In Europe and its surrounding neighborhood, it is necessary to cooperate with the European Union. There are several models of cooperation, one of them is regulated through the European Economic Area agreement (EEA-agreement). This agreement secures the EEA countries access to the EU-inner markets. This has historically been a great boost for the different countries’ economies. Even though the agreement secures market access to the world’s biggest integrated market it also comes with some issues, for example the glaring democratic deficit for the non-EU EEA-countries.
The history of European integration is long and complex, and it has spawned many different models for international cooperation. The most successful example of European integration is of course the European Union (EU). The development of the EU has been long, and it has historically had its fair share of alternatives or competitors. One of these has been the European Free Trade Association (EFTA), this association emerged in 1960 as an alternative trade association to the EU.
As the EU in the period from the 70s to the 90s developed and enlarged EFTA countries were increasingly looking to join the EU. In 1992 this led to the creation of the European Economic Area agreement which was signed between EU and EFTA countries. The EEA created an inner market between the EU and the EFTA countries. The process of integration between the EU and EFTA culminated with the enlargement in 1994/1995 when Austria, Finland and Sweden left EFTA in favour of EU-membership. This left Norway, Iceland, Switzerland and Liechtenstein as sole members of EFTA, a small block compared to the original association.
Norway was together with Sweden, Austria and Finland also supposed to use the EEA as a stepping stone ahead of joining the EU in 1995. That did not happen as the Norwegian people said no to membership in the 94’ EU-membership referendum. When it comes to Switzerland, although they signed the EEA agreement, they never ratified it and remained outside the European inner market and instead use sectoral agreements to trade with the EU-trading bloc.
This history of integration, or lack thereof, has left us in the present situation over 25 years later, where Norway, Iceland, and Liechtenstein all still use the EEA-agreement as their model for EU-cooperation. They remain members of the European integrated inner markets with certain exceptions. The EEA-agreement covers almost all EU-policies, with the exceptions of most notably common agriculture and fisheries policies but also excludes policies like the European customs union, trade and foreign policy, justice and home affairs and economic and monetary union.
The EEA-cooperation is essentially EU-membership with a few exceptions but without democratic representation. The EEA-countries cooperate in most EU-programs, they are subject to EU-law and the European courts, and they indirectly must “pay” for “membership” through the EEA-grants. This de facto EU-membership cooperation has been extremely favourable for the EEA-countries, as for example in Norway where the EEA account for almost 80 percent of the country’s total export. They are granted access to the European inner markets and massive EU-programmes such as Erasmus+ which allows students from the EEA countries to study abroad or Horizon Europa, the massive funding programme for research and innovations, which allow companies to develop the technology needed to fight the climate crisis. The EEA countries are also exempted from the customs union and EU-policies in agriculture and fisheries. This allows them to protect national farmers by avoiding competition on goods in that sector by imposing tolls on goods from other European countries.
Now this may sound like a good deal for the EEA-countries, but the cooperation also comes with several issues. One of the main problems is the democratic deficit that the agreement creates. The EEA-countries must follow European law and policies created by the EU-institutions. They have no democratically elected officials in the European Parliament, the Council, or the Commission. This in a sense creates a situation where huge amounts of policies and laws that the countries are mandated to follow and implement, are created without the possibility of democratically influencing them. This takes power away from the people and can create massive opposition.
This can, and traditionally has, created situations where the people or at least big parts of the political spectrum oppose different upcoming EU-policies. An example of this is the Norwegian popular opposition to The European Union Agency for the Cooperation of Energy Regulators (ACER). The opposition gained popularity because of fears among the populace that joining ACER would let EU-regulators be able to rule over Norwegian energy policy and that joining would raise power prices. This was of course just populist agitation and irrational fears and the opposition to ACER did not have a parliamentary majority. There have also been similar situations of opposition to for example European labour policies and railway policies.
The EEA-agreement may also not be ideal for the European Union. They harvest the goods of European integration without the duties of membership. The EEA-grants somewhat work as a temporary cover for membership-fees, but they are grants for projects in lesser wealthy member-states, and not contributions to the EU-budgets. In a certain way the EEA-countries are free riding on the European project and the programmes that follow with it.
The EEA-cooperation between the EFTA countries (excluding Switzerland) and the EU is one of the many models for EU-cooperation with non-member states. The question is whether this is a sustainable model or if the EEA-agreement is a stepping stone and a relic of the past that no longer serves its original intention.
