Eliminating Conventional Barriers to Trade

Abstract

EFTA’s principal technical achievement was to create a viable free trade area for industrial products between eight European countries. Part of the credit for this achievement, however, must go to the work done prior to the establishment of the Association in wider organizations dealing with trade matters, namely the GATT and OEEC. When the Stockholm Convention entered into force in May 1960 its seven founding members, with the exception of Portugal, had participated in four rounds of tariff negotiations in the GATT and fulfilled most of their obligations under the OEEC’s Code of Liberalization. Tariffs on European imports, though by no means negligible, were not high enough to prevent a rapid development of trade. Quantitative restrictions and licensing arrangements were no longer widely used to regulate trade, even with the dollar area, although they still loomed large in the minds of governments as a major instrument of balance-of-payments policy. Great strides had been taken from 1947 to 1960 to free intra-European trade in general, and both EFTA and the EEC started on their regional exercises in trade liberalization from a strong base in multilateral trade cooperation.