1. UNECE Executive Forum Competing in a Changing Europe 11-12 May 2004 Session 2: Strategies for Trade and Business in a Changing Europe The Evolving European Trade Environment Pétur G. Thorsteinsson Deputy Secretary-General EFTA efta@efta.int

2. Overview About EFTA Impact of EU enlargement Challenges ahead

3. EFTA history at a glance (…responding to the making of Europe) 1960Foundation of EFTA (7 States, 100 mil. People) 1972FTAs with the EEC, when UK & Denmark join 1992-1995 FTAs with acceding countries (except Cyprus and Malta) 1994EEA enters into force, internal market of 18 2004EU / EEA enlargement, internal market of 28

4. EFTA Main Features One voice, better position (two pillar structure) Free trade - increased competitiveness (8% annual increase vs. 2%) Better investment environment Closer political ties Vehicle for technical cooperation

5. Merchandise trade € 272 billion (9th largest, 2% of world trade) Trade per capita of € 22.300 Services trade € 42 billion (Japan € 57 bil.) Outward investments € 16 billion (Japan € 27 bil.) 13 of top 500 companies (14 in Italy) Competitiveness: CH 9th, IS 12th, NO 15th GDP of € 479 billion (9th largest, cf. Korea, Brazil, Australia) GDP per capita of € 39.260 (Budget: € 13.8 million / staff: 80) EFTA Main Figures

6. Case study 1: Poland and fish FTA --- EEA Poland’s accession to EEA imposes tariff barriers on trade in fish with EFTA States Agreement reached on tariff quotas, first come, first serve basis  Challenges for Polish fish processing industry  Norway and Iceland need to look for new trading partners for any increases

7. Case study 2: Financial Mechanism New EEA Financial Mechanism 2004-2009: € 1,17 billion (previously € 120 mil.) (Programme contributions € 640 mil). Approx. 60% of the grants will be divided between the three Baltic States and Poland An enlarged and well-functioning Internal Market is: - in the EEA EFTA States‘ economic interest - brings closer political cooperation

8. Main effects Increase opportunities for trade in goods, for example, simpler customs procedures, harmonised standards etc. New services markets New investment oportunities Labour market

9. Challenges ahead Continue free trade policy to remain competitive Develop new markets in the EU Find new markets as necessary Support the trade liberalisation process in the WTO

10. Conclusion Enlargement extensively prepared by the EEA Member States Transition from FTA to EEA not favourable in all respects, but: - new business opportunities - common labour market - strengthens relations between EFTA/EEA states and acceeding countries EEA Seminars (next: October 2004)