European Free Trade Association (EFTA) Essay Example | Topics and Well Written Essays - 500 words

European Free Trade Association (EFTA) - Essay Example Three out of the four EFTA members – all excluding Switzerland – are now members of the EEA (European Economic Area) Accord, linking the EC and EFTA countries for the purposes of multi lateral trade. The trend towards globalization of the world economy is promoted through the scheme of generalized tariff preferences (GSP) of the four members of the European Free trade Association. This scheme allows for preferential tariff arrangements among the trading countries of the EFTA and the EC which resulted in savings of $1.5 billion in preferential imports in 1980 (Brown 1989). The EFTA has fewer such preferential arrangements with other countries as compared to the EC and is therefore less restrictive in choosing the beneficiaries of preferential trading arrangements. Brown (1989) has provided the preferential tariff margins for 22 countries, listing all the major beneficiaries of this system, under which the payment of import duty is suspended on industrial products and small reductions in tariffs are available for some agricultural products. Manufactured and semi manufactured goods enjoy higher amounts of reductions in tariff. This provides a significant boost to free trade in the international context. The salient difference between the countries of the European Community and the EFTA countries lies in the degree to which they are willing to share sovereignty. The countries of the European Free Trade Association wanted to restrict the limits of their cooperation with other European countries to that of economic cooperation, while members of the EC were willing to hand over some of their sovereignty and autonomy over their own affairs in order to receive some concessions in influencing the policies of other countries in exchange.(Henning et al, p 86). For the four countries that are still members of the EFTA however, maintaining their autonomy and sovereignty is of supreme importance and they