The European Economic Area (EEA) is an international agreement that extends the common market of the European Union to three non-EU states: Norway, Iceland, and Liechtenstein. The EEA was established on 1 January 1994 upon entry into force of the Agreement on the European Economic Area. Governed by European law, the area aims to enable free movement of persons, goods, services, and capital within the European common market, including the freedom to choose residence in any country within this area.

New members of the European Free Trade Association (EFTA) would not automatically become party to the EEA Agreement, as each EFTA state decides on its own whether it applies to be party to the EEA Agreement or not. According to Article 128 of the EEA Agreement, "any European State becoming a member of the Community shall, and the Swiss Confederation or any European State becoming a member of EFTA may, apply to become a party to this Agreement. It shall address its application to the EEA Council." The EFTA does not envisage political integration. It does not issue legislation, nor does it establish a customs union. The EEA Agreement does not include participation in the Schengen Area, although all four EFTA member states have joined Schengen through separate bilateral agreements with the EU.

The EEA Agreement is a commercial treaty and differs from the EU Treaties in certain key respects. According to Article 1 its purpose is to "promote a continuous and balanced strengthening of trade and economic relation". The EFTA members do not participate in the Common Agricultural Policy or the Common Fisheries Policy.

The right to free movement of persons between EEA member states and the relevant provisions on safeguard measures are identical to those applying between members of the EU. The right and rules applicable in all EEA member states, including those which are not members of the EU, are specified in Directive 2004/38/EC and in the EEA Agreement.

The EEA Agreement specifies that membership is open to member states either of the EU or of the EFTA. The EFTA states that are party to the EEA Agreement participate in the EU's internal market without being members of the EU or the European Union Customs Union. They adopt most EU legislation concerning the single market, with notable exclusions including laws regarding the Common Agricultural Policy and Common Fisheries Policy. The EEA's "decision-shaping" processes enable EEA EFTA member states to influence and contribute to new EEA policy and legislation from an early stage. Third country goods are excluded for these states on rules of origin.

When entering into force in 1994, the EEA parties were 17 states and two European Communities: the European Community, which was later absorbed into the EU's wider framework, and the now defunct European Coal and Steel Community. Membership has grown to 30 states as of 2020: 27 EU member states, as well as three of the four member states of the EFTA (Iceland, Liechtenstein and Norway). One EFTA member, Switzerland, has not joined the EEA, but has a set of bilateral sectoral agreements with the EU which allow it to participate in the internal market.

Origins

In the late 1980s, the EFTA member states, led by Sweden, began looking at options to join the then-existing European Economic Community (EEC), the precursor of the European Union (EU). The reasons identified for this are manifold. Many authors cite the economic downturn at the beginning of the 1980s, and the subsequent adoption by the EEC of the "Europe 1992 agenda", as a primary reason. Arguing from a liberal intergovernmentalist perspective, these authors argue that large multinational corporations in EFTA countries, especially Sweden, pressed for EEC membership under threat of relocating their production abroad. Other authors point to the end of the Cold War, which made joining the EEC less politically controversial for neutral countries.Bache, Ian and Stephen George (2006) Politics in the European Union. Second Edition. Oxford: Oxford University Press: 543–548.

Meanwhile, Jacques Delors, who was President of the European Commission at the time, did not like the idea of the EEC enlarging with more member states, as he feared that it would impede the ability of the Community to complete internal market reform and establish monetary union. He proposed a European Economic Space (EES) in January 1989, which was later renamed the European Economic Area, as it is known today.

By the time the EEA was established in 1994, however, several developments hampered its credibility. First of all, Switzerland rejected the EEA agreement in a national referendum on 6 December 1992, obstructing full EU-EFTA integration within the EEA. Furthermore, Austria had applied for full EEC membership in 1989, and was followed by Finland, Norway, Sweden, and Switzerland between 1991 and 1992 (Norway's EU accession was rejected in a referendum, Switzerland froze its EU application after the EEA agreement was rejected in a referendum). The fall of the Iron Curtain had made the EU less hesitant to accept these highly developed countries as member states, since that would relieve the pressure on the EU's budget when the former socialist countries of Central Europe were to join.

Membership

The EEA Agreement was signed in Porto on 2 May 1992 by the then seven states of the European Free Trade Association (EFTA), the European Community (EC) and its then 12 member states.  On 6 December 1992, Switzerland's voters rejected the ratification of the agreement in a constitutionally mandated referendum, effectively freezing the application for EC membership submitted earlier in the year. Switzerland is instead linked to the EU by a series of bilateral agreements. On 1 January 1995, three erstwhile members of the EFTA—Austria, Finland and Sweden—acceded to the European Union, which had superseded the European Community upon the entry into force of the Maastricht Treaty on 1 November 1993. Liechtenstein's participation in the EEA was delayed until 1 May 1995. Any European State becoming a member of the EU shall, or becoming a member of EFTA may, apply to become a Party to the EEA agreement according to article 128 of the agreement.

, the contracting parties to the EEA are three of the four EFTA member states and the 27 EU member states.

Treaties Besides the 1992 Treaty, one amending treaty was signed, as well as three treaties to allow for accession of new members of the European Union.

Treaty Signature Entry into force Original signatoriesComment EEA agreement 19 states + EEC and ECSC Entered into force as adjusted by the 1993 Protocol Adjusting Protocol 18 states + EEC and ECSC Allowing entry into force without Switzerland Participation of 10 new States 28 states + ECIn view of 2004 enlargement of the European Union Participation of two new States 30 states + ECFollowing 2007 enlargement of the European Union Participation of one new State 31 states + EU Following 2013 enlargement of the European Union

Ratification of the EEA Agreement

StateSignedRatifiedEntered into forceExitNotes 2 May 1992 15 October 1992 1 January 1994 EU member (from 1 January 1995)Acceded to the EEA as an EFTA member 2 May 1992 9 November 1993 1 January 1994 EU member 25 July 2007 29 February 2008 9 November 2011 EU member 11 April 2014 24 March 2015 19 February 2025 EU member 14 October 2003 30 April 2004 6 December 2005 EU member(The application (and implementation) of the agreement is suspended in territories known as Northern Cyprus) 14 October 2003 10 June 2004 6 December 2005 EU member 2 May 1992 30 December 1992 1 January 1994 EU member 2 May 1992 13 December 1993 1 January 1994 Originally as European Economic Communityand European Coal and Steel Community 14 October 2003 13 May 2004 6 December 2005 EU member 2 May 1992 17 December 1992 1 January 1994 EU member (from 1 January 1995)Acceded to the EEA as an EFTA member 2 May 1992 10 December 1993 1 January 1994 EU member 2 May 1992 23 June 1993 1 January 1994 EU member 2 May 1992 10 September 1993 1 January 1994 EU member 14 October 2003 26 April 2004 6 December 2005 EU member 2 May 1992 4 February 1993 1 January 1994 EFTA member 2 May 1992 29 July 1993 1 January 1994 EU member 2 May 1992 15 November 1993 1 January 1994 EU member 14 October 2003 4 May 2004 6 December 2005 EU member 2 May 1992 25 April 1995 1 May 1995 EFTA member 14 October 2003 27 April 2004 6 December 2005 EU member 2 May 1992 21 October 1993 1 January 1994 EU member 14 October 2003 5 March 2004 6 December 2005 EU member 2 May 1992 31 December 1992 1 January 1994 EU member 2 May 1992 19 November 1992Norges traktater: Avtale om Det europeiske økonomiske samarbeidsområde 1 January 1994 EFTA member 14 October 2003 8 October 2004 6 December 2005 EU member 2 May 1992 9 March 1993 1 January 1994 EU member 25 July 2007 23 May 2008 9 November 2011 EU member 14 October 2003 19 March 2004 6 December 2005 EU member 14 October 2003 30 June 2005 6 December 2005 EU member 2 May 1992 3 December 1993 1 January 1994 EU member 2 May 1992 18 December 1992 1 January 1994 EU member (from 1 January 1995)Acceded to the EEA as an EFTA member 2 May 1992 Rejected Never EFTA memberEEA ratification rejected in a 1992 referendumRemoved as contracting party in 1993 protocol 2 May 1992 15 November 1993 1 January 1994 31 January 2020 Former EEA and EU member. EEA covered (with exceptions) Gibraltar and the Sovereign Base Areas of Akrotiri and Dhekelia as well as including (for limited purposes) the three Crown Dependencies (Isle of Man, Jersey and Guernsey). The EEA Agreement and EEA Regulations remained applicable in respect of the UK (and the UK in respect of the aforementioned Associated Territories) during the Transition period (also known in the UK as the Implementation period) until 31 December 2020.

Notes

Enlargement Recent EU member states When a state joins the EU, they do not necessarily simultaneously become part of the EEA. They are obliged to apply separately, and an agreement between EEA member states must be signed and ratified to admit a new member.

Following the 2004 enlargement of the EU, which saw Cyprus, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia and Slovenia acceding to the EU on 1 May 2004, the EEA Enlargement Agreement was applied on a provisional basis to the 10 acceding countries as from the date of their accession to the EU while their EEA accession agreement was pending ratification by all EEA parties.

On the other hand, following the 2007 enlargement of the EU, which saw Bulgaria and Romania acceding to the EU on 1 January 2007, an EEA Enlargement Agreement was not signed until 25 July 2007 and only provisionally entered into force on 1 August 2007. The agreement did not fully enter into force until 9 November 2011.

Croatia is the newest EU member state, having joined on 1 July 2013. Croatia applied to join the EEA on 13 September 2012, with the agreement concluded on 20 November 2013. It was signed in April 2014 and provisionally applied until it officially entered into force on 19 February 2025.

Future EU member states

There are nine recognised candidates for membership of the European Union: Turkey (since 1999), North Macedonia (2005), Montenegro (2010), Serbia (2012), Albania (2014), Moldova (2022), Ukraine (2022), Bosnia and Herzegovina (2022) and Georgia (2023). Kosovo (whose independence is not recognised by five EU member states) formally submitted its application for membership in 2022 and is considered a potential candidate by the European Union.

Faroe Islands