In the spotlight: EFTA and the EEA – Scotland’s post-independence options

Nathanael Williams

CommonSpace looks at what these different European trade groups and regional relationships mean for you and Scotland

AS SCOTLAND faces a hard Brexit and another independence referendum, the First Minister Nicola Sturgeon is reportedly looking at whether Scotland, once independent, can join any of the European groupings in a bid to increase the political attractiveness of independence. 

CommonSpace broke the revelation that Norway is not at all closed to the idea of Scotland being part of the free trade area known as EFTA. 

But what is EFTA and the EEA? These terms will be increasingly used by politicians and commentators over the next two years and beyond as politicians try to hammer out the future of Scotland international relationships and trade.

These acronyms and groupings can be a baffling thing so we at CommonSpace will breakdown the basics of what they are and how they operate.

What is EFTA?

EFTA is a free trade zone in Europe, set up in 1960, which consists of Norway, Iceland, Switzerland and Liechtenstein, but is different to the EU single market which is the Scottish government’s first option.

What is the EEA?

The European economic area, established in 1994, is an extension of the EU’s Single Market to three of the four EFTA states. Currently, the EEA contains the 28 EU member states and the three EEA EFTA States – Iceland, Liechtenstein and Norway. 

As a member of the EEA, outside the EU, Scotland could preserve non-membership of the Schengen area (no freedom of movement) and be outside the EU’s Economic and Monetary Union and single currency.

But Scotland would also be removed from its current role in the EU’s Common Foreign and Security Policy and Common Security and Defence Policy. Experts at the human rights legal charity, Chatham House, suggest that Scotland’s nationals would cease to be EU citizens and lose the rights that they have acquired with that status.

What is the Single Market?


The Single Market is a free trade area for EU member states where there are no tariffs, quotas or taxes on trade, however, there is also free movement of goods, services, capital and people.

What’s the difference with EFTA and the EEA Single Market?

The Single Market is a free trade area where there are no tariffs, quotas or taxes on trade, however, there is also free movement of goods, services, capital and people.

EFTA members have also accepted the core rules of free movement as part of their access to the European Single Market.

But Liechtenstein, Iceland and Norway have not agreed to agriculture and fishery terms. They have to implement EU single market rules and regulations in their own countries and pay varying amounts towards the EU for this access.

EFTA does not desire political integration. It does not issue legislation, nor does it establish a customs union but seek more liberal trade between its members. It does not include a common trade policy, common foreign and security policy, justice and home affairs, harmonised taxation or the economic and monetary union.

Who are the members of EFTA?

Three current members of EFTA, Liechtenstein, Iceland and Norway. Switzerland used to be a full member but in 2001 it started bilateral talks with the EU, believing it could get better terms on its own, which took ten years to negotiate.

What’s its influence and who rules the roost?

Some commentators state that being in EFTA or the EEA comes with risks and disadvantages as a nation must still pay to be in the Single Market and apply EU law to various areas of its industry, law, business and regulations.

Yet advocates of Norway’s position state that EFTA/EEA states have the right to not only reform but also reject EU proposals and retain a right to be consulted on any development of the Single Market. For example, representatives from Norway currently take part in more than 500 EU committees and expertise groups. 

Norway, an EFTA/EEA, member has been described as a ‘leader’ in EU rule-making. It is the biggest of the EFTA nations and has led negotiations on fishing, trade, security and environmental legislation.

Norway has expressed fears of another nation joining EFTA, especially a big nation like the UK which upset the balance of the group and its relationship with the EU. It fears the hostility of the EU towards a hard Brexit UK could destabilize its future negotiations with the EU.

Why is it vital to know?

The pro-independence campaign will be in a race to gain credibility in terms of who can guarantee Scotland’s relationships and future trade in the coming referendum. Already in the 2014 campaign saw unsubstantiated claims from the No side that Scotland would be definitively rejected by the EU and all other unions due to objections by neighbours.

The Scottish Government, the SNP, the Greens and the Yes movement will be keen to emphasise the variety of political viable options on the table at Scotland’s choice if a second referendum is won.

Pictures courtesy of NoF, Magnus Halsen, Stuart Crawford, European Parliament & EFTA Court

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