51ST ANNUAL REPORT 2011OF THE EUROPEAN FREETRADE ASSOCIATION

2486-RAPPORT-2012-06_AR 20/03/12 16:11 Page1

Annual Report of the European Free Trade Association 2011

• Editor: Tore Grønningsæter

• Copy Editor: Juliet Reynolds

• Layout by Orangemetalic

• Published March 2012

Cover picture: The border between Liechtenstein and Switzerland (iStockphoto/Shiran De Silva)

Editor’s note:For basic information on EFTA, please see the publication “This is EFTA”. Further information is alsoavailable on our website: www.efta.int/.

2486-RAPPORT-2012-06_AR 20/03/12 16:11 Page2

FOREWORDenvironment and climate change, civil society, humanand social development, cultural heritage, research andscholarships, and justice and home affairs.

In 2011, Hong Kong China and Montenegro joined theexpanding network of EFTA’s free trade partners,which now comprises 24 agreements with 33 countriesoutside the EU. Thus, the EFTA States havepreferential free trade relations with 60 countries inEurope and the rest of the world, as well as with eachother. This means that 80% of EFTA’s merchandisetrade is now covered by preferential tradingarrangements. In addition, other important economicactivities such as trade in services, cross-borderinvestment and access to government procurementmarkets also benefit from favourable provisions inEFTA agreements.

EFTA was also engaged in a number of importantfree trade negotiations in 2011, including withBosnia and Herzegovina, India, Indonesia and themembers of the Customs Union of Russia, Belarusand Kazakhstan. Preparations took place fornegotiations with Central American countries andVietnam, while exploratory processes were pursuedwith MERCOSUR and Malaysia.

The EFTA bilateral agreements are fully compatiblewith the multilateral trading system. They arecomplementary and not an alternative to this system.The EFTA States, therefore, continue to demonstratetheir full commitment to a robust multilateralframework and remain strong supporters of the WorldTrade Organization.

For more than 50 years the EFTA Secretariat hasconstantly adapted its processes and workingmethods to serve the needs of its Member States inthe best way possible. The two Deputy Secretaries-General and I have also endeavoured in the last yearto improve our efficiency in delivering the range ofservices and expertise that our members expect, andthat work will continue.

Kåre BrynSecretary-General

EFTA made good progress in2011 in its two main areas ofactivity: The management ofthe European Economic AreaAgreement and the furtherexpansion of EFTA’s globalnetwork of free trade relations.The year marked the 20th anniversary of the EFTAStatistical Office inLuxembourg, which acts as aliaison between the statisticaloffice of the European Union,

Eurostat, and the EFTA national statistical institutes.

The EEA Agreement, which entered into force in 1994,provides a solid framework for Iceland, Liechtensteinand Norway’s integration into the Single Market of theEuropean Union. With a population of over 500million, the EEA constitutes the world’s biggestcommon market.

In 2011, 373 legal acts were incorporated into the EEAAgreement, thereby ensuring that the entire EEA is stillgoverned by homogeneous rules, which is aprerequisite for the effective functioning of the EEA.Important additions include the Renewable EnergyDirective, the new Social Security Regulation and theinclusion of aviation activities in the EU EmissionsTrading Scheme. The EEA EFTA States are activelyinvolved in a number of programmes and agencieswhich play an increasingly important role in the EU. In2011, the Media Mundus Programme was included inthe EEA Agreement, supporting internationalcooperation in the audiovisual industry.

Through the EEA Grants and Norway Grants, Iceland,Liechtenstein and Norway continue to contribute toreducing economic and social disparities in the EEAand strengthening bilateral relations between EFTAand the 15 beneficiary countries in Central andSouthern Europe. Key areas of support include

2486-RAPPORT-2012-06_AR 20/03/12 16:11 Page3

4

AN

NU

AL

REPO

RT O

F TH

E EU

ROPE

AN

FRE

E TR

AD

E A

SSO

CIA

TIO

N 2

011

TABLE OF CONTENTS

FOREWORD 3

EFTA COUNCIL 5

EFTA Ministerial Meetings 5The EFTA Council 6The EFTA Convention 6Annual Meeting of EFTA and EU Finance Ministers 6

FREE TRADE RELATIONS 7

Main Developments 8Management of EFTA’s Free Trade Agreements and JointDeclarations on Cooperation 10Technical Cooperation 10Relations with the WTO 10

THE EEA AGREEMENT 13

The EEA Council 13The EEA Joint Committee 13The Standing Committee of the EFTA States 16Legal and Institutional Matters 16Free Movement of Goods 16Free Movement of Capital and Services 20Free Movement of Persons 22Flanking and Horizontal Policies 22

EFTA/EU Cooperation in Statistics 25Technical Cooperation in the Field of Statistics 26

EEA GRANTS AND NORWAY GRANTS 28

ADVISORY BODIES 30

The Parliamentary Committees 30The Consultative Committees 31The EEA EFTA Forum 32

INFORMATION ACTIVITIES 33

ADMINISTRATION 35

APPENDICES 36

FIGURES

Fig. 1: Joint Declarations on Cooperation and Free Trade Agreements between EFTA and Non-EU Partners 7

Fig. 2: Joint Committee Meetings in 2011 10

Fig. 3: Meetings Held and EU Acts Incorporated in 2011 14

Fig. 4: Publication in the EEA Supplement 2011 34

Fig. 5: 2011 EFTA Budget 35

Fig. 6: Contributions from the EFTA States to the 2011 EFTA Budget 35

2486-RAPPORT-2012-06_AR 20/03/12 16:11 Page4

5

AN

NU

AL

REPO

RT O

F TH

E EU

ROPE

AN

FRE

E TR

AD

E A

SSO

CIA

TIO

N 2

011

EFTA COUNCILEFTA Ministerial Meetings

The EFTA Council met twice at Ministerial level in2011, on 21 June in Schaan, Liechtenstein and on 14November in Geneva. The Council was chaired byLiechtenstein in the first half of 2011 and by Norwayin the second.

The International EconomicSituation

During their meetings, the EFTA Ministers discussedthe international economic and trade environment.They underlined the importance of continuing torefrain from protectionist measures and of promotingpolicies that enhance growth and financial andeconomic stability at European and international level.They reiterated their strong commitment to themultilateral trading system but expressed their deepconcern over the lack of progress in the World TradeOrganization’s Doha negotiations.

Preferential Trade Relations

Ministers reviewed developments in EFTA’s preferentialtrade activities with partners worldwide, includingrelations with Bosnia and Herzegovina; the CustomsUnion of Russia, Belarus and Kazakhstan; India;Indonesia; Malaysia; MERCOSUR (Argentina, Brazil,Paraguay and Uruguay); Vietnam; and countries inCentral America. They also signed free trade agreementswith Hong Kong China and Montenegro, and decided toexplore the possibility of developing closer traderelations with Sub-Saharan Africa.

Ministers also endorsed the outcome of discussions at atechnical level on the further liberalisation of trade inagricultural products between the EFTA Member States.

Relations with the European Union

At their June meeting in Schaan, the EEA EFTAMinisters discussed the general functioning of the EEAAgreement with a focus on the difficult economic

The EFTA Ministerial meeting in June 2011: Kåre Bryn, EFTA Secretary-General; Aurelia Frick, Minister of Foreign Affairs, Liechtenstein; Össur Skarphéðinsson, Minister ofForeign Affairs and External Trade, Iceland; Rikke Lind, State Secretary, Ministry of Trade and Industry, Norway; and Johann N. Schneider-Ammann, Federal Councillor, Head of the Federal Department of Economic Affairs, Switzerland.

2486-RAPPORT-2012-06_AR 20/03/12 16:11 Page5

6

AN

NU

AL

REPO

RT O

F TH

E EU

ROPE

AN

FRE

E TR

AD

E A

SSO

CIA

TIO

N 2

011

situation. They underlined the need for coordinatedand comprehensive action at European level. They alsoexpressed their satisfaction that the EEA EFTA Stateswould soon participate in the new system of EUfinancial supervisory architecture, which beganoperating on 1 January 2011.

Ministers welcomed the conclusion of the majority ofprojects, programmes and funds under the EEA andNorwegian Financial Mechanisms 2004-2009, and theagreements on the two mechanisms for 2009-2014.

The communiqués from the 2011 Ministerial meetingscan be found in the appendices to this report.

The EFTA Council

The Council met eight times in 2011 at the level ofheads of permanent delegations to EFTA in Geneva.Delegates discussed EFTA’s relations with countriesoutside the European Union, including free tradenegotiations and the management of existing free tradeagreements. They also approved a number of technicalcooperation projects and dealt with administrative andbudgetary matters.

The EFTA Convention

The Council is responsible for the Vaduz Convention,which is updated regularly to reflect legislativedevelopments in the EEA Agreement and the Swiss-EU Agreements. In 2011, the Council amended AnnexA on Rules of Origin, Annex C on Agriculture,Appendix I to Annex P on Land Transport and theAppendix to Annex Q on Air Transport. TheCommittee on Mutual Recognition in relation toConformity Assessment also adopted amendments toAnnex I on Mutual Recognition. Throughout the year,negotiations were held between agricultural expertsfrom the EFTA States regarding the furtherliberalisation of intra-EFTA trade in agriculturalproducts. At the Ministerial meeting in Geneva on 14 November, EFTA Ministers endorsed theunderstanding reached by the experts, and the Councilis expected to adopt amending measures in early 2012.

Annual Meeting of EFTA andEU Finance Ministers

The annual meeting of EFTA and EU FinanceMinisters took place on 8 November. With the topic of

“Ensuring Financial Sector Stability”, the meeting waschaired by Jan Vincent-Rostowski, Minister ofFinance, representing the Polish Presidency of the EUCouncil. EFTA was represented by Eveline Widmer-Schlumpf, Federal Councillor, Head of the FederalDepartment of Finance, Switzerland, as EFTA Chair;Klaus Tschütscher, Prime Minister and Minister ofFinance of Liechtenstein; Steingrímur Sigfússon,Minister of Finance of Iceland; and Sigbjørn Johnsen,Minister of Finance of Norway.

EFTA Ministers of Finance in Brussels in November 2011: Klaus Tschütscher,Liechtenstein; Eveline Widmer-Schlumpf, Switzerland; Steingrímur Sigfússon,Iceland; and Sigbjørn Johnsen, Norway.

The Lugano Convention

Iceland, Norway and Switzerland were parties to the1988 Lugano Convention on jurisdiction andenforcement of judgments in civil and commercialmatters. Following the enlargement of the EuropeanUnion, a revised Convention was adopted in 2007. The2007 Lugano Convention entered into force in the EU,Denmark and Norway on 1 January 2010, inSwitzerland on 1 January 2011 and in Iceland on 1 May 2011. EFTA participates as an observer in thework of the Convention’s Standing Committee.

2486-RAPPORT-2012-06_AR 20/03/12 16:11 Page6

7

AN

NU

AL

REPO

RT O

F TH

E EU

ROPE

AN

FRE

E TR

AD

E A

SSO

CIA

TIO

N 2

011

EFTA pursued an ambitious agenda in 2011, aimed atexpanding and deepening its preferential traderelations worldwide. With the signing of two new freetrade agreements (FTAs) with Hong Kong China andMontenegro, the number of EFTA’s FTAs rose to 24,covering 33 countries.

By the end of the year, EFTA’s formal engagementwith countries outside the European Union had

extended to 51 partners at the following levels ofcooperation:

Free Trade Agreements

EFTA had operational FTAs with 24 partner countriesin 2011: Albania, Canada, Chile, Colombia, Croatia,Egypt, Israel, Jordan, Korea, Lebanon, Macedonia,Mexico, Morocco, Palestinian Authority, Peru, Serbia,

FREE TRADE RELATIONS

Joint Declarations on Cooperation and Free Trade Agreementsbetween EFTA and Non-EU Partners Fig. 1

Partner Joint Declaration Free Trade Agreement Signature Signature Entry into force

Albania 10 December 1992 17 December 2009 1 November 2010Algeria 12 December 2002Canada 26 January 2008 1 July 2009Chile 26 June 2003 1 December 2004Colombia 17 May 2006 25 November 2008 1 July 2011Croatia 19 June 2000 21 June 2001 1 April 2002Egypt 8 December 1995 27 January 2007 1 August 2007Gulf Cooperation Council (GCC)[1] 23 May 2000 22 June 2009Hong Kong China 21 June 2011Israel 17 September 1992 1 January 1993Jordan 19 June 1997 21 June 2001 1 September 2002Korea, Republic of 15 December 2005 1 September 2006Lebanon 19 June 1997 24 June 2004 1 January 2007Macedonia 29 March 1996 19 June 2000 1 May 2002Malaysia 20 July 2010Mauritius 9 June 2009MERCOSUR[2] 12 December 2000Mexico 27 November 2000 1 July 2001Mongolia 28 July 2007Montenegro 12 December 2000 14 November 2011Morocco 8 December 1995 19 June 1997 1 December 1999Palestinian Authority 16 December 1996 30 November 1998 1 July 1999Panama 20 July 2010Peru 24 April 2006 24 June 2010 1 July 2011Southern African Customs Union (SACU)[3] 26 June 2006 1 May 2008Serbia 12 December 2000 17 December 2009 1 October 2010Singapore 26 June 2002 1 January 2003Tunisia 8 December 1995 17 December 2004 1 June 2005Turkey 10 December 1991 1 April 1992Ukraine 19 June 2000 24 June 2010

[1] Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates.[2] Argentina, Brazil, Paraguay and Uruguay.[3] Botswana, Lesotho, Namibia, South Africa and Swaziland.

2486-RAPPORT-2012-06_AR 20/03/12 16:11 Page7

8

AN

NU

AL

REPO

RT O

F TH

E EU

ROPE

AN

FRE

E TR

AD

E A

SSO

CIA

TIO

N 2

011

Singapore, the Southern African Customs Union(SACU; comprising Botswana, Lesotho, Namibia,South Africa and Swaziland), Tunisia and Turkey.

Signed Free Trade Agreements

Free trade agreements with Hong Kong China andMontenegro were signed in June and November 2011respectively. Together with the FTAs signed with thesix Member States of the Gulf Cooperation Council(GCC; comprising Bahrain, Kuwait, Oman, Qatar,Saudi Arabia and the United Arab Emirates) in 2009,and with Ukraine in 2010, they are in the process ofbeing ratified by the parties.

Free Trade Negotiations

In 2011, EFTA was engaged in or about to commencenegotiation processes with ten partners (Bosnia andHerzegovina; the Central American States of Costa Rica,Guatemala, Honduras and Panama; India; Indonesia; andRussia, Belarus and Kazakhstan). Negotiations withAlgeria and Thailand remained on hold.

Joint Feasibility Studies

Work on a joint feasibility study with Vietnam wasconcluded in February 2011.

Joint Declarations on Cooperation

Joint declarations on cooperation (JDCs) are operationalwith Malaysia, Mauritius, Mongolia and MERCOSUR(Argentina, Brazil, Paraguay and Uruguay).

Main Developments

New Agreements with Hong KongChina and Montenegro

Launched in January 2010, negotiations on acomprehensive free trade agreement with Hong KongChina were concluded in March 2011 after five rounds,and the FTA was signed in Schaan, Liechtenstein on 22June. Merchandise trade between the two sides reachedUSD 8.3 billion in 2010, with exports from the EFTAStates to Hong Kong China valued at USD 6.5 billion.Bilateral trade in services and investments were alsosignificant. For the first time in an EFTA FTA, a chapteron trade and environment was incorporated and anagreement on labour was concluded in parallel. The FTAwith Hong Kong China is EFTA’s third agreement with apartner in East Asia, following those already concludedwith Singapore and Korea.

From the launch of negotiations in March 2011 on afree trade agreement with Montenegro, progress wasswift and an FTA was signed in Geneva on 14November. The emphasis of the FTA is on trade ingoods and the protection of intellectual property rights,and it also contains a chapter on trade and sustainabledevelopment. Trade between EFTA and Montenegro isstill at a relatively low level but has increased stronglysince the country’s independence in 2006. With thisagreement, EFTA has further consolidated itspreferential trading network in South East Europe,

Celebrations following the signing of EFTA’s free trade agreement with HongKong China in June 2011: Gregory So Kam-leung, Acting Secretary for Commerceand Economic Development of Hong Kong China; and Aurelia Frick, EFTA Chairand Minister of Foreign Affairs, Liechtenstein.

Signing of EFTA’s free trade agreement with Montenegro in November 2011:Ljubiša Perović, Ambassador, Permanent Mission of Montenegro, Geneva; andVladimir Kavarić, Minister of Economy, Montenegro.

2486-RAPPORT-2012-06_AR 20/03/12 16:11 Page8

9

AN

NU

AL

REPO

RT O

F TH

E EU

ROPE

AN

FRE

E TR

AD

E A

SSO

CIA

TIO

N 2

011

adding to its existing FTAs with Albania, Croatia,Macedonia and Serbia.

Emerging Markets

In 2011, EFTA reinforced its focus on closer traderelations with major emerging market partners.

Negotiations on a broad-based agreement with India,commenced in 2008, gained new momentum with fourrounds of talks and additional meetings conductedthroughout the course of 2011. Significant progresswas achieved and the likelihood increased thatnegotiations would be concluded in 2012.

In January 2011, EFTA entered into formalnegotiations with the Russian Federation, along withits customs union partners Belarus and Kazakhstan,followed by another two rounds of talks. Soundfoundations were laid for this ongoing process, whichwill also benefit from Russia’s accession to the WorldTrade Organization, as adopted at the eighth WTOMinisterial Conference in December 2011.

Negotiations towards a “Comprehensive EconomicPartnership Agreement” with Indonesia started in

February and three full rounds were held during thecourse of the year. Particular attention was given toexplaining each side’s approach to the various fields,including technical cooperation.

A renewed dialogue with MERCOSUR (Argentina,Brazil, Paraguay and Uruguay) was established inSeptember in the framework of the joint declaration oncooperation between the two sides. EFTA andMERCOSUR agreed to pursue a joint assessment ofthe available options for increasing trade, investmentand cooperation in 2012.

Further Processes

In Europe, negotiations on a free trade agreement withBosnia and Herzegovina commenced in March. Afterthree rounds of talks, several parts of the FTA werecompleted. Negotiations on the remaining issues areexpected to be finalised in the first half of 2012.

In Asia, EFTA concluded a joint feasibility study attechnical level with Vietnam in February, examiningthe prospects for a preferential trade agreement.Based on positive recommendations made by thejoint study group, a dialogue continued towards

Representatives of EFTA and Central American States announcing the start of free trade negotiations in November 2011: Kåre Bryn, EFTA Secretary-General; Johann N.Schneider-Ammann, Federal Councillor, Head of the Federal Department of Economic Affairs, Switzerland; Ronald Saborio Soto, Ambassador, Permanent Mission of Costa Rica,Geneva; Trond Giske, Minister of Trade and Industry, Norway; Aurelia Frick, Minister of Foreign Affairs, Liechtenstein; Diana Salazar, Vice Minister, Chief Trade Negotiator,Panama; Dacio Castillo, Ambassador, Permanent Mission of Honduras, Geneva; and Einar Gunnarsson, Permanent Secretary of State of the Ministry for Foreign Affairs andExternal Trade, Iceland.

2486-RAPPORT-2012-06_AR 20/03/12 16:11 Page9

10

AN

NU

AL

REPO

RT O

F TH

E EU

ROPE

AN

FRE

E TR

AD

E A

SSO

CIA

TIO

N 2

011

launching negotiations between the two sides in2012. With Malaysia, a first joint committee meetingunder the declaration on cooperation of 2010 washeld in June 2011. Exploratory work is beingpursued with the perspective of possible free tradenegotiations with this partner in the near future.EFTA’s willingness to resume negotiations withThailand when conditions permit was reiterated byMinisters at their 2011 meetings.

In Latin America, FTAs with Colombia and Peruentered into force on 1 July (for Liechtenstein andSwitzerland), bringing the number of operationalEFTA agreements in the region to four (together withthose already concluded with Chile and Mexico).Based on a JDC concluded with Panama in 2010,exploratory talks took place with five CentralAmerican countries. EFTA Ministers announced thestart of negotiations at their meeting on 14 November,and in December modalities for the negotiating processwere agreed with Costa Rica, Guatemala, Hondurasand Panama. A first round of negotiations is anticipatedfor the first quarter of 2012.

In Northern Africa, negotiations with Algeria remainedsuspended during the reporting year, but EFTAMinisters confirmed their readiness to resume thisprocess. EFTA Ministers also agreed to furtherexamine the possibility of developing closer traderelations with countries in Sub-Saharan Africa (inaddition to the existing FTA with the Southern AfricanCustoms Union).

Management of EFTA’s FreeTrade Agreements and JointDeclarations on Cooperation

In 2011, the EFTA States held joint committeemeetings with four free trade partners (Chile, Israel,Jordan and SACU). On these occasions, EFTA and

its partner countries reviewed the functioning oftheir respective FTAs. They also assessed the needfor adjustments and extensions of existingcommitments in light of recent developments,notably new preferential arrangements with thirdcountries.

As a result, several decisions were made to updateexisting FTAs and work plans were agreed in view ofmaking further revisions, such as with Israel onagriculture. Experts also worked on possible futureamendments to existing FTAs with other partners,notably Canada, Korea and Turkey.

Technical Cooperation

Within the framework of EFTA’s technical cooperationpolicy (see box on page 12), activities in 2011 includedthe following:

• Export promotion seminars in two locations inAlbania;

• An export promotion seminar in Jordan; • A workshop in Vietnam on possible preferential

trade relations; and• Support to the Palestinian Authority for

participation in two international trade fairs.

Relations with the WTO

Under the World Trade Organization’s transparencymechanism for bilateral and regional tradeagreements, EFTA notified all new free tradenegotiations in 2011, as well as signings,ratifications and the entry into force of FTAs. EFTAalso submitted notifications to the WTO Secretariatregarding decisions adopted by joint committeesunder existing agreements. No EFTA FTAs wereexamined by the WTO’s Committee on RegionalTrade Agreements during the reporting year.

Joint Committee Meetings in 2011 Fig. 2

Free Trade Partner Venue and Date of MeetingJoint EFTA-Jordan Committee (3rd) Amman, 23 February 2011

Joint EFTA-Chile Committee (3rd) Geneva, 5 May 2011

Joint EFTA-SACU Committee (2nd) Geneva, 1 July 2011

Joint EFTA-Israel Committee (8th) Jerusalem, 23 November 2011

2486-RAPPORT-2012-06_AR 20/03/12 16:11 Page10

EFTA

’S W

ORL

DW

IDE

NET

WO

RK

EFTA

Sta

tes

4(F

ree

trad

e ar

ea)

Euro

pea

n U

nio

n 2

7(F

ree

trad

e p

artn

er)

EFTA

Fre

e Tr

ade

Ag

reem

ents

24

Alb

ania

, Can

ada,

Chi

le, C

olom

bia

, Cro

atia

, Eg

ypt,

the

Gul

f Coo

per

atio

n C

ounc

il (G

CC; c

omp

risin

g B

ahra

in, K

uwai

t,O

man

, Qat

ar, S

aud

i Ara

bia

and

the

Uni

ted

Ara

b E

mira

tes)

, Ho

ng

Kon

g C

hin

a, Is

rael

, Jor

dan

, Kor

ea, L

eban

on, M

aced

onia

, Mex

ico,

Mo

nte

neg

ro, M

oroc

co, P

ales

tinia

n A

utho

rity,

Peru

, Ser

bia

,Si

ngap

ore,

the

Sout

hern

Afr

ican

Cus

tom

s U

nion

(SA

CU

;co

mp

risin

g B

otsw

ana,

Les

otho

, Nam

ibia

, Sou

th A

fric

a an

dSw

azila

nd),

Tuni

sia,

Tur

key

and

Ukr

aine

.

FTA

neg

oti

atio

ns

Alg

eria

, Bo

snia

an

d H

erze

gov

ina,

Cen

tral

Am

eric

an S

tate

s(C

ost

a R

ica,

Gu

atem

ala,

Ho

nd

ura

s an

d P

anam

a), I

nd

ia,

Ind

on

esia

, Ru

ssia

/Bel

aru

s/K

azak

hst

an a

nd

Th

aila

nd.

Dec

lara

tio

ns

on

Co

op

erat

ion

Mal

aysi

a, M

auri

tiu

s, M

ERC

OSU

R (c

om

pri

sin

g A

rgen

tin

a, B

razi

l,Pa

rag

uay

an

d U

rug

uay

) an

d M

on

go

lia.

Dia

log

ue/

stu

dy

on

clo

ser

trad

e an

d in

vest

men

t re

lati

on

sC

entr

al A

mer

ican

Sta

tes

(El S

alva

do

r an

d N

icar

agu

a) a

nd

Vie

tnam

.

Free

tra

de

rela

tio

ns

wit

h in

div

idu

al E

FTA

Sta

tes

Ch

ina,

Far

oe

Isla

nd

s an

d J

apan

.

2486-RAPPORT-2012-06_AR 20/03/12 16:11 Page11

A New Convention on Rules of Origin for the Euro-Mediterranean RegionA free trade agreement contains rules of origin which normally limit preferential treatment under that agreementto producers and exporters from the contracting states, according to certain criteria.

The rules of origin concluded as part of the so-called “Pan-Euro-Mediterranean (PEM) Cumulation System”,however, go further than this: All participating countries recognise each other’s originating products ifcorresponding FTAs are in place. As a result, industries established in the PEM zone may source input materialfrom any other country in that zone and still benefit from preferential treatment for the final product, which inmost cases is duty-free access to markets.

The system dates back to the 1970s when the EFTA States concluded free trade agreements with the EU thatallowed for the “cumulation” of origin between the two blocs. It was later extended to Turkey and CentralEuropean States that have since joined the EU. In the late 1990s, the system was expanded further to countries inthe Mediterranean region in the context of the EU’s “Barcelona Process”. Today, in addition to the EU and theEFTA States, 11 other partners participate in the PEM Cumulation System[1].

On 15 June 2011, a new legal instrument, the “Regional Convention on Pan-Euro-Mediterranean PreferentialRules of Origin”, was opened for signature by the above-mentioned members of the PEM Cumulation System, as well as by additional countries in the Western Balkans[2].

From 2012[3], the new Convention will replace the largely identical rules of origin contained in FTAs concludedbetween the PEM countries. It will simplify the management of the cumulation system and allow for a singleregulatory reference for traders operating in the 49 participating countries and territories. Further partners mayjoin the PEM Convention in the future.

As most of the substantive rules included in the PEM Convention were initially conceived in the 1970s, they nolonger fully reflect today’s trading patterns and production requirements. A revision of the Convention hastherefore already begun. The EFTA States have a strong interest in simpler and more effective rules of origin andare therefore fully supportive of this revision process.

EFTA’s Technical CooperationEFTA’s technical cooperation projects cover a range of trade-related areas and are primarily directed at developingcountries and economies in transition. They are funded by the Association and organised by the EFTA Secretariat.EFTA’s projects may involve experts from Member States and partner countries, notwithstanding the EFTAStates’ own technical cooperation programmes and initiatives.

The main objectives of EFTA’s technical cooperation activities are to support prospective partner countries inpreparing for free trade negotiations, and to assist existing partners in the implementation and promotion of FTAs.To this effect, EFTA arranges training, seminars, workshops and study visits adapted to the particular needs of thepartner countries.

Areas in which EFTA provides assistance include trade facilitation and promotion, customs and origin matters,technical barriers to trade, sanitary and phytosanitary measures, intellectual property rights, governmentprocurement, competition, services and statistics. EFTA also participates in technical cooperation programmesand projects of the European Union aimed at third countries, especially in relation to customs matters,standardisation and statistics.

12

AN

NU

AL

REPO

RT O

F TH

E EU

ROPE

AN

FRE

E TR

AD

E A

SSO

CIA

TIO

N 2

011

[1] Algeria, Egypt, Faroe Islands, Israel, Jordan, Lebanon, Morocco, Palestinian Authority, Syria, Tunisia and Turkey.[2] Albania, Bosnia and Herzegovina, Croatia, Kosovo, Macedonia, Montenegro and Serbia.[3] The PEM Convention entered into force in the first three states (Norway, Liechtenstein and Switzerland) on 1 January 2012. At the end of 2011, it had been signed by

nine further parties, including the European Union and Iceland, with ratification pending.

2486-RAPPORT-2012-06_AR 20/03/12 16:11 Page12

13

AN

NU

AL

REPO

RT O

F TH

E EU

ROPE

AN

FRE

E TR

AD

E A

SSO

CIA

TIO

N 2

011

THE EEA AGREEMENT

The EEA Council

The EEA Council was chaired by the EU in the first halfof 2011 and by EFTA in the second half of the year. TheEEA Council met on 23 May and 15 November to reviewthe ongoing work in EEA cooperation and to note theprogress reports from the EEA Joint Committee. TheMinisters confirmed the positive overall functioning anddevelopment of the EEA Agreement and appreciated thefact that new acts were being incorporated quickly intothe Agreement. They also discussed the current financialcrisis and its implications for the EEA, includingregulation of the financial system; the EEA FinancialMechanisms; decision making and shaping; and energyand climate change. In addition, the EEA Council heldorientation debates on raw materials and the measurestaken to address the current economic crisis. Theconclusions from these meetings can be found in theappendices to this report.

The EEA Joint Committee

The EEA Joint Committee met eight times in 2011 andadopted 164 decisions incorporating 373 legal acts.

Among the more significant decisions adopted by theJoint Committee were those concerning theincorporation of the Renewables Directive, theEuropean Aviation Safety Agency (EASA)Regulation, aviation activities in the scheme forgreenhouse gas emission allowance trading, theEcodesign Framework Directive, modernised socialsecurity coordination rules, Solvency II on insuranceregulation, the revised Remedies Directive in the area

of public procurement, the Waste FrameworkDirective, the Media Mundus Programme and theFramework for the Deployment of IntelligentTransport Systems. Issues discussed by the JointCommittee included specific legal acts such as theRegulation establishing the European SupervisoryAuthorities for financial markets, the Third PostalDirective, the Audiovisual Media Services (AVMS) Directive and, more generally, how tofurther improve the processing of acquis in the EEA Agreement.

Over the year, the European Commission provided theJoint Committee with briefings on the Resource-Efficient Europe flagship initiative, the MaritimeTransport Strategy, the Energy Efficiency Plan and theSingle Market Act. The EEA EFTA States alsoprovided a briefing on the EFTA Ministerial meetingof 21 June 2011.

The EEA Council, 15 November 2011.

The Standing Committee of the EFTA States at Ministerial level on 15 November2011: Ambassador Jacques de Watteville, Mission of Switzerland to the EU;Ambassador Atle Leikvoll, Mission of Norway to the EU; and Minister of ForeignAffairs Jonas Gahr Støre, Norway.

2486-RAPPORT-2012-06_AR 20/03/12 16:11 Page13

Numbers of meetings Numbers of acts

held in 2011 incorporated in 2011

The Joint Committee 8 343

The Standing Committee 8 -

SUBCOMMITTEE I 7 221

Working Groups

Competition Policy - 2

Customs Matters 5 -

Efficient Trade Procedures - -

Energy Matters 7 14

Fisheries - -

Food Chain[1] 1 151

Intellectual Property Rights 3 1

Processed Agricultural Products 1 -

Product Liability - -

Public Procurement 1 3

State Aid - -

Technical Barriers to Trade (TBT) 4 -

Expert Groups under TBT

Agricultural and Forestry Tractors - 3

Appliances Burning Liquid or Gaseous Fuels - 1

ATEX (equipment for use in explosive atmospheres) - -

Cableway Installations - -

Chemicals - 25

Construction - -

Cosmetics - -

Electrical Equipment - -

Explosives - -

Fertilisers - 1

Good Laboratory Practice - -

Machinery - -

Marine Equipment - -

Maximum Residue Levels (MRLs) - -

Measuring Instruments - 4

Medical Devices - 1

Medicinal Products - 5

Motor Vehicles - 6

Organic Production - -

Personal Protective Equipment - -

Pressure Equipment - 3

Product Safety and Market Surveillance 1 -

Recreational Crafts - -

14

AN

NU

AL

REPO

RT O

F TH

E EU

ROPE

AN

FRE

E TR

AD

E A

SSO

CIA

TIO

N 2

011

Meetings Held and EU Acts Incorporated in 2011 Fig. 3

2486-RAPPORT-2012-06_AR 20/03/12 16:11 Page14

Numbers of meetings Number of acts

held in 2011 incorporated in 2011

Telecommunications Equipment - -

Textiles - 1

Wine and Spirit Drinks - -

SUBCOMMITTEE II 7 64

Working Groups

Company Law 1 6

Electronic Communication, Audiovisual Services and Information Society 3 5

Data Privacy Expert Group - 4

Financial Services 4 3

Postal Services - -

Transport 5 46

SUBCOMMITTEE III 7 29

Working Groups

Recognition of Professional Qualifications 1 1

Social Security 3 28

SUBCOMMITTEES III AND IV - -

Working Group

Free Movement of Persons, Working Life and Social Inclusion[2] 1 -

SUBCOMMITTEE IV 7 59

Working Groups

Budgetary Matters 3 -

Civil Protection 2 -

Consumer Affairs 3 -

Cultural Affairs 1 -

Education, Training and Youth 2 -

Enterprise Policy and Internal Market Affairs 2 2

Environment 4 23

Gender Equality, Anti-Discrimination and Family Policy 2 1

Heads of National Statistical Institutes 1 30

Health and Safety at Work and Labour Law[3] 1[4] 3[5]

Public Health 2 -

Research and Development 2 -

15

AN

NU

AL

REPO

RT O

F TH

E EU

ROPE

AN

FRE

E TR

AD

E A

SSO

CIA

TIO

N 2

011

[1] Food Chain encompasses Feedingstuffs, Plant Health and Foodstuffs.[2] Temporary merger of the Group on Free Movement of Persons, Employment and Social Policy and the Group on Health and Safety at Work and Labour Law in June 2011.[3] Merged temporarily with the Group on Free Movement of Persons, Employment and Social Policy in June 2011.[4] Prior to the merger.[5] Two acts were incorporated in this field prior to the merger and one after.

2486-RAPPORT-2012-06_AR 20/03/12 16:11 Page15

16

AN

NU

AL

REPO

RT O

F TH

E EU

ROPE

AN

FRE

E TR

AD

E A

SSO

CIA

TIO

N 2

011

The Standing Committee ofthe EFTA States

The Standing Committee was chaired by Norway in thefirst half of 2011 and by Liechtenstein in the secondhalf of the year. The agendas and conclusions of theStanding Committee meetings are available on theEFTA website. On 15 November, the EFTA StandingCommittee held a joint meeting at Ministerial level inBrussels with the Committee of Members of Parliamentof the EFTA States and the Consultative Committee, todiscuss developments in the EEA.

Legal and InstitutionalMatters

Subcommittee V on Legal and Institutional Questionsmet six times in 2011. The Subcommittee devotedconsiderable efforts to the issue of comitology in theEFTA pillar and how to deal with criminal lawsanctions in Internal Market legislation. TheSubcommittee also discussed the status of the coaland steel sectors under the EEA Agreement, socialsecurity rules in the EEA and the territorial scope ofthe EEA Agreement. Finally, the Subcommitteecontinued to monitor two-pillar issues in the EEAAgreement, as well as case law developments in the EEA.

Free Movement of Goods

A substantial part of EU legislation concerns the freemovement of goods, a principle that is appliedthroughout the Single Market. Today, about 75% oftrade in the Single Market is in goods, but this does notimply that all products can circulate freely. They mustconform to requirements set for the protection oflegitimate interests such as health, safety and theenvironment. Additionally, in order to ensure a fair andefficient market, a wide range of legislative measureshave been established in the fields of competition, stateaid and public procurement.

Subcommittee I prepares for the integration into theEEA Agreement of legislation relating to all aspectsof the free movement of goods – competition, stateaid, public procurement, intellectual property rightsand energy matters. Subcommittee I is assisted by

12 working groups and 26 expert groups. The EEAEFTA States and the Secretariat undertook a reviewprocess of these groups in 2010 and 2011, and therevised structure, designed to further improve theefficiency of the EEA integration process, wasimplemented in 2011.

Two committees deal with issues related to goodsunder the EFTA Council: The Technical Barriers toTrade (TBT) Committee and the Committee of Originand Customs Experts (COCE) (see page 20).

In 2011, the TBT Committee gave written input to theEuropean Commission on the review of thestandardisation system in Europe, and to the EUinstitutions on the Commission’s proposal for a newregulation on standardisation.

The Committee also focused on keeping the VaduzConvention updated, and on the entry into force ofProtocol E (mutual recognition of conformityassessments) to the EFTA-Turkey Free TradeAgreement on 5 July 2011. A new EU qualityinfrastructure project, IPA 2011, cofinanced by EFTA,was approved by the EFTA Council in December 2010and began in August 2011, following the terminationof IPA 2008. This EUR 2.5 million regional projectinvolves Turkey and the Western Balkans, and isexpected to last just over two years.

Finally, the Committee continued its discussions on theissue of a possible fragmentation of the Single Market forServices arising from certification and standardisation atnational level, and cooperated with Nordic Innovation inits third study on the certification of services.

Veterinary, Food and AgriculturalIssues

The veterinary and food legislation in the EEAAgreement only applies to Iceland and Norway. Since2007, Liechtenstein has been subject to the Swiss-EUAgricultural Agreement pertaining to legislation inthese areas.

Veterinary issues

The Food Law Package, which includes key legislationon general food law, hygiene and control matters, andanimal by-products, and the extension of certain

2486-RAPPORT-2012-06_AR 20/03/12 16:11 Page16

17

AN

NU

AL

REPO

RT O

F TH

E EU

ROPE

AN

FRE

E TR

AD

E A

SSO

CIA

TIO

N 2

011

veterinary legislation to Iceland, entered into force inthe EEA in May 2010. This means that general foodlegislation in Iceland and Norway is now in line withEU law. Iceland, however, had a transitional period ofuntil 1 November 2011 to transpose legislation in areasthat were not previously applicable to Iceland.

The EEA Joint Committee incorporated 64 acts in theveterinary area into the EEA Agreement in 2011.

Animal feed

34 legal acts regarding the authorisation of feedadditives were incorporated into the EEA Agreementin 2011.

Food

The Food Law Package ensures full participation bythe EEA EFTA States in the European Food SafetyAuthority (EFSA) including the possibility ofemployment for EEA EFTA nationals.

The EEA EFTA States continued to discuss the NovelFoods Regulation and Regulations on geneticallymodified food and feed and the traceability andlabelling of genetically modified organisms (GMOs).These Regulations have not yet been incorporated intothe EEA Agreement.

Preparation continued for the incorporation into theEEA Agreement of the new legal framework onorganic production.

Approximately 40 legal acts were incorporated into theEEA Agreement in the foodstuffs area in 2011.

Trade in agricultural products

Following the conclusion of negotiations betweenNorway and the European Commission in 2010 on theliberalisation of trade in basic agricultural productsunder Article 19 of the EEA Agreement, the Agreementis expected to enter into force at the beginning of 2012.

In November 2011, Iceland, Norway and the EuropeanCommission carried out their annual review of trade inprocessed agricultural products in accordance withArticle 2(2) of Protocol 3 to the EEA Agreement. Theparties exchanged information on developments in theirrespective agricultural policies, and on trade statistics.They also discussed the principles of Protocol 3 andconcluded that the Protocol was functioning well.

Technical Barriers to Trade

EFTA deals with the removal of technical barriers totrade in two forums: The TBT Committee, whichreports to the EFTA Council (including Switzerland)(see previous page) and the Working Group on TBT,which coordinates the assessment of EEA relevanceand acceptability of new EU legislation to the threeEEA EFTA Member States. Switzerland is an observerin this Working Group. In addition to clearing acts, theWorking Group discussed the following issues in 2011:The Goods Package, the Alignment Package andMutual Recognition Agreements.

Motor vehicles

Six technical acts on motor vehicles were incorporatedinto the EEA Agreement in 2011. The FrameworkDirective regarding approvals of motor vehicles andtrailers is still being discussed by the EFTA States andawaits incorporation into the EEA Agreement.

Medicinal products

The EFTA States continued discussions with the EU onthe incorporation of the Paediatric Regulation.

Dangerous substances

Trade in and use of dangerous substances are strictlyregulated in order to protect consumers, workers and theenvironment. The EEA Agreement contains both generalchemicals legislation and product-specific legislation. Intotal, 23 acts concerning dangerous substances wereincorporated into the EEA Agreement in 2011.

Mutual recognition agreements

Mutual recognition agreements (MRAs) facilitatemarket access by reducing the costs and timeassociated with obtaining product certifications.Protocol 12 to the EEA Agreement ensures the smoothfunctioning and homogeneity of the EEA market withregard to MRAs. In that respect, discussions withCanada were reopened in late 2010 and continued in2011 in order to finalise a long-pending revision of theEEA EFTA-Canada MRA.

Market surveillance and consumer product safety

The EFTA States are fully committed to the enhancedapplication of market surveillance under the terms of

2486-RAPPORT-2012-06_AR 20/03/12 16:11 Page17

18

AN

NU

AL

REPO

RT O

F TH

E EU

ROPE

AN

FRE

E TR

AD

E A

SSO

CIA

TIO

N 2

011

the new legislative framework for the marketing ofproducts. EFTA was a member of the Commission’sproject group on the development of guidelines forcustoms controls in the area of product safety andcontributed directly to their preparation, including thepresentation of the draft guidelines to the EuropeanParliament’s Internal Market Committee. The EFTAStates also participated in meetings conducted by theSenior Officials Group for Standardisation andConformity Assessment Policy (SOGS) and the SOGSMarket Surveillance Group.

The EFTA States participate in the work of PROSAFE,Europe’s product safety enforcement forum, which isan informal network of market surveillanceenforcement authorities. PROSAFE’s Secretariat islocated in the EFTA Secretariat’s building in Brussels.EFTA participates as an advisory member of thePROSAFE Board. PROSAFE is engaged in a jointaction on market surveillance and has contributed tothe development of EU Commission guidelines oncooperation between market surveillance authoritiesand customs authorities. The PROSAFE Boardmonitors the financial management of the joint actionsand develops the strategic direction of PROSAFE inthe ongoing development of European marketsurveillance.

European Standardisation

The EFTA States and the European Commission givefinancial support to the European standardisationorganisations (ESOs): CEN, the European Committeefor Standardization; CENELEC, the EuropeanCommittee for Electrotechnical Standardization; andETSI, the European Telecommunications StandardsInstitute. Like the Commission, EFTA has the formalstatus of counsellor to CEN and ETSI, and is entitledto participate in the administrative boards of theseorganisations, as well as in the general assemblies ofthe three ESOs.

In 2011, EFTA dealt with over 19 mandates for newstandardisation activities covering a wide range ofsectors. In addition, EFTA signed 58 agreements in thestandardisation area, including for the first time aFramework Partnership Agreement with ANEC, theEuropean association for the coordination of consumerrepresentation in standardisation.

EFTA continued its financial support to ANEC; to theEAAB, the Association for European Cooperation for Accreditation; and to ECOS, the European

Environmental Citizens Organisation for Standardisation,which represents consumer and environmentalinterests in standardisation.

In December 2011, EFTA cofinanced a CEN workshopon standardisation in support of resource efficiency.

EFTA continued to provide financial support to EOTA,the European Organisation for Technical Approvals,relating to the construction sector. The EEA EFTAStates also provided financial support to the EuropeanOffice of Crafts, Trades and Small and Medium-sizedEnterprises for Standardisation, which promotes theinterests of SMEs in standardisation.

Energy

In the field of energy, 14 acts were incorporated intothe EEA Agreement in 2011, 12 of which were relatedto ecodesign requirements for energy-using products.One act was related to the inter-TSO compensationmechanism for Transmission System Operators in theEuropean Electricity Market, and another was theRenewables Directive, which had been of particularinterest to the EEA EFTA States for a long time due totheir high share of renewables.

The EEA EFTA States monitored the follow-up to theEnergy Strategy 2011 carefully, including acommunication on smart grids and work on developingan energy infrastructure instrument. Significant focuswas put on the Commission’s proposal for a new EnergyEfficiency Directive, which was presented in June 2011and will be among the most important energy-relatedinitiatives to be discussed in the EU in 2012.

2486-RAPPORT-2012-06_AR 20/03/12 16:11 Page18

19

AN

NU

AL

REPO

RT O

F TH

E EU

ROPE

AN

FRE

E TR

AD

E A

SSO

CIA

TIO

N 2

011

The Third Package for the Internal Energy Marketentered into force in March 2011 and the EEA EFTAStates aim to incorporate it into the EEA Agreement assoon as possible.

Competition Policy

Two block exemptions in the fields of specialisationagreements and research and development agreementswere incorporated into the EEA Agreement inFebruary 2011.

The EEA EFTA States initiated a review of the actsrelated to the former European Coal and SteelCommunity that had been incorporated into the EEAAgreement.

State Aid

The EEA EFTA States followed the work on reformingthe state aid rules applicable to Services of GeneralEconomic Interest (SGEI) compensation closely. TheReform Package entered into force in the EU on 31January 2012, and the EEA EFTA States foresee itsquick incorporation into the EEA Agreement.

In addition, the EEA EFTA States participated inmultilateral state aid meetings in 2011 concerning theamendment of regional aid guidelines, the amendmentof reporting obligations, state aid to shipbuilding, stateaid to broadband networks and state aid to audiovisualworks (film).

Public Procurement

Three acts in the field of public procurement wereincorporated into the EEA Agreement in 2011: TheRemedies Directive, which sets out review proceduresrelated to the award of public contracts; and tworegulations relating to threshold values and standardnotification forms.

The EEA EFTA States followed the Commission’sconsultation on reforming EU public procurementlegislation closely. The reform focuses on simplifyingexisting rules; facilitating SME access to publiccontracts; promoting green, social and innovationprocurement; and increasing the use of electronicprocurement. Norway provided feedback and the EEAEFTA States participated in the follow-up conferenceto the consultation. A reform package consisting ofproposals for three directives was presented on

20 December 2011. Two of the proposals will replacethe existing procurement directives (the “Utilities”Procurement Directive 2004/17/EC and the “Classical”Procurement Directive 2004/18/EC), whereas the thirdproposal is for a new directive concerning serviceconcession contracts.

Intellectual PropertyIn May, the Commission published a proposal forcertain permitted uses of orphan works. Orphan worksare works that are still in copyright but whose ownerscannot be identified or located. On 13 December 2011,the EEA EFTA States provided the Commission withcomments to its proposal for a directive.

The EU Council has agreed to a general approach to aunitary patent for Europe. In addition, discussions arecurrently taking place in the Council on theestablishment of what is now known as the “UnifiedPatent Court”. The EEA EFTA States are followingthis issue closely.

A European Observatory on Counterfeiting and Piracywas launched by the Commission in April 2009 and,following a dialogue between the Working Group onIntellectual Property Rights and the Commission, itwas agreed that the EFTA Member States wouldparticipate as observers.

In October, EFTA hosted a workshop organised byCEPI, EUROCINEMA, FERA, IMPALA and SAA,organisations from the world of film, cinema andaudiovisual services, on the financing and taxation ofthe cultural industry. The workshop was organised

2486-RAPPORT-2012-06_AR 20/03/12 16:11 Page19

20

AN

NU

AL

REPO

RT O

F TH

E EU

ROPE

AN

FRE

E TR

AD

E A

SSO

CIA

TIO

N 2

011

within the framework of the European Platform onthe Potential of Cultural and Creative Industries.

Customs Matters, Safety andSecurity Matters and TradeFacilitationCustoms

In June, the EFTA States signed the RegionalConvention on Pan-Euro-Mediterranean PreferentialRules of Origin that will replace the current network oforigin protocols in the various agreements of the freetrade zone. Ratification and implementation of theConvention have started in the contracting parties tothe Convention, which will create a preferentialtrading zone throughout Europe and the Mediterraneanregion (for further information on the PEMConvention see box on page 12). In parallel, theCommittee of Origin and Customs Experts is workingon the revision of the European rules of origin, aimedat completely modernising and simplifying Europeanorigin provisions.

The Committee addressed other customs and originmatters related to free trade agreements with third-country partners, and other open technical customsissues among EFTA countries to guarantee goodrelations between customs administrations and thesmooth functioning of preferential trade relations.Among others, the Committee agreed with theSecretariat of the Central European Free TradeAgreement (CEFTA) to start diagonal cumulation on 1January 2012 between the EFTA States and theWestern Balkan countries – Albania, Croatia,Macedonia and Serbia.

Safety and security matters

With the conclusion of bilateral agreements by Norwayand Switzerland with the EU, these two countries wereintegrated into the EU’s safety and security system,with the result that traders do not have to submitprearrival/predeparture declarations when trading withthe EU. The Norwegian bilateral agreement wasimplemented in Protocol 10 to the EEA Agreement,and a joint working group responsible for theimplementation and monitoring of the safety andsecurity measures addressed under the bilateralagreement is currently being set up.

Free Movement of Capital andServices

Subcommittee II on the Free Movement of Capital andServices coordinates matters of financial services,company law, electronic communications, audiovisualservices, information society and data privacy, postalservices and transport. Five working groups report toSubcommittee II.

Financial Services

The EEA EFTA States monitored closely thesignificant number of legislative acts issued by theEuropean Commission in response to the financialcrisis, in particular the regulations creating a newEuropean architecture of financial supervision. Inaddition to the European Systemic Risk Board,responsible for macro-prudential supervision, the EUestablished three new supervisory bodies at micro-prudential level:

Trade FacilitationTrade facilitation seeks to improve procedures and controls in merchandise trade across national borders byreducing associated cost burdens and maximising efficiency, while safeguarding legitimate regulatory objectives.Recent developments, such as the challenge of bringing trade facilitation in line with growing safety and securityconcerns, as well as rising concerns about the use/misuse of trade procedures as trade policy tools, haveheightened the political profile of trade facilitation. At the beginning of 2011, the EFTA Committee on TradeFacilitation elaborated a trade facilitation template for EFTA’s ongoing and future trade negotiations, and theCommittee is continuously analysing the developments of trade facilitation within other internationalorganisations such as the World Trade Organization, the United Nations Economic Commission for Europe, theOrganisation for Economic Co-operation and Development and the World Customs Organization, which haveadded trade facilitation to their agendas.

2486-RAPPORT-2012-06_AR 20/03/12 16:11 Page20

21

AN

NU

AL

REPO

RT O

F TH

E EU

ROPE

AN

FRE

E TR

AD

E A

SSO

CIA

TIO

N 2

011

• The European Banking Authority• The European Insurance and Occupational

Pensions Authority • The European Securities and Markets Authority

The EEA EFTA States continued to work on adequateEEA EFTA participation in these bodies.

Company Law

Several acts were reviewed in 2011, including theproposal on the interconnection of central, commercialand company registers and, more recently, the proposalfor a European Foundation Statute.

Electronic Communications,Audiovisual Services, InformationSociety and Data Privacy

In the realm of electronic communications, expertsfrom the EEA EFTA States continued to work on theincorporation of the Telecom Package into the EEAAgreement, notably on the role of the EEA EFTAStates in the Body of European Regulators inElectronic Communications (BEREC).

The EEA EFTA States finalised their discussion on theincorporation of the Data Retention Directive into theEEA Agreement.

In the area of audiovisual services, the Media MundusProgramme was incorporated into the EEA Agreement.This is a broad international cooperation programmefor the audiovisual industry to strengthen cultural andcommercial relations between Europe’s film industryand film makers from third countries.

Discussions continued on the possible incorporation ofthe Audiovisual Media Services (AVMS) Directiveinto the EEA Agreement.

Postal Services

Deliberations took place regarding the incorporation ofthe Third Postal Services Directive into the EEAAgreement.

Transport

A significant number of proposals for new EU actswere considered and discussed in depth with the EUduring the year. An important development was theincorporation of the Regulation on common rules forthe operation of air services and the Regulationestablishing the European Aviation Safety Agency(EASA).

The EEA EFTA States submitted a Comment on theWhite Paper on the Future of Transport, which waspublished in March and identifies the main trends andchallenges that will shape the future of transport policyover the coming decades.

Other important issues on the transport agenda werethe Directive on Intelligent Transport Systems inEurope and a proposal for the revision of theguidelines for the development of a trans-Europeantransport network.

In the rail sector, high priority was given to theRegulation concerning a European rail network forcompetitive freight and a proposal to establish a SingleEuropean Railway Market.

The proposal for amendments to the Regulation on theestablishment of the European Maritime Agency andthe Regulation on Passenger Rights were prioritised inthe field of maritime transport.

The main items on the agenda in the field of airtransport were the Second Single European SkyPackage, legislation linked to aviation security and theEASA Regulation.

2486-RAPPORT-2012-06_AR 20/03/12 16:11 Page21

22

AN

NU

AL

REPO

RT O

F TH

E EU

ROPE

AN

FRE

E TR

AD

E A

SSO

CIA

TIO

N 2

011

Free Movement of Persons

Subcommittee III on the Free Movement of Personscoordinates matters related to all aspects of the freemovement of persons, working life and socialinclusion, social security and the recognition ofprofessional qualifications. Three working groupsreport to Subcommittee III.

Free Movement of Persons,Working Life and Social Inclusion

Following the provisional merger between theWorking Group on free movement of persons,employment and social policy and the Working Groupon health and safety at work and labour law, the newWorking Group discussed various horizontal issuessuch as the EU Multiannual Financial Framework(2014-2020); the Green Paper on Public Procurement,which is linked to the social priorities of the Europe2020 Strategy; and the Single Market Act. Attentionwas also given to the relevant flagship initiatives underEurope 2020.

In the area of free movement, the EEA EFTA Statesmonitored, for information purposes, developments onthe EU side related to proposals for third-countrynationals legally residing in the EU.

With regard to employment, the EEA EFTA States wereinvited to the informal meetings of the EU EmploymentCommittee, where they submitted a report on the labourmarket situation in each of the EEA EFTA States. Theyparticipated in EURES, a cooperation network betweenthe European Commission and the public employmentservices of the EEA Member States that providesinformation and assistance to both workers and employers,and monitored the planned reforms of this network.

As regards social policy, the EEA EFTA Statescontinued their informal dialogue with the EU’s SocialProtection Committee and discussed their potentialparticipation in the European Year for Active Ageing2012. The EEA EFTA States participated actively inboth the employment and social protection sections ofthe PROGRESS Programme, which supports theimplementation of the European Employment Strategyand underpins the EU’s coordination activities in thefight against poverty and social exclusion.

In the areas of health and safety at work and labourlaw, EEA EFTA experts followed developments related

to the planned revision of the Working Time Directive,the debate between the Council and Parliament overthe Pregnant Workers Directive, and the proposedrevision of the Electromagnetic Fields Directive. TheWorking Group also held a joint meeting with theEFTA Consultative Committee in Luxembourg, wherethey mainly discussed issues related to the posting ofworkers and temporary agency work.

Social Security

New social security coordination rules wereincorporated into the EEA Agreement in 2011. Thesenew rules completely replace Annex VI to the EEAAgreement on the coordination of social securityschemes. Their aim is to modernise and simplify socialsecurity coordination within the EU and EEA.

Recognition of ProfessionalQualifications

Work relating to the proposal to revise the ProfessionalQualifications Directive was monitored closely. In thisrespect, an EEA EFTA Comment on the Green Paperon Modernising the Professional QualificationsDirective was sent to the EU side in September.

Flanking and HorizontalPolicies

Subcommittee IV on Flanking and Horizontal Policiescoordinates matters related to all aspects of thehorizontal provisions of the EEA Agreement, as well ascooperation outside the four freedoms. There are 13working groups reporting to Subcommittee IV.

Research and Development

The EEA EFTA States continued to follow theimplementation of the Seventh Framework Programmeon Research (FP7), the Europe 2020 Strategy and itsflagship initiatives in the area of research andinnovation, and the EU’s ongoing work on newEuropean Research Area (ERA) initiatives. They alsofollowed closely the Commission’s preparation of itsproposal for a new framework programme in the fieldof research and innovation – Horizon 2020.

The EEA EFTA States are negotiating with theCommission on the possibility of incorporating the

2486-RAPPORT-2012-06_AR 20/03/12 16:11 Page22

23

AN

NU

AL

REPO

RT O

F TH

E EU

ROPE

AN

FRE

E TR

AD

E A

SSO

CIA

TIO

N 2

011

Council Regulation on the Community legalframework for a European Research InfrastructureConsortium (ERIC) into the EEA Agreement.

Environment

The EEA Joint Committee adopted several decisions inthe field of environment in 2011, namely on the inclusionof aviation activities in the EU Emissions TradingScheme (ETS), the ETS single EU registry, ambient airquality, the control of priority substances in water and theEU Waste Framework Directive.

One of the Working Group’s main priorities for 2011was to continue to prepare for the incorporation of therevised EU ETS Package into the EEA Agreement. Thesecond trading period for this scheme will end in 2012,so preparations for the third trading period were at thecentre of the Working Group’s work and discussionswith the Commission.

The experts also focused on areas such as theincorporation of acts related to the INSPIRE Directiveand the incorporation of the new EU EcolabelRegulation and related acts.

Other initiatives that the Working Group followedcarefully in 2011 included a proposal for a regulation onthe possibility for Member States to restrict or prohibitthe cultivation of GMOs in their territory, a proposal onwaste electrical and electronic equipment (WEEE) and aproposal on the control of major accident hazardsinvolving dangerous substances (Seveso III).

Topics discussed with the Commission included forestprotection and action against invasive species, and theevaluation of the Commission’s Sixth EnvironmentAction Programme. The Working Group also receivedbriefings from the EU presidencies on their prioritiesin the field of environment and climate change.

Education, Training and Youth

The EEA EFTA States’ current priority in the area ofeducation, training and youth is their participation inthe Lifelong Learning Programme (2007-2013) and theYouth in Action Programme (2007-2013). The EEAEFTA States followed the Commission’s preparatorywork for the post-2013 programme – Erasmus for All– and submitted an EEA EFTA Comment on futureprogrammes in the field of education, training andyouth (2014-2020).

The EEA EFTA States monitored the work of the HighLevel Group on Education and Training Policies in theEU and submitted an EEA EFTA Comment on theCommunication on Early Childhood Education andCare. They also continued to follow the development ofthe Rights of the Child initiatives and the relevant partsof the Rights and Citizenship Programme (2014-2020).

Gender Equality, Anti-Discrimination and Family Policy

The Directive on the application of the principle of equaltreatment between men and women engaged in anactivity in a self-employed capacity was incorporatedinto the EEA Agreement in July 2011. The EEA EFTAStates continued their participation in the gender equalitystrand of the PROGRESS Programme and in the DaphneIII Programme on Community action to prevent violenceagainst children, young people and women, and toprotect victims and groups at risk (2007-2013). Expertsalso focused on relevant proposals for new programmeswithin the Multiannual Financial Framework (2014-2020) and monitored plans for an accessibility act andattempts to increase the representation of women oncompany boards.

Consumer Affairs

The EEA EFTA States followed the revision ofconsumer acquis and assessed in particular the

Diana Wallis, then Vice-President of the European Parliament, presenting herviews as Rapporteur on a Common European Sales Law to the EFTA WorkingGroup on Consumer Protection.

2486-RAPPORT-2012-06_AR 20/03/12 16:11 Page23

24

AN

NU

AL

REPO

RT O

F TH

E EU

ROPE

AN

FRE

E TR

AD

E A

SSO

CIA

TIO

N 2

011

Directive on Consumer Rights in view of its possibleincorporation into the EEA Agreement. EEA EFTAexperts also followed closely the newly-issuedproposal on a Common European Sales Law andproposals on alternative dispute resolution and onlinedispute resolution.

The EEA EFTA States received confirmation from theCommission that they would be fully included in allupcoming editions of the Consumer Market Scoreboard.

Two further priorities for 2011 were the upcomingConsumer Programme (2014-2020) and the newConsumer Policy Strategy.

Enterprise Policy and InternalMarket Affairs

The main issues monitored by the EEA EFTA States inthe area of enterprise policy and Internal Market affairsin 2011 were the new proposal for the Programme onCompetitiveness of Enterprises and SMEs (COSME)and the innovation, growth and competitiveness aspectsof the Horizon 2020 Programme. The EEA EFTA Statesalso followed the SME policy, the implementation of theServices Directive, e-commerce, the Internal MarketInformation (IMI) system, which provides a multilingualdatabase to support implementation of Internal Marketlegislation, and the Better Regulation initiative, whichaims to improve and simplify new and existinglegislation in the EU.

Finally, the EEA EFTA States monitored thedevelopment of SOLVIT, an online network forsolving problems caused by the misapplication ofInternal Market law, as well as the “Your Europe”portal, which provides practical information on therights and opportunities available to individuals andbusinesses in the Internal Market.

Civil Protection

The EEA EFTA States continued to participate activelyin the Community Mechanism for Civil Protection andthe Civil Protection Financial Instrument (2007-2013).Particular attention was given to the ongoing revisionof the legal instruments in this area and theCommission’s proposals for a revised mechanism andfinancial instrument.

The Working Group and Subcommittee finalised theirposition on the Directive on Critical Infrastructure

Protection with a view to incorporating it into the EEAAgreement.

Cultural Affairs

The EEA EFTA States’ main priority in the field ofculture and sport was to follow the new proposal onCreative Europe (2014-2020) closely, as well as thesports part of the Erasmus for All Programme.

Public Health

The Working Group on Public Health prepared for theincorporation of the Patient Mobility Directive into theEEA Agreement and attended the meetings of the newComitology Committee on cross-border healthcare onthe EU side. Particular attention was given to pandemicpreparedness and health security, including possible jointprocurement of vaccines; developments at EU level withregard to a possible revision of the Tobacco ProductsDirective; and challenges facing Europe’s healthworkforce and health inequalities overall. The Groupalso focused on the proposal for a new Health for GrowthProgramme (2014-2020) and a new Justice Programme,including drugs prevention and information.

Budgetary Matters

The Working Group on Budgetary Matters monitors andcoordinates the preparation of the annual EEA EFTABudget, which covers the EEA EFTA countries’contribution to the EU Budget and allows for EEA EFTAparticipation in EU programmes, actions and agencies.

Of particular interest in 2011 were the estimatedbudgetary implications of the proposal for theMultiannual Financial Framework (2014-2020),adopted by the Commission on 30 June 2011. TheSecretariat prepared a working document that wascirculated to the relevant working groups. The EEAEFTA commitment to EU operational costs in 2011was EUR 262 million, an increase of EUR 36 millionfrom 2009. EEA EFTA payments in 2010 amounted toEUR 215 million, adjusted for the 2009 credits.

The EEA EFTA States also contribute to theadministrative costs of the European Commission, animportant part of which is the contribution in kind ofseconded national experts. In 2011, 34 EEA EFTAnational experts were seconded to the variousdirectorates within the European Commission dealingwith EEA-relevant programmes and activities.

2486-RAPPORT-2012-06_AR 20/03/12 16:11 Page24

25

AN

NU

AL

REPO

RT O

F TH

E EU

ROPE

AN

FRE

E TR

AD

E A

SSO

CIA

TIO

N 2

011

EFTA/EU Cooperation inStatistics

The EFTA StatisticalOffice (ESO) celebratedits 20th anniversary in2011. The office wascreated in 1991 inLuxembourg as a

liaison office between Eurostat, the statistical office ofthe European Union, and the EFTA national statisticalinstitutes (NSIs). Since then, the combined efforts ofESO and Eurostat have resulted in close and well-functioning cooperation, as well as in the sustainedintegration of Iceland, Liechtenstein, Norway andSwitzerland into the European Statistical System (ESS).

EFTA celebrated the anniversary with a reception andpanel discussion on the Statistical Office's past, presentand future.

To mark the occasion ESO also published a new editionof the EFTA/EU Statistical Cooperation Handbook. Thisupdated edition, published as part of the EFTA Bulletinseries, describes the institutional and practical aspects ofEFTA/EU statistical cooperation.

Heads of EFTA National StatisticalInstitutes

The Working Group of the Heads of EFTA NSIsreports to Subcommittee IV. In 2011, the WorkingGroup dealt in particular with:

• The development of the 2011 EEA AnnualStatistical Programme based on the EU AnnualStatistical Programme;

• The impact of the new legislative proceduresintroduced by the Lisbon Treaty;

• Possible implications of the EU FinancialSupervisory Architecture for NSIs; and

• The significant reorganisation of Eurostat due to itsstrengthened verification powers as regards thequality of statistical data.

Integration of EFTA Statistics intothe European Statistical System

In addition to their core activities, ESO and the EFTANSIs ensured EFTA’s presence in the ESS by:

Panel participants at ESO’s 20th anniversary event: Pieter Everaers, Director for External Cooperation, Eurostat; Olav Ljones, Deputy Director-General, Statistics Norway; Wilfried Oehry, Director-General, Liechtenstein Office of Statistics; Gabriel Gamez, Regional Adviser for the Statistics Division of UNECE and former Head of ESO; Heinrich Brüngger, former Director of the Statistics Division of UNECE and former Head of ESO; and Andrea Scheller, Head of ESO (moderator).

EFTA Statistical Office

2486-RAPPORT-2012-06_AR 20/03/12 16:11 Page25

26

AN

NU

AL

REPO

RT O

F TH

E EU

ROPE

AN

FRE

E TR

AD

E A

SSO

CIA

TIO

N 2

011

• Monitoring the inclusion of EFTA data in Eurostat’sdatabases and publications;

• Ensuring EFTA’s and the EFTA NSIs’ activeinvolvement in EU technical cooperationprogrammes in the field of statistics with Europeanand non-European third countries; and

• Contributing substantially to the EuropeanStatistical Training Programme (ESTP).

Production and Dissemination of EFTA Statistics

Protocol 30 to the EEA Agreement and the Swiss-EUAgreement in the field of statistics provide forstatistical information from all EFTA States to betransmitted to Eurostat for storage, processing anddissemination. ESO continues to strive for the regularinclusion of EFTA data in Eurostat databases andpublications. The tangible result of this joint initiativebetween ESO, the EFTA NSIs and Eurostat is that theinclusion of EFTA data in Eurostat databases andpublications is at a good level, despite there stillremaining some room for improvement.

EFTA Participation in EurostatWorking Groups and Committees

Eurostat organised around 110 meetings in 2011 toprepare and implement new legislation, exchange anddevelop methodologies and follow up on datacollection. The EFTA Member States participatedactively in the relevant meetings on an equal footingwith colleagues from the EU Member States, and ESOprepared a guide on participation in Eurostat workinggroups for participants to get the most out of thesemeetings and make their opinions heard.

Technical Cooperation in theField of Statistics

EFTA works closely with Eurostat on technicalcooperation in the field of statistics. This is based ona Memorandum of Understanding that has thegeneral objective of ensuring close collaborationbetween the EFTA States and Eurostat in a number ofprogrammes. Cooperation may also take the form ofjoint undertakings with international organisations

such as the United Nations Economic Commissionfor Europe (UNECE) and the International MonetaryFund (IMF).

EFTA’s involvement gives priority to countries thathave concluded JDCs or FTAs with EFTA. Support isgranted mainly to countries covered by the EuropeanNeighbourhood Policy (ENP East and South), to theWestern Balkans and to Turkey, but can also includeEFTA free trade and prospective partners in otherregions of the world.

Technical Cooperation Activitiesand Projects

2011 was an exceptional year in terms of thegeographical coverage of regions that benefited fromEFTA technical cooperation, including EasternEurope, Caucasus and Central Asia (EECCA), Turkey,the Western Balkans, the Mediterranean, LatinAmerica and the Caribbean. The main activities andprojects were:

• The continuation of the global assessments of theEECCA countries’ national statistical systems.EFTA support was granted through the funding ofassessors from EFTA countries and ESO in theassessments of the Kyrgyz Republic and Ukraine;

• A joint EFTA/Eurostat/UNECE high-level seminaron streamlining statistical production for expertsfrom the Western Balkan countries;

• A training course for experts from the nationalstatistical offices of the 23 Economic Commissionfor Latin America and the Caribbean (ECLAC)countries on the use of administrative registers inthe production of statistics;

• A training course for experts from the French-speaking Mediterranean countries (Algeria,Lebanon, Morocco and Tunisia) on advancedmethods for sample surveys;

• A joint IMF/EFTA/UNECE course on governmentfinance statistics for experts from theCommonwealth of Independent States and severalother countries; and

• The funding of experts’ participation ininternational and regional events in the field ofstatistics.

2486-RAPPORT-2012-06_AR 20/03/12 16:11 Page26

27

AN

NU

AL

REPO

RT O

F TH

E EU

ROPE

AN

FRE

E TR

AD

E A

SSO

CIA

TIO

N 2

011

EFTA Seconded National Experts at Eurostat

At the end of 2011, three experts from Norway and twoexperts from Switzerland were seconded to Eurostatwithin the framework of the EEA Agreement and theSwiss-EU Agreement respectively. One more fromeach country will start their secondments in early 2012.Two Norwegian experts were seconded to Eurostat asa contribution in kind within the framework ofEFTA/EU technical cooperation to ensure continuityof support and EFTA visibility in the overallprogramming and management of EFTA/EU activity.Two experts completed their secondments and returnedto Statistics Norway in 2011.

European Statistical TrainingProgramme

An exchange of letters between the EFTA Secretariatand Eurostat stipulates that the EFTA Secretariatfinances at least two ESTP courses per year in returnfor EFTA statisticians having the right to participate inall courses.

In 2011, the EFTA Secretariat financed three of theclose to 25 ESTP courses that were held: Oneorganised by Statistics Norway on the set-up, use andmaintenance of business registers, and two by theSwiss Federal Statistical Office on data analysis anddata modelling, and survey methodology and samplingtechniques.

ESO Heads past and present: Heinrich Brüngger, Andrea Scheller (current Head of ESO), Ib Thomsen and Gabriel Gamez.

2486-RAPPORT-2012-06_AR 20/03/12 16:11 Page27

28

AN

NU

AL

REPO

RT O

F TH

E EU

ROPE

AN

FRE

E TR

AD

E A

SSO

CIA

TIO

N 2

011

2011: Over 1 000 ProjectsCompleted

Projects awarded support under the EEA Grants andNorway Grants 2004-2009 were to be implemented by30 April 2011. By that date, 90% of the 1 215 projectssupported were completed, while some 100 projectswere granted a one-year extension.

Evaluating Results

Two sector evaluations of projects funded by the EEAand Norway Grants 2004-2009 were completed in2011.

Significant Funding for Research

An evaluation assessing academic research fundingfound that the support provided both a relevant andsignificant source of funding, complementing widerEU funding schemes. The evaluation also showed thatthat all funded projects had met their immediate

Through the EEA Grants and Norway Grants,Iceland, Liechtenstein and Norway contribute toreducing disparities in the EEA and to strengtheningbilateral relations with the 15 beneficiary countriesin Central and Southern Europe. Key areas ofsupport include environment and climate change,civil society, human and social development, culturalheritage, research and scholarships, decent work, andjustice and home affairs.

EUR 1.789 billion in funding has been agreed for theperiod 2009-2014, up from EUR 1.307 billion for theprevious five-year period. Norway representsapproximately 97% of the total funding.

The Financial Mechanism Office (FMO) of the EFTASecretariat in Brussels administers the grant schemeson behalf of Iceland, Liechtenstein and Norway.

Reducing Disparities andStrengthening Relations

Since funding from the EEA EFTA States to the leastdeveloped countries and regions of the EU started in1994, the Grants have contributed to a variety of areas,such as reducing greenhouse gas emissions, protectingbiodiversity, improving health services, promotingsocial inclusion and strengthening civil society.

In addition, the Grants have increasingly contributed todeveloping mutual cooperation and strengtheningbilateral relations. Under the EEA Grants and NorwayGrants 2004-2009, donor and beneficiary state entitiescooperated to implement over 900 projects, both smalland large.

More strategic cooperation is being establishedbetween 2009 and 2014. Over half of the expected 140programmes will be planned and implemented incooperation with public entities from the donor states.Bilateral funds at national and programme level willalso spur bilateral contacts, networking and projectcooperation.

EEA GRANTS AND NORWAY GRANTS

Lake monitoring in Estonia (Photo: I. Ansko).

2486-RAPPORT-2012-06_AR 20/03/12 16:11 Page28

29

AN

NU

AL

REPO

RT O

F TH

E EU

ROPE

AN

FRE

E TR

AD

E A

SSO

CIA

TIO

N 2

011

objectives and conducted their activities as planned.Research cooperation contributed to strengthenedbilateral relations.

Addressing Health Challenges

The evaluation of the health and childcare fundingconcluded that the projects addressed relevant EU andnational health challenges, as well as local needs. Theimpact on target areas and groups was generallyreported to be positive. The report also concluded thatalmost all evaluated projects had achieved at least theplanned deliverables, with some even exceeding theirpredefined objectives.

2011: Preparing for NewFunding

Important steps were taken in 2011 to prepare thefunding under the EEA Grants and Norway Grants2009-2014. By the end of the year, funding prioritiesand institutional arrangements had been agreed inMemoranda of Understanding (MoUs) with 13 of the15 beneficiary countries.

Under the EEA Grants and Norway Grants 2009-2014,the donor states provide support to larger programmesrather than projects. This approach strengthens thestrategic and impact-oriented approach of the Grants.The programme areas are agreed in the MoUs.

In 2011, the first two programmes were approved. Thefirst is a fund for decent work and tripartite dialoguecovering the 12 newest EU and EEA Member States,and the second is a programme in Greece aimed at

strengthening the national migration managementsystem, paying special attention to the situation ofunaccompanied children seeking asylum.

For the current funding period, support for programmesdealing with environment, climate change and greeninnovation is expected to represent around one-third ofthe total. The EEA Grants and Norway Grants contributeto programmes in the following areas:

EEA Grants• Environmental protection and management• Climate change and renewable energy• Civil society• Research and scholarship• Human and social development• Protecting cultural heritage

Norway Grants• Carbon capture and storage• Green industry innovation• Decent work and tripartite dialogue• Research and scholarship• Human and social development• Justice and home affairs

“Walk the Grants“, an event organised by the Norwegian Embassy in Warsaw,brought together representatives of all funded projects in Poland (Photo:Mateusz Pieczko).

Allocation per country, 2009-2014 (in million EUR)

Poland 578

Portugal 58

Romania 306

Slovak Republic 81

Slovenia 27Spain 46

TOTAL: 1 789

Bulgaria 127Cyprus 8

Czech Republic 132

Estonia 49

Greece 63

Hungary 153

Latvia 73

Lithuania 84Malta 5

2486-RAPPORT-2012-06_AR 20/03/12 16:11 Page29

30

AN

NU

AL

REPO

RT O

F TH

E EU

ROPE

AN

FRE

E TR

AD

E A

SSO

CIA

TIO

N 2

011

The ParliamentaryCommittees

The Committee of Members of Parliament of theEFTA Countries (CMP) and Committee of Members ofParliament of the EFTA States (MPS) continued theiractive involvement in EFTA third-country relationsand cooperation with the EU. The Chair of theCMP/MPS in 2011 was Mr Svein Roald Hansen(Norway) and the Vice Chair was Mr Harry Quaderer(Liechtenstein).

Third-Country Relations

In February 2011, representatives of the CMP/MPSvisited Vietnam to support the ongoing dialogue onpossible free trade negotiations by strengthening tieswith stakeholders in Vietnam and sharing their viewson the merits of free trade. Together with an observerfrom the Consultative Committee, the parliamentariansmet with the Speaker and relevant committees of theNational Assembly, government officials and businessrepresentatives.

The CMP/MPS met with EFTA Ministers in Schaan inJune and Geneva in November, receiving updates onthird-country relations and raising points of interest

for the Committee members. Among other issues, theCommittee discussed the FTA negotiations with theCustoms Union of Russia, Belarus and Kazakhstan,and showed an interest in strengthening free tradewith emerging markets and the relation betweendevelopment aid and trade. The Committee continuedits active engagement with respect to sustainabledevelopment provisions in free trade agreements,which have been incorporated into all EFTAnegotiations since the model chapter was agreed in2010. The Committee met with WTO officials inNovember to discuss the Doha Round and therelationship between the multilateral and bilateralapproach to trade.

Cooperation with the EU

The EEA Joint Parliamentary Committee (EEA JPC)met twice in 2011, in Svalbard in April and inStrasbourg in October. The EEA JPC took a highlyactive role in the reflections on the EEA Agreement,and as a joint committee, its members gatheredinformation and insights from both the EU and EFTAsides on the ongoing EEA review processes. A workingdocument entitled “The Review of the EEA” wasdeveloped for the spring meeting, and will bedeveloped further in the coming period. As withprevious meetings, the EEA JPC engaged in a fruitful

ADVISORY BODIES

Discussions at a joint seminar in Oslo on 13 December 2011 between the EFTA Consultative Committee and representatives of the European Economic and Social Committee’sSingle Market Observatory: Elisabeth Walaas, Director-General, Ministry of Foreign Affairs, Norway; and Halldór Grönvold, Chair of the Consultative Committee, IcelandicConfederation of Labour (ASÍ).

2486-RAPPORT-2012-06_AR 20/03/12 16:11 Page30

31

AN

NU

AL

REPO

RT O

F TH

E EU

ROPE

AN

FRE

E TR

AD

E A

SSO

CIA

TIO

N 2

011

dialogue with the EEA Council, the EEA JointCommittee and the EFTA Surveillance Authority onthe functioning of the EEA. The meeting in Svalbardalso had the High North on the agenda, attractingnotable interest from the European Parliament.Furthermore, the EEA JPC took an initiative toestablish a refund scheme for beverage packaging byadopting a resolution in the October meeting calling onthe European Commission to introduce a mandatoryEEA-wide system. The EEA JPC also adoptedresolutions on the Digital Agenda and the EEA Grantsand Norway Grants.

Furthermore, the MPS continued its active dialoguewith the EFTA Ministers on EEA affairs, and met withthe Standing Committee at Ministerial level for thethird time in Brussels in November. These jointmeetings also included the EFTA ConsultativeCommittee and constitute an increasingly importantdialogue between the Ministers and the advisorybodies on developments in the EEA.

The Consultative Committees

The EFTA Consultative Committee (EFTA CC) heldfour internal meetings in 2011 and focused, amongothers, on developments in the Internal Market, withspecific emphasis on the implementation of the SingleMarket Act and a citizen’s approach; responses to theeconomic and financial crisis; innovation in the energyfield; and a new flagship/agenda for skills and jobs(Europe 2020). The Committee also continued its workon international trade developments, focusingespecially on EFTA’s third-country relations.

Committee Work

The EFTA CC met with the Standing Committee ofthe EFTA States in March, the EFTA Ministers inJune and the Ministerial Chair of the Council inDecember, and the EFTA Parliamentary Committeein June. In November, the Parliamentary andConsultative Committees held a joint seminar on thefinancial and economic crisis, focusing especially ondevelopments in smaller economies, featuring casestudies from the EFTA countries.

Concerning the EEA, the EFTA CC met with the EFTAStanding Committee at Ministerial level in Novemberin Brussels. It also invited the Vice President of ESA togive a briefing in June on ESA’s most recent activities.The Committee continues to emphasise strongly theimportance of holding such joint meetings, whichcontribute to enhancing dialogue with the relevantEFTA authorities at political, parliamentary anddiplomatic level in the four EFTA countries.

In March, the EFTA CC held an exchange of viewswith the European External Action Service, the EFTAAmbassadors to the EU and a representative of aBrussels-based think tank on the future of the EEA andEU-Swiss relations.

Furthermore, the EFTA CC continued its cooperationwith the EFTA authorities at EFTA working group level.In March, the Committee and the EFTA Working Groupon Health and Safety at Work and Labour Law organiseda visit to the EFTA Court in Luxembourg, where theyobserved the hearing on the Icelandic Posting of Workerscase, discussed with a Commission representative thelatest developments in the labour market field, and metwith the President of the EFTA Court.

Members of the EFTA Parliamentary Committee at the EFTA Ministerial meetingin Geneva on 14 November 2011: Harry Quaderer (Independent), Liechtenstein;and Svein Roald Hansen (Labour), Norway.

2486-RAPPORT-2012-06_AR 20/03/12 16:11 Page31

AN

NU

AL

REPO

RT O

F TH

E EU

ROPE

AN

FRE

E TR

AD

E A

SSO

CIA

TIO

N 2

011

32

EEA Consultative Committee

At its meeting in May in Tartu, Estonia, the EEAConsultative Committee (EEA CC) focused onEuropean economic governance and on Iceland’s EUaccession negotiations. It also visited a project in Tartuthat had received funding from the EEA FinancialMechanism. Furthermore, the EEA CC engaged in adialogue with representatives of the EEA JointCommittee and ESA on the latest EEA developments,and discussed and adopted two resolutions on theSingle Market Act and innovation in the energy field.

OsmosisCooperation between social partners in the EEA wasfurther reinforced in 2011 through the Osmosisprocedure, which allows representatives of the EFTAConsultative Committee to participate in the work of theEuropean Economic and Social Committee (EESC) andvice versa. Cooperation in 2011 included EFTAparticipation in the EESC Joint Consultative Committeemeetings with Croatia, Turkey and Macedonia; theEESC Steering Committee on Europe 2020; and theEESC Single Market Observatory.

The Co-chairs of the EEA CC in 2011 were, for theEFTA CC, Halldór Grönvold (Iceland) and, for theEESC, Meelis Joost (Estonia).

The EEA EFTA Forum

The EEA EFTA Forum ofelected representatives fromlocal and regional authorities(the Forum) was establishedby the Standing Committee ofthe EFTA States in 2009 as aninformal body to involveelected representatives fromlocal authorities and regionsin EEA matters. The Forumhas 12 members, six fromIceland and six from Norway.Liechtenstein has decided notto take part in the meetingsfor the time being.

The Forum held twomeetings in 2011, the first inHamar, Norway, from 31 May to 1 June, and thesecond in Brussels from 14 to 15 November. TheForum adopted opinions on the planned revision ofthe EU Public Procurement Directive, multilevelgovernance in the EEA, public services in the EEAcontext, and the European Commission’s draftdirective on energy efficiency.

Halldór Halldórsson, IcelandicAssociation of Local Authorities,was elected as new Chair of theEEA EFTA Forum of Local andRegional Authorities from 1 June 2011.

2486-RAPPORT-2012-06_AR 20/03/12 16:11 Page32

AN

NU

AL

REPO

RT O

F TH

E EU

ROPE

AN

FRE

E TR

AD

E A

SSO

CIA

TIO

N 2

011

33

EFTA informs its stakeholders and the general publicabout its activities through a website, seminars andvarious publications. Members of the public can accessor order EFTA documents through a link on the site.Furthermore, presentations are given to visitors to theSecretariat offices in Geneva, Brussels andLuxembourg. In Brussels alone, approximately 70groups (a total of 1 250 people) visited EFTA in 2011.

Website

The website contains news and general information onEFTA’s work, as well as legal texts related to EFTA’sfree trade agreements and the EEA Agreement. Thesite has approximately 800 visitors per day.

Seminars

EFTA held several seminars and workshops in 2011,including the following:

• In February, an export promotion seminar wasorganised in Amman by EFTA, the JordanianMinistry of Industry and Trade and the JordanianChambers of Industry and Commerce.

• In May, the EFTA Secretariat, in collaboration withthe stakeholder organisation Science|Business, helda roundtable discussion on data protection andsecurity.

• In June, around 90 participants from both the publicand private sectors in the EEA countries met inBrussels for EFTA’s regular seminar on the EEA,which had a special focus on the EU’s InternalEnergy Market.

• In October, EFTA hosted a workshop with around50 representatives of organisations from a widerange of cultural and creative sectors to discuss thefinancing and taxation of the cultural industries.

Publications

The latest editions of all of EFTA’s brochures areavailable on the website. Paper copies can be orderedfree of charge, subject to availability. The followingwere released in 2011:

• This is EFTA 2011: An annual publication,providing an overview of EFTA and its activities,together with useful trade and economic statistics.

• The EFTA Bulletin: EFTA/EU StatisticalCooperation Handbook. A new and updated edition.

In addition, EFTA’s updated fact sheet, “EFTA at aGlance”, provides a brief introduction to theorganisation and its activities.

INFORMATION ACTIVITIES

2486-RAPPORT-2012-06_AR 20/03/12 16:11 Page33

34

AN

NU

AL

REPO

RT O

F TH

E EU

ROPE

AN

FRE

E TR

AD

E A

SSO

CIA

TIO

N 2

011

The EEA Supplement

The EEA Supplement to the Official Journal of theEuropean Union is a translation into Icelandic andNorwegian of EEA-relevant texts. The EEASupplement contains material from:

• The EEA Joint Committee • The Standing Committee of the EFTA States • The EFTA Surveillance Authority • The EFTA Court • The European Commission

The EEA Supplement is published on the EFTAwebsite once a week. Since 2008, the Icelandic andNorwegian versions of the EEA Supplement have notbeen synchronised with regard to content.

In 2011, the EFTA Secretariat published 71 issues ofthe EEA Supplement. The publication of actsincorporated into the EEA Agreement decreased in2011 compared to the previous year for the Icelandicversion, whilst the Norwegian version saw an increasein the number of acts published in 2011.

Publication in the EEA Supplement 2011 Fig. 4

Number of pagesIcelandic Norwegian

EEA Joint Committee Decisions 325 325

EC Acts 3 132 2 811

EFTA Standing Committee 28 28

EFTA Surveillance Authority 694 694

EFTA Court 47 47

EU Institutions 1 344 1 344

Total 5 570 5 249

2486-RAPPORT-2012-06_AR 20/03/12 16:11 Page34

35

AN

NU

AL

REPO

RT O

F TH

E EU

ROPE

AN

FRE

E TR

AD

E A

SSO

CIA

TIO

N 2

011

At the end of 2011 there were 22 fixed-term and short-term staff based in Geneva, and 63 in Brussels andLuxembourg. The Financial Mechanism Office inBrussels employed 52 staff. All figures are on a full-time equivalent basis and include trainees.

The Secretariat’s budget is prepared according to theframework budgeting principle used by the MemberStates’ public administrations. This approach aims toincrease awareness of budgetary spending at all levels.The budget is accompanied by a performance plan inwhich the activities of the Secretariat are divided intoprojects. The plan and subsequent reports keep theMember States informed of the costs and outcomes ofthe Secretariat’s various activities.

EFTA’s budget is prepared in two currencies: Swissfrancs (CHF) and euros (EUR). The total budget for2011 was equivalent to CHF 23 654 000.

The EFTA Board of Auditors

The EFTA Board of Auditors (EBOA), established inMay 1992, is the supreme audit authority of EFTA. Itis a permanent committee which, in cooperation withexternal auditors, performs an annual audit of the threeEFTA institutions: The EFTA Secretariat, the EFTASurveillance Authority (ESA) and the EFTA Court. Formatters related to the Secretariat, EBOA meets “atfour” (one representative from each EFTA State) andreports directly to the EFTA Council. For mattersrelated to the EEA Agreement (ESA and the EFTACourt), EBOA meets “at three” (Iceland, Liechtensteinand Norway) and reports to the ESA/Court Committee.EBOA also works in cooperation with the EuropeanCourt of Auditors. EBOA met three times in 2011.

EBOA’s annual audit report is made available on theEFTA Secretariat’s website once the relevant Councilprocedures for the year in question have been finalised.

ADMINISTRATION

2011 EFTA Budget Fig. 5

Budget Posts 2011 Budget (in CHF)

Trade-related activities 4 682 000EEA-related activities 8 824 000EFTA/EU statistical cooperation 747 000Secretary-General's services (information, horizontal and Council activities) 1 964 000EU/EFTA and EFTA cooperation programmes 3 245 000Administration and Management 4 192 000

23 654 000

Contributions from the EFTA States to the 2011 EFTA Budget Fig. 6

Member State Contributions (in CHF) Share (in %)

Iceland 1 025 000 4.33Liechtenstein 205 000 0.87Norway 13 510 000 57.12Switzerland 8 914 000 37.68Total 23 654 000 100.00

2486-RAPPORT-2012-06_AR 20/03/12 16:11 Page35

36

AN

NU

AL

REPO

RT O

F TH

E EU

ROPE

AN

FRE

E TR

AD

E A

SSO

CIA

TIO

N 2

011

APPENDICESEFTA Parliamentary Committee Members[1]

Iceland

Mr Árni Þór Sigurðsson Left-Green Movement

Mr Skúli Helgason Social-Democratic Alliance

Ms Þorgerður K. Gunnarsdóttir Independence Party

Mr Sigmundur D. Gunnlaugsson Progressive Party

Mr Magnús Orri Schram Social-Democratic Alliance

Liechtenstein

Mr Harry Quaderer Independent

Mr Albert Frick Progressive Citizens’ Party

Norway

Mr Svein Roald Hansen Labour Party (Chair CMP/MPS and President of the EEA JPC)

Mr Harald T. Nesvik Progress Party

Ms Gina Knutson Barstad Socialist Left Party

Ms Laila Gustavsen Labour Party

Ms Laila Marie Reiersten Progress Party

Mr Jan Tore Sanner Conservative Party

Switzerland

Mr Ignazio Cassis Radical-Liberal Party

Mr Didier Berberat Social Democratic Party

Mr Eugen David Christian Democratic Party

Ms Brigitta M. Gadient Civic Democratic Party

Mr Hans Kaufmann Swiss People’s Party

[1] Committee members as at October 2011.

2486-RAPPORT-2012-06_AR 20/03/12 16:11 Page36

37

AN

NU

AL

REPO

RT O

F TH

E EU

ROPE

AN

FRE

E TR

AD

E A

SSO

CIA

TIO

N 2

011

EFTA Consultative Committee Members

Iceland

Mr Halldór Grönvold (Chair) Icelandic Confederation of Labour (ASÍ)

Mr Róbert Trausti Árnason Confederation of Icelandic Employers (SA)

Mr Haraldur Ingi Birgisson Icelandic Chamber of Commerce

Ms Helga Jónsdóttir Federation of State and Municipal Employees (BSRB)

Mr Bjarni Már Gylfason Federation of Icelandic Industries (SI)

Liechtenstein

Mr Josef Beck Liechtenstein Chamber of Commerce and Industry (LCCI)

Mr Sigi Langenbahn (Second Vice Chair) Federation of Liechtenstein Employees

Norway

Mr Thomas Angell (First Vice Chair) Federation of Norwegian Commercial and Service Enterprises (Virke)

Ms Liz Helgesen Norwegian Confederation of Unions for Professionals(Unio)

Mr Vidar Bjørnstad Norwegian Confederation of Trade Unions (LO)

Ms Bente Stenberg-Nilsen Norwegian Association of Local and Regional Authorities (KS)

Mr Espen Søilen Confederation of Norwegian Enterprise (NHO)

Mr Christopher Navelsaker Norwegian Confederation of Vocational Unions (YS)

Switzerland

Mr Jan Atteslander economiesuisse

Ms Ruth Derrer Balladore Confederation of Swiss Employers

Ms Jean-Pierre Monti Swiss Workers’ Federation and Swiss Federation of Employees

Ms Marco Taddei Swiss Association of Small and Medium-sized Enterprises

Mr Pierre Weiss Fédération des Entreprises Romandes Genève (FER Genève)

2486-RAPPORT-2012-06_AR 20/03/12 16:11 Page37

38

AN

NU

AL

REPO

RT O

F TH

E EU

ROPE

AN

FRE

E TR

AD

E A

SSO

CIA

TIO

N 2

011

Communiqué

On 21 June 2011, the European Free Trade Association(EFTA) held its summer Ministerial meeting inSchaan, Liechtenstein, chaired by Ms Aurelia Frick,Minister of Foreign Affairs of Liechtenstein. Ministersof the four EFTA States (Iceland, Liechtenstein,Norway and Switzerland) signed a Free TradeAgreement with Hong Kong, China, represented by MrGregory So, Acting Secretary for Commerce andEconomic Development.

The international economic and trade environment

The EFTA Ministers welcomed the robust rebound intrade flows recorded in 2010. They underlined theimportance to continue to refrain from protectionistmeasures and to strengthen economic and financialstability. They reiterated their strong commitment tothe multilateral trading system. In this connection, theyexpressed their deep concern over the lack of progressin the WTO Doha negotiations. EFTA Ministers urgedall parties to the negotiations to engage constructivelyin order to complete the Round.

Preferential trade relations

The EFTA Ministers welcomed the addition of the FreeTrade Agreement (FTA) with Hong Kong, China toEFTA’s network of preferential trade relations. HongKong, China is one of EFTA’s major trading partnersglobally and the Agreement further reinforces EFTA’sengagement with Asia. EFTA has now concluded 23FTAs with 32 countries and territories outside theEuropean Union.

In light of the priority accorded to improving traderelations with important partners in Asia, Ministersdiscussed the state of the negotiations with India andexpressed their hope that these would come to aconclusion in 2011. They welcomed the start ofnegotiations with Indonesia earlier in the year.Ministers furthermore reiterated their wish to resumenegotiations with Thailand when conditions allow.

Ministers expressed their satisfaction at the positiveconclusions reached on the feasibility of a free tradeagreement in the Report from the EFTA-Vietnam JointStudy Group and expressed their readiness to launchnegotiations at the earliest possible opportunity.

They furthermore expressed their readiness to engagein free trade negotiations with Malaysia.

With the objective of continuing to strengthen relationswith countries in Europe, Ministers were pleased tonote the start of negotiations in early 2011 with thethree members of the Customs Union of Russia,Belarus and Kazakhstan, as well as with Bosnia andHerzegovina and with Montenegro.

Minsters also expressed their wish to deepen therelations with countries on the American continent.They discussed the exploratory work conducted withfive Central American States (Costa Rica, El Salvador,Guatemala, Honduras and Panama) to date anddecided to continue preparations for possiblenegotiations. They also agreed to explore thepossibility for closer trade relations with MERCOSUR(Argentina, Brazil, Paraguay and Uruguay) based onthe existing Joint Declaration on Cooperation.

Relations with the European Union

The EEA EFTA Ministers discussed the generalfunctioning of the EEA Agreement with a focus on theeconomic crisis. They underlined the need forcoordinated and comprehensive action at Europeanlevel. Ministers expressed their satisfaction that theEEA EFTA States would soon participate in the newsystem of EU financial supervisory architecture, whichbegan operating on 1 January 2011.

Ministers reiterated the importance of closecooperation with the European Union on energy andclimate change, and welcomed the incorporation of theaviation emissions scheme into the EEA Agreement.

Ministers welcomed the conclusion of the majority ofthe projects, programmes and funds under the EEAFinancial Mechanism and the Norwegian FinancialMechanism 2004-2009 and the Agreements on theEEA Financial Mechanism and Norwegian FinancialMechanism 2009-2014. They expressed their hope forthe rapid completion of the Memoranda ofUnderstanding with the beneficiary states.

Ministers noted the EU Council Conclusions ofDecember 2010, in particular the statement that thevery good and close relations with the EFTA countrieshad further intensified.

EFTA Ministerial Communiqués and EEA Council ConclusionsEFTA Ministerial Meeting, Schaan, 21 June 2011

2486-RAPPORT-2012-06_AR 20/03/12 16:11 Page38

39

AN

NU

AL

REPO

RT O

F TH

E EU

ROPE

AN

FRE

E TR

AD

E A

SSO

CIA

TIO

N 2

011

Advisory bodies

Ministers met with the EFTA advisory bodies that areactively engaged in EFTA’s work: the ParliamentaryCommittee and the Consultative Committee. A fruitfulexchange of view with committee members took placeon a range of issues, including EFTA’s third-countryrelations. Concerning the EEA they in particulardiscussed the economic crisis, Europe 2020 and thereviews of the EEA undertaken by Liechtenstein,Norway and the EU.

Attending

Liechtenstein: Ms Aurelia Frick, Minister ofForeign Affairs (Chair)

Iceland: Mr Össur Skarphéðinsson,Minister for Foreign Affairs andExternal Trade

Norway: Ms Rikke Lind, State Secretary,Ministry of Trade and Industry

Switzerland: Mr Johann N. Schneider-Ammann, Federal Councillor,Head of the Federal Departmentof Economic Affairs

EFTA: Mr Kåre Bryn, Secretary-General

EFTA Ministerial Meeting, Geneva, 14 November 2011

Communiqué

On 14 November 2011, the European Free TradeAssociation (EFTA) held a Ministerial Meeting inGeneva under the Chairmanship of Mr Trond Giske,Minister of Trade and Industry of Norway. Ministersfrom the four EFTA Member States and Montenegrosigned a Free Trade Agreement (FTA). Together withCosta Rica, Honduras and Panama, the EFTA Ministersannounced the start of free trade negotiations.

The international economic and trade environment

The EFTA Ministers discussed the currentinternational economic and trade environment. Theyemphasised the importance of promoting policies toenhance growth and financial and economic stabilityat European and international level. They reiteratedtheir strong commitment to the multilateral tradingsystem. In view of the upcoming WTO MinisterialConference the Ministers expressed their deepconcerns over the lack of progress in the WTO/Dohanegotiations and recognised that, in order to deliveron the Doha mandate, there is a need to explore newnegotiating approaches.

EFTA-Montenegro Free Trade Agreement

The EFTA Ministers welcomed the addition of the FreeTrade Agreement with Montenegro to EFTA’s networkof agreements, thereby bringing the total to 24 FTAswith 33 countries and territories outside the EuropeanUnion. EFTA now has five FTAs with partners inSouth-Eastern Europe.

Announcement of negotiations with CentralAmerican partners

The EFTA Ministers States announced the start ofnegotiations on a comprehensive free trade agreementwith Costa Rica, Honduras and Panama. Both sidesdeclared their readiness to open negotiations early nextyear. Other Central American countries may join theprocess at a later stage.

Other preferential trade relations

The EFTA Ministers reviewed the state of and theoutlook for preferential trade relations with partnersworldwide. They welcomed the significant progressmade in the negotiations with India and expressed thewish that these could be finalised in early 2012. Theyalso welcomed the progress achieved in 2011 in thenegotiating process with the Members of the CustomsUnion of Russia, Belarus and Kazakhstan. In thiscontext, they expressed their great satisfaction with therecent conclusion of the negotiations on Russia’saccession to the WTO. Ministers further noted thepositive developments in the negotiations betweenEFTA and Indonesia. They took note of the progressachieved in the negotiations with Bosnia andHerzegovina and looked forward to a rapid finalisationof the Agreement.

Ministers expressed their desire to continue thedialogue with Malaysia with the aim of launching freetrade negotiations. Based on a Joint Feasibility Studyat technical level with Vietnam, they looked forward toopening negotiations as soon as possible. They also

2486-RAPPORT-2012-06_AR 20/03/12 16:11 Page39

40

AN

NU

AL

REPO

RT O

F TH

E EU

ROPE

AN

FRE

E TR

AD

E A

SSO

CIA

TIO

N 2

011

confirmed their interest in exploring ways to furtherdevelop trade relations with MERCOSUR (Argentina,Brazil, Paraguay and Uruguay). The Ministersdiscussed prospects for developing closer traderelations with countries in Sub-Saharan Africa anddecided to explore the possibilities with potentialpartner countries in the region. They furthermoreconcurred to follow developments in Algeria andThailand with a view to resuming negotiations withthose partners when conditions allow.

Further liberalisation of intra-EFTA trade inagricultural products

Ministers endorsed the outcome of discussions attechnical level on the further liberalisation of trade inagricultural products among the EFTA Member States.

The EFTA Parliamentary Committee

Ministers exchanged views with the EFTAParliamentary Committee on recent developments andpriorities in EFTA’s trade relations with the world.

Appointments

To succeed Secretary-General Kåre Bryn on 1September 2012, Ministers appointed AmbassadorKristinn F. Árnason of Iceland. They also appointed MrIvo Kaufmann of Switzerland to the post of DeputySecretary-General in Geneva. Norway will nominate acandidate to the post of Deputy Secretary-General inBrussels to be appointed at a later stage. Ministersfurthermore appointed Mr Georges Baur ofLiechtenstein as Assistant Secretary-General in Brussels.

Attending

Norway: Mr Trond Giske, Minister ofTrade and Industry (Chair)

Iceland: Mr Einar Gunnarsson, PermanentSecretary of State of the Ministryfor Foreign Affairs and ExternalTrade

Liechtenstein: Ms Aurelia Frick, Minister ofForeign Affairs

Switzerland: Mr Johann N. Schneider-Ammann, Federal Councillor,Head of the Federal Departmentof Economic Affairs

EFTA: Mr Kåre Bryn, Secretary-General

1. The thirty-fifth meeting of the EEA Council tookplace in Brussels on 23 May 2011 under thePresidency of Mr János Martonyi, Minister ofForeign Affairs of Hungary, representing thePresidency of the Council of the EuropeanUnion. The meeting was attended by Mr JonasGahr Støre, Minister of Foreign Affairs ofNorway, Ms Aurelia Frick, Minister for ForeignAffairs of Liechtenstein, and Mr Thorir Ibsen,Ambassador, Head of the Mission of Iceland tothe EU, as well as by Members of the Council ofthe European Union and by Representatives ofthe European Commission and the EuropeanExternal Action Service.

2. The EEA Council noted that within theframework of the Political Dialogue theMinisters discussed North Africa, Middle Eastand Piracy off the coast of Somalia.

3. The EEA Council noted the Council Conclusionsfrom December 2010, in particular that the EU

relations with the EFTA countries, which wherealready considered to be very good and close in2008, have further intensified in the past twoyears. The EEA Council is looking forward tocontinue the positive relationship.

4. The EEA Council welcomed the adoption of theseven “Flagship Initiatives” of the Europe 2020by the Commission. With many of the proposalscontained in these initiatives being EEA relevant,the EEA Council welcomed the contribution ofthe EEA EFTA States to the Strategy.

5. The EEA Council welcomed the progress made onthe Single Market Act, recalling that the SingleMarket has a key role to play to deliver growth andemployment and promote competitiveness. TheEEA Council furthermore welcomed the EEAEFTA Comment to the Act received on 10 March.The EEA EFTA States will follow up to the variousproposals resulting from the Act and will continueto contribute to its development.

Conclusions of the 35th meeting of the EEA Council, Brussels, 23 May 2011

2486-RAPPORT-2012-06_AR 20/03/12 16:11 Page40

41

AN

NU

AL

REPO

RT O

F TH

E EU

ROPE

AN

FRE

E TR

AD

E A

SSO

CIA

TIO

N 2

011

6. The EEA Council welcomed the launch of theEuropean semester of economic policycoordination in January 2011 and took note of therecently adopted Euro Plus Pact aimed at furtherstrengthening policy coordination to improvecompetitiveness and achieve a higher degree ofconvergence.

7. The EEA Council welcomed that the new systemof European Financial Supervision, including thethree supervisory authorities in the areas ofBanking, Insurance, and Securities, had begunoperating on 1 January 2011. The EEA Councilwelcomed that the EEA EFTA States wouldparticipate in the authorities and looked forwardto conclude a formal agreement on the modalitiesof their participation. The EEA Councilfurthermore expressed the hope that anunderstanding can be reached soon on theappropriate form of participation of the EEAEFTA States’ relevant authorities in the EuropeanSystemic Risk Board (ESRB).

8. The EEA Council welcomed the entry into forceon 3 March 2011 of the Third Package for theInternal Energy Market aimed at creating aninterconnected and competitive European energymarket. With the EEA EFTA States being fullyintegrated in the internal energy market, the EEACouncil underlined the importance of a timelyparticipation of the EEA EFTA States in the newbodies, Agency for the Cooperation of EuropeanRegulators (ACER) and the European Networkof Transmission System Operators (ENTSO)which will play an important role for thecooperation between European energy regulatorsand transmission system operators.

9. The EEA Council welcomed the progress madein incorporating the Renewables Directive intothe EEA Agreement. In this context, the EEACouncil took note of the EEA EFTA States’ largeshares of renewable energy sources.Furthermore, the EEA Council acknowledged theEEA EFTA States’ commitment to ambitioustargets for their share of renewable energy by2020.

10. The EEA Council took note of the EnergyEfficiency Plan 2011, published on 8 March2011, along with a Roadmap for moving to acompetitive low carbon economy in 2050. ThePlan constitutes an important contribution to

reaching the EUs 20% energy saving target aswell as helping to realise the EU's longtermenergy and climate goals.

11. The EEA Council reiterated the importance ofmaintaining close cooperation between the EUand the EEA EFTA States in energy and climatechange polices, in particular in the areas ofemission trading, the promotion of competitivelow carbon economy, energy efficiency andrenewable energy resources, as well as on carboncapture and storage (CCS). The EEA Councilalso welcomed the incorporation of the aviationemissions scheme into the EEA Agreement.

12. The EEA Council welcomed the conclusion ofmost projects, programmes and funds under theEEA and Norwegian Financial Mechanisms2004-09 by the implementation deadline 30 April2011. The EEA Council emphasised theimportance of ensuring that projects with one-year extensions will be completed within thisfinal deadline.

13. The EEA Council welcomed the progress madein the implementation of the EEA and NorwegianFinancial Mechanisms 2009-2014, includingspecification of programme areas to besupported. The EEA Council urged all parties tostrive for rapid completion of the negotiations onthe country specific Memoranda ofUnderstanding to ensure sufficient time forimplementation of programmes.

14. The EEA Council welcomed the implementationof the Additional Protocols resulting frombilateral negotiations between the EuropeanCommission and Iceland and Norway concerningthe review of the quota levels for certain fish andfishery products.

15. Ministers noted the progress made in thenegotiations between the EU and Iceland onIceland's accession to the European Union.

16. The EEA Council noted the Progress Report ofthe EEA Joint Committee and, in particular:

• welcomed that in March 2011, the EuropeanParliament had a debate on a Commissionproposal for a directive of the EuropeanParliament and of the Council on consumerrights , and that it continues its constructive

2486-RAPPORT-2012-06_AR 20/03/12 16:11 Page41

42

AN

NU

AL

REPO

RT O

F TH

E EU

ROPE

AN

FRE

E TR

AD

E A

SSO

CIA

TIO

N 2

011

work towards the adoption of that directive,and noted in this context that the EEA EFTAComment had been taken into consideration;

• noted the result of the negotiations onliberalisation of trade in agricultural productsbetween the European Commission andNorway based on Article 19 of the EEAAgreement, hoped for an expedientimplementation of the outcome and lookedforward to the foreseen review of theconditions of trade in agricultural products intwo years time, with a view to exploringpossible concessions;

• agreed to continue the dialogue on the traderegime for processed agricultural productswithin the framework of Article 2(2) ofProtocol 3 of the EEA Agreement;

• welcomed the participation of the EEA EFTAStates in EEA relevant EU Programmes, notingthat these are co-financed by the EEA EFTAStates. It emphasised the importance ofincluding the EEA EFTA States in appropriateprogrammes thus contributing to building amore competitive, innovative and socialEurope;

• took note of further progress made in thedevelopment of an Integrated Maritime Policyand welcomed the active involvement of theEEA EFTA States. It noted that the EEA EFTAStates are currently looking into the possibleparticipation in the new programme for thefurther development of the IntegratedMaritime Policy;

• noted that since the last meeting of the EEACouncil, the Aviation Safety Regulation216/2008 and the Audiovisual Media ServicesDirective have not yet been incorporated into theEEA Agreement and expressed its expectationfor an early conclusion of this process;

• recalled the adoption in 2007 of the HorizontalFood Law Package, and looked forward to itsfull implementation by all contracting partiesby 1 November 2011.

17. The EEA Council recalled its commitment to theEU's social agenda reinforced in the Europe 2020Strategy and welcomed the new inclusive growth

initiatives, in particular the EU Platform againstPoverty and Social Exclusion and the Agenda forNew Skills and Jobs and reiterated theimportance of how these issues will be followedup. The EEA Council underlined and encouragedefforts to meet social needs through innovation.

18. The EEA Council welcomed the EEA EFTAcontributions to the decision-shaping process ofEEA relevant EU legislation and programmesthrough their participation in relevantcommittees, expert groups and agencies and bysubmitting EEA EFTA Comments.

19. The EEA Council held an orientation debate onRaw Materials.

20. The Ministers reiterated that it was the commoninterest of all Contracting Parties to ensureappropriate information on the EEA Agreementwithin the European Economic Area.

21. The EEA Council underlined the importance ofinviting EEA EFTA Ministers to relevantinformal EU Ministerial Meetings andMinisterial Conferences on the basis of EEAEFTA participation in the Internal Market, andexpressed its appreciation to the incoming PolishPresidency for the continuation of this practice.The EEA Council also recalled the practice ofinviting the EEA EFTA States - at the level ofofficials - to political dialogue meetings at thelevel of relevant Council Working Parties.

22. The EEA Council noted the Resolutions of theEEA Joint Parliamentary Committee adopted atits 35th meeting in Strasbourg on 24-25 November2010 on the European Year for CombatingPoverty and Social Exclusion and on Europe2020: Innovation and the EEA and at its 36th

meeting in Spitsbergen on 13 April 2011 on theHigh North: Opportunities and PolicyChallenges and on the Annual report of the EEAJPC on the functioning of the EEA in 2010, andthe Resolutions of the EEA ConsultativeCommittee adopted at its 19th meeting in Tartu,Estonia, on 12-13 May 2011 on the Single MarketAct and on Innovation and Energy.

2486-RAPPORT-2012-06_AR 20/03/12 16:11 Page42

43

AN

NU

AL

REPO

RT O

F TH

E EU

ROPE

AN

FRE

E TR

AD

E A

SSO

CIA

TIO

N 2

011

1. The thirty-sixth meeting of the EEA Council tookplace in Brussels on 15 November 2011 under thePresidency of Ms Aurelia Frick, Minister forForeign Affairs of Liechtenstein. The meeting wasattended by Mr Jonas Gahr Støre, Minister ofForeign Affairs of Norway, Mr Einar Gunnarson,representing the Minister for Foreign Affairs ofIceland, Mr Marcin Korolec, Deputy StateSecretary of the Ministry of Economic Affairs ofPoland, representing the Presidency of the Councilof the European Union, as well as by Members ofthe Council of the European Union and byRepresentatives of the European Commission andthe European External Action Service.

2. The EEA Council noted that within theframework of the Political Dialogue theMinisters discussed North Africa/ the MiddleEast, Promotion of International CriminalJustice, Afghanistan – 10 years after, andMyanmar.

3. The EEA Council recognised that the currenteconomic crisis is a common concern, andreaffirmed the need for responsibility andsolidarity among the nations of Europe intackling the challenges ahead. The EEA Councilstressed that it is in the common interest of allcountries of the European Economic Area torestore confidence and put the economies on thepath towards renewed and sustainable growth,and underlined the need to take into accountbudgetary discipline and shared social objectivesin the measures taken to combat the crisis.

4. The EEA Council welcomed the conclusion ofthe Agreement on the participation of Bulgariaand Romania in the EEA, a step through whichthe EEA will be formally enlarged to aneconomically integrated entity of 500 millionpeople with 30 Member States fully participatingin the Internal Market.

5. The EEA Council welcomed the progress madeon the seven “Flagship Initiatives” of theEurope 2020 strategy by the Commission. Withmany of the proposals contained in theseinitiatives being EEA relevant, the EEACouncil welcomed the contribution of the EEAEFTA States to the Strategy.

6. The EEA Council welcomed the progress madeon the Single Market Act, including the recentpresentation of legislative proposals of several ofthe 12 key actions of the Act, and looks forwardto the other actions to follow soon. Specialpriority should be given to the growth-enhancingmeasures. The EEA EFTA States will continue tobe actively involved in the development of theSingle Market and will follow up on theproposals resulting from the Act. The EEACouncil also welcomed the achievements of theSingle Market Forum, which took place inKrakow on 3-4 October 2011, and the Krakowdeclaration made by the Forum .

7. The EEA Council welcomed the successfulconclusion of the European semester ofeconomic policy coordination and took note ofthe proposal of the European Commission for anew Multiannual Financial Framework for 2014-2020.

8. The EEA Council welcomed the Councilconclusions of 29 September 2011 on aCompetitive European Economy: Industrialcompetitiveness in the light of resource efficiencyand looked forward to further work in this area, inparticular on competitiveness proofing.

9. The EEA Council noted the ongoingdiscussions between the EU and EFTA sides onhow to ensure that the significant volume oflegislation currently being adopted in the EU inthe financial services field, including theRegulation establishing the EuropeanSupervisory Authorities, can be dealt with andincluded in the EEA agreement. The EEACouncil emphasised the need to ensure thetimely incorporation of such legislation. TheEEA Council furthermore expressed the hopethat an understanding can be reached soon onthe appropriate form of participation of theEEA EFTA States' relevant authorities in theEuropean Systemic Risk Board (ESRB).

10. The EEA Council welcomed the new system ofdelegated and implementing acts replacing thesystem as it existed before the entry into force ofthe Lisbon Treaty. The EEA Council furthernoted with satisfaction that the new system

Conclusions of the 36th meeting of the EEA Council, Brussels, 15 November 2011

2486-RAPPORT-2012-06_AR 20/03/12 16:11 Page43

44

AN

NU

AL

REPO

RT O

F TH

E EU

ROPE

AN

FRE

E TR

AD

E A

SSO

CIA

TIO

N 2

011

confirms the continued involvement of the EFTAside in expert groups and committees, andunderlined the importance of its implementationfor all Contracting Parties.

11. The EEA Council noted that the Third Packagefor the Internal Energy Market had entered intoforce in the EU on 3 March 2011, and thatimportant work on derived legislation wascurrently ongoing in the new bodies, - theAgency for the Cooperation of EnergyRegulators (ACER) and the EuropeanNetwork(s) for Transmission System Operators(ENTSOs). Since the EEA EFTA States werealready well integrated in the internal energymarket, the EEA Council underlined theimportance of ensuring appropriate EEA EFTAparticipation in the new bodies in line with theThird Package and the EEA Agreement.

12. The EEA Council welcomed the adoption of theRegulation on Energy Market Integrity andTransparency, which creates a framework ofconsistent rules tailored to the particularities ofthe energy markets (electricity and natural gas),aiming at the prevention and effective detectionof market abuse.

13. The EEA Council welcomed the progress madein incorporating the Renewables Directive intothe EEA Agreement. In this context, the EEACouncil took note of the EEA EFTA States’already large shares of renewable energy sourcesand acknowledged the EEA EFTA States’commitment to targets for their share ofrenewable energy by 2020.

14. The EEA Council took note of the Commissionproposal for a new Energy Efficiency Directive,presented on 22 June 2011. The EEA Councilagreed to the importance of energy efficiency torealise energy and climate goals.

15. The EEA Council welcomed the CommissionCommunication titled “The EU Energy Policy:Engaging with Partners beyond Our Borders”,which had been presented on 7 September2011. In this regard, the EEA Councilunderlined the importance of the strong tiesbetween the EU and the EEA EFTA States inthe energy field. The EEA Council looksforward to the discussions of the EU Councilmeeting of 24 November in this respect.

16. The EEA Council reiterated the importance ofmaintaining close cooperation between the EUand the EEA EFTA States in energy and climatechange polices, in particular in the areas ofemission trading, the promotion of competitive,safe and sustainable low carbon economy,energy efficiency and renewable energyresources, as well as on carbon capture andstorage (CCS).

17. The EEA Council recognised the importance ofcooperation for the development of future-oriented energy technologies, among others bymeans of advocating and supporting commonResearch & Development projects, enhancingand developing a framework allowing cross-border exchanges of knowledge and scientificcooperation and advocating a free flow ofintellectual capital.

18. The EEA Council underlined the need tocontinue constructive work on the revisedemissions trading system to ensure that it isoperational in the whole EEA as of 1 January2013.

19. The EEA Council welcomed the high level ofimplementation of projects under the EEA andNorwegian Financial Mechanisms 2004-09, andemphasized the importance of ensuringcompletion of extended projects by the finaldeadline of 30 April 2012.

20. The EEA Council urged all parties to strive for arapid conclusion of the remaining countryspecific Memoranda of Understanding for theEEA and Norwegian Financial Mechanisms2009-14, in order to ensure sufficient time forthe implementation of programs.

21. The EEA Council welcomed the progress madeconcerning the process of Iceland's accession tothe European Union following the thirdIntergovernmental Conference in October 2011and the launch of substantive negotiationsbetween the EU and Iceland.

22. The EEA Council noted the Progress Report ofthe EEA Joint Committee and, in particular:

• welcomed the final agreement reached for adirective of the European Parliament and ofthe Council on consumer rights , and noted in

2486-RAPPORT-2012-06_AR 20/03/12 16:11 Page44

45

AN

NU

AL

REPO

RT O

F TH

E EU

ROPE

AN

FRE

E TR

AD

E A

SSO

CIA

TIO

N 2

011

this context that EEA EFTA concerns had beentaken into account;

• noted the conclusion of an Agreement onfurther liberalisation of trade in agriculturalproducts between the European Union andNorway based on Article 19 of the EEAAgreement, hoped for an expedientimplementation of the new agreement andlooked forward to the continuation of reviewsof the conditions of trade in agriculturalproducts in accordance with Article 19, with aview to exploring possible concessions;

• agreed to continue the dialogue on the traderegime for processed agricultural productswithin the framework of Article 2(2) ofProtocol 3 of the EEA Agreement, noted that ameeting is taking place on 15 November 2011in Brussels for the purpose, and underlined theimportance of deepening the dialogue;

• welcomed the participation of the EEA EFTAStates in EEA relevant EU Programmes, notingthat these are co-financed by the EEA EFTAStates. It emphasised the importance ofincluding the EEA EFTA States in appropriateprogrammes thus contributing to building amore competitive, innovative and socialEurope;

• took note of further progress made in thedevelopment of an Integrated Maritime Policyand welcomed the active involvement of theEEA EFTA States in preparatory actions for aEuropean marine observation and datanetwork. It noted that the EEA EFTA States arecurrently looking into the possibleparticipation in activities under the newprogramme for the further development of theIntegrated Maritime Policy;

• welcomed that since the last meeting of theEEA Council, the outstanding issuesconcerning the Aviation Safety Regulation(216/2008/EC) had been resolved and lookedforward to its rapid incorporation into the EEAAgreement;

• noted that the outstanding issue concerning theincorporation of the Audiovisual MediaServices Directive (2007/65/EC) had not yet

been solved and reiterated the expectation for arapid conclusion of this process;

• noted the importance of maintaining closecooperation between the EU and the EEAEFTA States on postal reforms whileaddressing the concerns on the implementationof the Third Postal Directive (2008/6/EC);

• recalled the adoption in 2007 of the HorizontalFood Law Package, which required fullimplementation by all contracting parties by 1November 2011;

• recalled its commitment to the socialobjectives of the Europe 2020 Strategy and itsinclusive growth initiatives which are aimed atcombating poverty and social exclusion,encouraging youth mobility and matchingskills with jobs. The EEA Council underlinedthe importance of finding innovative responsesto the social impact of the crisis andencouraged the need for solidarity among thenations of Europe in tackling the challengesahead.

23. The EEA Council welcomed the EEA EFTAcontributions to the decision-shaping process ofEEA relevant EU legislation and programmesthrough their participation in relevantcommittees, expert groups and agencies and bysubmitting EEA EFTA Comments.

24. The EEA Council held an orientation debate onMeasures taken to address the current EconomicCrisis.

25. The EEA Council reiterated that it was in theircommon interest that the EEA Agreement waswell known throughout the European EconomicArea and urged all Contracting Parties to ensurethat appropriate information on the Agreement isavailable.

26. The EEA Council underlined the importance ofinviting EEA EFTA Ministers to relevantinformal EU Ministerial Meetings andMinisterial Conferences on the basis of EEAEFTA participation in the Internal Market, andexpressed its appreciation to the incomingDanish Presidency for the continuation of thispractice. The EEA Council also recalled the

2486-RAPPORT-2012-06_AR 20/03/12 16:11 Page45

practice of inviting the EEA EFTA States - at thelevel of officials - to political dialogue meetingsat the level of relevant Council Working Parties.

27. The EEA Council noted the Resolutions of theEEA Joint Parliamentary Committee adopted atits 37th meeting in Strasbourg on 25-27 October2011 on EU Digital Agenda and the EEA,European Refund Scheme for Drinks Containers,and EEA and Norwegian Grants: Contributing tothe social and economic cohesion in Europe.

46

AN

NU

AL

REPO

RT O

F TH

E EU

ROPE

AN

FRE

E TR

AD

E A

SSO

CIA

TIO

N 2

011

2486-RAPPORT-2012-06_AR 20/03/12 16:11 Page46

The 2011 Annual Report is available in electronic form only. To access it via the EFTA website, please visitwww.efta.int/publications/annual-report. To be added to the mailing list for future Annual Reports, please sendan email to webmaster@efta.int.

If you no longer wish to receive a copy of the Annual Report, please unsubscribe by email to:webmaster@efta.int.

Subscription

2486-RAPPORT-2012-06_AR 20/03/12 16:11 Page47

ISSN

02

58

-38

44

EUROPEAN FREE TRADE ASSOCIATION - EFTA

9-11, rue de Varembé1211 Geneva 20Switzerland

Tel: +41 22 33 22 600Fax: +41 22 33 22 677Email: mail.gva@efta.inthttp://www.efta.int/

EFTA Secretariat, Geneva (Headquarters)

Rue Joseph II, 12-161000 BrusselsBelgium

Tel.: +32 2 286 17 11Fax: +32 2 286 17 50Email: mail@efta.inthttp://www.efta.int/

EFTA Secretariat, Brussels

Bâtiment BechOffice F2/9085 Rue Alphonse Weicker2721 Luxembourg

Tel: +352 4301 37775Fax: +352 4301 32145Email: efta-lux@ec.europa.euhttp://www.efta.int/

EFTA Statistical Office, Luxembourg

2486-RAPPORT-2012-06_AR 20/03/12 16:11 Page48