the European Commission and EU Member States. Four subcommittees assist theJoint Committee on the free movement of goods (I);free movement of capital and services includingcompany law (II); free movement of persons (III) andhorizontal and flanking policies (IV). Numerousexperts and working groups report to thesesubcommittees.
The Chair of the Committee alternates every 6 months between the European Commission andthe EFTA Chair. In 2005 the Committee met 8 times.
The Joint Committee continued to discuss EEAEFTA participation in EU agencies. The Committeehas now agreed on general principles to be appliedto future participation in EU agencies. So far, EEAEFTA States participate in 7 agencies. Discussionsare ongoing on the European Food Safety Authority(EFSA) and are expected to be finalised in 2006.
The Committee also discussed the simplification ofdecision-making procedures for EEA EFTAparticipation in EU programmes. The EEA EFTAStates also reiterated their position on Open Skies,following the European Commission's reluctance toextend its Open Skies negotiations to third countriesto include the EEA EFTA States. The latter haveunderlined the EEA relevance of the issue andexpressed strong interest in maintaining the InternalMarket in the field of civil aviation.
THE EEA AGREEMENT
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In 2005, 314 legal acts (105 in the veterinaryfield) were incorporated or otherwise included inthe EEA Agreement.
The Standing Committee
The Standing Committee of the EFTA States is theforum in which the EEA EFTA States consult oneanother and arrive at a position before meeting withthe EU in the EEA Joint Committee. In addition, theCommittee discusses relevant EEA EFTA matters.The sub-structure of the Standing Committeemirrors that of the EEA Joint Committee, with 4subcommittees and numerous experts and workinggroups. In addition, the Standing Committee isassisted by Subcommittee V, which deals with legal
and institutional matters. It is made up ofrepresentatives of Iceland, Liechtenstein andNorway and observers from Switzerland and theEFTA Surveillance Authority.
In 2005, the Committee met 8 times. In the first half
of the year, Norway was in the chair and
Liechtenstein in the second half. The chair's work
programmes can be found on the EFTA website.
Agendas and conclusions of the Standing Committee
meetings are also available on the website.
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Subcommittee II
Free Movement ofCapital and Services
WORKING GROUPS
• Audio-visualServices
• Company Law• Financial Services• Information andTelecom Services
• Postal Services• Transport
Subcommittee III
Free Movement of Persons
WORKING GROUPS
• Free Movement of Workers andEmployment
• Mutual Recognitionof Diplomas
• Social Security
Subcommittee IV
Flanking andHorizontal Policies
WORKING GROUPS
• Budgetary Matters• Civil Protection• ConsumerProtection
• Cultural Affairs• The Disabled, theElderly and SocialExclusion
• Education, Trainingand Youth
• Enterprises• Environment• Gender Equalityand Family Policy
• Heads of Nat. Stat.Institutes
• Health and Safety at Work and Labour Law
• IDA• Public Health• Research andDevelopment
Subcommittee I
Free Movement ofGoods
WORKING GROUPS
• Competition Policy• Customs Matters• Efficient TradeProcedures
• Energy Matters• Feedingstuffs• Fisheries• IntellectualProperty
• Plant Health• ProcessedAgriculturalProducts
• Product Liability• Public Procurement• State Aid• Technical Barriers to Trade
• Veterinary Matters
Subcommittee V
Legal andInstitutional Matters
Ad hoc Working Group on Services in the Internal Market
Committees of Members of Parliament
Consultative Committee
Group on the Lisbon Process and Other Horizontal Policy Issues
STANDING COMMITTEE OF THE EFTA STATES
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Decision-Shaping
The EEA EFTA States have emphasised theimportance of active participation in the decision-shaping process. They have various formal andinformal means to exert influence on decision-shaping. By participating in around 400Commission committees and working groupspreparing legislation of EEA relevance, the EEAEFTA States can contribute towards the shaping ofdecisions on new legislation. The EEA EFTA Statesalso submit EEA EFTA Comments on proposals fornew EU legislation to the European Commissionand European Parliament.
In November, the EFTA Secretariat organised aseminar on decision-shaping in the EEA. The seminartargeted experts from Iceland, Liechtenstein andNorway who represent their countries in the EU'sexperts groups and comitology committees. The aimof the seminar was to allow the EEA EFTA expertswho participate in these committees to exchange ideasand best practice on participation in these meetings.
The seminar was organised after a request from boththe Norwegian and Liechtenstein chairmanship of theStanding Committee. About 40 experts participated inthe seminar, ensuring a maximum turnout and a highlevel of interaction and debate. After presentations ofthe EU's committee system, veteran experts from the
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EEA EFTA States explained how they influencedecisions in EU committees through well preparedinterventions that are properly coordinated in capitals,good networking practices and effective follow-up.The European Commission also presented itsexpectations towards EEA EFTA experts.
Consultative Committees
The EFTA Social Partners participate in 2Consultative Committees: one in the EFTA contextand the other in the EEA context.
The EFTA Consultative Committee is a forum forsocial partner organisations in the four EFTAcountries, serving as a platform for dialogue andconsultations between EFTA's trade unions andemployers' organisations, and between EFTA SocialPartners and EFTA authorities. In 2005, Mr Jon Vea(Confederation of Norwegian Business and Industry)chaired the EFTA Consultative Committee. MrHalldór Grönvold (Icelandic Confederation ofLabour) and Ms Ruth Derrer Balladore (Swiss Unionof Employers) were Vice-Chairs.
The EEA Consultative Committee is a voice forworkers, employers and other organisations in the 28EEA countries. The Committee forms part of the EEAinstitutional set-up and is composed of representativesof the EFTA Consultative Committee and of theEuropean Economic and Social Committee (EESC).
The information and consultation process of the EEA Agreement gives the EEA EFTA States the right tosubmit to the EU its views on forthcoming legislative measures in areas covered by the EEA Agreement.The comments are elaborated by working groups, cleared by subcommittees, endorsed by the StandingCommittee and officially noted by the Joint Committee after they have been sent to the relevant servicesin the Commission and in the European Parliament. In 2005, comments were submitted on the:
• proposal concerning Media 2007 • issue papers for the Liverpool audio-visual conference 21/22 Sept 2005 • proposal for quality assurance in higher education • proposal for a regulation on nutrition and health claims made on foods • proposal for a regulation on the addition of vitamins and minerals and of certain other substances to food • Youth in Action programme 2007-2013 • proposal for a regulation on the registration, evaluation, authorisation and restriction of chemicals • proposal for the Culture 2007 programme• proposal for a directive on end use energy efficiency and energy services
The full texts of the comments are at: http://secretariat.efta.int/Web/EuropeanEconomicArea/eeacomments
EEA EFTA Comments to the EU in 2005
Mr Jon Vea (EFTA CC) and Mr Leif E. Nielsen(EESC) co-chaired the EEA Consultative Committeein 2005. The Swiss members of the EFTAConsultative Committee participate in the EEAConsultative Committee as observers.
In 2005, the EFTA Consultative Committee focusedmainly on 3 issues: “European NeighbourhoodPolicy (ENP), Russia and EFTA third-countryrelations; the mid-term review of the Lisbon Processand the EFTA follow-up; and corporate socialresponsibility”. The Committee submitted a writtenopinion to the Standing Committee of the EFTAStates on “The European Neighbourhood and NewChallenges for EFTA” (adopted on 27 April 2005).
The EFTA Consultative Committee met internally 4 times in 2005. In addition, the Committee had 2 meetings with EFTA Ministers, one with theStanding Committee of the EFTA States and onewith the EFTA Parliamentary Committees. Informalpolicy consultations were held with the EFTAGroup on the Lisbon Strategy and Other HorizontalPolicy Issues.
The EEA Consultative Committee adopted 2resolutions at its annual meeting in Tallinn on 30-31May 2005: “Instruments for increased economicand social cohesion in Europe and The LisbonStrategy — role and expectations of economic andsocial partners in the EEA”.
Cooperation between social partners in the EEAwas further reinforced in 2005 through the Osmosisprocedure, which allows representatives of theEFTA Consultative Committee to participate in thework of the EESC and vice-versa. Cooperation in2005 included EFTA participation in EESC JointConsultative Committee meetings with Romaniaand Turkey, an EESC study group on the EuropeanNeighbourhood Policy, and an EESC seminar on thecontribution of civil society organisations to thework of the WTO.
Parliamentary Committees
Similarly to the Consultative Committees, there are2 EFTA Parliamentary Committees: the Committeeof Members of Parliament of the EFTA States(MPS), which deals with EEA-related matters and
forms the EFTA side of the EEA Joint ParliamentaryCommittee (JPC), and the Committee of Membersof Parliament of the EFTA countries (CMP), whichdeals with all other matters, including relations withthird countries. The CMP and MPS hold jointmeetings and function practically as one, withSwitzerland as an observer when EEA issues arebeing discussed. In 2005, the CMP-MPS waschaired by Mr Morten Høglund (Progress Party,Norway) and after the Norwegian Parliamentaryelections in September, Mr Svein Roald Hansen(Labour Party, Norway) took over as Chair for theremainder of the year. Mr Erwin Jutzet (Social-Democratic Party, Switzerland) was the Vice-Chairman of the CMP in 2005 and Mr Franz Heeb(Progressive Citizen's Party, Liechtenstein) was theVice-Chairman of the MPS. The CMP-MPS held 4joint meetings during 2005, in addition to the 2regular joint meetings with EFTA Ministers. TheCommittees discussed a number of issues related tothe EEA and EFTA third-country relations amongstthemselves and with the Ministers.
The EEA JPC met twice during the year. As atprevious meetings, the EEA JPC engaged in adialogue with the EEA Council, the EEA JointCommittee and the EFTA Surveillance Authority onthe functioning of the EEA and on progressregarding prior resolutions of the JPC. The EEAJPC discussed and adopted resolutions on thefunctioning of the EEA Agreement during 2005, onthe review of regional aid guidelines, on the adoptedresolutions of the EEA JPC 2000-2005, and on thenew environmental legislation and the EEA. Itforwarded these resolutions to the EEA Council andto relevant parliamentary committees. The EEA JPCalso adopted a statement on the services directive.In addition to its regular meetings, the EEA JPC metwith the European Parliament's Internal Market and Consumer Affairs Committee (IMCO) anddiscussed the services directive. In 2005, thePresident of the EEA JPC was the Chairman of theCMP-MPS and the Vice-President was Ms DianaWallis (Member of the European Parliament,ALDE, UK).
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Joint EFTA-EU Projects
EFTA participated in EU projects under the PHAREand TACIS programmes in the fields of customs andorigin matters and statistics. The EFTA States alsoprovided experts for CARDS activities and wereinvolved in the MEDSTAT statistics programme. Aquality infrastructure project under PHARE, designedfor Bulgaria and Romania, was due to start towards theend of 2005.
Customs Cooperation under PHARE and TACIS
The EFTA States and the Commission establishedclose contacts in technical cooperation activitiestargeting the EU's neighbours, including theTACIS and West Balkan regions (CARDs). Theparties set up financial conditions for EFTA'sparticipation in EU-funded projects. In principle,EFTA and the EFTA countries are to bear all theexpenses that EFTA experts incur whileparticipating in the projects. The Commission willuse Eurocustoms as coordinator for many of theprojects. In view of the development, the EFTAMemorandum of Understanding with Eurocustomswas updated and signed during 2005.
EFTA continued its support to the EurocustomsSecretariat by providing project managers tocustoms projects within the PHARE and TACISprogrammes. This included a project funded byEFTA to prepare the ground for the acceding andcandidate countries to adhere to the Convention onCommon Transit.
Quality Infrastructure Projects
A project that the EU and EFTA jointly financed topromote quality infrastructure in Bulgaria andRomania formally began in late 2005. The project'ssteering committee met for the first time inFebruary 2006.
The EFTA countries supplied experts for short-termmissions to Turkey in 2005.
Free Movement of Goods
Subcommittee I, under the EFTA StandingCommittee, coordinates matters relating to the freemovement of goods. In 2005, it met 8 times bothinternally and with the European Commission.
In 2005, 216 EC legal acts were incorporated through85 Joint Committee Decisions into the annexes andprotocols of the EEA Agreement, in the areas thatSubcommittee I covers. The Subcommittee sent 4EEA EFTA Comments to the Commission during theyear. It also registered positive results with theinclusion in the EEA Agreement of:
• Protocol 4 on origin, due to the inclusion ofseveral Mediterranean partner countries, i.e.,Algeria, Egypt, Israel, Jordan, Lebanon,Morocco, the PLO, Syria, Tunisia and Turkey, inthe European cumulation system;
• competition: exceptions from the competitionrules for liner shipping companies andtechnology transfer agreements;
• 105 EC legal acts in the veterinary fieldcovering, i.a., a passport for pet animals andcontrol of salmonella;
• 27 acts in the field of feedingstuffs, mainly onfeed additives, including continued derogationfor antibiotics in feedingstuffs;
• 63 acts in the field of technical requirements(Annex II), and most of these in the foodstuffs,dangerous substances, medicinal products andmotor vehicles sectors;
• the second Internal Energy Market packagecovering electricity and gas and cross-bordertrade in electricity and a directive settingindicative targets for renewable energyproduction.
EFTA also made progress in the fields of technicalregulations and third countries. In October 2005, theEEA EFTA States and the United States signed 2 Mutual Recognition Agreements (MRAs) covering4 product sectors (telecommunications equipment,electromagnetic compatibility, recreational craftsand marine equipment).
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Consultations with the Commission will continueduring 2006 on:
• customs: the proposal for pre-arrival/pre-departure information before a product arrives inthe Union;
• state aid: follow-up of the State Aid Action Planincluding revision of the Commission's guidelinesfor aid, which cover regional aid, the environmentand R&D (research and development), and theproposals on the link between state aid andservices of general economic interest;
• public procurement: integration of thelegislative reform package;
• energy: eco-design and conditions for access tonatural gas transmission networks;
• veterinary issues: hygiene package and officialfood and feed control;
• foodstuffs: integration of the new food lawestablishing a European Food Safety Authority,and new regulations on genetically modifiedfood and feed;
• pharmaceutical products: the reform of EUlegislation;
• chemicals: the REACH proposal for a newchemicals framework, and the establishment ofthe European Chemicals Agency;
• trade in wine: update of the existing EEAProtocol.
Trade in Agricultural Products
Iceland negotiated the conditions of trade inagricultural products with the Commissionaccording to Article 19 of the EEA Agreement.These negotiations were finalised at the end of 2005.
The EFTA Working Group on ProcessedAgricultural Products did not meet in 2005.
Customs Matters/Rules of Origin
The EFTA Working Group on Customs Mattersheld 4 meetings in 2005, in conjunction withmeetings of the EFTA Committee of Origin andCustoms Experts (COCE). Members of theWorking Group also participated in 2 meetings ofthe Pan-Euro-Med Working Group, which consists
of origin experts from the 42 countries participatingin the system of Pan-Euro-Med cumulation.
The Commission's proposal for pre-arrival/pre-departure declarations was a central issue for theWorking Group in 2005. The proposal requires thata set of security data be submitted to the EU customsauthorities before goods physically arrive in/leavethe customs territory of the Union. EFTA and theCommission held several meetings in order toprevent the requirement from impacting negativelyon trade between the EFTA countries and the Union.Proof that the security level in the EFTA countries isequal to that in the EU Member States should allowfor import/export procedures to continue without therequired advance information. Consultations withthe Commission will continue in 2006.
Another important topic for the Working Group in2005 was the implementation of the system of Pan-Euro-Med cumulation to include the Mediterraneanpartner countries, i.e., Algeria, Egypt, Israel,Jordan, Lebanon, Morocco, the PLO, Syria, Tunisiaand Turkey. This led to an update of the originprotocols under the various free trade agreements,including the EEA origin protocol (Protocol 4). TheEEA Joint Committee adopted the latter on 21October 2005. At the end of 2005, theimplementation process was sufficiently advancedto start with Pan-Euro-Med cumulation. During theyear, the Pan-Euro-Med zone incorporated theFaroe Islands as a partner.
Since the European rules of origin have beenharmonised, EFTA origin experts cooperateclosely with their counterparts in the EU and in itspartner countries. The EFTA experts haveparticipated in 2 project groups that the EuropeanCommission established under the Customs 2007programme. One project group studied thepossibility of revising the first part of theprotocols on rules of origin. The other looked intothe feasibility of replacing the existing protocolsby a regional convention on rules of origin. Theproject groups finalised their work and presentedseveral recommendations. The Commission,however, decided not to continue the process untilthe Pan-Euro-Med cumulation system is in force.
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The Working Group addressed customs mattersexpressly related to free trade agreements withthird-country partners and open technical customsissues among EFTA countries.
Trade in Fish and other Marine Products
The EFTA Working Group on Fisheries did notmeet in 2005.
Veterinary, Feedingstuffs and Phytosanitary Matters
Veterinary Issues
Veterinary legislation applies to Norway, and toIceland only in terms of aquaculture animals andproducts, bivalve molluscs and fishery products.Liechtenstein has a permanent derogation sinceJanuary 2003 and is linked to the bilateral Swiss-EU Agreement on Agriculture.
The Working Group on Veterinary Matters met 3 times in 2005. It focused on issues related to theincorporation of a new regulatory framework for thehandling and disposal of animal by-products, theincorporation of Regulation (EC) No 178/2002laying down general principles and requirements offood law and procedures in matters of food safety,and the establishment of the European Food SafetyAuthority (EFSA), (see section on foodstuffs on page26), as well as a new regulation on the movement ofpet animals. The Working Group also starteddiscussing the incorporation of the hygiene packageand the regulation on official food and feed control.
During 2005, 105 legal acts in the veterinary fieldfrom 2003, 2004 and 2005 were incorporated intothe Agreement. Among these was the legislation onthe movement of pet animals, introducingharmonised rules within the EEA and a model petpassport and health certificate. Harmonised ruleson the monitoring of zoonoses and the control ofsalmonella and other food-borne zoonotic agentswere also incorporated into the Agreement. Finally,the regulation establishing a system for the
identification and registration of ovine and caprineanimals was incorporated in the Agreement.
Each year, a number of acts are subject tosimplified procedures. This implies that certainacts are applicable to the EEA EFTA States withoutfirst being incorporated into the Agreement.Instead, the EEA Joint Committee takes note of theacts for transparency purposes. During 2005, 79acts falling under simplified procedures wereidentified.
Feedingstuffs
The Working Group on Feedingstuffs met once in2005. The Group focused on legislative proposals,such as the maximum level of undesirablesubstances in animal feed, and on the regulationson feed hygiene and official food and feed control,being prepared in the EU institutions.
In 2005, 27 acts in the field of feedingstuffs from2003, 2004 and 2005 were incorporated into theAgreement. One of the most important was the newlegislative framework for the authorisation ofadditives in feedingstuffs, by which Iceland andNorway were granted a continuation of thederogations from the provisions on the use ofantibiotics in feedingstuffs. Most of the otherincorporated acts concern the authorisation ofadditives under the new legal framework for additives.
Phytosanitary Matters
In 2005, the EEA Joint Committee incorporated intotal 11 acts from 2004 and 2005 in the Agreement.These mainly concern marketing and comparativetrials and tests on seeds.
Technical Barriers to Trade
The removal of technical barriers to trade (TBT)through the harmonisation of product requirementsand certification systems is a central element forthe completion of the Internal Market. In manyproduct areas, European Standards play a vital rolein this process.
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The Working Group on Technical Barriers to Tradecoordinates the assessment of the relevance andacceptability of new EU technical legislation relatingto Annex II (Technical Regulations, Standards,Testing and Certification) and Protocol 47 (Abolitionof Technical Barriers to Trade in Wine) of the EEAAgreement. It met 7 times in 2005.
In the course of the year, the EEA Joint Committeeincorporated a total of 63 acts into Annex II of theEEA Agreement. Most of the new acts relate tofoodstuffs, dangerous substances, medicinal productsand motor vehicles.
Experts from the 22 experts and ad hoc groupsestablished under the Working Group on TBT,were directly involved in the information andconsultation process with the European Union.Over the year, experts from EEA EFTA Statesparticipated in more than 100 committees,working groups and other bodies set up by theCommission in the field of TBT.
During the year, EFTA experts in the fields offoodstuffs, medicinal products, chemicals andtrade in wine met mainly to consider new EUlegislative initiatives.
The legislation on the non-commercial movement of pet animals was incorporated into the EEAAgreement in 2005 and entered into force on 9 July 2005. It aims at preventing the spread of rabies toensure a high level of protection of human and animal health, while facilitating the movement of petanimals and their owners.
The legislation introduces harmonised health requirements applicable to the non-commercial movementof pet animals within the European Economic Area and from third countries. When pets are taken fromone country to another within the European Economic Area, they must be accompanied by a passportissued by a veterinarian authorised by the competent authority of their state of origin, while animals fromthird countries must be accompanied by a certificate issued by an official veterinarian.
The animals must be identified with the aid of an electronic identification system (transponder) or a clearlyreadable tattoo. As from 3 July 2011, the transponder will be the only valid means of identification.
Passport for Pet Animals
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Motor Vehicles
In 2005, 7 acts concerning motor vehicles wereintegrated into the EEA Agreement and theprocessing another 8 acts started. The motor vehiclelegislation is one of several sectors to which theCommission's Strategy for the Simplification of theRegulatory Environment gives priority. This workwill continue in 2006.
Foodstuffs
The EFTA Expert Group on Foodstuffs met twicein 2005.
Throughout 2005, high priority was given to theintegration into the EEA Agreement of Regulation(EC) No 178/2002, laying down general principlesand requirements of food law and procedures inmatters of food safety and the establishment of theEuropean Food Safety Authority (EFSA).
EFSA will be responsible for providing scientificadvice and opinions on food safety issues, andensuring close cooperation and exchange ofinformation on emerging risks between the Authorityand the bodies undertaking similar tasks in the EUMember States. It is, therefore, important to ensurethat the EEA EFTA States can participate in the workof the Authority.
Both EFTA and the Commission continued internalconsultations on different aspects of the adaptationsthat the EEA EFTA States proposed. A revisedEFSA proposal laying down the modalities ofparticipation was submitted to the Commission in
May. The possible expansion of the scope of theEEA veterinary legislation for Iceland is a key issueof the proposal. Consultations will continue in 2006.
The EEA EFTA States continued discussing theincorporation into the EEAAgreement of the NovelFoods Regulation from 1997, the regulations onGM food and feed, and the traceability andlabelling of GMOs that the EU adopted in 2004. Adraft EEA Joint Committee Decision was sent tothe Commission in December 2005.
The Joint Committee incorporated a total of 23 actsin the field of foodstuffs into the Agreement during2005. Among these was the new legislation onsmoke flavourings and on food contact materials.The Working Group submitted 2 EEA EFTAComments to the European Commission: one onfortification and the other on nutrition and healthclaims made on foods.
Medicinal Products
The EFTA Expert Group on Medicinal Productsmet twice in 2005.
The reform of the EU pharmaceuticals legislationupdating existing rules on launching and monitoringmedicines, adopted on 31 March 2004, was themain item on the agenda. The new legislation aimsto respond to technical and scientific innovationswhilst maintaining a high level of health protection,and continuing to ensure that the EU's InternalMarket in the pharmaceuticals sector functionsproperly. A draft EEA Joint Committee Decisionwill be sent to the Commission in early 2006.
Meeting of the Technical Barriers to Trade Committee, December 2005. From left to right: Kathleen Byrne, Lars Varden, and Jóhannes Thorsteinsson, EFTA Secretariat,Brussels, Kari-Ann Kristiansen, and Tor Arne Johnsen, Ministry of Trade and Industry, and Torleif Hauge, Norway Accreditation.
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EFTA experts continued to participate in the work ofthe European Medicines Agency (EMA). Preparationscommenced on the EEA EFTA States' renewal ofexchange of letters with EMA relating to theirparticipation in the Agency. This is required due torecent changes in the pharmaceuticals legislation, butwill not be concluded until the new legislation hasbeen incorporated into the EEA Agreement.
Chemicals
The EFTA Expert Group on Chemicals met once in2005. The experts mainly discussed theCommission's proposal on a new chemicalsframework (REACH), the establishment of aEuropean Chemicals Agency (ECA) in Helsinki, aregulation on export and import of dangerouschemicals, and a regulation on persistent organicpollutants. EEA EFTA Comments on the REACHproposal were sent to the Commission in April 2005.
Revision of certain derogations for Liechtensteinand Norway in the field of dangerous substancesstarted in 2005 and is expected to be finalised inearly 2006. The Group closely monitored ongoingCommission work on a new framework legislationfor plant protection products.
During 2005, the Joint Committee incorporated atotal of 13 acts in the field of dangerous substancesinto the EEAAgreement. Five of these acts concernplant protection products for which the EEA EFTAStates have a derogation. The Committee incor-porated the Detergents Regulation into the EEAAgreement in December 2005.
Trade in Wine
The EFTA Expert Group on Wine met once in2005, and continued work on an update ofProtocol 47 on Trade in Wine. The Group alsorevised a draft EEA Joint Committee Decision toincorporate 22 acts in the trade in wine field intothe Agreement. It will be presented to the EEAJoint Committee in spring 2006.
EFTA Participation in European StandardisationOrganisations
EFTA continued to play an active role in the EuropeanStandardisation Organisations (ESOs). Along with theCommission, EFTA has the formal status of counsellorto European Committee for Standardisation (CEN) andEuropean Telecommunications Standards Institute(ETSI), with the right to participate in theAdministrative Boards of these organisations, as wellas in their General Assemblies.
The Working Group on TBT continued itsinvolvement in the preparation of mandates for theESOs for new standardisation activities to facilitatethe functioning of the European market. Thirteennew mandates were considered for presentation tothe ESOs during 2005. The 98/34 CommissionCommittee on Standards and Technical Regulationsdiscusses and clears the mandates. This Committeenormally meets 3-4 times a year and the EEA EFTAcountries participate as observers. The EFTAStanding Committee approves the mandates on the EFTA side. The mandates approved in 2005mainly concerned consumer product safety,
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telecommunications, construction products andenvironmental issues.
The mandates are followed by grant agreementsrelating to standardisation activities, financed on theEFTA side by all 4 States. In addition to the 3 annualperformance contracts signed between EFTA andthe ESOs in parallel to the EC, 43 grant agreementswere signed in 2005. EFTA's 5% financialcommitment to standardisation activities amountedto almost one million euros in 2005.
Market Surveillance and Consumer Product Safety
A European market surveillance programmingConference took place in Brussels in March, organisedby the Commission in coordination with EFTA. Theobjective was to discuss with market surveillanceauthorities the development of best practices, andpossible improvements of market surveillance activities,with specific focus on cross-sector cooperation.
The EFTA countries participate in the work ofPROSAFE, an informal network of marketsurveillance enforcement authorities. Thisorganisation was successful in its application in2005 for EU financing of an extensive three-yearproject on best practices to improve marketsurveillance, which will commence in January 2006.
The EEA EFTA States participate as observers in theCommission's Committee on Consumer ProductSafety, which delivers opinions on draft Commissiondecisions related to products presenting serious andimmediate risks.
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Extension of the Internal Market to Third-Countries
In areas with harmonised product legislation for industrial products, the Commissionnegotiates mutual recognition agreements(MRAs) on conformity assessment with thirdcountries. Such agreements enable institutions ina third country to test and certify products toEU/EEA requirements in a specific productsector (and vice versa). The aim is to avoidduplication of testing and certification by theimporting country. According to Protocol 12 ofthe EEA Agreement, the EEA EFTA States shallconclude equivalent agreements with thirdcountries in order to maintain the homogeneity of the Internal Market and to ensure the freemovement of goods.
On 17 October 2005, the EEA EFTA States signed2 MRA with the USA: a framework MRAcovering 3 product sectors (telecommunicationsequipment, electromagnetic compatibility andrecreational crafts), and a separate MRA onmarine equipment. These Agreements will enterinto force on 1 March 2006.
The EFTA Working Group on TBT and the EFTACommittee on TBT discussed the possibility of anagreement on mutual recognition of conformityassessment between the EFTA countries andTurkey. This work will continue in 2006.
The Commission hosted a conference on the New Approach on 30 November 2005. Mr Odd Eriksen, theNorwegian Minister for Trade and Industry, represented the EFTA countries as a keynote speaker.
The New Approach aims to facilitate trade, covering some 25 product sectors such as electrical equipment,machines, toys, etc. This means that the European institutions in Brussels decide only on the essential healthand safety requirements that the products need to meet. Specialists working through the European standardsorganisations then provide detailed guidance on ways to meet these requirements. The manufacturers showthat their products conform to the European law by affixing the CE marking on the products.
EFTA experts have given their full support to the Commission in its efforts to refine the New Approachand to create trust in the CE marking as the passport for free circulation of industrial products within theEuropean market. This work will continue in 2006.
20th Anniversary of the New Approach to Technical Harmonisation and Standards
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end of 2005, the Working Group on Energy Matterswas discussing these acts with a view to theirincorporation into the EEA Agreement.
The Working Group also followed up 2 proposalslaunched by the Commission in 2003: one onmeasures to safeguard security of supply andinfrastructure investment and the other on energyend-use efficiency and energy services. This workwill continue in 2006.
In January 2005, the EEA EFTA States submittedEEA EFTA Comments to the European Commissionon the proposal on energy end-use efficiency andenergy services.
The Working Group on Energy Matters met 5 timesin 2005.
Competition Policy
Strict competition rules have been introduced into theEEA Agreement in order to prevent companies fromestablishing barriers that would reduce the benefitsgained from the free movement of goods. In order tocreate a homogeneous EEA with equal conditions forcompetition, the same competition rules apply for allundertakings within the entire EEA.
The Working Group on Competition Policy met 4times in 2005. It finalised its work on 3 regulationson the application of Article 81 (3) of the EU Treaty,
Energy
The second Internal Energy Market package wasincorporated into the EEAAgreement on 2 December2005. It includes the 2 directives on the InternalMarket in electricity and in natural gas, theCommission's decision establishing the EuropeanRegulators Group for electricity and gas, a regulation on cross-border trade in electricity, and a joint declaration.
An EEA Joint Committee Decision incorporated thedirective on the promotion of electricity producedfrom renewable energy sources into the EEAAgreement on 8 July 2005. The decision allowed fora derogation from the directive for Liechtenstein, butset indicative targets for Iceland and Norway onrenewable energy production.
Alongside the energy framework programme, the EUaims to manage its dependence on imported energyby introducing energy security of supply and energyefficiency measures. In February 2004, the Counciland the European Parliament adopted a directive oncogeneration, based on useful heat demand in theinternal energy market. A Joint Committee Decisionwill be sent to the Commission in early 2006.Furthermore, a framework directive on eco-designwas adopted on 6 July 2005, while the regulation onconditions for access to the natural gas transmissionnetworks was adopted by the Council and theEuropean Parliament on 28 September 2005. By the
The EEA EFTA States sign two Mutual Recognition Agreements with the USA, October 2005.From left to right: Knut Vollebaek, Norwegian Ambassador to the United States,Claudia Fritsche, Liechtenstein Ambassador to the United States,Rob Portman, US Trade Representative, and Helgi Agustsson, Icelandic Ambassador to the United States. © Keystone
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economic and social considerations into account.
The EEA EFTA States closely followed up theState Aid Action Plan and attended themultilateral meeting on the State Aid Action Planon 11 and 12 July, and the UK presidency meetingon 14 July 2005. In addition, the Working Groupon State Aid held an internal meeting and a jointmeeting with the Commission on 26 September2005 on this matter.
As a consequence of the Altmark judgment, theCommission adopted 3 acts concerning services ofgeneral interest by the end of 2005. These actsstipulate the distinction between compensation andstate aid for undertakings entrusted with theoperation of services of general economic interest.
Public Procurement
The legislative reform package on publicprocurement was adopted on 31 March 2004. It introduced more flexibility for the contractingauthority and put electronic means of communi-cation on an equal footing with traditional means.The contract award criteria take account of theenvironment.
The Working Group on Public Procurement closely scrutinised the package, and sent a draftJoint Committee Decision to the Commission on 29 September 2005. The Commission has madeseveral comments on the draft. Consultations willcontinue in 2006.
granting an exception from the competition rules tocertain categories of agreements, decisions andconcerted practices
The Working Group also finalised its work on aregulation concerning air transport between theUnion and third countries. It also finalised a draftagreement amending Protocol 4 of the Surveillanceand Court Agreement. The EEA Joint Committeeincorporated these acts into the Agreement in March.
The Working Group prepared “The conditions ofclaims for damages in case of infringement ofEEA competition rules” — a report from the EEAEFTA States in May 2005. The report is based onthe Ashurst Study on “The conditions of claimsfor damages in the case of infringement of ECcompetition rules”. The report aimed not only todetermine the status of private enforcement in theEEA EFTA States but also to ensure that work inthat area is in line with that of the Commission.The Working Group followed the work on theCommission's green paper closely and submittedthe findings of the EEA EFTA States' report to theCommission.
State Aid
In line with the EC Treaties, the EEA Agreementgenerally prohibits any measures that can beidentified as state aid, including grants, soft loansand tax concessions, which may distort trade.However, it is possible to take certain political,
On 7 July 2005, the Commission launched the State Aid Action Plan for 2005-2009, “Less and BetterTargeted Aid”. As the name implies, the aim is to simplify the current state aid provisions and introducemore effective procedures and a refined economic approach. The Plan also emphasises greater cooperationbetween the Commission and the Member States and among the Member States. During 2005, theCommission revised the regional aid guidelines and the communication on short-term credit insurance.
During 2006, the Commission will revise the current system of granting exemptions from the state aidrules by introducing a general block exemption with extended scope, and increase the threshold values forgranting state aid (de minimis). The Commission will also revise the guidelines for the environment, R&Dand present a communication on innovation. It will also establish various networks to discuss state aidissues with the Member States. It is important for the EEA EFTA States to participate in these networks.
State Aid Action Plan
In its communication on public-private partnershipsand EU law released on 15 November 2005, theCommission indicated that it would propose legislativeinitiatives relating to concessions. The Working Groupon Public Procurement followed this issue.
Intellectual Property
The EEA Agreement contains provisions onintellectual property rights whose main purpose isto provide harmonised EEA rules on intellectualproperty, while ensuring a high level of protection.
The Working Group on Intellectual Property, which mettwice in 2005, followed the developments of theproposal for a regulation on the legal protection ofdesigns and on an EU patent. It also monitored theproposal for a directive on the patentability of software,which the European Parliament rejected in July.
The Working Group considered the directive on theenforcement of intellectual property rights, whichis to bolster the fight against counterfeiting andpiracy. The Group is discussing the EEA relevanceof the directive.
Conventions on Common Transit and the Simplification ofFormalities in Trade in Goods
The conventions on Common Transit and thesimplification of formalities in trade in Goodsentered into force in 1988. The EFTA countries andthe EU Member States are contracting parties to theConventions. The EC-EFTA Joint Committee onCommon Transit and Simplification of Formalitiesin Trade in Goods met in Basel, Switzerland, on 4 October 2005. The meeting accepted Romania asa member as of 1 January 2006 and Bulgaria andTurkey as observers in the two Conventions.
The purpose of the Convention on Common Transitis to simplify the customs clearance formalities uponborder-crossing, thus providing for the temporarysuspension of customs duties and taxes normallylevied on imported goods moving inside the zone.
In the 1990s, millions of transit documents coveringvast quantities of goods and accounting for billionsof euros in duties and taxes were issued every year.
Unfortunately, not only the number of transitmovements but also the incidents of transit fraudincreased considerably. Therefore, it becamenecessary to consider a reform entailing changes atboth legal and procedural level, based on fullcomputerisation of the system.
The legal part of the reform entered into force on 1July 2001. The second part, the New ComputerisedTransit System (NCTS) was fully operational for mostcontracting parties by 1 July 2003. The NCTS servesas a tool to manage and control the transit system.Based on the use of advanced computer systems andthe electronic processing of data, it guarantees moremodern and efficient management than the old paper-based system. The implementation of a computerisedtransit guarantee system, finalised at the end of 2005,is the last step of the NCTS project.
The Joint EC-EFTA Working Group on CommonTransit and the Simplification of Formalities in Tradein Goods met 5 times in 2005. Among otherimportant tasks carried out during the year, the Groupimplemented the computerised guarantee system andconverted the Transit Manual into a handbookpresenting NCTS as the normal transit procedure.
Group of Experts on Efficient Trade Procedures
The EFTA Group of Experts on Efficient TradeProcedures (GEETP) met 3 times in 2005. Themeetings discussed, inter alia, cooperation on tradefacilitation matters with the EFTA partner countries,in particular the follow-up of the EFTA Trader's ABC(see below). The GEETP meetings also discussed theestablishment of security measures in order toprevent terrorism, such as the US Container SecurityInitiative (CSI), and the Commission's securityproposal with the introduction of pre-arrival/predeparture declarations. Furthermore, the GEETPclosely followed the discussions and developmentson trade facilitation issues within various bodies,such as the CEN-ISSS (eBES), UN-CEFACT, WTO,WCO, the World Bank and EUROPRO.
As part of its ongoing contribution to EFTA's partnercountries on trade facilitation matters, in 1999 theGEETP produced a CD ROM on trade facilitation:the EFTA Trader's ABC. It provides background
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information on trade practices for those engaged orinterested in international trade practices. The CDROM is available upon request from the EFTASecretariat. The GEETP is currently preparing anupdate of Volume I of the EFTA Trader's ABC, to be uploaded on the EFTA website in 2006(http://secretariat.efta.int/Web/EFTAAtAGlance/tradersabc/).
The EFTA Committee on TechnicalBarriers to Trade
The EFTA Committee on Technical Barriers toTrade (TBT) met 3 times in 2005 and discussedstandardisation and conformity assessment policies,relations with other European quality infrastructureorganisations and international aspects of the work.
The Committee on TBT discussed conformityassessment issues that are mainly related to thereview of the New and the Global Approach. Inthis respect, the Committee discussed CE marking,voluntary quality marking, notification of notifiedbodies, market surveillance and accreditation. TheCommittee contributed actively to the discussionsin various fora, particularly in meetings of theEuropean Commission Senior Officials Group onStandardisation and Conformity AssessmentPolicy (SOGS).
The Committee on TBT monitored the follow-up ofa Commission communication on the role ofstandardisation in the framework of Europeanpolicy, and another communication on theintegration of environmental aspects into Europeanstandardisation. The Commission presented aproposal for a decision on the financing of Europeanstandardisation to the European Parliament and theEuropean Council in August 2005. The EFTAcountries are considering ways to follow this up inorder to ensure that rights and obligations areparallel within the EU and EFTA States.
In 2005, the EFTA countries signed a contract with ECOS (European Environmental Citizens’Organisation for Standardisation) to assist theorganisation financially in its support to environmental
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considerations in the European standardisationprocess. During 2005, EFTA also continued tofinancially support the work of ANEC (EuropeanAssociation for the Co-ordination of ConsumerRepresentation in Standardisation).
Directive 98/34 on notification of new national drafttechnical regulations is currently being revised inorder to extend the notification requirements toservices. Progress in 2005 was slow due to thediscussions on the proposed services directive. TheCommittee is following the developments.
The Committee on TBT has discussed internationalaspects of the work on removing technical barriersto trade. The EFTA Committee on TBT hascontributed to the preparation of provisions ontechnical barriers to trade in EFTA free tradeagreements with third countries.
In addition, international work on good regulatorypractices is being carried out within various fora:the OECD, UNECE, the Trans-Atlantic EconomicPartnership (TEP) and also within the GlobalHarmonization Task Force on Medical Devices.Additionally, UNECE’S Working Party VI, TechnicalHarmonisation and Standardisation Policies, isactively promoting a model that is compatible withthe European new approach model.
A part of the international aspect of the workconcerns EFTA's role in promoting qualityinfrastructure in the EU candidate and accedingcountries. The EU and EFTA are jointly financing aprogramme for Bulgaria and Romania, and expertsfrom the EFTA countries have participated intechnical assistance seminars in Turkey.
Presently, the Committee is looking closer into thepossibility of better alignment with the EuropeanCommission in relation to technical cooperationprogrammes to be carried out in the Mediterraneanarea, as well as in the Western Balkans. EFTA expertscan now participate to a limited extent in individualseminars. A more general solution will be consideredfor 2007 onwards as follow-up to the coordinatedCommission's new Pre-Accession Instrument.
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Mutual Recognition of Tests and Inspections
In the 1970s, the EFTA States instigated a number ofconventions and a scheme on the mutual recognitionof tests and inspections, the aim of which was tomaintain standards and consumer protection inindividual signatory countries, while allowing othersignatory countries to carry out conformity tests andinspections, thus facilitating trade. Althoughindependent, the EFTA Secretariat still services theconventions — which were extended to a number ofnon-EFTA States — as a matter of practicalconvenience. The EFTA Secretariat services thePharmaceutical Inspection Convention (PIC), thePharmaceutical Inspection Cooperation Scheme(PIC/S) and the Convention on the Control andMarking of Articles of Precious Metals(Hallmarking Convention). The conventions and thescheme publish their own annual reports (seehttp://www.picscheme.org).
Free Movement of Servicesand Capital
Subcommittee II on the Free Movement of Capitaland Services under the EFTA Standing Committeecoordinates matters of financial services, transport,information and telecommunications services,audio-visual services, postal services and companylaw, as well as data protection.
Six working groups report to Subcommittee II:
• Working Group on Financial Services• Working Group on Company Law• Working Group on Information and
Telecommunications Services• Working Group on Audio-visual Services• Working Group on Postal Services• Working Group on Transport
In addition, an Ad Hoc Group on Services in theInternal Market was established for one year. The AdHoc Group reports to Subcommittees II, III and IV.
Subcommittee II met 7 times during 2005.
Services
The Ad Hoc Working Group on Services wasestablished in March 2004 to follow and assess theproposed directive on services in the InternalMarket in the context of the EEA Agreement. Theproposal aims to create a real internal market inservices by removing administrative and legalbarriers to the cross-border provision of MemberStates. In order to fully understand the scope andpotential implications of the proposal, the WorkingGroup met with representatives of the Commissionand the Council, and actively followed the politicaldevelopments in 2005. The Group's mandate wasprolonged to May 2006.
Financial Services
The Working Group on Financial Services assisted
in the incorporation of a number of key legislative
acts into the EEA Agreement including the markets
in financial instruments directive, the transparency
directive and the takeover bids directive. These acts
were key priorities in the European Commission's
Financial Services Action Plan and will contribute to
the integration of the European capital market and
more effective supervision and regulation of the
sector.
One major challenge for the Working Group has
been, and will continue to be in 2006, to find an
effective way to deal with the increased workload
from the new comitology procedures for the
regulation of the securities markets (Lamfalussy
process) which results in a relatively large number
of highly technical implementing directives and
regulations. This process has been extended to the
entire financial sector.
During 2005, the Working Group discussed
several initiatives of key importance to the EEA
EFTA States with the Commission, including
clearing and settlement and market infrastructure
issues, the Commission green paper on financial
services policy and the green paper on
investment funds.
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The Working Group on Financial Services met 3times in 2005 and 7 acts in its field wereincorporated into the EEA Agreement.
Company Law
Company law and corporate governance are priorityareas for the EU. The Working Group on CompanyLaw has considered a number of new policyinitiatives and proposals emanating from theCompany Law and Corporate Governance ActionPlan. In addition to being seen as an area whereEuropean level action is needed for the well-functioning of the Internal Market, several of theinitiatives are also a response to financial scandalsboth in the USA and in Europe.
The Working Group discussed with theCommission, as well as representatives of theCouncil and the European Parliament, a number ofEU policy initiatives. These included the directiveon cross-border mergers, a draft proposal for adirective on the transfer of seat and the directive onstatutory audit. These issues will continue to be highon the Group's agenda in 2006. The Group alsodealt with a series of EC regulations covering theapplication of international accounting standards.
The Working Group on Company Law met once in2005 and 9 acts in its field were incorporated in theEEA Agreement.
Information andTelecommunications Services
With the regulatory framework on the electroniccommunications networks and services up andrunning, the Commission is looking into therevision of the Telecom Package.
In July 2005, the Joint Committee Decision,allowing the EEA EFTA States to participate inthe European Network Security Agency (ENISA)was adopted. The aim of this Agency is tointensify European coordination to achieve a highlevel of information security in the MemberStates. The Agency is expected to enhance theability of the European Community and theMember States to respond to network andinformation security problems.
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The legal basis for the participation of the EEA EFTAStates in the eContent Plus programme was finalisedin September 2005. The Working Group also finalisedthe preparatory work for the participation of the EEAEFTA States in the Safer Internet Plus programme2005-2008, the programme on trans-EuropeanTelecommunications Networks (eTEN programme)and a prolongation of the multi-annual MODINISprogramme (2003-2005), which covers monitoringand benchmarking activities in the Member States aspart of the Lisbon Strategy's open method ofcoordination, as of 1 January 2006.
The Working Group on Information andTelecommunications Services met 4 times during2005 and 5 acts in its field were incorporated intothe EEA Agreement.
Audio-visual Services
The EEA EFTA States participate in the EU ContactCommittee established with the Television withoutFrontiers Directive, it is a specialised workinggroup on television broadcasting regulation in theEuropean Union.
The EEA EFTA States participated actively in theprocess of reviewing the Television withoutFrontiers Directive initiated by the Commission in2003. They submitted EEA EFTA Comments on theissue papers preparing the Liverpool audiovisualconference to which experts from the EEA EFTAStates were also invited. The Commission isexpected to present a proposal to amend the existingTelevision without Frontiers Directive at thebeginning of 2006.
The EEA EFTA States participate in the MEDIA Plusand the MEDIA Training programmes (2001-2005)extended to 2006. In July, the Working Group onAudio-visual Services submitted EEA EFTAComments on the proposal for the new MEDIA 2007-2013 programme, expected to be adopted in 2006.
The Working Group on Audio-visual Services metonce in 2005.
Postal Services
The EEA EFTA Working Group on Postal Servicesmet twice during 2005. The meetings were coordinated with the meetings of the ConsultativeCommittee for the Postal Services Directive2002/39/EC in which the EEA EFTA Statesparticipate as observers. In good collaboration withthe Commission unit responsible for postal services,the Working Group discussed the Commission'spreliminary work to eventually fully open up themarket for postal services by 2009. The EEA EFTAStates are contributing to the collection of postal data,which the Commission undertook in autumn 2005.They also co-finance the two external studies on theimpact of the full accomplishment of the postalinternal market in 2009 on universal services and thestudy on the main developments in the Europeanpostal sector, which started in December 2005.
Transport
A significant number of proposals for new EU actswere considered and discussed in depth with theCommission. The Working Group also met withboth EU presidencies.
Land Transport
The incorporation of the regulation establishing theEuropean Railway Agency in the EEA Agreementwas a significant event in 2005.
The Working Group discussed the 4 directives onthe Third Railway package on the continuation torevitalise the European railway by graduallyopening the transport of passengers to competition.The Working Group considered several proposalsincluding those on the incorporation of newdirectives on the interoperability of electronic roadtoll systems and the proposal on minimumrequirements for tunnels.
The EFTA States actively participated in the variouspreparatory EU working groups in the landtransport field.
Maritime Transport
The Working Group considered a number of policyinitiatives and proposals, inter alia, related tomaritime safety and security. The regulation onenhancing ship and port facility security wasincorporated into the EEA Agreement along withseveral other directives on maritime safety.
The proposals on port security and market access toport services, along with initiatives concerningproposals on ship source pollution andimplementation of the International SafetyManagement Code were some of the issues with thehighest profile in this field. The Group closelymonitored these developments and discussed themin depth with the Commission.
At the end of 2005, the Commission put forward anew maritime safety legislation package,introducing 7 new proposals. These will continue tobe high on the Group's agenda for 2006.
Air Transport
Several regulations concerning aviation safety andsecurity were incorporated into the EEA Agreement,along with a legislative act concerning the safety ofthird country aircrafts.
The Working Group considered a number of policyinitiatives and proposals, inter alia, related toaviation safety and security. The regulationsestablishing a single European Sky (Single Skypackage) were the issues with the highest profile inthis field. The package is due to be incorporated intothe EEA Agreement in 2006.
Other Transport Issues
EEA EFTA participation in the European SatelliteRadionavigation System (Galileo programme) hasbeen high on the agenda for the EEA EFTA Statesover the last couple of years. By the end of 2004, theEEA Joint Committee adopted a political decisionfacilitating a possible bilateral or EEA EFTA
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participation in the Galileo joint undertaking. TheWorking Group agreed to the same approach ofadopting a political decision for the deployment andoperational phases of Galileo.
In 2005, the EEA EFTA States participated in theprogramme which grants financial assistance toimprove the environmental performance on thefreight transport system (Marco Polo).
The Working Group on Transport met 5 timesduring 2005. The twenty-three acts in its field wereincorporated into the EEA Agreement by the JointCommittee.
EU Horizontal Policies and Reforms
The Standing Committee's Group on the LisbonStrategy and Other Horizontal Policy Issues (theHorizontal Group) took stock of the mid-termreview of the Lisbon Strategy and its re-launch,focussing on jobs and growth. The Groupcoordinated input on the mid-term review to theLuxembourg presidency in the run-up to the EU'sspring summit. The Group also discussed theEuropean Neighbourhood Policy (ENP), Turkey'saccession to the EU, the EU's discussion on politicalpriorities for the budgetary period 2007-2013,reform of working practices, decision-making andgovernance in the EU.
Free Movement of Persons
Subcommittee III on the Free Movement of Personsunder the Standing Committee coordinates mattersrelated to all aspects of the movement of people,including the mutual recognition of diplomas andsocial security.
Three working groups report to Subcommittee III:• Working Group on the Recognition of
Professional Qualifications• Working Group on Social Security• Working Group on the Free Movement of
Workers and Employment
Subcommittee III met 7 times in 2005.
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Free Movement of Workers and Employment
The main item of discussion in the Working Groupon the Free Movement of Workers and Employmentwas the European Parliament and Council directiveon the right of citizens of the Union and their familymembers to move and reside freely within theterritory of the Member States.
The EEA EFTA States also continued participatingin the technical committee dealing with the freemovement of workers.
The Working Group on the Free Movement ofWorkers and Employment met once during the year.
Social Security
The Working Group on Social Security continuedpreparations for the incorporation of the regulationof 2004 simplifying the coordination of the socialsecurity systems, which will replace the existingRegulation 1408/71.
In 2005, the EEA Joint Committee adopted 4decisions in the field of social security. These JointCommittee Decisions incorporated 2 regulations ofthe Commission amending Regulation 574/72 layingdown the procedure for implementing Regulation1408/71 on the application of social security schemesto employed persons, to self-employed persons andto members of their families moving within theCommunity and 5 decisions of the AdministrativeCommission on Social Security for Migrant Workers.
The EEA EFTA States continued to take part in themeetings of the Administrative Commission onSocial Security for Migrant Workers and in itsvarious working parties, as well as in the TechnicalCommission on Data Processing and the AuditBoard. The EEA EFTA States also participated inMISSOC, a mutual information system on socialprotection in the European Union.
The Working Group on Social Security met twicein 2005.
Recognition of ProfessionalQualifications
In 2005, the Working Group on the Recognition ofProfessional Qualifications mainly discussed theproposal and then the directive on the recognition ofprofessional qualifications. This directive clarifiesand simplifies the rules in order to facilitate the freemovement of qualified people between the MemberStates and replaces 15 existing directives. It alsoforesees greater liberalisation of the provision ofservices and more automatic recognition ofqualifications.
The EEA EFTA States continued to take part in theGroup of Coordinators for the General System ofRecognition of Diplomas and some of them in theWorking Party ‘Diplomas Architecture’.
The Working Group on the Recognition ofProfessional Qualifications met twice in 2005.
Flanking and HorizontalPolicies
Subcommittee IV on Flanking and HorizontalPolicies under the Standing Committee coordinatesmatters related to all aspects of the horizontalprovisions of the EEA Agreement as well ascooperation outside the four freedoms.
Fifteen working groups report to Subcommittee IVnamely:
• Working Group on Research and Development
• Working Group on the Environment• Working Group on Education, Training and
Youth• Working Group on the Disabled, the Elderly
and Social Exclusion• Working Group on Gender Equality and Family
Policy• Working Group on Health and Safety at Work
and Labour Law• Working Group on Consumer Protection• Working Group on Consumers' Consultative
Committee• Working Group on Enterprise Policy• Working Group on Civil Protection• Working Group on Cultural Affairs• Working Group on Public Health• Working Group on Interchange of data between
administrations (IDA)• Working Group on Heads of National Statistical
Institutes• Working Group on Budgetary Matters
Subcommittee IV worked actively towards ensuringEEA EFTA participation as early as possiblewhenever new and successive programmes wereadopted by the EU.
In 2005, Subcommittee IV submitted 2 EEA EFTAComments to the EU on the:
• Commission proposal COM (2004) 469 for theCulture 2007 programme (2007-2013);
• Commission proposal COM (2004) 471 for theestablishment of the Youth in Action programmefor the period 2007-2013.
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Iceland and Norway have been fully integrated into the EURES (EuropeanEmployment Services) network since the EEAAgreement entered into force in 1994.EURES advisers provide information on social legislation and taxation, educationand healthcare, training opportunities, comparability of qualifications and cost of
living and accommodation. This network has at its disposal a database of job vacancies in Europe and asecond database containing general information on living and working conditions in EEA countries. Thusall users of EURES services can receive up to date information in their home countries before taking upor considering a job in another country. The European Job Mobility Portal offers information on jobvacancies, a EURES CV search, a database on living and working conditions and information on educationand training opportunities throughout the EEA (see http://europa.eu.int/eures).
European Employment Services (EURES)
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Research and Development
In June 2004, the Commission presented acommunication with its views on the futureEuropean Union policy to support research. Itargues for a doubling of the budget for the SeventhResearch Framework Programme (2007-2013), inline with the Lisbon Strategy and the objective ofthe Barcelona Summit to increase the Europeanresearch effort to 3% of the EU's GDP by 2010. Theformal proposal for the new framework programmeis expected to be presented in spring 2006.
A key focus for the Working Group on Research andDevelopment in 2005 was therefore to follow thepreparations on the Seventh Research FrameworkProgramme (FP7) for Research and TechnologicalDevelopment (2007-2013) in the EuropeanCommission and in the European Parliament.
In 2005, the EEA EFTA States requested toparticipate in a preparatory action for theenhancement of European security research from2006. This new activity started in 2004 as a pilotscheme for a future large security researchprogramme that the Commission foresees as animportant component of the FP7 from 2007.
The EEA EFTA Working Group on Research andDevelopment met twice during 2005.
Environment
The EEA Joint Committee adopted decisions in theareas of waste, eco-label, air quality and wastepackaging. Furthermore, the 6th EnvironmentalAction Programme was entered into Protocol 31.
The Working Group on the Environment discussedon several occasions with the Commission onpolicy documents and progress in the field ofenvironmental legislation. Among topics discussedwere: the thematic strategies in the fields of airquality and the marine environment and relatedproposals for legislation. The Group also discussedthe Better Regulation initiative and its application inthe environment sector. Finally the Group met with
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the Commission to discuss the proposal for adirective on the protection of groundwater.
Education, Training and Youth
The EEA EFTA States participate inthe Socrates, Leonardo da Vinci, andYouth programmes (2000-2006),Europass (2006), the Erasmus Mundus
programme, the e-Learning programme (2004-2006)and in the Community action programmes topromote bodies active at European level in the fieldsof education and training as well as youth.
The Working Group on Education, Training andYouth met twice in 2005.
During the year, the Working Group submitted 2EEA EFTA Comments on the proposed Youth inAction programme and on the recommendation onEuropean cooperation in quality assurance in highereducation the European Commission and EuropeanParliament Committee on Education and Culture.
The Commission's proposal for the LifelongLearning programme (2007-2013) was followed bythe Group. The new programme aims to merge allthe existing education and training programmes.The Commission has proposed a budget for theprogramme nearly 3 times larger than the totalbudgets of the current programmes, thus emphasisingits importance for growth and employment as part ofthe Lisbon Strategy.
Gender Equality and Family Policy
In the field of gender equality, the EEA EFTA Statescontinued active participation in the EU's programmeframework Strategy on Gender Equality (2002-2005).A draft Joint Committee Decision on the prolongationof the programme for 2006 was handed over to theCommission in November 2005. An EFTA nationalexpert has been seconded to the Commission underthe programme. Experts from the EEA EFTA Statescontinued to participate actively in the AdvisoryCommittee on Equal Opportunities for Women andMen. Likewise, the EEA EFTA States continued to
actively participate in Daphne II, the EU programmeto prevent violence against children, young peopleand women and to protect victims and groups at risk(2004-2008). The proposals for a European Year ofEqual Opportunities for All 2007, a EuropeanGender Equality Institute and a new programme foremployment and social solidarity (PROGRESS)were followed closely by the Working Group. Theproposed PROGRESS programme aims at merging4 existing programmes in the field of social policy.
The Working Group on Gender Equality and Family
Policy met twice in 2005.
The Disabled, the Elderly and Social Exclusion
In 2005, the EEA EFTA States continued participation
in the Anti-discrimination programme (2001-2006).
The EEA EFTA States also continued their
participation in the Social Exclusion programme
(2002-2006). A national expert has been seconded to
the Commission under the programme. The Working
Group closely followed the proposals for a European
Year of Equal Opportunities for All 2007 and the
PROGRESS programme.
The Working Group on the Disabled, the Elderly
and Social Exclusion did not meet in 2005.
Health and Safety at Work and Labour Law
In the field of health and safety at work and labour
law, Directive 2004/37/EC on the protection of
workers from the risk related to exposure to
carcinogens or mutagens at work was incorporated
into the EEA Agreement.
The Group prepared for the incorporation of a new
directive on physical agents concerning
electromagnetic fields and experts continued to
follow the development of the proposed working
time directive as well as a directive on physical
agents regarding optical radiation.The EFTA side participated in the Advisory
Committee on Safety and Health at Work. Each EEAEFTA State has the right to send an observer pergroup (government, employers and employees)during the Committee's meeting. Experts alsocontinued to attend the meetings of the Directors-General for Industrial Relations and those organisedby the European Foundation for the improvement ofliving and working conditions in Dublin. An expertfrom the EEA EFTA side participated in themeetings of the Scientific Committee forOccupational Exposure Limits (SCOEL). Expertsalso participated in the meetings of the SeniorLabour Inspectorates (SLIC).
The Working Group on Health and Safety at Workand Labour Law met twice in 2005.
Consumer Protection
The Working Group on Consumer Protection's mainpriority 2005 was following the adoption of adirective on unfair commercial practices. TheGroup takes part in the cooperation between theCommission and Member States in theimplementation of the directive. The Group has alsobeen following up the 2004 regulation oncooperation between national authoritiesresponsible for the enforcement of consumerprotection laws. At the end of the year, the Groupwas discussing the incorporation of these acts intothe EEA Agreement.
The EEA EFTA States also closely followed thedevelopments of the contract law initiative, anamended proposal for a revised consumer creditdirective, and continued their active participation inthe European Extra-Judicial Network under theEuropean Consumer Centres Network (ECC). TheGroup invited representatives of DG SANCO topresent and discuss legislative and other consumerpolicy matters, and met with the Consumer LiaisonOfficer of DG Competition.
The Group also discussed the possibility for EEAEFTA States to participate in the EuropeanConsumer Consultative Group (ECCG) and theConsumer Policy Network (CPN) with the
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Commission. The EEA EFTA States were invited tothe second meeting of CPN in November and wereinformed that they would be invited to this group'sfuture meetings and activities.
The EFTA Working Group on Consumer Protectionmet twice in 2005.
Consumers' ConsultativeCommittee
The Consumers' Consultative Committee, made upof representatives of consumers' organisations in theEEA EFTA States, has an advisory role on consumerissues. The Committee met in May in connectionwith an ANEC meeting, an organisation responsiblefor coordinating consumer participation in Europeanstandardisation.
Enterprise Policy
Since 2004, the EEA EFTA States have beenparticipating in the project Implementation andDevelopment of the Internal Market, which hasseveral sub-projects. These include: Dialogue withCitizens, Dialogue with Business and the SOLVIT
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database. The first two are projects that gatherdetailed practical information on rules andpractices in the EU and its Internal Market andpublish it in a user-friendly format on a singlewebsite. SOLVIT is an on-line problem-solvingnetwork in which the authorities work together tosolve problems caused by the misapplication ofInternal Market law by public authorities withoutlegal proceedings. In 2005, the SOLVIT portal waslaunched in both Icelandic and Norwegian.
The EEA EFTA States continued active participationin the Multi-annual programme for Enterprises andEntrepreneurship (MAP) and in other EU initiativesthat aim to enhance the business environment forsmall and medium-sized enterprises (SMEs). TheEuropean Business Test Panel (EBTP) is a systemthat allows the Commission to contact and obtain theviews of businesses operating in the Internal Marketwhenever major Commission legislative proposalsand/or policy initiatives are being considered. TheEBTP is entirely Internet-based.
The Working Group on Enterprise Policy met twicein 2005.
EEA EFTA Financial Contributions* Figure 3
Programme Area or Activity EEA EFTA Contributions (€)2004 (€) 2005 (€)
Research 73 469 897 69 988 231Information services, incl. IDA/IDABC 1 716 015 1 760 720Environment programmes 117 941 57 959Education, training and youth 13 437 206 14 806 773Social policy 908 988 1 336 483Consumer protection 532 280 466 436Enterprises, SMEs & tourism 1 732 464 2 138 700Audio-visual sector 1 634 644 2 090 370Civil protection 213 716 153 576Culture 562 841 840 469Energy 1 064 395 795 747Employment 651 103 692 802Public health 1 532 116 1 141 252Statistics 1 057 529 992 394Transport 194 100 270 303European Environment Agency 596 040 567 590European Agency for the Evaluation of Medicinal Products 745 892 552 873European Maritime Safety Agency 276 816 676 250European Agency for Networks and Information Security 143 480European Aviation Safety Agency 412 083European Railway Agency 288 437Total 100 443 983 100 172 928
* The amounts in the table are those paid by the EEA EFTA States to the Commission in 2004 and in 2005 to participate in EU programmes and activities. In 2005, thelegal basis for two programmes (Safer Internet Plus and IDABC) and two agencies (European Railway Agency and European Network Information Security Agency)was not established in time. Therefore the EU will reimburse the EEA EFTA States, the financial contribution for those programmes when the EU financial year closes,i.e., January 2007.
Civil Protection
The EEA EFTA States participated actively in 2programmes in the field of civil protection: theCommunity Mechanism and the second CommunityAction Programme in the field of civil protection.
The Action Programme is primarily concerned withthe exchange of information, mapping of bestpractices and training. In the CommunityMechanism, the major focus has been on the CivilProtection Mechanism Databank — the CECISsystem.
In 2005, the Working Group followed theCommission's preparation of a rapid response andpreparedness instrument for major emergencies(2007-2013).
The Working Group on Civil Protection met 3 timesin 2005.
Culture
The Culture 2000 programme for the period 2005-2006 was prolonged and integrated into the EEAAgreement by a decision of the EEA Joint Committeein December 2004. The programme focuses on onemain sector of cultural activity per year.
During 2005, the Working Group on CulturalAffairs followed the Commission's proposal for thenext framework programme for culture, i.e., Culture2007 (2007-2013), and met with the Commissionand the EU presidencies on two occasions. TheWorking Group also submitted EEA EFTAComments on this programme to the EU.
The Working Group on Cultural Affairs met twicein 2004.
Public Health
A significant development in this field was theadoption by the EEA Joint Committee of a decisionon the participation of the EEA EFTA States in theEuropean Centre for Disease Prevention and Control
(ECDC). The decision entered into force on 19 May2005 and the EEA EFTA States have subsequentlytaken part in the Management Board and theAdvisory Forum of the ECDC. The EEA EFTAStates continued participation in the Public Healthprogramme (2003-2008) and in experts groups andnetworks financed by the programme. Threenational experts are seconded under the programme.Senior officials from the EEA EFTA States took partin the 2 meetings of the High Level Committee onHealth, which advises the Commission on healthissues. Senior officials from the EEA EFTA Statesalso participated for the first time in the High LevelGroup on Health Services and Medical Care.Furthermore, EEA EFTA representatives continuedto participate in the Health Security Committee, abody coordinating national measures in case ofterror threats and attacks, and in the Network for theEpidemiological Surveillance and Control ofCommunicable Diseases.
The Working Group on Public Health met 3 times in2005, and each time also met with the Commission.
Budgetary Matters
One of the Budgetary Matters Working Group'smain tasks in 2005 was to coordinate thepreparation and monitoring of the EEA EFTAbudget, which establishes the annual EEA EFTAcontribution to EU programmes and activities inwhich the EEA EFTA States participate.
The EEA EFTA budget contains 2 types ofcontributions: one for new commitments and theother to cover payments resulting from old and newcommitments. The amounts committed to newprojects in 2005 are to cover all the future expensesof the projects started that year. The projects startedin 2005 may continue for more than one year andtherefore payments will be distributed over a longerperiod of time. The EEA EFTA commitments arecalculated on the basis of their gross domesticproduct (GDP). In 2005, the proportionality factorwas 2.11%, which means that for a programme withan EU budget of 100 million euros, the EEA EFTAStates contribute an additional 2.11 million euros.
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The EEA EFTA commitments were 136.0 millioneuros in 2005, an increase from 130.7 million eurosin 2004. The EEA EFTA payments were 100.2million euros in 2005, a small decrease from 100.4million euros in 2004.
During 2005, the Working Group on BudgetaryMatters held 3 internal meetings and 3 others withthe Commission.
Legal and InstitutionalMatters
Subcommittee V met 7 times in 2005. It devotedconsiderable effort to developing new rules onpublic access to EEA EFTA documents. It finalisedits discussions on this matter and issued a decisionof the Standing Committee of the EFTA States,which was adopted on 9 June 2005.
In 2005, the Subcommittee also discussedpossibilities of improving the flow of informationconcerning the discussions on EC acts to beincorporated into the EEA Agreement to the public.It concluded its discussions by making additionalinformation available on the Internet.
Subcommittee V addressed numerous other issues,some of which were new on its agenda, while workon others had not been completed in 2004. Amongthis the Subcommittee’s suggestions to the StandingCommittee on the simplification of the proceduresleading up to amendments of Protocol 31 to theEEA Agreement. Among old issues featured theanalysis of third-country provisions in the EEAAgreement. This work will continue in 2006.
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EEA Cooperation in the Fieldof Statistics
The main objective of EFTA statistical cooperationwithin and outside the framework of the EEAAgreement is to contribute to the development of abroad and integrated European Statistical System (ESS).
For the second time within 2 years, the EuropeanCommission completed an in-depth restructuring ofEurostat by the end of 2005. The main objectives ofthis reorganisation were to strengthen the statisticalcapacity of the institution, to harmonise the size ofEurostat's units and to adapt to new statisticalrequirements due to the enlargement of the EU. Itwas also an opportunity to appoint managers fromthe 10 new Member States.
Main EEA Activities in 2005
The EFTA Statistical Adviser's Office (EFTA-SAO)was created in the perspective of the EEAAgreement to liaise between Eurostat and the EFTANational Statistical Institutes (NSIs). In 2005, as inprevious years, the SAO's main objective was tosustain the integration of the EFTA States in theevolving European Statistical System (ESS), andthus to provide harmonised and comparablestatistics supporting the general cooperation processbetween EFTA and EU within the EEA Agreement.
In order to revise and update the Lugano Convention (on jurisdiction and the enforcement of judgments incivil and commercial matters), the Council of the European Union authorised the Commission to opennegotiations with Iceland, Norway and Switzerland. The negotiations opened with an exchange of viewsin September 2003 and are currently suspended, awaiting a ruling from the European Court of Justice(ECJ). The question raised before the ECJ is whether the European Union has exclusive competence tonegotiate on behalf of the EU Member States with the non-EU contracting parties or whether there ismixed competence between the Union and its Member States. The decision of the ECJ is expected in thefirst half of 2006.
The EFTA Secretariat continued to follow the work under the Lugano Convention and participated as anobserver institution in the 12th session of the Standing Committee of the Lugano Convention.
Lugano Convention
Role and Visibility of EFTA in the ESS
Despite the extension of Eurostat's activities to the10 new Member States and only a slight increase inits human and financial resources, the EFTAStatistical Adviser's Office succeeded in securingthe role and visibility of EEA EFTA in the ESS.
Production and Dissemination of EFTA Statistics
Protocol 30 to the EEA Agreement specifies thatstatistical information from EEA EFTA States shallbe transmitted to Eurostat for storage, processingand dissemination. In that respect, 2005 was abreaking year after the European Commissiondecided in 2004 to make all Eurostat statistical dataand publications available electronically and free ofcharge. As a result, the number of visitors toEurostat's website has increased enormously. InNovember 2005, for example, almost one millionuser sessions were recorded and the number of dataextractions quadrupled after the new disseminationpolicy came into force. Consequently, statistical data
and indicators for the EFTA countries are exposed toa wider number of users, making the availability ofhigh quality data even more important.
In 2005, the SAO secured the production and
dissemination of data from EEA EFTA countries on
structural indicators in order to monitor the
achievement of the goals set by the Lisbon Summit and
recently refocused on jobs and economic growth. The
Statistical Adviser's Office in Luxembourg worked
closely with the EEA EFTA statistical institutes and
Eurostat to collect and compile the data, which forms
the basis of structural indicators. As a result, the level of
representation of EEA EFTA data on structural
indicators disseminated by Eurostat increased.
Nevertheless, EEA EFTA countries were not
included in the statistical annex to the spring report
of the Commission on the Lisbon Process. For this
reason, the SAO decided to issue an EFTA
publication including a shortlist of structural
indicators for all EEA countries, Japan and the
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Rudolf Knoblauch, Swiss Ambassador to Bulgaria, Øystein Hovdkinn, EFTA Deputy Secretary-General, and Rolf Baltzersen, Norwegian Ambassador to Bulgariaat the EEA Seminar in Sofia, Bulgaria, December 2005.
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USA. Indicators for Switzerland will be included in
the next edition of the publication.
EFTA Participation in Eurostat Working
Groups and Committees
In 2005, Eurostat organised approximately 130
meetings to prepare and implement new legislation,
exchange and develop methodologies and follow up
data collection. The EFTA Member States
participate actively in the EEA-relevant meetings.
Apart from not having the right to vote in formal
committees (comitology), the EEA EFTA delegates
have the same rights as the EU participants. Swiss
delegates have observer status.
Development of Legislation in the Field
of Statistics
More than 20 new — mostly implementing or
amending — acts were included in Annex XXI to
the EEA Agreement in 2005.
EFTA Experts at Eurostat
Statistical experts from EFTA countries have been
working at Eurostat as seconded national experts
(SNEs). These secondments are important since they
secure the transfer of knowledge and promote
integration of the European Statistical System. Eurostat
continuously express their interest in maintaining this
high level of EFTA expert involvement.
At the end of 2005, two experts from Norway and
one from Iceland were involved in the following
EEA-relevant areas: PRODCOM product statistics,
labour market statistics and information technology.
At the same time, one Norwegian and one Swiss
expert were seconded to Eurostat as a contribution
in kind to the EFTA-EU technical cooperation
programme in the Balkans (CARDS) and the
Mediterranean (MEDSTAT) areas.
MEDSTAT and CARDS technical cooperation
programmes are outside the framework of the EEA
Agreement and concern therefore all 4 EFTA
Member States.
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European Statisticians Training Programme
In order to maintain a high level of competence and to
ensure data consistency throughout the European
Statistical System, statisticians require continuous
training in new methods, new techniques and best
practices. After the closing down of the external body
providing training for statisticians, the overall European
Statistical Training Programme (ESTP) was returned to
Eurostat. The SAO is actively involved in the planning
and implementation of the ESTP programme through a
gentlemen's agreement with Eurostat.
In order to secure the full participation of EFTA
statisticians in the ESTP, the SAO financed 2 courses
in 2005. These were organised by Statistics Norway
and the Swiss Federal Statistical Office respectively
on business registers and on advanced sampling
techniques. In total, more than 50 statisticians from
EFTA and EU countries participated in these courses.
In return, EFTA statisticians were allowed to
participate in all ESTP courses organised by Eurostat
and EU Member States.
Technical Cooperation in theField of Statistics
Impartial and reliable statistical data are widely
considered as a prerequisite for a democratic society
and a necessary condition for the smooth running of
a competitive market economy. Thus, EFTA and the
European Union have a common interest in
assisting countries neighbouring the enlarged
European Economic Area to develop their statistical
capacity and to harmonise statistical methods and
standards with international norms.
New Memorandum of Understanding
In January 2005, a new Memorandum of
Understanding (MoU) on technical cooperation in
the field of statistics between the EFTA Secretariat
and Eurostat came into force. The MoU, which
covers a three-year period (2005-2007), involves
funds totalling 1.74 million euros.
The MoU's overall objective is to promote and evendevelop close links between the EFTA States and
Eurostat in a number of programmes for technicalcooperation within the field of statistics. Throughsuch cooperation, EFTA is seeking active andvisible participation in the planning, execution andrevision of EFTA-EU projects.
EFTA's involvement in technical cooperationprogrammes under the MoU gives priority tocountries that have concluded declarations oncooperation or free trade agreements with EFTA.Support is mainly granted to developing countriesand economies in transition in the Balkans(CARDS) and Mediterranean (MEDSTAT) regionsand to recent and prospective partner countries tothe eastern boundary of the enlarged EU.
Two EFTA national experts are seconded to Eurostatas part of the contribution to ensure continuity ofsupport and EFTA visibility in the overallprogramming and management of EFTA-EU actions.
Technical Cooperation Activities and Projects
In 2005, the EFTA Statistical Adviser's Office inLuxembourg was particularly concerned with thedesign and implementation of a proper technicalcooperation programme within the framework of thenew MoU between the EFTA Secretariat andEurostat.
In 2005, the main technical cooperation activitiesand projects in the field of statistics were:
• a joint cooperation project between the EFTASecretariat, the Swiss Federal Statistical Office(SFSO) and the National Statistical Institute ofAlbania (INSTAT) on analysis and valorisationof the Albanian population and housing census.The project aimed to place the data of the censusof the Albanian population on the INSTATwebsite and to combine them with those of the
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The monitoring of the EEA Agreement requires that all contracting parties supply coherent and comparablestatistical data in all relevant economic, social and environmental fields. To this end, EEA expertsparticipate yearly in more than 130 meetings organised by Eurostat in order to develop harmonisedstatistical methods, definitions and classifications.
Harmonising methods and concepts at a European level through informal agreements or binding legislationis an important element for the production of comparable European statistics. Nevertheless, institutional,organisational and professional factors can also have a significant influence on the reliability and thecomparability of European official statistics.
Therefore, in May 2005, the European Commission adopted a recommendation on the independence,integrity and accountability of the national and European statistical authorities promulgating the EuropeanStatistics Code of Practice (CoP). This code is an ambitious set of 15 principles with a view to fostering ahigh quality environment for the production and dissemination of European statistics.
The CoP is a self-regulatory instrument with a dual purpose:
• to improve trust and confidence in the statistical authorities by proposing certain institutional andorganisational arrangements;
• to reinforce the quality of produced and disseminated statistics by promoting coherent application of thebest international statistical principles, methods and practices by all producers of official statistics inEurope.
The CoP also applies to EFTA national statistical authorities as members of the European Statistical Systemand therefore, the recommendation of the European Commission was incorporated in the statistical annexto the EEA Agreement. Consequently, the EFTA States commit themselves to adhering to the principles ofthe CoP. More concretely, statistics produced by the EFTA States and their statistical systems will be subjectto the same scrutiny through assessments and peer reviews as for the EU Member States.
More information on the CoP is available on: http://epp.eurostat.cec.eu.int
European Statistics Code of Practice
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Living Standards Measurement Study (LSMS)of the World Bank. The objective was to analysethe integration of the young generation in theAlbanian labour market.
• a strategic management seminar for directors-general of national statistical institutes fromWestern Balkan countries, Turkey, Bulgaria andRomania. Directors of the regional statisticaloffices from Serbia, Montenegro and Kosovowere also invited. The aim of the seminar was toshare experiences and good practices on strategicplanning from the design to the practicalimplementation of a statistical programmeincluding the management of human resources.Statistics Norway and the Swiss FederalStatistical Office organised the content of theseminar, shared their experiences and led thediscussions on the theory and practice of strategicplanning and management of human resources.Experts from Statistics Finland, StatisticsGermany (DESTATIS) and INSEE, the Frenchstatistical institute, were also invited as keyspeakers in the different sessions. The seminarwas held in Montenegro.
• a training course on business registers supportingthe overall MEDSTAT programme. The courseprovided participants from 10 Mediterraneancountries with a basic understanding ofdefinitions, set up, and maintenance of businessregisters for statistical purposes. The course wasgiven by Statistics Norway and was designed forexperts dealing with statistical business registersand experienced staff using business registers inthe production of statistics. The course was heldin Istanbul.
• training courses on advanced statistical conceptsand methods. The EFTA Secretariat financed 4experts from the State Statistical Committee ofUkraine to participate in advanced coursesorganised by the Swiss Federal Statistical Officeand the University of Neuchâtel.
• bridging technical assistance activities forWestern Balkan countries. The 2001 CARDSstatistical programme from the EuropeanCommission ended in 2005 and a certain numberof important activities for the sustainability ofthe overall programme had to be financed.Therefore, on the request of Eurostat, EFTASAO accepted to support a certain number ofactivities in the region on external trade statisticsand purchasing power parities (PPP).
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EEA Enlargement
As enlargement of the EEA took place on 1 May 2004,2005 was the first full calendar year of the EEAEnlargement Agreement. All contracting states haveratified the Agreement. Enlargement to includeBulgaria and Romania is set to happen in the nearfuture. The EEA EFTA States received applicationsfrom both countries in July. Simultaneous accession ofnew members to the EU and to the EEA is a commonobjective as it contributes to the homogeneity andgood functioning of the European Economic Area.
The establishment of the EEA Financial Mechanismand the Norwegian Financial Mechanism is aconcrete consequence of the 2004 EEAEnlargement Agreement. These funds willcontribute towards the reduction of social andeconomic disparities in the enlarged InternalMarket. Over a five-year period (2004-2009), thefunds will make close to 1.2 billion euros availableto 13 beneficiary states — the 10 countries that joinedthe EU in May 2004, and Greece, Portugal andSpain. Memoranda of Understanding (MoU) havebeen concluded with all of them, and the FinancialMechanisms are now in the implementation phase.
Financial Mechanisms 2004-2009
State of Play
2005 was the first full year of operationfor the Financial Mechanisms Office(FMO), the secretariat that administers
the day-to-day operations of the EEA FinancialMechanism and the Norwegian Financial Mechanism.The Financial Mechanisms progressed from thepreparatory phase to the implementation phase, whichincluded negotiations with all 13 beneficiary states3 forMemoranda of Understanding (MoUs) and developmentof detailed rules, guidelines and procedures for theimplementation of the twin Mechanisms.
By mid-2005, MoUs had been signedwith all 13 beneficiary states. TheMoUs define the framework of
cooperation and the administrative set-up in thebeneficiary state, its prioritisation and specific formsof grant assistance. In total, 23 MoUs were signed in2005, with all but 3 of the beneficiaries beingsupported by both Financial Mechanisms.
3 Poland, Hungary, Czech Republic, Slovakia, Lithuania, Latvia, Spain, Greece, Estonia, Portugal, Slovenia, Cyprus and Malta.
The first open calls for project proposals wereannounced in spring 2005. The Czech Republic wasthe first with its open call on May 18, whichgenerated over 150 applications. It was followed bySlovenia at the end of May. Poland — the biggestbeneficiary of the Financial Mechanisms — and Maltalaunched open calls just after the summer recess.The Slovak Republic announced its open call justbefore the close of 2005. In total, 214 million euroswere made available to potential applicants. Callsfor proposals were also launched for NGO,scholarship and research fund intermediaries. Thevarious calls for proposals have resulted in manymore applications than were expected.
The FMO received and processed the first applicationsfor technical assistance and seed money funds. TheEuropean Commission carried out part of the screeningfor these fund applications. It will also be the case forapplications relating to individual projects, the mainform of support to end-beneficiaries. The FMO alsostarted receiving applications from those beneficiarystates that had published their first open calls forproposals. Before sending them to the FMO, thebeneficiary states firstly prioritise the applications theyreceive on the basis of evaluations by steering and/or
evaluation committees and select the applications theywant processed further for a final decision.
The first annual meetings were held with Poland,the Czech Republic and Latvia. These annualmeetings were constructive in their assessment ofthe year that had passed. Furthermore, they set anambitious platform for the year to come. Most of theother beneficiary states are scheduled to have theirfirst annual meetings in the first half of 2006.
Information issues were high on the agenda of theFinancial Mechanisms, which organised a widerange of information seminars and a new websiteto deal with the growing demand for andproliferation of information. Seminars were heldwith the NGO communities in several of thebeneficiary states, as well as workshops relatingto the implementation of sustainable developmentand good governance in projects.
Behind the Scenes
The donor states and the FMO developed a modelgrant agreement that will be the contractual basisfor all approved project proposals. In addition,
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Hungary signs a 61 million euro funds deal with Iceland, Liechtenstein and Norway. From left to right: Elisabeth Walaas, Deputy Head of Mission of Norway to the EU,Kjartan Jóhannsson, Ambassador of Iceland to the EU, H.S.H. Prince Nikolaus of Liechtenstein, Ambassador of Liechtenstein to the EU, and Tibor Kiss, PermanentRepresentative of Hungary to the European Union.
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several guidelines on technical aspects weredeveloped in order to ensure the smoothimplementation of the Mechanisms. 2005 saw thedevelopment of the FMO case-handling system,whose launch is expected in spring 2006. It willenable FMO staff to keep track of project progressand disbursements.
The size of the FMO staff has increased to keep upwith the growing workload as the Mechanismsmove into the implementation stage in the 13beneficiary states.
Financial Instrument 1999-2003
By the end of the commitment period, the FinancialInstrument Committee had approved 25 projects (17in Spain, 5 in Greece, 1 in Ireland, 1 in NorthernIreland and 1 in Portugal). The last grantagreements were signed in 2005 and had all enteredinto force at the end of the year. One project — theEnvironmental Improvement of the Sewage Systemat Gran Canaria in Spain — was abandoned by thebeneficiary state as the project promoter was unableto fulfil the conditions for co-financing.
During 2005, the Financial Instrument disbursedin total 21 963 130 euros towards 15 projects.Altogether, the Financial Instrument has disbursed22 906 767 euros, i.e., 20.2% of the committedamount.
Two projects — La Carolina Urban Renewal projectin Andalusia in Spain and the Lifetime Lab projectin Cork in Ireland — were completed in 2005.
Financial Mechanism 1994-1998
2005 was the last year of operation for the FinancialMechanism (1994-1998). At the end of the year,funds for 50 projects had been fully disbursed out ofthe total 56 projects and 4 were under disbursement.Funding for the remaining two projects had beenwithdrawn. The total grant disbursement as of 31 December 2005 was approximately 447.9 millioneuros. The final disbursement round under the
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Financial Mechanism, amounting to approximately2.8 million euros, was scheduled to take place on 31 January 2006.
DG Economic and Financial Affairs is
responsible for the financial management of the
Financial Mechanism (1994-1998) allocation.
During 2005, the net interest on the fund was
approximately 0.8 million euros. Since the start
of the Financial Mechanism (1994-1998) the
total interest accrued amounts to 10.2 million
euros, and the total bonds to 40.9 million euros,
giving the total amount of 51.1 million euros.
The Fund Management Agreement with DG
Economic and Financial Affairs was prolonged to
31 January 2006, when any remaining financial
resources, including accrued interest, would be
repaid to the funding parties.
EEA Seminar
Due to high demand, the EFTA Seminar on the EEA
is now being organised twice a year. The seminars aim
to provide professionals with a thorough overview of
the EEA, with particular focus on current issues such
as the first effects of EU-EEA enlargement and the
new European Neighbourhood Policy.
More than 100 participants attended the spring
event, while the autumn seminar attracted 125. The
two-day seminars featured speakers from various
EFTA and external bodies.
The presentations from the seminars are available
at: http://www.efta.int
EEA Info Kit and Publications
In preparation for the EEA seminars, the EFTASecretariat develops an Info Kit on EEA and EFTAactivities. It provides the reader with generalinformation on the European Economic Area, anoverview of EFTA's history and main activities,EEA and EFTA legal texts, an explanation of EEAdecision-making and decision-shaping, a descriptionof EFTA participation in EU programmes as well asrelevant policy developments on the EU side, suchas the Lisbon Strategy.
As an additional service, the EFTA Secretariat hascreated a supporting webpage to the EEA Info Kiton the EFTA website. This page serves as anintroduction portal to the EEA. Here the reader canfind a listing of supporting documents and usefullinks to each chapter of the Info Kit that describe thesubject matter in more detail. The Info Kit isavailable at http://secretariat.efta.int/infokit
The EFTA Secretariat publishes a number ofregularly updated fact sheets. These provide aconcise introduction to a specific EFTA theme andto the latest developments. Currently, there are factsheets on: EFTA's relations with third countries,technical cooperation with third countries, theEuropean Economic Area, enlargement of the EEA,the free movement of goods, EFTA and EEAParliamentary Committees and EFTA and EEAConsultative Committees. All the fact sheets — ofwhich some are produced in a number of languages— can be obtained from the Secretariat on requestor downloaded from the EFTA website.
The latest versions of all EFTA publications areavailable at:http://secretariat.efta.int/Web/Publications/note/
EEA Supplement
The Publication team is responsible for the translationinto Icelandic and Norwegian of EEA-relevant texts,and for their publication in the EEA Supplement to theOfficial Journal of the European Union.
The EEA Supplement is published on the EFTAwebsite once a week and issues — including materialderiving from the EEA Joint Committee Decisions —are also printed and distributed to subscribers.
The EEA Supplement contains material from:
• the EEA Joint Committee,• the Standing Committee of the EFTA States,• the EFTA Surveillance Authority,• the EFTA Court,• the EEA Joint Parliamentary Committee,• the EEA Consultative Committee,• the European Commission.
In 2005, the EFTA Secretariat published 66 issues ofthe EEA Supplement. As in previous years, much ofthe content of the EEA Supplement came from theEEA Joint Committee, mainly in the form of EEAJoint Committee Decisions and EEA-relevant EC acts.The publication of acts incorporated in the EEAAgreement almost doubled in 2005 compared to 2004.
The yearly cooperation meeting between theSecretariat, the Icelandic and NorwegianTranslation Centres was held in Oslo in October.The Translation Centres, which are responsiblefor the translation of EEA-relevant EC acts,reported that their workload was steadilyincreasing. The participants discussed variousconcrete measures to further improve proceduresand cooperation.
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Publication in the EEA Supplement 2005 Figure 4
Number of Pages Icelandic Norwegian
EEA Joint Committee(Joint Committee Decisions and EC acts) 2 408 2 752
EFTA Standing Committee 24 24
EFTA Surveillance Authority 206 206
EFTA Court 14 14
EU institutions 828 828
Total 3 480 3 824
The Secretariat employs 92 staff members, of whomone third are based in Geneva and two thirds inBrussels, Luxembourg and Paris.
The Head of Administration is based in Brusselswhere administrational tasks and finances arecoordinated. Human resources management iscoordinated from Geneva.
On 31st January 2005, the Brussels Secretariat movedto new office premises on Rue Joseph II, 12-16, wherethe Financial Mechanism Office is also located.
The Secretariat's budget is worked out according tothe framework budgeting principle established inpublic administrations in Member States. Thisapproach aims to increase awareness of budgetaryspending at all levels. The budget is accompaniedby a performance plan where the Secretariat'sactivities are divided into project groups andprojects. The plan and the ensuing reporting raisesthe Member States' awareness of the costs andoutcomes of the Secretariat's different activities.EFTA's budget for 2005 was prepared in twocurrencies: Swiss francs (the base currency) andeuros. The total budget was 22 265 257 Swiss francs.
Information Activities
One of the EFTA Secretariat’s major tasks is toinform the public on its activities openly andtransparently. Thus, focus on public informationcontinued in 2005:
• A high number of seminars were held, both inBrussels and in the EU accession countries,throughout the year.
• A new Intranet was launched to improve thestaff’s access to tools.
• A new position of Head of Information andCommunication was filled at the beginning ofthe year.
Around 70 visiting groups (1 700 people) visited theSecretariat in the year. Additionally, the EFTAwebsite was visited around 730 000 times, almostdouble the number in 2004.
The EEA EFTA Member States adopted DecisionNo 3/2005/SC, which provides new rules on publicaccess to EEA-related EFTA documents. Theserules are based on the principle that openness shallbe applied to the greatest extent possible.
ADMINISTRATION
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EFTA Budget 2005
Budget Posts Budget 2005 (in CHF)
Intra-EFTA relations 85 528
Management of FTAs with third countries 768 118
Free trade negotiations 1 933 641
Prospective FTA partners 328 837
Servicing the EFTA Council and programmes 855 554
EEA matters 7 272 330
Statistical cooperation - Luxembourg 615 708
Organisation management and administration 4 483 600
Other horizontal activities 2 718 975
EU-EFTA and EFTA cooperation activities 3 202 967
TOTAL 22 265 257
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The Member States made their contributions in Swiss francs and euros. The table below shows thecontributions in Swiss francs.
Contributions to the EFTA Budget 2005
Member State Contributions (in CHF) ShareIceland 922 547 4.14%
Liechtenstein 227 975 1.02%
Norway 11 416 307 51.27%
Switzerland 9 698 428 43.56%
TOTAL 22 265 257 100%
EFTA Secretariat in Brussels
Conclusions
1. The twenty-third meeting of the EEA Council tookplace in Luxembourg on 14 June 2005 under thepresidency of Mr Jean Asselborn, Deputy PrimeMinister and Minister for Foreign Affairs ofLuxembourg. The meeting was attended by Mr JanPetersen, Minister for Foreign Affairs of Norway,Mr David Oddsson, Minister for Foreign Affairs ofIceland and Mrs Rita Kieber-Beck, Minister forForeign Affairs of Liechtenstein, by Members of theCouncil of the European Union and by theresponsible Member of the Commission.
2. The EEA Council noted that within the frameworkof the Political Dialogue the Ministers discussed theNorthern Dimension/Russia, the Western Balkansand Middle East.
3. The EEA Council noted that the enlarged EEA of 1May 2004 has functioned well. The EEAEnlargement Agreement was, however, still beingapplied on a provisional basis. The Ministersappealed to the Contracting Parties that had still notratified the Agreement to do so without delay.
4. The Ministers appreciated the good progress madein the implementation of the new EEA FinancialMechanism and the Norwegian FinancialMechanism. With the legal framework andguidelines in place and the Memoranda ofUnderstanding concluded with Beneficiary States,the implementation has entered a new stage ofproject generation. The importance of transparencyand broad participation in this work was underlined.The EEA Council welcomed the launching of thefirst calls for proposals.
5. The EEA Council welcomed the signing of theAccession Treaty with Bulgaria and Romania on 25April and recalled that Article 128 of the EEAAgreement states that any European State becominga member of the Community shall apply to becomea Party to this Agreement. The parties concernedwere therefore asked to negotiate and conclude therespective Enlargement Agreements in conformitywith this. The EEA Council underlined the commonobjective of simultaneous accession of newmembers to the EU and to the EEA, in order tosecure the homogeneity and the good functioning ofthe European Economic Area.
6. The EEA Council encouraged all ContractingParties to inform relevant actors about the EEAAgreement, in order to facilitate a smoothfunctioning of the Agreement and safeguard theinterests of economic operators in the whole ofthe EEA.
7. The EEA Council took note of the ratificationprocess of the Treaty establishing a Constitutionfor Europe since the signing of the Treaty on 29 October 2004.
8. The EEA Council noted the re-launch of theLisbon Strategy at the spring summit on 22 and 23 March 2005, by re-focussing on growth andemployment. The Lisbon Strategy shall continueto include the economic, social and environmentalpillars, mobilising synergies to boost growth andemployment. The Ministers acknowledged thatfurther improvement of the Internal Market playsan important role in reaching the goals of theLisbon Strategy. The EEA Council noted EEAEFTA input to the mid-term review, in particularthe recommendations concerning innovation,environmental sustainability, employment andgender equality.
9. Regarding the review of the overall work in theEEA cooperation, the EEA Council noted theProgress Report of the EEA Joint Committee. The Ministers welcomed the continuation of a well-functioning cooperation, and the speedyincorporation of new legislation for the InternalMarket into the Agreement.
The EEA Council in particular:
• Recalled the importance of timely EEA EFTAparticipation in EEA relevant EU Agencies andlooked forward to a decision by the EEA JointCommittee on EEA EFTA participation in theEuropean Food Safety Authority as soon as possible.
• Recalled the aim of maintaining the goodfunctioning of the Internal Market in the field ofcivil aviation. The EEA Council noted in thatcontext the common interest of the EU and theEEA EFTA States to develop further the close tiesin this field, in particular with regard to commonrules and principles governing the organisation ofthe European airspace (Single European Sky).The EEA Council also noted that the EU and theEEA EFTA States continue to pursue closeinformal contacts with respect to the EU's OpenSkies Policy. Furthermore, the EEA Councilencouraged all Contracting Parties to prevent anypossible restrictions to the freedom to provide airservices within the EEA, such as discriminatorycharges or tax measures.
• Acknowledged that the possible extension ofelements of the Internal Market to third countries,such as the Balkan States, may have implications
Conclusions of the 23rd meeting of the EEA Council on 14 June 2005
APPENDICES
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also for the EEA EFTA States and that it may bemutually beneficial for the Contracting Parties ofthe EEA Agreement to develop relations withinternational partners in a way that benefits thegood functioning of the EEA Agreement.
• Welcomed the continued constructive dialogue inorder to find practical solutions with regard to asystem of pre-arrival declarations - the so called“24-hours rule” - and thereby to avoid newobstacles to the free movement of goods in theEuropean Economic Area.
• Acknowledged the EEA EFTA stake in the effortsto establish a general framework for services inthe Internal Market.
• Welcomed the continued EEA EFTAcontributions in the decision-shaping process ofEEA relevant EC legislation and programmesthrough i.a. the participation in appropriatecommittees and working groups, and throughEEA EFTA Comments.
• Reaffirmed the importance of EEA EFTAparticipation in EEA relevant EU programmes.This participation is co-financed by the EEAEFTA States and contributes to the strengtheningof the EEA cooperation outside the four freedomsof the Internal Market, thereby promoting thecommon political and economic goals attached tothe EEA Agreement.
10. The EEA Council reaffirmed the shared aim ofcreating stable, peaceful and prosperous relationswith the neighbouring countries. The EEA Councilacknowledged that giving neighbourhood countriesor third countries a stake in the Internal Marketwould be mutually beneficial to all parties involvedand of great relevance to the EEA. The EEA Councilwelcomed the continued exchange of informationon further developments of the European
Neighbourhood Policy and discussion on possibleareas of cooperation.
11. The EEA Council held an orientation debate on thestate of play of the Doha-round (WTO).
12. The EEA Council noted the interest of the EEA-EFTA States in the ongoing discussions on the EUFinancial Perspectives for 2007-2013, due to EEAEFTA participation in EU related activities(programmes, etc.) financed by the EU budget.
13. The EEA Council underlined the need to finalise theoutstanding issues to ensure rapid implementationof transit of fish and the shrimp quota, which areincluded in the EEA Enlargement Agreement.
14. The EEA Council recognised the desirability ofinviting EEA EFTA ministers to attend relevantinformal EU Ministerial Meetings as well asMinisterial Conferences, based on the EEA EFTAparticipation in the Internal Market. The EEACouncil also recalled the practice of inviting theEEA EFTA States, at the level of officials, topolitical dialogue meetings with relevant Councilworking groups in troika format and expressed itsappreciation to the incoming UK presidency for thecontinuation of this practice.
15. The EEA Council noted the following Resolutionsby the EEA Joint Parliamentary Committeeadopted at its 24th meeting in Reykjavík, Iceland,on 25 April 2005 on The Annual Report on thefunctioning of the EEA Agreement in 2004 and onThe Review of the Regional Aid Guidelines. Italso noted the Resolution of the EEA ConsultativeCommittee adopted at its 13th meeting in Tallinn,Estonia on 31 May 2005 on The Lisbon Strategy -role and expectations of Economic and SocialPartners in the EEA and its Resolution onInstruments for increased economic and socialcohesion in Europe adopted on 8 June 2005.
1. The twenty-fourth meeting of the EEA Counciltook place in Brussels on 21 November 2005under the presidency of Ms Rita Kieber-Beck,Minister for Foreign Affairs of Liechtenstein. Themeeting was attended by Mr Jonas Gahr Støre,Minister for Foreign Affairs of Norway, and by Mr Geir H. Haarde, Minister for Foreign Affairs ofIceland, from the EEA - EFTA side, as well as byMr Douglas Alexander, Minister for State forEurope of the United Kingdom, representing theEU presidency, by Members of the Council of theEuropean Union and by the Member of theEuropean Commission responsible for EEACouncil matters, from the EU side.
2. The EEA Council noted that within the frameworkof the Political Dialogue the Ministers discussed thefight against terrorism, the OSCE Reform Processand the preparations for the Ministerial Meetingwhich will take place in Ljubljana on 4 - 5
December 2005, as well as the capacity building inAfrica and the responsibility for peace building andconflict resolution.
3. The EEA Council noted that the enlarged EuropeanEconomic Area of 1 May 2004 has functioned welland welcomed that all the Contracting States hadnow ratified the EEA Enlargement Agreement.
4. The Ministers appreciated the good progress made in the implementation of the new EEAFinancial Mechanism and the Norwegian FinancialMechanism. With the Memoranda of Understandingconcluded with the Beneficiary States, the processhas entered a new stage of project generation and the Financial Mechanisms are now firmly in the implementation phase. The importance oftransparency and broad participation in this workwas underlined. The EEA Council welcomed thelaunching of the first calls for proposals in the Czech
Conclusions of the 24th meeting of the EEA Council on 21 November 2005
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Republic, Slovenia, Malta and Poland, which havemade close to 200 million euros available topotential applicants.
5. The EEA Council welcomed the applications ofBulgaria and Romania to becoming ContractingParties to the EEA Agreement and recalled thatArticle 128 of the EEA Agreement states that anyEuropean State becoming a member of theEuropean Community shall apply to become a Partyto this Agreement. The Parties concerned weretherefore asked to prepare negotiations of therespective Enlargement Agreements in conformitywith this. The EEA Council underlined the commonobjective of the simultaneous accession of newmembers to the European Union and to theEuropean Economic Area, in order to secure thehomogeneity and the good functioning of theEuropean Economic Area. The EEA Council alsonoted the opening of EU's membership negotiationswith Turkey and Croatia.
6. The EEA Council encouraged all ContractingParties to inform relevant actors on the EEAAgreement, in order to facilitate a smoothfunctioning of the Agreement and to safeguard theinterests of economic operators throughout theEuropean Economic Area.
7. The EEA Council welcomed the renewed goals ofthe Lisbon Process and expressed optimism thatthey would promote delivery of growth andimplement reforms.
8. Regarding the review of the overall work in EEAcooperation, the EEA Council noted the ProgressReport of the EEA Joint Committee. The Ministerswelcomed the continuation of well-functioningcooperation, and the speedy incorporation of newlegislation for the Internal Market into the EEAAgreement.
The EEA Council in particular:
• Welcomed the timely EEA - EFTA participationin EEA-relevant Agencies of the European Unionand looked forward to a decision by the EEA JointCommittee on EEA - EFTA participation in theEuropean Food Safety Authority (EFSA) as soonas possible.
• Recalled the aim of maintaining the goodfunctioning of the Internal Market in the field ofcivil aviation. In that context, the EEA Councilnoted the common interest of the EU and the EEA- EFTA States to develop further the close ties inthis field, in particular the incorporation ofcommon rules and principles governing theorganisation of the European airspace (SingleEuropean Sky) into the EEA Agreement. TheEEA Council also noted that the EU and the EEA- EFTA States continue to pursue close informalcontacts with respect to the Open Skies Policy ofthe European Union. Furthermore, the EEACouncil encouraged all Contracting Parties toprevent any possible restrictions to the freedom toprovide air services within the European
Economic Area, such as discriminatory charges ortax measures.
• Welcomed the progress made towards betterregulation within the Internal Market.
• Welcomed the continued constructive dialogue inorder to find a practical solution with regard to thenew safety and security system (pre-arrival / pre-departure declarations) and thereby avoidingobstacles to the free movement of goods withinthe European Economic Area.
• Acknowledged the EEA - EFTA stake in theefforts to establish a general framework forservices in the Internal Market.
• Welcomed the continued EEA - EFTAcontributions in the decision-shaping process ofEEA-relevant legislation and programmes of theEuropean Community through i.a. participation inappropriate committees and working groups ofthe European Community, and through EEA -EFTA Comments.
• Reaffirmed the importance of EEA - EFTAparticipation in EEA-relevant programmes of theEuropean Union. This participation is co-financedby the EEA - EFTA States and contributes to thestrengthening of the EEA cooperation outside thefour freedoms of the Internal Market, therebypromoting the common political and economicgoals attached to the EEA Agreement.
9. The EEA Council reaffirmed the shared aim ofcreating stable, peaceful and prosperous relationswith the neighbouring countries. The EEA Councilacknowledged that giving neighbourhood countriesor third countries a stake in the Internal Marketwould be mutually beneficial to all parties involvedand of relevance to the European Economic Area.The EEA Council welcomed the continuedexchange of information on further developments ofthe European Neighbourhood Policy.
10. The EEA Council held an orientation debate on thestatus of the negotiations leading up to the WTOMinisterial Conference which will take place inHong Kong on 13 - 18 December 2005.
11. The EEA Council underlined the need to finalise theoutstanding issues to ensure rapid implementationof the shrimp quota and transit of fish, which areincluded in the EEA Enlargement Agreement.
12. The EEA Council recognised the desirability ofinviting EEA - EFTA Ministers to attend relevantinformal EU Ministerial Meetings as well asMinisterial Conferences on the basis of EEA - EFTAparticipation in the Internal Market. The EEACouncil also recalled the practice of inviting theEEA - EFTA States - at the level of officials - topolitical dialogue meetings with relevant WorkingGroups of the Council of the European Union in thetroika format and expressed its appreciation to theincoming Austrian presidency for the continuationof this practice.
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Communiqué
EFTA Ministers review the status of their free tradenegotiations with the South African Customs Union(SACU) and discuss new partners in Asia; EEAAgreementfunctioning well in enlarged Internal Market; mid-termreview of Lisbon Strategy reflects EEA EFTA input.
The European Free Trade Association (EFTA) held itsSpring Ministerial meeting in Vaduz, Liechtenstein, on 27 June. Ms Rita Kieber-Beck, Minister for ForeignAffairs of Liechtenstein, chaired the meeting.
Relations with countries outside the European Union
Ministers recalled their strong commitment to themultilateral trading system as developed under the WTO.Acting as a supplement to this system, EFTA's free tradeagreements play an important role to safeguardcompetitiveness and increase market access in a worldwhere regional and preferential trade agreements areproliferating.
Ministers discussed current and future initiatives toexpand their free trade network in Asia. EFTA hopes toconclude negotiations with the Republic of Korea thisyear. Moreover, free trade negotiations with Thailand willformally open this autumn and a dialogue with Indonesiahas started. Ministers agreed that EFTA's relations withChina and other Asian partners were a high priority andwill actively seek to strengthen their trade relations withthe countries, with the aim of initiating free tradenegotiations. As regards Japan, Ministers underlined theimportance of strong trade relations with EFTA's largesttrading partner in Asia.
Ministers discussed the ongoing negotiations with themembers of the Southern African Customs Union andwere looking forward to conclude the free tradeagreement (FTA) in the coming months. The agreementwill forge closer relations between SACU and EFTA.Ministers welcomed the EFTA-Tunisia free tradeagreement which is in force for Switzerland andLiechtenstein as of 1 June. They reconfirmed the EFTAcountries' commitment to a Euro-Mediterranean free tradearea and stressed the need to conclude the longstandingnegotiations with Egypt. Talks on FTAs with Algeria andthe Gulf Cooperation Council could start in theforeseeable future.
Ministers reiterated their support for Russia's swiftaccession to the WTO. They stressed the importance ofdeveloping EFTA's relations with Russia, highlighting herimportance as a trading nation both on the European andthe global stage. The EFTA States have decided toapproach the Russian Federation in order to explore thestrengthening of trade relations, including the possibilityof a free trade agreement at an appropriate time.
Ministers discussed developments in the Americas. Theylooked forward to an early resumption of their FTAnegotiations with Canada. As regards the United States,Ministers underlined their important trade relations withEFTA's second largest trading partner.
EEA
EEA EFTA Ministers were pleased to note the continuedgood functioning of the EEA Agreement in the enlargedInternal Market. EFTA closely follows the development ofthe Lisbon Strategy, recently re-launched to focus on growthand employment. EEA EFTA Ministers noted that the springsummit conclusions reflected many of the priorities put forward by the EEA EFTA States in their input to the Strategy's Mid-term Review, and in particularrecommendations concerning innovation, reform of theinternal market, environmental sustainability, employment,and gender equality. Ministers also highlighted theimportance of EFTA participation in new EU Agencies.
On future EU enlargement, Ministers recalled theimportance of simultaneous accession of new members tothe EU and to the EEA.
Ministers welcomed the progress made in implementingthe EEA Financial Mechanism and the NorwegianFinancial Mechanism, where 1.17 billion euros will bemade available over the five-year period 2004-2009 tosupport social and economic cohesion within theenlarged EEA.
New Secretaries-General from autumn 2006
To succeed Mr William Rossier on 1 September 2006,Ministers appointed Ambassador Kåre Bryn of Norway asSecretary-General of EFTA. They also appointed Ms LiljaVidarsdóttir of Iceland to the post of Deputy Secretary-General in Brussels. Switzerland will nominate a candidateto the post of Deputy Secretary-General in Geneva to beappointed by Ministers at the autumn meeting.
Advisory Bodies
Ministers held meetings with EFTA's advisory bodies, theParliamentary Committee and the ConsultativeCommittee. Ministers welcomed the important workundertaken by the Committees, which both continued toenjoy fruitful cooperation with their counterparts in theEU and other EFTA partner countries.
WTO
EFTA Ministers reaffirmed their strong commitment toachieving a substantial outcome at the upcoming WTOMinisterial Meeting in Hong Kong in December this year.
Ministers attending:
Liechtenstein: Ms Rita Kieber-Beck, Minister for Foreign Affairs (Chair)
Iceland: Mr Davíd Oddsson, Minister for Foreign Affairs
Norway: Mr Børge Brende, Minister for Trade and Industry
Switzerland: Mr Joseph Deiss, Minister for Economic Affairs.
EFTA Ministerial Meeting in Vaduz on 27 June 2005
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EFTA Ministerial Meeting in Geneva on 29 November 2005
Communiqué
EFTA Ministers welcomed the recently concludednegotiations on free trade agreements with Korea and theSouthern African Customs Union (SACU) as well as therecent start of negotiations with Thailand. Theyfurthermore agreed to jointly conduct a feasibility studywith Indonesia on a possible future trade agreement.
On 29 November, the European Free Trade Association(EFTA) held its Autumn Ministerial meeting in Geneva,Switzerland, where Ministers held fruitful discussions onfree trade relations with third countries as well as onmultilateral trade negotiations. Mr Odd Eriksen, Ministerfor Trade and Industry, Norway, chaired the meeting.EFTA Ministers also met with the EFTA ParliamentaryCommittee.
Ministers were pleased that the negotiations on free tradeagreements had been concluded with Korea and theSouthern African Customs Union (SACU). TheAgreement with Korea is scheduled to be signed in HongKong in December. Ministers emphasised thecomplementarities of the export-based economies of theEFTA States and Korea and expect considerable gainsfrom this Agreement.
They anticipated that the Free Trade Agreement withSACU, the first with African partners outside theMediterranean region, will be signed shortly. ThisAgreement will likewise contribute to a mutuallybeneficial deepening of trade and economic relationsbetween the EFTA States and SACU and constitute animportant element also in the overall relations between theEFTA countries and SACU. They expressed their hopethat the new trade opportunities would lead to increasedeconomic growth and development.
Ministers discussed the longstanding free tradenegotiations with Canada and Egypt and expressed theirhope that it would soon be possible to detect convergencetowards the successful conclusion of these negotiations in2006. They welcomed that negotiations with Thailand hadstarted in October.
Ministers reiterated the commitment of the EFTA States tothe Euro-Mediterranean free trade area and welcomedprogress in expanding the network of free tradeagreements featuring the Euromed model protocol onrules of origin.
Ministers discussed initiatives to further expand thenetwork of free trade agreements of EFTA. They werelooking forward to the possibility of starting free tradenegotiations with Algeria at the earliest. They alsosigned a Record of Understanding with Indonesia,establishing a Joint EFTA-Indonesia Study Group toevaluate the feasibility of a future trade agreement.The Study Group's final report is expected byDecember 2006.
It was furthermore agreed to establish and pursuedialogues with important trading partners such as China,India, Japan and Russia and to monitor developments withregard to cooperation partners such as Ukraine, the GulfCooperation Council and MERCOSUR.
New Deputy Secretary-General in Geneva from autumn 2006
To succeed Mr Pétur G. Thorsteinsson on 1 September2006, Ministers appointed Mr Didier Chambovey ofSwitzerland as Deputy Secretary-General in Geneva.
ISSN
02
58
-38
44
EUROPEAN FREE TRADE ASSOCIATION - EFTA
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