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Ministry for Foreign Affairs

EFTA Ministerial Meeting in Switzerland

EFTA Ministerial Meeting in Switzerland, November 30, 1998
Halldór Ásgrímsson, Minister for Foreign Affairs

The small EFTA is strong

At present EFTA has further consolidated its position in the European economic and political arena. This has been a successful year and we can look back with satisfaction to our achievements. The Association continues to serve its member countries well and it has performed excellently in fulfilling its obligations under the EEA Agreement as well as continuing to expand and strengthen its relations with third countries.
We can be proud of our achievements but we must avoid complacency in approaching new opportunities. We should also refrain from unnecessary complexities in the general administration of our Association. Our size, small in number of member states, has frequently proved to be our strength. This important fact should continue to serve as a basis for efficiency in decisionmaking and implementation.

Strenghts and weaknesses
In the past few months we have witnessed both the strengths and the weaknesses of the EEA Agreement. On the one hand we managed in July after a long preparatory phase to take a decision in the Joint Committee on the additional veterinary package. This decision incorporates 650 legal acts into the Agreement and changes radically our situation on the market and simplifies all border procedures and health checks for fisheries products. This was difficult and complicated to achieve within the EEA agreement, without it it would have been impossible.
On the other hand we have been faced with new demands from Spain for continued payments into the Financial Mechanism that was established at the time of the EEA Agreement for a duration of five years. Even though a number of European Union Member States agree with us that the Financial Mechanism was never meant to last for more than five years they have still rallied around the Spanish demands and Spain has been allowed to block a number of decisions of interest to us.

Dynamic EEA
The EEA Agreement is by its nature dynamic and if it is not allowed to develop and grow along with the European Union it would quickly lose its value. This is not the first time that one Member State holds a decision hostage to their own demands but this is unusually systematic and highlights our weakness when one Member State decides to exploit its position. We are dependent upon the political goodwill of the Member States, when it is lacking we get into difficulties. A considerable part of our research establishment now focuses on and is organised around European projects financed through the fourth Framework Programme. Now our participation in the fifth framework Programme is in jeopardy because of the Spanish demands.

Political claims
Even though Spain quite clearly does not have a legal case for its demands its political claims cannot be dismissed as easily. We tend to claim equal status with the Member States on all things related to the Internal Market. It should therefore not be a total surprise that they expect us to contribute to the cohesion efforts that inside the European Union are clearly linked to the Internal Market. It is not very easy to deny all solidarity in a partnership that after all is very close.
The way in which the Spanish demands have been presented has, however, not made it very easy to find a solution that would allow everyone concerned to preserve their dignity. It is not easy to negotiate when threaths are used. We have not excluded that we would be able to find new ways to reduce economic and social disparities between the regions of the EEA. But it would have to be on a new legal basis although still referring to article 115 of the EEA agreement. It would have to be limited in time and amount, it would have to take into account the changing nature of the European Union and the new challenges that come with enlargement. The original amount for the Financial Mechanism was fixed on the assumption that Switzerland would be a contributor. When the EEA agreement was rejected in Switzerland it proved to be too complicated to reduce the total sum so the remaining EEA/EFTA partners divided its contribution between them. We have a political commitment to reduce economic and social disparities, not to eliminate them.

EFTA and enlargement
Enlargement will be a major challenge for the European Union and even if we will inevitably be on the sidelines the European Union will in fact be negotiating not only EU membership but also EEA membership of the candidate countries. We have been building up contacts to follow the negotiations and will have to continue to do so. It is not enough to talk to the Commission, we have to develop our relations with the candidate countries and in this respect the network of EFTA free trade agreements we have established over the years will be useful. We will also have to keep in mind that in certain areas we have better coverage for example of fisheries products than in the EEA Agreement. This will call for compensation when these countries take up the tariff structure of the European Union.

I am convinced that the introduction of the EURO will bring about fundamental changes in Europe and although monetary matters are outside the scope of the EEA Agreement it too will be affected. In the months and years ahead we will have to start exploring the possibilities for cooperating with and possibly establishing some sort of a link with the European Central Bank. The eleven countries presently participating represent less than half of our external trade but this would change radically if the United Kingdom, Denmark and Sweden decide to join.

European Parliament
We are all aware of the increasing powers of the European Parliament and the need to develop our relations with it. Unfortunately this is inadequately reflected in the EEA agreement, as it was negotiated in a different environment. We therefore have to show some imagination and initiative in establishing contacts with the Parliament as a whole, with individual parliamentarians and committees. The EFTA secretariat has been very helpful in mapping out the different possibilities but it obviously remains the role of the EFTA Member States to present the EFTA point of view and engage in political lobbying when matters of concern to us are being debated inside the European Parliament. Our Missions both in Brussels and Strasbourg will clearly have an important role in this but I remain convinced that nothing replaces the direct political contacts between parliamentarians. The nordic parliamentarian cooperation is of particular importance as a tool to influence and follow the work on EU legislation. I would also like to encourage more contacts between political groupings in the EFTA countries and the European Parliament. This calls for effective cooperation between the administration and the parliamentarians willing to engage in this kind of lobbying.
Inside the European Union national Parliaments are increasingly demanding and getting a more direct role in the shaping of European legislation. The need for more contacts between the European Parliament and national parliaments inside the European Union is more clearly apparent now than ever before. We will have to find a way to fit into this new picture even though it will be difficult to establish a very clear institutional framework.

Free trade with PLO and Egypt
An important step in the expansion of EFTA's network of agreements with third countries is taken by signing an Interim Free Trade Agreement between the EFTA States and the PLO, on behalf of the Palestinian Authority. This is to be welcomed and can serve to further regional economic integration in the Middle East. Tomorrow, free trade negotiations between the EFTA States and Egypt are to begin which we also welcome. Egypt will therefore be the fourth partner in the Mediterranean area with which we are currently undertaking free trade negotiations.
I believe that when we have successfully concluded these negotiations we have fulfilled our guiding principles and objectives we set by the Bergen Declaration in 1995. Nevertheless, we must recognise that reaching out to countries and regions outside Europe and its immediate confines is already an imminent task. Therefore, it is my view that we need to seriously consider setting new priorities and guidelines to conduct EFTA third country relations. It is also my view that our immediate priorities are in the Western Hemisphere, in the Americas. But if other countries or groupings come knocking at our door let us give them a fair hearing as well.

Atlantic dialogue
The importance of the Atlantic dialogue cannot be undermined and it is of utmost importance for EFTA to keep its guard on any developments in this matter. In my opinion the free trade negotiations and eventual free trade agreement with Canada can and should be of an advantage while establishing and consolidating contacts and increased co-operation in the Western Hemisphere. Recently we have encountered interest in South America to establish such links. Consequently we cannot but urge for the appropriate but immediate and constructive proceedings.
The prospect of an EFTA-Mexico Free Trade Agreement is of considerable importance. This is an opportunity we should seize and that we should start now preparing to explore EFTA free trade talks with Mexico. We have already agreed to the draft text of a Declaration on Trade and Investment Co-operation with MERCOSUR. In my view, these two important issues will most certainly fit as key parts in a new set of our priorities. I am confident that as soon as conditions permit we can also explore the possibilities of establishing free trade co-operation with other countries in Latin America.


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