College of Business Administration

International Business and Trade

Group Activity

Trading Bloc Worksheet

Trading Bloc Level of Integration

European Free Trade EFTA is classified as a Free Trade level of economic integration.
Association (EFTA) For example it has a Free Trade agreement with the Philippines.
It is a broad-based agreement, the FTA covers trade in goods,
trade in services, investment, competition, the protection of
intellectual property rights, government procurement, and trade
and sustainable development. In the area of trade in goods,
EFTA abolishes all customs duties on industrial products as of the
entry into force of the Agreement, whereas the Philippines will
gradually lower or abolish its duties on the vast majority of such
products.
Member Countries Top 5 Imports Top 5 Exports
1. Iceland 1. Machinery 1. Aluminum
2. Liechtenstein 2. Mechanical appliances 2. Mineral fuels and oil
3. Norway 3. Vehicles 3. Pharmaceutical products
4. Switzerland 4. Electrical machinery 4. Machinery
5. Precious stones and Metals 5. Mechanical Appliances
Brief Background / Short History
EFTA was founded by the Stockholm Convention in 1960.
Relations with the EEC, later the European Community (EC) and
the European Union (EU), have been at the core of EFTA
activities from the beginning. EFTA is an intergovernmental
organization established in 1960 by the EFTA Convention, that
promotes free trade and economic integration between its
members, within Europe and globally. There were 7 founding
countries: Austria, Denmark, Norway, Portugal, Sweden,
Switzerland and the United Kingdom (UK) however, EFTA
currently has 4 member countries: Iceland, Liechtenstein,
Norway and Switzerland.

Reasons of forming the trading bloc

1. to liberalise trade among its Member States, and the Convention thus contained
basic rules regarding free trade in goods and related disciplines.

2. to remove barriers to trade in industrial goods among themselves, but with each
nation maintaining its own commercial policy toward countries outside the group.

3. to promote closer economic cooperation and free trade in Europe.

Trade Agreements
1. An Agreement on Trade between Iceland and Greenland
An agreement with Denmark on trade between Iceland and Greenland provides for
certain tariff preferences between the countries.

2. Iceland-EU bilateral agreements on tariff preferences for fish and agricultural

products

3. The Free Trade Agreement between Iceland and the Faroe Islands
The Hoyvík Agreement entered into force on 1 November 2006. It establishes a joint
economic area within the territories of Iceland and the Faroe Islands. The Agreement
provides for the abolition of tariffs on all originating goods.